Omnibus Credit Facility Agreement - Black Box Corp. of Pennsylvania, Black Box Corp. and Mellon Bank NA
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OMNIBUS CREDIT FACILITY AGREEMENT
dated as of February 12, 1999
among
BLACK BOX CORPORATION OF PENNSYLVANIA,
BLACK BOX CORPORATION
and
MELLON BANK, N.A.
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Table of Contents
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Section Title Page
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ARTICLE I DEFINITIONS; CONSTRUCTION...........................................................................1
1.01 Certain Definitions.............................................................................1
1.02 Construction...................................................................................17
1.03 Accounting Principles..........................................................................18
ARTICLE II REVOLVING CREDIT..................................................................................20
2.01 Revolving Credit Loans.........................................................................20
2.02 Revolving Credit Commitment Fee................................................................21
2.03 Making of Revolving Credit Loans...............................................................21
2.04 Interest Rates.................................................................................22
2.05 Conversion or Renewal of Interest Rate Options.................................................25
2.06 Prepayments Generally..........................................................................26
2.07 Optional Prepayments...........................................................................27
2.08 Interest Payment Dates.........................................................................27
2.09 Payments Generally; Interest on Overdue Amounts................................................28
2.10 Additional Compensation in Certain Circumstances...............................................28
2.11 Taxes..........................................................................................31
2.12 Funding by Branch, Subsidiary or Affiliate.....................................................32
ARTICLE III LETTERS OF CREDIT................................................................................33
3.01 Letters of Credit..............................................................................33
3.02 Letter of Credit Fees..........................................................................33
3.03 Procedure for Issuance of Letters of Credit....................................................35
3.04 Payments.......................................................................................35
3.05 Increased Costs................................................................................35
3.06 Further Assurances.............................................................................36
3.07 Obligations Absolute...........................................................................36
3.08 Additional Provisions Regarding Letters of Credit..............................................37
ARTICLE IV REPRESENTATIONS AND WARRANTIES....................................................................38
4.01 Corporate Status...............................................................................38
4.02 Corporate Power and Authorization..............................................................38
4.03 Execution and Binding Effect...................................................................39
4.04 Governmental Approvals and Filings.............................................................39
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4.05 Absence of Conflicts...........................................................................39
4.06 Audited Financial Statements...................................................................40
4.07 Absence of Undisclosed Liabilities.............................................................41
4.08 Absence of Material Adverse Changes............................................................41
4.09 Accurate and Complete Disclosure...............................................................41
4.10 Margin Regulations.............................................................................41
4.11 Subsidiaries...................................................................................41
4.12 Partnerships, etc..............................................................................42
4.13 Ownership and Control..........................................................................42
4.14 Litigation.....................................................................................42
4.15 Absence of Events of Default...................................................................43
4.16 Absence of Other Conflicts.....................................................................43
4.17 Insurance......................................................................................43
4.18 Title to Property..............................................................................43
4.19 Intellectual Property..........................................................................43
4.20 Taxes..........................................................................................44
4.21 Employee Benefits..............................................................................44
4.22 Environmental Matters..........................................................................45
4.23 Solvency.......................................................................................45
4.24 Regulatory Status..............................................................................46
4.25 Permits and Other Operating Rights.............................................................46
4.26 Year 2000 Compliance...........................................................................46
ARTICLE V CONDITIONS OF LENDING..............................................................................47
5.01 Conditions to Initial Revolving Credit Loans...................................................47
5.02 Conditions to All Revolving Credit Loans.......................................................48
ARTICLE VI AFFIRMATIVE COVENANTS.............................................................................49
6.01 Basic Reporting Requirements...................................................................49
6.02 Insurance......................................................................................54
6.03 Payment of Taxes and Other Potential Charges and Priority Claims...............................54
6.04 Preservation of Corporate Status...............................................................55
6.05 Governmental Approvals and Filings.............................................................55
6.06 Maintenance of Properties......................................................................55
6.07 Avoidance of Other Conflicts...................................................................55
6.08 Financial Accounting Practices.................................................................56
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6.09 Use of Proceeds................................................................................57
6.10 Continuation of or Change in Business..........................................................57
6.11 Consolidated Tax Return........................................................................57
6.12 Fiscal Year....................................................................................57
6.13 Covenant to Secure Note Equally................................................................57
ARTICLE VII NEGATIVE COVENANTS...............................................................................57
7.01 Consolidated Net Worth.........................................................................58
7.02 Leverage.......................................................................................58
7.03 Cash Flow......................................................................................58
7.04 Liens..........................................................................................58
7.05 Indebtedness...................................................................................59
7.06 Guarantees, Indemnities of the Borrower, etc...................................................60
7.07 Loans, Advances and Investments................................................................61
7.08 Dividends and Related Distributions............................................................62
7.09 Sale-Leasebacks................................................................................62
7.10 Mergers, Acquisitions, etc.....................................................................62
7.11 Dispositions of Properties.....................................................................63
7.12 Dealings with Affiliates.......................................................................63
7.13 Capital Expenditures...........................................................................63
7.14 Limitation on Other Restrictions on Liens......................................................63
7.15 License Agreement..............................................................................63
ARTICLE VIII DEFAULTS........................................................................................64
8.01 Events of Default..............................................................................64
8.02 Consequences of an Event of Default............................................................66
ARTICLE IX GUARANTY AND SURETYSHIP...........................................................................67
9.01 Guaranty and Suretyship........................................................................67
9.02 Obligations Absolute...........................................................................67
9.03 Waivers, etc...................................................................................69
9.04 Reinstatement..................................................................................70
9.05 No Stay........................................................................................71
9.06 Payments.......................................................................................71
9.07 Subrogation, etc...............................................................................71
9.08 Continuing Guaranty............................................................................71
9.09 Subordination..................................................................................72
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ARTICLE X MISCELLANEOUS......................................................................................72
10.01 Holidays......................................................................................72
10.02 Records.......................................................................................72
10.03 Amendments and Waivers........................................................................72
10.04 No Implied Waiver; Cumulative Remedies........................................................73
10.05 Notices.......................................................................................73
10.06 Expenses; Taxes; Indemnity....................................................................73
10.07 Severability..................................................................................75
10.08 Prior Understandings..........................................................................75
10.09 Duration; Survival............................................................................75
10.10 Counterparts..................................................................................76
10.11 Limitation on Payments........................................................................76
10.12 Set-Off.......................................................................................76
10.13 Successors and Assigns; Participations........................................................77
10.14 Governing Law; Submission to Jurisdiction: Waiver of Jury Trial; Limitation of Liability.....78
10.15 Termination of Existing Revolving Credit Facilities...........................................79
10.16 Confidentiality...............................................................................80
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Continuing Letter of Credit Agreement
Exhibit C - Form of Documentary Letter of Credit Application
Exhibit D - Form of Note (Stock Payments)
Exhibit E - Subordination Terms
Schedule 4.01 - Jurisdictions of Incorporation
Schedule 4.11 - Capitalization of Subsidiaries
Schedule 4.12 - Joint Ventures
Schedule 4.13 - Capitalization of Borrower and Guarantor
Schedule 4.14 - Litigation
Schedule 4.21 - Plans and Multiemployer Plans
Schedule 7.04 - Existing Liens
Schedule 7.05 - Existing Indebtedness
Annex A - Pricing Grid
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THIS OMNIBUS CREDIT FACILITY AGREEMENT (this "Agreement"),
dated as of February 12, 1999, by and among BLACK BOX CORPORATION OF
PENNSYLVANIA, a Delaware corporation (the "Borrower"), BLACK BOX CORPORATION, a
Delaware corporation (the "Guarantor"), and MELLON BANK, N.A., a national
banking association (the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrower is proposing to refinance certain
obligations of the Borrower and the Guarantor to the Lender under the Credit
Agreement, dated as of May 6, 1994, between the Lender and the Borrower, as
amended (the "Existing Revolving Credit Facility");
WHEREAS, the Borrower has requested the Lender (a) to provide
the funds necessary to refinance such obligations and (b) to provide a revolving
credit facility to provide funds for the working capital requirements and
general corporate purposes of the Borrower and to provide for the issuance of
Letters of Credit for the account of the Borrower; and
WHEREAS, the Lender has agreed to extend credit to the
Borrower on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS; CONSTRUCTION
1.01. Certain Definitions. In addition to other words and
terms defined elsewhere in this Agreement, as used herein the following words
and terms shall have the following meanings, respectively, unless the context
hereof otherwise clearly requires:
"ABS Rate" shall mean a per annum rate of interest equal to
the rate of interest determined by the Lender, in its sole discretion from time
to time, to be its ABS Rate. Such ABS Rate shall change from time to time as of
the effective date of each change in the ABS Rate as determined in the sole
discretion of the Lender. The ABS Rate may be greater or less than other
interest rates charged by the Lender to other borrowers and is not solely based
or dependent upon the interest rate which the Lender may charge any particular
borrower or class of borrowers.
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"ABS Rate Option" shall have the meaning set forth in Section
2.04(a)(iii) hereof.
"ABS Rate Portion" of any Revolving Credit Loan or Loans shall
mean at any time the portion, including the whole, of such Revolving Credit Loan
or Loans bearing interest at such time under the ABS Rate Option. If no
Revolving Credit Loan or Loans is specified, "ABS Rate Portion" shall refer to
the ABS Rate Portion of all Revolving Credit Loans outstanding at such time.
"Acquisition" of a Person shall mean the acquisition of all or
substantially all of the assets of such Person, whether by acquisition of the
assets of such Person or of the ownership interests of such Person, or
otherwise.
"Affiliate" of a Person (the "Specified Person") shall mean
any Person which directly or indirectly controls, or is controlled by, or is
under common control with, the Specified Person. For purposes of the preceding
sentence, "control" of a Person means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of such
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Applicable Margin" shall have the meaning set forth in
Section 2.04(b).
"Applicable Tier" shall have the meaning set forth in Annex A
hereof.
"Assured Obligation" shall have the meaning set forth in the
definition of Guaranty Equivalent.
"Base Rate" shall have the meaning set forth in Section
2.04(a)(i) hereof.
"Base Rate Option" shall have the meaning set forth in Section
2.04(a)(i) hereof.
"Base Rate Portion" of any Revolving Credit Loan or Loans
shall mean at any time the portion, including the whole, of such Revolving
Credit Loan or Loans bearing interest at such time (a) under the Base Rate
Option or (b) in accordance with Section 2.09(b)(ii) hereof. If no Revolving
Credit Loan or Loans is specified, "Base Rate Portion" shall refer to the Base
Rate Portion of all Revolving Credit Loans outstanding at such time.
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"Business Day" shall mean any day other than a Saturday,
Sunday, public holiday under the laws of the Commonwealth of Pennsylvania or
other day on which banking institutions are authorized or obligated to close in
Pittsburgh, Pennsylvania.
"Capital Expenditures" of any Person shall mean, for any
period, all expenditures (whether paid in cash or accrued as liabilities during
such period) of such Person during such period which would be classified as
capital expenditures in accordance with GAAP (including, without limitation,
expenditures for maintenance and repairs which are capitalized, and Capitalized
Leases to the extent an asset is recorded in connection therewith in accordance
with GAAP).
"Capitalized Lease" shall mean at any time any lease which is,
or is required under GAAP to be, capitalized on the balance sheet of the lessee
at such time, and "Capitalized Lease Obligation" of any Person at any time shall
mean the aggregate amount which is, or is required under GAAP to be, reported as
a liability on the balance sheet of such Person at such time as lessee under a
Capitalized Lease.
"Cash Equivalent Investments" shall mean any of the following,
to the extent acquired for investment and not with a view to achieving trading
profits: (a) obligations fully backed by the full faith and credit of the United
States of America maturing not in excess of nine (9) months from the date of
acquisition, (b) commercial paper maturing not in excess of nine (9) months from
the date of acquisition and rated "P-1" by Moody's Investors Service or "A-1" by
Standard & Poor's Corporation on the date of acquisition, and (c) the following
obligations of any domestic commercial bank having capital and surplus in excess
of $500,000,000, which has, or the holding company of which has, a commercial
paper rating meeting the requirements specified in clause (b) above: (i) time
deposits, certificates of deposit and acceptances maturing not in excess of nine
(9) months from the date of acquisition, or (ii) repurchase obligations with a
term of not more than seven (7) days for underlying securities of the type
referred to in clause (a) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, and any successor statute of similar
import, and regulations thereunder, in each case as in effect from time to time.
"CERCLIS" shall mean the Comprehensive Environmental Response,
Compensation and Liability Information System List, as the same may be amended
from time to time.
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"Change of Control Event" shall mean the beneficial ownership
or acquisition by any Person or group of affiliated Persons (in any transaction
or series of transactions) of (a) shares of the Guarantor representing more than
fifty percent (50%) of the voting control of the Guarantor or (b) the power to
elect, appoint or cause the election or appointment of at least a majority of
the members of the board of directors of the Guarantor.
"Closing Date" shall mean the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute of similar import, and regulations thereunder, in each
case as in effect from time to time. References to sections of the Code shall be
construed also to refer to any successor sections.
"Commitment Fee Rate" shall have the meaning set forth in
Section 2.02.
"Consolidated Cash Flow Coverage Ratio", as of the last day of
any fiscal quarter, shall mean the ratio of (a) Consolidated EBITDA minus
Capital Expenditures of the Guarantor minus charges against income for foreign,
federal, state and local income Taxes to (b) the current maturities of long term
Indebtedness of the Guarantor plus Consolidated Interest Expense, in each case
for the 4 most recently completed fiscal quarters ending on such day, considered
as a single accounting period. If an Acquisition occurs during such period, each
element of the Consolidated Cash Flow Coverage Ratio shall be calculated on a
pro forma basis as if the Acquisition had been made, and any Indebtedness or
other obligations issued or incurred in connection therewith had been issued or
incurred, as of the first day of such period. In making such pro forma
calculation of the Consolidated Interest Expense with respect to Indebtedness or
other obligations issued or incurred in connection with the Acquisition,
interest expense thereon shall be calculated on the basis of an interest rate
per annum not less than the one-month Euro-Rate as of the last day of such
period plus an Applicable Margin determined on the basis of the Consolidated
Leverage Ratio as of the last day of such period.
"Consolidated EBIT" for any period, with respect to the
Guarantor and its consolidated Subsidiaries, shall mean the sum of (a)
Consolidated Net Income of the Guarantor for such period, (b) Consolidated
Interest Expense for such period and (c) charges against income for foreign,
federal, state and local income taxes for such period, all as determined on a
consolidated basis in accordance with GAAP.
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"Consolidated EBITDA" for any period, with respect to the
Guarantor and its consolidated Subsidiaries, shall mean the sum of (a)
Consolidated EBIT for such period, (b) depreciation expense for such period, and
(c) amortization expense for such period, all as determined on a consolidated
basis in accordance with GAAP plus noncash charges to the extent included in
determining Consolidated Net Income for which no future cash expenditure is
reasonably anticipated.
"Consolidated Interest Expense" for any period shall mean the
total interest expense of the Loan Parties and their consolidated Subsidiaries
for such period determined on a consolidated basis in accordance with GAAP.
"Consolidated Leverage Ratio", as of the last day of each
fiscal quarter, shall mean the ratio of (a) the aggregate Indebtedness of the
Guarantor and its consolidated Subsidiaries as of such day to (b) Consolidated
EBITDA of the Guarantor and its consolidated Subsidiaries for the 4 most
recently completed fiscal quarters ending on such day, considered as a single
accounting period. If an Acquisition occurs during such period, (i) Consolidated
EBITDA of the Guarantor and its consolidated Subsidiaries shall be calculated on
a pro forma basis as if the Acquisition had been made as of the first day of
such period and (ii) the aggregate Indebtedness of the Guarantor and its
consolidated Subsidiaries as of the date of determination of the Consolidated
Leverage Ratio shall include Indebtedness incurred in connection with and after
giving effect to the Acquisition (and including, on a pro forma basis, all
Indebtedness to be incurred in connection with the Acquisition, to the extent
not incurred on such date).
"Consolidated Net Income" of any Person (the "Statement
Person") for any period shall mean the net earnings (or loss) after taxes of the
Statement Person and its consolidated Subsidiaries for such period determined on
a consolidated basis in accordance with GAAP; provided, that there shall be
deducted therefrom (a) income or loss accounted for by the Statement Person on
the equity method because of the income (or deficit) during such period of any
Person (other than a consolidated Subsidiary of the Statement Person) in which
the Statement Person or any consolidated Subsidiary of the Statement Person has
an ownership interest, but the deduction for such equity income shall be
reversed to the extent that during such period an amount not in excess of such
income has been actually received by the Statement Person or such consolidated
Subsidiary of the Statement Person in the form of cash or property dividends or
similar distributions, (b) the undistributed earnings of any consolidated
Subsidiary of
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the Statement Person to the extent that the declaration or payment of dividends
or similar distributions by such consolidated Subsidiary of the Statement Person
is restricted (whether such restriction arises by operation of Law (including
Law applicable to a foreign Subsidiary), by agreement, by its articles of
incorporation or by-laws (or other constituent documents), or otherwise), (c)
any restoration to income of any contingency reserve, except to the extent that
provision for such reserve was made against income during such period, and (d)
any gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of the Statement Person or any consolidated
Subsidiary of the Statement Person.
"Consolidated Net Worth" of any Person at any time shall mean
the total amount of stockholders' equity of such Person and its consolidated
Subsidiaries at such time determined on a consolidated basis in accordance with
GAAP (exclusive of the effects of foreign currency translations and the accrual
of interest on any note receivable from an Affiliate of such Person unless paid
in cash).
"Controlled Group Member" shall mean each trade or business
(whether or not incorporated) which together with any Loan Party is treated as a
single employer under Sections 4001(a)(14) or 4001(b)(1) of ERISA or Sections
414(b), (c), (m) or (o) of the Code.
"Corresponding Source of Funds" shall mean, with respect to
any Funding Segment of the Euro-Rate Portion, the proceeds of hypothetical
receipts by a Notional Euro-Rate Funding Office or by the Lender through a
Notional Euro-Rate Funding Office of one or more Dollar deposits in the
interbank eurodollar market at the beginning of the Euro-Rate Funding Period
corresponding to such Funding Segment having maturities approximately equal to
such Euro-Rate Funding Period and in an amount approximately equal to the
principal amount of such Funding Segment.
"Dollar," "Dollars" and the symbol "$" shall mean lawful money
of the United States of America.
"Environmental Affiliate" shall mean, with respect to any
Person, any other Person whose liability (contingent or otherwise) for any
Environmental Claim such Person has retained, assumed or otherwise is liable for
(by Law, agreement or otherwise).
"Environmental Approvals" shall mean any Governmental Action
pursuant to or required under any Environmental Law.
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"Environmental Claim" shall mean, with respect to any Person,
any action, suit, proceeding, investigation, notice, claim, complaint, demand,
request for information or other written communication by any other Person
(including but not limited to any Governmental Authority, citizens' group or
present or former employee of such Person) alleging, asserting or claiming any
actual or potential (a) violation of any Environmental Law, (b) liability under
any Environmental Law or (c) liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
the presence, or release into the environment, of any Environmental Concern
Materials at any location, whether or not owned by such Person, in violation of
any Environmental Law.
"Environmental Cleanup Site" shall mean any location which is
listed or proposed for listing on the National Priorities List, on CERCLIS or on
any similar state list of sites requiring investigation or cleanup, or which is
the subject of any pending or threatened action, suit, proceeding or
investigation related to or arising from any alleged violation of any
Environmental Law.
"Environmental Concern Materials" shall mean (a) any flammable
substance, explosive, radioactive material, hazardous material, hazardous waste,
toxic substance, solid waste, pollutant, contaminant or any related material,
raw material, substance, product or by-product of any substance specified in or
regulated by any Environmental Law (including but not limited to any "hazardous
substance" as defined in CERCLA or any similar state Law), (b) any toxic
chemical or other substance from or related to industrial, commercial or
institutional activities, and (c) asbestos, gasoline, diesel fuel, motor oil,
waste and used oil, heating oil and other petroleum products or compounds,
polychlorinated biphenyls, radon and urea formaldehyde.
"Environmental Law" shall mean any Law, whether now existing
or subsequently enacted or amended, relating to (a) pollution or protection of
the environment, including natural resources, (b) exposure of Persons, including
but not limited to employees, to Environmental Concern Materials, (c) protection
of the public health or welfare from the effects of products, by-products,
wastes, emissions, discharges or releases of Environmental Concern Materials or
(d) regulation of the manufacture, use or introduction into commerce of
Environmental Concern Materials including their manufacture, formulation,
packaging, labeling, distribution, transportation, handling, storage or
disposal. Without limitation, "Environmental Law" shall also include any
Environmental Approval and the terms and conditions thereof.
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"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended, and any successor statute of similar import, and
regulations thereunder, in each case as in effect from time to time. References
to sections of ERISA shall be construed also to refer to any successor sections.
"Euro-Rate" shall have the meaning set forth in Section
2.04(a)(ii) hereof.
"Euro-Rate Funding Period" shall have the meaning set forth in
Section 2.04(c) hereof.
"Euro-Rate Option" shall have the meaning set forth in Section
2.04(a)(ii) hereof.
"Euro-Rate Portion" of any Revolving Credit Loan or Loans
shall mean at any time the portion, including the whole, of such Revolving
Credit Loan or Loans bearing interest at any time under the Euro-Rate Option or
at a rate calculated by reference to the Euro-Rate under Section 2.09(b)(i)
hereof. If no Revolving Credit Loan or Loans is specified, "Euro-Rate Portion"
shall refer to the Euro-Rate Portion of all Revolving Credit Loans outstanding
at such time.
"Euro-Rate Reserve Percentage" shall have the meaning set
forth in Section 2.04(a)(ii) hereof.
"Event of Default" shall mean any of the Events of Default
described in Section 8.01 hereof.
"Funding Breakage Date" shall have the meaning set forth in
Section 2.10(b) hereof.
"Funding Breakage Indemnity" shall have the meaning set forth
in Section 2.10(b) hereof.
"Funding Segment" of the Euro-Rate Portion of the Revolving
Credit Loans at any time shall mean the entire principal amount of the Euro-Rate
Portion to which at the time in question there is applicable a particular
Euro-Rate Funding Period beginning on a particular day and ending on a
particular day. (By definition, the Euro-Rate Portion is at all times composed
of an integral number of discrete Funding Segments and the sum of the principal
amounts of all Funding Segments of the Euro-Rate Portion at any time equals the
principal amount of the Euro-Rate Portion at such time.)
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"GAAP" shall have the meaning set forth in Section 1.03
hereof.
"Governmental Action" shall have the meaning set forth in
Section 4.04 hereof.
"Governmental Authority" shall mean any government or
political subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any court, tribunal,
grand jury or arbitrator, in each case whether foreign or domestic.
"Guaranteed Obligations" shall mean all obligations from time
to time of the Borrower to the Lender under or in connection with any Loan
Document, whether for principal, interest, fees, indemnities, expenses or
otherwise, and all refinancings or refundings thereof, whether such obligations
are direct or indirect, otherwise secured or unsecured, joint or several,
absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising (specifically including but not
limited to obligations arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization or similar proceeding with respect to the
Borrower or any other Person, or which would have arisen or accrued but for the
commencement of such proceeding, even if the claim for such obligation is not
enforceable or allowable in such proceeding). Without limitation of the
foregoing, such obligations include all obligations arising from any extensions
of credit under or in connection with the Loan Documents from time to time,
regardless of whether any such extensions of credit are in excess of the amount
committed under or contemplated by the Loan Documents or are made in
circumstances in which any condition to extension of credit is not satisfied.
Without limitation of the foregoing, the Lender (or any successive assignee or
transferee) from time to time may assign or otherwise transfer all or any
portion of its rights or obligations under the Loan Documents (including,
without limitation, all or any portion of any commitment to extend credit), or
any other Guaranteed Obligations, to any other Person, and such Guaranteed
Obligations (including, without limitation, any Guaranteed Obligations resulting
from extension of credit by such other Person under or in connection with the
Loan Documents) shall be and remain Guaranteed Obligations entitled to the
benefit of the Agreement.
"Guaranty Equivalent": A Person (the "Deemed Guarantor") shall
be deemed to be subject to a Guaranty Equivalent in respect of any indebtedness,
obligation or liability (the "Assured Obligation") of another Person (the
"Deemed Obligor") if the Deemed Guarantor directly or indirectly guarantees,
becomes
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surety for, endorses, assumes, agrees to indemnify the Deemed Obligor against,
or otherwise agrees, becomes or remains liable (contingently or otherwise) for,
such Assured Obligation. Without limitation, a Guaranty Equivalent shall be
deemed to exist if a Deemed Guarantor agrees, becomes or remains liable
(contingently or otherwise), directly or indirectly: (a) to purchase or assume,
or to supply funds for the payment, purchase or satisfaction of, an Assured
Obligation, (b) to make any loan, advance, capital contribution or other
investment in, or to purchase or lease any property or services from, a Deemed
Obligor (i) to maintain the solvency of the Deemed Obligor, (ii) to enable the
Deemed Obligor to meet any other financial condition, (iii) to enable the Deemed
Obligor to satisfy any Assured Obligation or to make any Stock Payment or any
other payment, or (iv) to assure the holder of such Assured Obligation against
loss, (c) to purchase or lease property or services from the Deemed Obligor
regardless of the non-delivery of or failure to furnish of such property or
services, (d) in a transaction having the characteristics of a take-or-pay or
throughput contract or as described in paragraph 6 of FASB Statement of
Financial Accounting Standards No. 47, or (e) in respect of any other
transaction the effect of which is to assure the payment or performance (or
payment of damages or other remedy in the event of nonpayment or nonperformance)
of any Assured Obligation.
"Indebtedness" of a Person shall mean (without duplication):
(a) All obligations on account of money borrowed by, or credit
extended to or on behalf of, or for or on account of deposits with or
advances to, such Person;
(b) All obligations of such Person evidenced by bonds,
debentures, notes or similar instruments (except trade accounts payable
arising in the ordinary course of business);
(c) All obligations of such Person for the deferred purchase
price of property or services;
(d) All obligations secured by a Lien on property owned by
such Person (whether or not assumed); and all obligations of such
Person under Capitalized Leases (without regard to any limitation of
the rights and remedies of the holder of such Lien or the lessor under
such Capitalized Lease to repossession or sale of such property);
(e) The unreimbursed amount of all drawings under any letter
of credit issued for the account of such Person;
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(f) All obligations of such Person in respect of acceptances
or similar obligations issued for the account of such Person;
(g) All obligations of such Person under a product financing
or similar arrangement described in paragraph 8 of FASB Statement of
Accounting Standards No. 49 or any similar requirement of GAAP;
(h) All obligations of such Persons under any Swaps; and
(i) All indebtedness of others as to which such Person is a
Deemed Guarantor under a Guaranty Equivalent.
"Indemnified Parties" shall mean the Lender and its
affiliates, and their respective directors, officers, employees, attorneys and
agents.
"Law" shall mean any law (including common law), constitution,
statute, treaty, convention, regulation, rule, ordinance, order, injunction,
writ, decree or award of any Governmental Authority.
"Letter of Credit" shall have the meaning set forth in Section
3.01 hereof.
"LIBID Rate" as of any Funding Breakage Date shall mean the
rate of interest determined in good faith by the Lender in accordance with its
usual procedures (which determination shall be conclusive) to be the average of
rates per annum for deposits in Dollars bid for by major money center banks in
the euro-dollar interbank market for delivery on the Funding Breakage Date,
which deposits are of an amount comparable to the Funding Segment that is paid,
prepaid or converted to the Base Rate Option and which deposits mature on the
last day of the corresponding Euro-Rate Funding Period (or if no such deposits
mature on such date, the rate determined by standard securities interpolation
methods as applied to deposits maturing as close as possible to, but earlier
than, such date, and to deposits maturing as close as possible to, but later
than, such date).
"License Agreement" shall mean that certain Trademark/Service
Mark License Agreement, dated as of October 1, 1992, between BB Technologies,
Inc. and the Borrower, as amended by Amendment No. 1 to the Trademark/Service
Mark License Agreement, dated as of December 21, 1993, Amendment No. 2 to the
Trademark/Service Mark License Agreement, dated as of May 6, 1994, and Amendment
No. 3 to the Trademark/Service Mark License
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<PAGE> 17
Agreement, dated as of July 1, 1995, and, subject to Section 7.15, as amended,
modified or supplemented from time to time.
"Lien" shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, including but not limited to any conditional sale or title
retention arrangement, and any assignment, deposit arrangement or lease intended
as, or having the effect of, security.
"Loan Documents" shall mean this Agreement, the Revolving
Credit Note and all other agreements and instruments extending, renewing,
refinancing or refunding any indebtedness, obligation or liability arising under
any of the foregoing, in each case as the same may be amended, modified or
supplemented from time to time hereafter.
"Loan Party" shall mean the Borrower and the Guarantor.
"London Business Day" shall mean a day for dealing in deposits
in Dollars by and among banks in the London interbank market and which is a
Business Day.
"Material Adverse Effect" shall mean: (a) a material adverse
effect on the business, operations, condition (financial or otherwise) or
prospects of a Loan Party and its Subsidiaries taken as a whole, (b) a material
adverse effect on the ability of any Loan Party to perform or comply with any of
the terms and conditions of any Loan Document, or (c) an adverse effect on the
legality, validity, binding effect, enforceability or admissibility into
evidence of any Loan Document, or the ability of the Lender to enforce any
rights or remedies under or in connection with any Loan Document.
"Multiemployer Plan" shall mean any employee benefit plan
which is a "multiemployer plan" within the meaning of Section 4001(a)(3) of
ERISA and to which the Borrower or any Controlled Group Member has or had an
obligation to contribute.
"Net Income" of any Person for any period shall mean the net
earnings (or loss) after taxes of such Person for such period determined in
accordance with GAAP (exclusive of principles of consolidation).
"Notional Euro-Rate Funding Office" shall have the meaning
given to that term in Section 2.12(a) hereof.
"Obligations" shall mean all indebtedness, obligations and
liabilities of the Borrower to the Lender from time to time
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<PAGE> 18
arising under or in connection with or related to or evidenced by or secured by
or under color of this Agreement or any other Loan Document, and all extensions,
renewals or refinancings thereof, whether such indebtedness, obligations or
liabilities are direct or indirect, otherwise secured or unsecured, joint or
several, absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising. Without limitation of the
foregoing, such indebtedness, obligations and liabilities include the principal
amount of the Revolving Credit Loans, Reimbursement Obligations, interest, fees,
indemnities or expenses under or in connection with this Agreement or any other
Loan Document, and all extensions, renewals and refinancings thereof, whether or
not such Revolving Credit Loans were made or the Letters of Credit were issued
in compliance with the terms and conditions of this Agreement or in excess of
the obligation of the Lender to lend and to issue Letters of Credit. Obligations
shall remain Obligations notwithstanding any assignment or transfer or any
subsequent assignment or transfer of any of the Obligations or any interest
therein.
"Office," when used in connection with the Lender, shall mean
its office located at Three Mellon Bank Center, Pittsburgh, Pennsylvania 15259,
or at such other office or offices of the Lender or any branch, subsidiary or
affiliate thereof as may be designated in writing from time to time by the
Lender to the Borrower.
"Option" shall mean the Base Rate Option or the Euro-Rate
Option or the ABS Rate Option, as the case may be.
"Participant" shall have the meaning set forth in Section
10.13(b) hereof.
"PBGC" means the Pension Benefit Guaranty Corporation
established under Title IV of ERISA or any other governmental agency, department
or instrumentality succeeding to the functions of said corporation.
"Pension-Related Event" shall mean any of the following events
or conditions:
(a) Any action is taken by any Person (i) to terminate, or
which would result in the termination of, a Plan, either pursuant to
its terms or by operation of law (including, without limitation, any
amendment of a Plan which would result in a termination under Section
4041(e) of ERISA), or (ii) to have a trustee appointed for a Plan
pursuant to Section 4042 of ERISA;
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<PAGE> 19
(b) PBGC notifies any Person of its determination that an
event described in Section 4042 of ERISA has occurred with respect to a
Plan, that a Plan should be terminated, or that a trustee should be
appointed for a Plan;
(c) Any Reportable Event occurs with respect to a Plan;
(d) Any action occurs or is taken which could result in any
Loan Party becoming subject to liability for a complete or partial
withdrawal by any Person from a Multiemployer Plan (including, without
limitation, seller liability incurred under Section 4204(a)(2) of
ERISA), or any Loan Party or any Controlled Group Member receives from
any Person a notice or demand for payment on account of any such
alleged or asserted liability; or
(e) (i) There occurs any failure to meet the minimum funding
standard under Section 302 of ERISA or Section 412 of the Code with
respect to a Plan, or any tax return is filed showing any tax payable
under Section 4971(a) of the Code with respect to any such failure, or
any Loan Party or any Controlled Group Member receives a notice of
deficiency from the Internal Revenue Service with respect to any
alleged or asserted such failure, or (ii) any request is made by any
Person for a variance from the minimum funding standard, or an
extension of the period for amortizing unfunded liabilities, with
respect to a Plan.
"Person" shall mean an individual or a corporation,
partnership, trust, unincorporated association, joint venture, joint-stock
company, Governmental Authority or any other entity.
"Plan" means any employee pension benefit plan within the
meaning of Section 3(2) of ERISA (other than a Multiemployer Plan) covered by
Title IV of ERISA by reason of Section 4021 of ERISA, of which any Loan Party or
any Controlled Group Member is or has been within the preceding five (5) years a
"contributing sponsor" within the meaning of Section 4001(a)(13) of ERISA, or
which is or has been within the preceding five (5) years maintained for
employees of any Loan Party or any Controlled Group Member.
"Portion" shall mean the Base Rate Portion, the Euro-Rate
Portion or the ABS Rate Portion, as the case may be.
"Postretirement Benefits" shall mean any benefits, other than
retirement income, provided by any Loan Party to retired employees, or to their
spouses, dependents or beneficiaries,
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<PAGE> 20
including, without limitation, group medical insurance or benefits, or group
life insurance or death benefits.
"Potential Default" shall mean any event or condition which
with notice, passage of time or a determination by the Lender, or any
combination of the foregoing, would constitute an Event of Default.
"Prime Rate" as used herein, shall mean the interest rate per
annum announced from time to time by Mellon Bank, N.A. as its prime rate.
"Reimbursement Obligations" shall have the meaning set forth
in Section 3.04 hereof.
"Reportable Event" means (a) a reportable event described in
Section 4043 of ERISA and regulations thereunder, (b) a withdrawal by a
substantial employer from a Plan to which more than one employer contributes, as
referred to in Section 4063(b) of ERISA, (c) a cessation of operations at a
facility causing more than twenty percent (20%) of Plan participants to be
separated from employment, as referred to in Section 4068(f) of ERISA, or (d) a
failure to make a required installment or other payment with respect to a Plan
when due in accordance with Section 412 of the Code or Section 302 of ERISA
which causes the total unpaid balance of missed installments and payments
(including unpaid interest) to exceed $750,000.
"Responsible Officer" with respect to any Loan Party shall
mean the Chief Executive Officer, President, any Vice President, Treasurer,
Chief Financial Officer or Controller of such Loan Party.
"Revolving Credit Commitment" shall have the meaning set forth
in Section 2.01(a) hereof.
"Revolving Credit Commitment Fee" shall have the meaning set
forth in Section 2.02 hereof.
"Revolving Credit Committed Amount" shall mean $49,000,000.
"Revolving Credit Extensions of Credit" shall have the meaning
set forth in Section 2.01(a) hereof.
"Revolving Credit Loans" shall have the meaning set forth in
Section 2.01(a) hereof.
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<PAGE> 21
"Revolving Credit Maturity Date" shall mean September 30,
2002.
"Revolving Credit Note" shall mean the promissory note of the
Borrower executed and delivered under Section 2.01(c) hereof, any promissory
note issued in substitution therefor under Section 2.12(b), together with all
extensions, renewals, refinancings or refundings thereof in whole or part.
"Solvent" means, with respect to any Person at any time, that
at such time (a) the sum of the debts and liabilities (including, without
limitation, contingent liabilities) of such Person is not greater than all of
the assets of such Person at a fair valuation, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (c) such Person has not incurred, will not incur,
does not intend to incur, and does not believe that it will incur, debts or
liabilities (including, without limitation, contingent liabilities) beyond such
person's ability to pay as such debts and liabilities mature, (d) such Person is
not engaged in, and is not about to engage in, a business or a transaction for
which such person's property constitutes or would constitute unreasonably small
capital, and (e) such Person is not otherwise insolvent as defined in, or
otherwise in a condition which could in any circumstances then or subsequently
render any transfer, conveyance, obligation or act then made, incurred or
performed by it avoidable or fraudulent pursuant to, any Law that may be
applicable to such Person pertaining to bankruptcy, insolvency or creditors'
rights (including but not limited to the Bankruptcy Code of 1978, as amended,
and, to the extent applicable to such Person, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act, or any other applicable Law pertaining
to fraudulent conveyances or fraudulent transfers or preferences).
"Standard Notice" shall mean an irrevocable notice provided to
the Lender on a Business Day which is
(a) At least one (1) Business Day in advance in the case of
selection of, conversion to or renewal of the Base Rate Option or the
ABS Rate Option or prepayment of any Base Rate Portion or any ABS Rate
Portion; and
(b) At least three (3) London Business Days in advance in the
case of selection of the Euro-Rate Option of any Euro-Rate Portion.
Standard Notice must be provided no later than 10:00 a.m., Pittsburgh time, on
the last day permitted for such notice.
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<PAGE> 22
"Stock Payment" by any Person shall mean any dividend,
distribution or payment of any nature (whether in cash, securities, or other
property) on account of or in respect of any shares of the capital stock (or
warrants, options or rights therefor) of such Person, including but not limited
to any payment on account of the purchase, redemption, retirement, defeasance or
acquisition of any shares of the capital stock (or warrants, options or rights
therefor) of such Person, in each case regardless of whether required by the
terms of such capital stock (or warrants, options or rights) or any other
agreement or instrument.
"Subsidiary" of a Person at any time shall mean any
corporation of which a majority (by number of shares or number of votes) of any
class of outstanding capital stock normally entitled to vote for the election of
one or more directors (regardless of any contingency which does or may suspend
or dilute the voting rights of such class) is at such time owned directly or
indirectly, beneficially or of record, by such Person or one or more
Subsidiaries of such Person, and any trust of which a majority of the beneficial
interest is at such time owned directly or indirectly, beneficially or of
record, by such Person or one or more Subsidiaries of such Person.
"Swaps" shall mean, with respect to any Person, payment
obligations with respect to interest rate swaps, currency swaps and similar
obligations obligating such Person to make payments, whether periodically or
upon the happening of a contingency. For the purposes of this Agreement, the
amount of the obligation under any Swap shall be the amount determined in
respect thereof as of the end of the then most recently ended fiscal quarter of
such Person, based on the assumption that such Swap had terminated at the end of
such fiscal quarter, and in making such determination, if any agreement relating
to such Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Taxes" shall have the meaning set forth in Section 2.11(a)
hereof.
1.02. Construction. Unless the context of this Agreement
otherwise clearly requires, references to the plural include the singular, the
singular the plural and the part the whole; "or" has the inclusive meaning
represented by the phrase "and/or"; and "property" includes all properties and
assets of any kind or nature, tangible or intangible, real, personal or mixed.
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References in this Agreement to "determination" (and similar terms) by the
Lender include good faith estimates by the Lender (in the case of quantitative
determinations) and good faith beliefs by the Lender (in the case of qualitative
determinations). The words "hereof," "herein," "hereunder" and similar terms in
this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. References herein to "out-of-pocket expenses" of a
Person (and similar terms) include, but are not limited to, the reasonable fees
of in-house counsel and other in-house professionals of such Person to the
extent that such fees are routinely identified and specifically charged under
such Person's normal cost accounting system. The section and other headings
contained in this Agreement and the Table of Contents preceding this Agreement
are for reference purposes only and shall not control or affect the construction
of this Agreement or the interpretation thereof in any respect. Section,
subsection and exhibit references are to this Agreement unless otherwise
specified.
1.03. Accounting Principles.
(a) As used herein, "GAAP" shall mean generally accepted
accounting principles as such principles shall be in effect at the Relevant
Date, subject to the provisions of this Section 1.03. As used herein, "Relevant
Date" shall mean the date a relevant computation or determination is to be made
or the date of relevant financial statements, as the case may be.
(b) Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters shall be
made, and all financial statements to be delivered pursuant to this Agreement
shall be prepared, in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms shall
have the meanings ascribed to such terms by GAAP.
(c) If any change in GAAP after the date of this Agreement is
or shall be required to be applied to transactions then or thereafter in
existence, and a violation of one or more provisions of this Agreement shall
have occurred or in the opinion of the Borrower would likely occur which would
not have occurred or be likely to occur if no change in accounting principles
had taken place,
(i) The Lender agrees that such violation shall not be
considered to constitute an Event of Default or a Potential Default for
a period of ninety (90) days from the date the Borrower notifies the
Lender of the application of this Section 1.03(c);
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<PAGE> 24
(ii) The Borrower and the Lender agree in such event to negotiate
in good faith an amendment of this Agreement which shall approximate to
the extent possible the economic effect of the original financial
covenants after taking into account such change in GAAP; and
(iii) If the Borrower and the Lender are unable to negotiate such an
amendment within such ninety-day period, the Borrower shall have the
option of (A) prepaying the Revolving Credit Loans and causing the
cancellation of any Letters of Credit (pursuant to applicable
provisions hereof) or (B) submitting the drafting of such an amendment
to a firm of independent certified public accountants of nationally
recognized standing acceptable to the Borrower and the Lender, which
shall complete its draft of such amendment within ninety (90) days of
submission; if the Borrower and the Lender cannot agree, the firm shall
be selected by binding arbitration in the City of Pittsburgh,
Pennsylvania, in accordance with the rules then being used by the
American Arbitration Association. If the Borrower does not exercise
either such option within said period, then as used in this Agreement,
"GAAP" shall mean generally accepted accounting principles in effect at
the Relevant Date. The Lender agrees that if the Borrower elects the
option in clause (B) above, until such firm has been selected and
completes drafting such amendment, no such violation shall constitute
an Event of Default or a Potential Default.
(d) If any change in GAAP after the date of this Agreement is
required to be applied to transactions or conditions then or thereafter in
existence, and the Lender shall assert that the effect of such change is or
shall likely be to distort materially the effect of any of the definitions of
financial terms in Article I hereof or any of the covenants of the Borrower in
Article VII hereof (the "Financial Provisions"), so that the intended economic
effect of any of the Financial Provisions will not in fact be accomplished,
(i) The Lender shall notify the Borrower of such assertion,
specifying the change in GAAP which is objected to, and until otherwise
determined as provided below, the specified change in GAAP shall not be
made by the Borrower in its financial statements for the purpose of
applying the Financial Provisions; and
(ii) The Borrower and the Lender shall follow the procedures set
forth in paragraph (ii) and the first sentence of paragraph (iii) of
subsection (c) of this Section. If the
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<PAGE> 25
Borrower and the Lender are unable to agree on an amendment as provided
in said paragraph (ii) and if the Borrower does not exercise either
option set forth in the first sentence of said paragraph (iii) within
the specified period, then as used in this Agreement "GAAP" shall mean
generally accepted accounting principles in effect at the Relevant
Date, except that the specified change in GAAP which is objected to by
the Lender shall not be made in applying the Financial Provisions. The
Lender agrees that if the Borrower elects the option in clause (B) of
the first sentence of said paragraph (iii), until such independent firm
has been selected and completes drafting such amendment, the specified
change in GAAP shall not be made in applying the Financial Provisions.
(e) All expenses of compliance with this Section 1.03 shall be
paid for by the Borrower.
ARTICLE II
REVOLVING CREDIT
2.01. Revolving Credit Loans.
(a) Revolving Credit Commitments. Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
the Lender agrees (such agreement being herein called the "Revolving Credit
Commitment") to make loans (the "Revolving Credit Loans") to the Borrower at any
time or from time to time on or after the date hereof and to but not including
the Revolving Credit Maturity Date. The Lender shall have no obligation to make
any Revolving Credit Loan to the extent that the sum of (a) the aggregate
principal amount of the Revolving Credit Loans at any time outstanding and (b)
the aggregate face amount of all Letters of Credit at any time outstanding (such
sum being hereinafter referred to as the "Revolving Credit Extensions of
Credit") would exceed the Revolving Credit Committed Amount at such time.
(b) Nature of Credit. Within the limits of time and amount set
forth in this Section 2.01, and subject to the provisions of this Agreement, the
Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder.
(c) Revolving Credit Note. The obligation of the Borrower to
repay the unpaid principal amount of the Revolving Credit Loans made to it by
the Lender and to pay interest thereon shall be evidenced in part by a
promissory note of the Borrower, dated the Closing Date, in substantially the
form attached hereto
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<PAGE> 26
as Exhibit A, with the blanks appropriately filled, payable to the order of the
Lender in a face amount equal to the Revolving Credit Committed Amount.
(d) Maturity. To the extent not due and payable earlier, the
Revolving Credit Loans shall be due and payable on the Revolving Credit Maturity
Date and, to the extent that the aggregate Revolving Credit Extensions of Credit
at any time outstanding is in excess of the Revolving Credit Committed Amount at
such time (whether as a result of the reduction of the Revolving Credit
Committed Amount or otherwise), a portion of the Revolving Credit Loans in an
amount equal to such excess shall be immediately due and payable.
2.02. Revolving Credit Commitment Fee. The Borrower shall pay
to the Lender a commitment fee calculated at the Commitment Fee Rate for each
day from and including the date hereof to but not including the Revolving Credit
Maturity Date (or such earlier date on which the Revolving Credit Commitment
terminates), on the amount (not less than zero) equal to (a) the Revolving
Credit Committed Amount minus (b) Revolving Credit Extensions of Credit on such
day. Such Revolving Credit Commitment Fee shall be due and payable for the
preceding period for which such fee has not been paid (x) on the first (1st) day
of each January, April, July and October and (y) on the date of each reduction
of the Revolving Credit Committed Amount on the amount so reduced and (z) on the
Revolving Credit Maturity Date. For purposes hereof, the "Commitment Fee Rate"
for each day shall mean the applicable percentage set forth in Annex A based on
the Applicable Tier on such day times 1/360.
2.03. Making of Revolving Credit Loans. Whenever the Borrower
desires that the Lender make a Revolving Credit Loan, the Borrower shall provide
Standard Notice to the Lender setting forth the following information:
(a) The date, which shall be a Business Day, on which such
proposed Revolving Credit Loan is to be made;
(b) The principal amount of such proposed Revolving Credit
Loan, which shall be the sum of the principal amounts selected pursuant to
clause (c) of this Section 2.03, and which shall be an integral multiple of
$100,000 not less than $100,000;
(c) The interest rate Option or Options selected in accordance
with Section 2.04(a) hereof and the principal amounts selected in accordance
with Section 2.04(d) hereof of the Base Rate Portion and the ABS Rate Portion
and each Funding Segment of the Euro-Rate Portion of such proposed Revolving
Credit Loan; and
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<PAGE> 27
(d) With respect to each such Funding Segment of such proposed
Revolving Credit Loan, the Euro-Rate Funding Period to apply to such Funding
Segment, selected in accordance with Section 2.04(c) hereof.
Unless any applicable condition specified in Article V hereof has not been
satisfied, on the date specified in such Standard Notice, the Lender shall make
the proceeds of the Revolving Credit Loan available to the Borrower in funds
immediately available at the Lender's Office.
2.04. Interest Rates.
(a) Optional Bases of Borrowing. The unpaid principal amount
of the Revolving Credit Loans shall bear interest for each day until due on one
or more bases selected by the Borrower from among the interest rate Options set
forth below. Subject to the provisions of this Agreement, the Borrower may
select different Options to apply simultaneously to different Portions of the
Revolving Credit Loans and may select different Funding Segments to apply
simultaneously to different parts of the Euro-Rate Portion of the Revolving
Credit Loans. The aggregate number of Funding Segments applicable to the
Euro-Rate Portion of the Revolving Credit Loans at any time shall not exceed
five (5).
(i) Base Rate Option: A rate per annum (computed on the basis of a
year of 360 days and actual days elapsed) for each day equal to the
Base Rate for such day. The "Base Rate" for any day shall mean the
Prime Rate for such day such interest rate to change automatically from
time to time effective as of the effective date of each change in the
Prime Rate.
(ii) Euro-Rate Option: A rate per annum (based on a year of 360
days and actual days elapsed) for each day equal to the Euro-Rate for
such day plus the Applicable Margin for such day. The "Euro-Rate" for
any day shall mean for each Funding Segment of the Euro-Rate Portion
corresponding to a proposed or existing Euro-Rate Funding Period the
rate per annum determined by the Lender by dividing (the resulting
quotient to be rounded upward to the nearest 1/1000 of 1%) (A) the rate
of interest (which shall be the same for each day in such Euro-Rate
Funding Period) determined in good faith by the Lender in accordance
with its usual procedures (which determination shall be conclusive) to
be the average of the rates per annum for deposits in Dollars offered
to major money center banks in the London interbank market at
approximately 11:00 a.m., London time, two (2) London
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<PAGE> 28
Business Days prior to the first day of such Euro-Rate Funding Period
for delivery on the first day of such Euro-Rate Funding Period in
amounts comparable to such Funding Segment and having maturities
comparable to such Euro-Rate Funding Period (except that the Euro-Rate
with respect to a two-week Euro-Rate Funding Period shall be determined
on the basis of deposits having a maturity of one month and not two
weeks) by (B) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage.
The "Euro-Rate" may also be expressed by the following
formula:
[average of the rates offered to major money]
[center banks in the London interbank market]
Euro-Rate = [determined by the Lender per subsection (A)]
[1.00 - Euro-Rate Reserve Percentage ]
"Euro-Rate Reserve Percentage" for any day shall mean the
percentage (expressed as a decimal, rounded upward to the nearest
1/1000 of 1%), as determined in good faith by the Lender (which
determination shall be conclusive), which is in effect on such day as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) representing the maximum reserve requirement (including,
without limitation, supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred
to as "Eurocurrency liabilities") of a member bank in such System. The
Euro-Rate shall be adjusted automatically as of the effective date of
each change in the Euro-Rate Reserve Percentage. The Euro-Rate Option
shall be calculated in accordance with the foregoing whether or not the
Lender is actually required to hold reserves in connection with its
eurocurrency funding or, if required to hold such reserves, is required
to hold reserves at the "Euro-Rate Reserve Percentage" as herein
defined.
The Lender shall give prompt notice to the Borrower of the
Euro-Rate determined or adjusted in accordance with the definition of
the Euro-Rate, which determination or adjustment shall be conclusive if
made in good faith.
(iii) ABS Rate Option: A rate per annum (computed on the basis
of a year of 360 days and the actual days elapsed) for each day equal
to the ABS Rate for such day plus one half of one percent (0.50%), such
interest rate to change automatically from time to time effective as of
the effective date of each change in the ABS Rate.
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<PAGE> 29
(b) Applicable Margin. The Applicable Margin for each day
shall mean the applicable percentage set forth in Annex A based on the
Applicable Tier on such day.
(c) Euro-Rate Funding Periods. At any time when the Borrower
shall select, convert to or renew the Euro-Rate Option to apply to any part of
the Revolving Credit Loans, the Borrower shall specify one or more periods
during which the Euro-Rate Option shall apply, such periods being two weeks or
one, two, three or six months ("Euro-Rate Funding Period"); provided, that (i)
each Euro-Rate Funding Period shall begin on a London Business Day, and the term
"month", when used in connection with a Euro-Rate Funding Period, shall be
construed in accordance with prevailing practices in the interbank eurodollar
market at the commencement of such Euro-Rate Funding Period, as determined in
good faith by the Lender (which determination shall be conclusive); (ii) the
Borrower may not select a Euro-Rate Funding Period that would end after the
Revolving Credit Maturity Date; and (iii) the Borrower shall, in selecting any
Euro-Rate Funding Period, allow for scheduled mandatory payments of the
Revolving Credit Loans.
(d) Transactional Amounts. Every selection of, conversion
from, conversion to or renewal of an interest rate Option and every payment or
prepayment of any Revolving Credit Loans shall be in a principal amount such
that after giving effect thereto the aggregate principal amount of (i) the Base
Rate Portion or the ABS Rate Portion shall be for any aggregate principal amount
and (ii) each Funding Segment of the Euro-Rate Portion of the Revolving Credit
Loans shall be $100,000 or an integral multiple thereof.
(e) Euro-Rate Unascertainable; Impracticability. If
(i) on any date on which a Euro-Rate would otherwise be set
the Lender shall have determined in good faith (which determination
shall be conclusive) that:
(A) adequate and reasonable means do not exist for
ascertaining such Euro-Rate,
(B) a contingency has occurred which materially and
adversely affects the interbank eurodollar market, or
(C) the effective cost to the Lender of funding a
proposed Funding Segment of the Euro-Rate Portion from a
Corresponding Source of Funds shall exceed the Euro-Rate
applicable to such Funding Segment, or
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(ii) at any time the Lender shall have determined in good
faith (which determination shall be conclusive) that the making,
maintenance or funding of any part of the Euro-Rate Portion has been
made impracticable or unlawful by compliance by the Lender or a
Notional Euro-Rate Funding Office in good faith with any Law or
guideline or interpretation or administration thereof by any
Governmental Authority charged with the interpretation or
administration thereof or with any request or directive of any such
Governmental Authority (whether or not having the force of law);
then, and in any such event, the Lender may notify the Borrower of such
determination. Upon such date as shall be specified in such notice (which shall
not be earlier than the date such notice is given), the obligation of the Lender
to allow the Borrower to select, convert to or renew the Euro-Rate Option shall
be suspended until the Lender shall have later notified the Borrower of the
Lender's determination in good faith (which determination shall be conclusive)
that the circumstance giving rise to such previous determination no longer
exist.
If the Lender notifies the Borrower of a determination under
subsection (ii) of this Section 2.04(e), the Euro-Rate Portion of the Revolving
Credit Loans shall automatically be converted to the Base Rate Option as of the
date specified in such notice (and accrued interest thereon shall be due and
payable on such date).
If at the time the Lender makes a determination under
subsection (i) or (ii) of this Section 2.04(e) the Borrower previously has
notified the Lender that it wishes to select, convert to or renew the Euro-Rate
Option with respect to any proposed Revolving Credit Loan but such Revolving
Credit Loan has not yet been made, such notification shall be deemed to provide
for selection of, conversion to or renewal of the Base Rate Option instead of
the Euro-Rate Option with respect to such Loan.
2.05. Conversion or Renewal of Interest Rate Options.
(a) Conversion or Renewal. Subject to the provisions of
Section 2.10(b) hereof, and if no Event of Default or Potential Default shall
have occurred and be continuing or shall exist, the Borrower may convert any
part of the Revolving Credit Loans from any interest rate Option or Options to
one or more different interest rate Options and may renew the Euro-Rate Option
as to any Funding Segment of the Euro-Rate Portion:
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(i) At any time with respect to conversion from the Base Rate
Option or the ABS Rate Option; or
(ii) At the expiration of any Euro-Rate Funding Period with
respect to conversions from or renewals of the Euro-Rate Option as to
the Funding Segment corresponding to such expiring Euro-Rate Funding
Period.
Whenever the Borrower desires to convert or renew any interest rate Option or
Options, the Borrower shall provide to the Lender Standard Notice setting forth
the following information:
(v) The date, which shall be a Business Day, on which the
proposed conversion or renewal is to be made;
(w) The principal amounts selected in accordance with Section
2.04(d) hereof of the Base Rate Portion and the ABS Rate Option and
each Funding Segment of the Euro-Rate Portion to be converted from or
renewed;
(x) The interest rate Option or Options selected in accordance
with Section 2.04(a) hereof and the principal amounts selected in
accordance with Section 2.04(d) hereof of the Base Rate Portion and the
ABS Rate Portion and each Funding Segment of the Euro-Rate Portion to
be converted to; and
(y) With respect to each Funding Segment to be converted to or
renewed, the Euro-Rate Funding Period selected in accordance with
Section 2.04(c) hereof to apply to such Funding Segment.
Standard Notice having been so provided, after the date specified in such
Standard Notice, interest shall be calculated upon the principal amount of the
Revolving Credit Loans as so converted or renewed. Interest on the principal
amount of any part of the Revolving Credit Loans converted or renewed
(automatically or otherwise) shall be due and payable on the conversion or
renewal date.
(b) Failure to Convert or Renew. Absent due notice from the
Borrower of conversion or renewal in the circumstances described in Section
2.05(a)(ii) hereof, any part of the Euro-Rate Portion for which such notice is
not received shall be converted automatically to the Base Rate Option on the
last day of the expiring Euro-Rate Funding Period.
2.06. Prepayments Generally. Whenever the Borrower desires or
is required to prepay any part of Revolving Credit
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Loans, it shall provide Standard Notice to the Lender setting forth the
following information:
(a) The date, which shall be a Business Day, on which the
proposed prepayment is to be made;
(b) The total principal amount of such prepayment, which shall
be the sum of the principal amounts selected pursuant to clause (c) of this
Section 2.06; and
(c) The principal amounts selected in accordance with Section
2.04(d) hereof of the Base Rate Portion and the ABS Rate Portion and each part
of each Funding Segment of the Euro-Rate Portion to be prepaid.
Standard Notice having been so provided, on the date specified
in such Standard Notice, the principal amounts of the Base Rate Portion and the
ABS Rate Portion and each part of the Euro-Rate Portion specified in such
notice, together with interest on each such principal amount to such date, shall
be due and payable.
2.07. Optional Prepayments. The Borrower shall have the right
at its option from time to time to prepay the Revolving Credit Loans in whole or
part without premium or penalty (subject, however, to Section 2.10(b) hereof):
(a) At any time with respect to any part of the Base Rate
Portion and the ABS Rate Portion; or
(b) At the expiration of any Euro-Rate Funding Period with
respect to prepayment of the Euro-Rate Portion with respect to any part of the
Funding Segment corresponding to such expiring Euro-Rate Funding Period.
Any such prepayment shall be made in accordance with Section 2.06 hereof.
2.08. Interest Payment Dates. Interest on the Base Rate
Portion and the ABS Rate Portion shall be due and payable on the first (1st)
Business Day of each calendar month. Interest on each Funding Segment of the
Euro-Rate Portion shall be due and payable on the last day of the corresponding
Euro-Rate Funding Period. After maturity of any part of the Revolving Credit
Loans (by acceleration or otherwise), interest on such part of the Revolving
Credit Loans shall be due and payable on demand.
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2.09. Payments Generally; Interest on Overdue Amounts.
(a) Payments Generally. All payments and prepayments to be
made by the Borrower in respect of principal, interest, fees, indemnity,
expenses or other amounts due from the Borrower hereunder or under any Loan
Document shall be payable in Dollars by 12:00 o'clock Noon, Pittsburgh time, on
the day when due without presentment, demand, protest or notice of any kind, all
of which are hereby expressly waived, and an action therefor shall immediately
accrue, without setoff, counterclaim, withholding or other deduction of any kind
or nature. Such payments shall be made to the Lender at its Office in Dollars in
funds immediately available at such Office. Any payment or prepayment received
by the Lender after 12:00 o'clock Noon, Pittsburgh time, on any day shall be
deemed to have been received on the next succeeding Business Day.
(b) Interest on Overdue Amounts. To the extent permitted by
law, after there shall have become due (by acceleration or otherwise) principal,
interest, fees, indemnity, expenses or any other amounts due from the Borrower
hereunder or under any other Loan Document, such amounts shall bear interest for
each day until paid (before and after judgment), payable on demand, at a rate
per annum (in each case based on a year of 360 days and actual days elapsed)
which for each day shall be equal to the following:
(i) In the case of any part of the Euro-Rate Portion, (A)
until the end of the applicable then-current Euro-Rate Funding Period
at a rate per annum two percent (2%) above the rate otherwise
applicable to such part, and (B) thereafter in accordance with the
following clause (ii); and
(ii) In the case of any other amount due from the Borrower
hereunder or under any Loan Document, two percent (2%) above the
then-current Base Rate Option.
To the extent permitted by law, interest accrued on any amount which has become
due hereunder or under any Loan Document shall compound on a day-by-day basis,
and hence shall be added daily to the overdue amount to which such interest
relates.
2.10. Additional Compensation in Certain Circumstances.
(a) Increased Costs or Reduced Return Resulting From Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc. If any Law or guideline
or interpretation or application thereof by any Governmental Authority charged
with the interpretation or
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administration thereof or compliance with any request or directive of any
Governmental Authority (whether or not having the force of law) now existing or
hereafter adopted:
(i) subjects the Lender or any Notional Euro-Rate Funding
Office to any tax or changes the basis of taxation with respect to this
Agreement, the Revolving Credit Note, the Revolving Credit Loans, the
Letters of Credit or payments by the Borrower of principal, interest,
commitment fee or other amounts due from the Borrower hereunder or
under the Revolving Credit Note (except for taxes on the overall net
income or overall gross receipts of the Lender or such Notional
Euro-Rate Funding Office imposed by the jurisdictions (federal, state
and local) in which the Lender's principal office or Notional Euro-Rate
Funding Office is located),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments
to extend credit extended by, assets (funded or contingent) of,
deposits with or for the account of, other acquisitions of funds by,
the Lender or any Notional Euro-Rate Funding Office (other than
requirements expressly included herein in the determination of the
Euro-Rate hereunder),
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or
contingent) of, or credits or commitments to extend credit extended by,
the Lender or any Notional Euro-Rate Funding Office, or (B) otherwise
applicable to the obligations of the Lender or any Notional Euro-Rate
Funding Office under this Agreement, or
(iv) imposes upon the Lender or any Notional Euro-Rate Funding
Office any other condition or expense with respect to this Agreement,
the Revolving Credit Note or its making, maintenance or funding of any
Revolving Credit Loan, any Letter of Credit or any security therefor,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon the
Lender, any Notional Euro-Rate Funding Office or, in the case of clause (iii)
hereof, any Person controlling the Lender, with respect to this Agreement, the
Revolving Credit Note or the making, maintenance or funding of any Revolving
Credit Loan or any Letter of Credit (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the rate of return on the
Lender's or controlling
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Person's capital, taking into consideration the Lender's or controlling Person's
policies with respect to capital adequacy) by an amount which the Lender deems
to be material (the Lender being deemed for this purpose to have made,
maintained or funded each Funding Segment of the Euro-Rate Portion from a
Corresponding Source of Funds), the Lender may from time to time notify the
Borrower of the amount determined in good faith (using any averaging and
attribution methods) by the Lender (which determination shall be conclusive) to
be necessary to compensate the Lender or such Notional Euro-Rate Funding Office
for such increase, reduction or imposition. Such amount shall be due and payable
by the Borrower to the Lender five (5) Business Days after such notice is given,
together with an amount equal to interest on such amount from the date two (2)
Business Days after the date demanded until such due date at the Base Rate
Option. A certificate by the Lender as to the amount due and payable under this
Section 2.10(a) from time to time and the method of calculating such amount
shall be conclusive. The Lender agrees that it will use good faith efforts to
notify the Borrower of the occurrence of any event that would give rise to a
payment under this Section 2.10(a); provided, however, that any failure of the
Lender to give any such notice shall have no effect on the Borrower's
obligations hereunder.
(b) Funding Breakage. In addition to all other amounts payable
hereunder, if and to the extent for any reason any part of any Funding Segment
of any Euro-Rate Portion of the Revolving Credit Loans becomes due (by
acceleration or otherwise), or is paid, prepaid or converted to the Base Rate
Option (whether or not such payment, prepayment or conversion is mandatory or
automatic and whether or not such payment or prepayment is then due), on a day
other than the last day of the corresponding Euro-Rate Funding Period (the date
such amount so becomes due, or is so paid, prepaid or converted, being referred
to as the "Funding Breakage Date"), the Borrower shall pay the Lender an amount
("Funding Breakage Indemnity") determined by the Lender by calculating the
following amount: (A) the principal amount of such Funding Segment of the
Revolving Credit Loans owing to the Lender which so became due, or which was so
paid, prepaid or converted, times (B) the greater of (x) zero or (y) the rate of
interest applicable to such principal amount on the Funding Breakage Date minus
the market LIBID Rate as of the Funding Breakage Date, times (C) the number of
days from and including the Funding Breakage Date to but not including the last
day of such Funding Period, times (D) 1/360. Such Funding Breakage Indemnity
shall be due and payable on demand. In addition, the Borrower shall, on the due
date for payment of any Funding Breakage Indemnity, pay to the Lender an
additional amount equal to interest on such Funding Breakage Indemnity from the
Funding Breakage Date to but not including such
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due date at the Base Rate Option (calculated on the basis of a year of 360 days
and actual days elapsed). The amount payable to the Lender under this Section
2.10(b) shall be determined in good faith by the Lender, and such determination
shall be conclusive absent manifest error.
2.11. Taxes.
(a) Payments Net of Taxes. All payments made by the Borrower
under this Agreement or any other Loan Document shall be made free and clear of,
and without reduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, and all liabilities with respect
thereto, excluding
(i) income or franchise taxes imposed on the Lender by the
jurisdiction under the laws of which the Lender is organized or any
political subdivision or taxing authority thereof or therein or as a
result of a connection between the Lender and any jurisdiction other
than a connection resulting solely from this Agreement and the
transactions contemplated hereby, and
(ii) income or franchise taxes imposed by any jurisdiction in
which the Lender's lending offices which make or book Revolving Credit
Loans are located or any political subdivision or taxing authority
thereof or therein
(all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes"). If any Taxes are required to be
withheld or deducted from any amounts payable to the Lender under this Agreement
or any other Loan Document, the Borrower shall pay the relevant amount of such
Taxes and the amounts so payable to the Lender shall be increased to the extent
necessary to yield to the Lender (after payment of all Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement and the other Loan Documents. Whenever any Taxes are paid by the
Borrower with respect to payments made in connection with this Agreement or any
other Loan Document, as promptly as possible thereafter, the Borrower shall send
to the Lender a certified copy of an original official receipt received by the
Borrower showing payment thereof.
(b) Indemnity. The Borrower hereby indemnifies the Lender for
the full amount of all Taxes attributable to payments by or on behalf of the
Borrower hereunder or under any of the other Loan Documents, any Taxes paid by
the Lender, any present or
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future claims, liabilities or losses with respect to or resulting from any
omission to pay or delay in paying any Taxes (including any incremental Taxes,
interest or penalties that may become payable by the Lender as a result of any
failure to pay such Taxes), whether or not such Taxes were correctly or legally
asserted. Such indemnification shall be made within thirty (30) days from the
date the Lender makes written demand therefor.
2.12. Funding by Branch, Subsidiary or Affiliate.
(a) Notional Funding. The Lender shall have the right from
time to time, prospectively or retrospectively, without notice to the Borrower,
to deem any branch, subsidiary or affiliate of the Lender to have made,
maintained or funded any part of the Euro-Rate Portion at any time. Any branch,
subsidiary or affiliate so deemed shall be known as a "Notional Euro-Rate
Funding Office." The Lender shall deem any part of the Euro-Rate Portion of the
Revolving Credit Loans or the funding therefor to have been transferred to a
different Notional Euro-Rate Funding Office if such transfer would avoid or cure
an event or condition described in Section 2.04(e)(ii) hereof or would lessen
compensation payable by the Borrower under Section 2.10(a) hereof, and if the
Lender determines in its sole discretion that such transfer would be practicable
and would not have a material adverse effect on such part of the Revolving
Credit Loans, the Lender or any Notional Euro-Rate Funding Office (it being
assumed for purposes of such determination that each part of the Euro-Rate
Portion is actually made or maintained by or funded through the corresponding
Notional Euro-Rate Funding Office). Notional Euro-Rate Funding Offices may be
selected by the Lender without regard to the Lender's actual methods of making,
maintaining or funding Revolving Credit Loans or any sources of funding actually
used by or available to the Lender.
(b) Actual Funding. The Lender shall have the right from time
to time to make or maintain any part of the Euro-Rate Portion by arranging for a
branch, subsidiary or affiliate of the Lender to make or maintain such part of
the Euro-Rate Portion. The Lender shall have the right to (i) hold the Revolving
Credit Note for the benefit and account of such branch, subsidiary or affiliate
or (ii) request the Borrower to issue one or more promissory notes in the
principal amount of such Euro-Rate Portion, in substantially the form attached
hereto as Exhibit A, with the blanks appropriately filled, payable to such
branch, subsidiary or affiliate and with appropriate changes reflecting that the
holder thereof is not obligated to make any additional Revolving Credit Loans to
the Borrower. The Borrower agrees to comply promptly with any request under
subsection (ii) of this Section 2.12(b). If the Lender causes a branch,
subsidiary or
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affiliate to make or maintain any part of the Euro-Rate Portion hereunder, all
terms and conditions of this Agreement shall, except where the context clearly
requires otherwise, be applicable to such part of the Euro-Rate Portion and to
any note payable to the order of such branch, subsidiary or affiliate to the
same extent as if such part of the Euro-Rate Portion were made or maintained and
such note were the Revolving Credit Note.
ARTICLE III
LETTERS OF CREDIT
3.01. Letters of Credit. Subject to the terms and conditions
of this Agreement and relying upon the representations and warranties herein set
forth, the Lender agrees to issue for the account of the Borrower letters of
credit, up to a maximum aggregate face amount of $10,000,000 outstanding at any
time, in such form as may from time to time be approved by the Lender (each a
"Letter of Credit" and collectively the "Letters of Credit"); provided, that on
the date of the issuance of any Letter of Credit, and after giving effect to
such issuance, and on each date thereafter, the Revolving Credit Extensions of
Credit shall not exceed the Revolving Credit Committed Amount. Each Letter of
Credit shall (a) be in favor of such beneficiaries as the Borrower shall specify
from time to time (which shall be reasonably satisfactory to the Lender), (b)
have an expiration date no later then one (1) year from the date of issuance
thereof or, if earlier, the thirtieth (30th) day prior to the Revolving Credit
Maturity Date, unless the Lender in its sole discretion shall permit a Letter of
Credit to have an expiration date later than one (1) year from the date of
issuance thereof, and (c) be denominated in any currency issued by a nation
within which is located a banking institution with which the Lender maintains a
correspondent banking relationship at the time of issuance of such Letter of
Credit or such other currency acceptable to the Lender.
3.02. Letter of Credit Fees.
(a) Standby Letters of Credit.
(i) Issuance Fee. For each Standby Letter of Credit which the
Lender issues pursuant to this Agreement, the Borrower shall pay to the
Lender an issuance fee in an amount equal to the issuance fee
customarily charged by the Lender from time to time in connection with
the issuance of standby letters of credit.
(ii) Amendment Fee. For each amendment to a Standby Letter of
Credit which the Lender issues pursuant to this
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Agreement, the Borrower shall pay to the Lender an amendment fee in an
amount equal to the amendment fee customarily charged by the Lender
from time to time in connection with amendments to standby letters of
credit.
(iii) Commission. The Borrower shall pay to the Lender with
respect to each outstanding Standby Letter of Credit a fee at the rate
of one percent (1.00%) per annum on the undrawn stated amount of such
Standby Letter of Credit from time to time. The fee shall be payable
quarterly in advance on the date of issuance of such Standby Letter of
Credit and on the first day of each January, April, July and October
while such Standby Letter of Credit is outstanding.
(b) Documentary Letters of Credit.
(i) Issuance Fee and Charges. For each Documentary Letter of
Credit which the Lender issues pursuant to this Agreement, the Borrower
shall pay to the Lender an issuance fee and other customary charges in
an amount equal to the issuance fee and charges customarily charged by
the Lender from time to time in connection with the issuance of
documentary letters of credit.
(ii) Amendment or Transfer Fee. For each amendment to or
transfer of a Documentary Letter of Credit which the Lender issues
pursuant to this Agreement, the Borrower shall pay to the Lender an
amendment or transfer fee, as the case may be, in an amount equal to
the amendment or transfer fee, as the case may be, customarily charged
by the Lender from time to time in connection with amendments to and
transfers of documentary letters of credit.
(iii) Negotiation Fee. The Borrower shall pay a negotiation
fee to the Lender with respect to each drawing under a Documentary
Letter of Credit in an amount equal to the negotiation fee customarily
charged by the Lender from time to time in connection with drawings
under documentary letters of credit. Such negotiation fee shall be
payable at the time of each drawing on a Documentary Letter of Credit.
(iv) Commission. The Borrower shall pay to the Lender with
respect to each outstanding Documentary Letter of Credit a at the rate
of one and 25/100 percent (1.25%) per annum on the undrawn stated
amount of such Documentary Letter of Credit from time to time or such
higher rate customarily charged by the Lender from time to time with
respect to documentary letters of credit. The fee shall be payable
quarterly in advance on the date of issuance of such
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Documentary Letter of Credit and on the first day of each January,
April, July and October while such Documentary Letter of Credit is
outstanding.
3.03. Procedure for Issuance of Letters of Credit.
(a) Standby Letters of Credit. The Borrower shall,
concurrently with the execution and delivery of this Agreement, execute and
deliver to the Lender, a Continuing Letter of Credit Agreement in substantially
the form attached hereto as Exhibit B and the Borrower may from time to time
request the Lender to issue a Standby Letter of Credit in accordance with the
terms thereof.
(b) Documentary Letters of Credit. The Borrower may from time
to time request, upon at least three (3) Business Days' notice, the Lender to
issue a Documentary Letter of Credit by delivering to the Lender an Application
and Security Agreement (Documentary Letter of Credit) in substantially the form
attached hereto as Exhibit C or the Lender's then current form of application
(the "Documentary Letter of Credit Application"), completed to the satisfaction
of the Lender, together with such other certificates, documents and other papers
and information as the Lender may reasonably request. Upon receipt of any
Documentary Letter of Credit Application, the Lender will process such
Documentary Letter of Credit Application, and the other certificates, documents
and other papers delivered in connection therewith, in accordance with its
customary procedures and shall promptly issue such Documentary Letter of Credit
(but in no event earlier than two (2) Business Days after receipt by the Lender
of the Documentary Letter of Credit Application relating thereto) by issuing the
original of such Documentary Letter of Credit to the beneficiary thereof and by
furnishing a copy thereof to the Borrower.
3.04. Payments. The Borrower agrees (i) to reimburse the
Lender, not later than the Business Day next following any drawing, for any
payment made by the Lender under any Letter of Credit ("Reimbursement
Obligations") and (ii) to pay to the Lender interest on any unreimbursed portion
of any such payment from the date of such payment until reimbursement in full
thereof at a fluctuating rate per annum equal to the Base Rate plus two percent
(2%) per annum.
3.05. Increased Costs.
(a) In the event that any requirement of Law (or any change
therein or in the interpretation or application thereof) shall either (i)
impose, modify or hold applicable any reserve, special deposit or similar
requirement against letters of credit
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issued by the Lender or (ii) impose upon the Lender any other condition
regarding any Letter of Credit and the result of any event referred to in clause
(i) or (ii) above shall be to increase the cost to the Lender of issuing or
maintaining such Letter of Credit or to reduce any amount receivable in
connection therewith, then, in any such case the Borrower shall, without
duplication of any amounts paid pursuant to Subsection 2.10(a), promptly pay to
the Lender upon receipt of its demand setting forth in reasonable detail any
additional amounts which shall be sufficient to compensate the Lender for such
increased cost or reduced amount receivable, together with interest on each such
amount from the date two (2) Business Days after the date demanded until payment
in full thereof at the Prime Rate. A certificate as to the fact and amount of
such increased cost incurred by the Lender, or such reduced amount receivable as
a result of any event mentioned in clause (i) or (ii) above, submitted by the
Lender to the Borrower shall be conclusive in the absence of manifest error.
(b) In the event that the Lender shall have determined that
the adoption of any law, rule, regulation or guideline regarding capital
adequacy, or any change therein or in the interpretation or application thereof
or compliance by the Lender or any Person controlling the Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any central bank or Governmental Authority, including, without
limitation, the issuance of any final rule, regulation or guideline, does or
shall have the effect of reducing the rate of return on the Lender's or such
controlling Person's capital as a consequence of its obligations hereunder to a
level below that which the Lender or such Person could have achieved but for
such adoption, change or compliance (taking into consideration the Lender's or
such controlling Person's policies with respect to capital adequacy) by an
amount deemed by the Lender to be material, then from time to time, after
submission by a written request therefor, the Borrower shall promptly pay to the
Lender, without duplication of any amounts paid pursuant to subsection 2.10(a)
such additional amount or amounts as will compensate the Lender for such
reduction.
3.06. Further Assurances. The Borrower hereby agrees, from
time to time, to do and perform any and all acts and to execute any and all
further instruments reasonably requested by the Lender more fully to effect the
purposes of this Agreement insofar as it relates to the issuance of Letters of
Credit hereunder.
3.07. Obligations Absolute. The payment obligations of the
Borrower under Section 3.04 shall be unconditional and irrevocable and shall be
paid strictly in accordance with the
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terms of this Agreement under all circumstances, including, without limitation,
the following circumstances:
(a) any lack of validity or enforceability of any Letter of
Credit or any of the Loan Documents;
(b) any amendment or waiver of or any consent to departures
from all or any of the Loan Documents;
(c) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from any
guaranty;
(d) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against any beneficiary, or any
transferee, of any Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Lender, or any other
Person, whether in connection with this Agreement, the transactions contemplated
herein, or any unrelated transaction;
(e) any statement or any other document presented under any
Letter of Credit opened for its account proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(f) payment by the Lender under any Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit, except payment resulting solely from the gross negligence
or willful misconduct of the Lender; or
(g) any other circumstances or happening whatsoever, whether
or not similar to any of the foregoing, except payment by the Lender under any
Letter of Credit resulting solely from the gross negligence or willful
misconduct of the Lender.
3.08. Additional Provisions Regarding Letters of Credit. The
Borrower hereby indemnifies and holds the Lender harmless from and against any
and all claims, damages, losses, liabilities, costs or expenses whatsoever
(including reasonable attorneys' fees) which the Lender may incur (or which may
be claimed against the Lender by any entity or entities whatsoever) by reason of
or in connection with the execution and delivery or use or transfer of, or
payment of, or failure to pay under, any Letter of Credit, except for any
claims, damages, losses, liabilities, costs or expenses to the extent, but only
to the extent, caused by the Lender's deliberate breach of the terms of a Letter
of Credit or the gross negligence or willful misconduct of
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the Lender in determining whether a statement or draft presented under a Letter
of Credit complied with the terms of the Letter of Credit.
Neither the Lender nor any of its officers or directors shall
be liable or responsible for: (a) the use which may be made of any Letter of
Credit or for any acts or omissions of the beneficiary or any transferee in
connection therewith; (b) the 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 invalid, insufficient, fraudulent or forged; (c) payment
by the Lender against presentation of documents which do not comply with the
terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to a Letter of Credit; or (d) any other
circumstances whatsoever in making or failing to make payment under a Letter of
Credit, except only that the Borrower shall have a claim against the Lender, and
the Lender shall be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential, damages suffered by the
Borrower which were caused by the Lender's gross negligence, misfeasance or
willful misconduct in connection with the matters referred to in clauses (b)
through (d) above.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Loan Parties hereby represent and warrant to the Lender as
follows:
4.01. Corporate Status. Each Loan Party and each of its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each Loan Party
and each of its Subsidiaries has corporate power and authority to own its
property and to transact the business in which it is engaged or presently
proposes to engage. Each Loan Party and each of its Subsidiaries is duly
qualified to do business as a foreign corporation and is in good standing in all
jurisdictions in which the ownership of its properties or the nature of its
activities or both makes such qualification necessary or advisable. Schedule
4.01 hereof states as of the date hereof the jurisdiction of incorporation of
each Loan Party and each of its Subsidiaries, and the jurisdictions in which
each such Person is qualified to do business as a foreign corporation.
4.02. Corporate Power and Authorization. Each Loan Party has
corporate power and authority to execute, deliver,
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perform, and take all actions contemplated by, each Loan Document to which it is
a party, and all such action has been duly and validly authorized by all
necessary corporate proceedings on its part.
4.03. Execution and Binding Effect. This Agreement and each
other Loan Document to which any Loan Party is a party and which is required to
be delivered on or before the Closing Date pursuant to Section 5.01 hereof has
been duly and validly executed and delivered by each Loan Party which is a party
hereto or thereto, as the case may be. This Agreement and each such other Loan
Document to which such Loan Party is a party constitutes, and each other Loan
Document when executed and delivered by the applicable Loan Party will
constitute, the legal, valid and binding obligation of each Loan Party which is
a party hereto or thereto, as the case may be, enforceable against such Loan
Party in accordance with its terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency or other similar laws of general application
affecting the enforcement of creditors' rights or by general principles of
equity limiting the availability of equitable remedies.
4.04. Governmental Approvals and Filings. No approval, order,
consent, authorization, certificate, license, permit or validation of, or
exemption or other action by, or filing, recording or registration with, or
notice to, any Governmental Authority (collectively, "Governmental Action") is
or will be necessary or advisable in connection with execution and delivery of
any Loan Document by any Loan Party, consummation by any Loan Party of the
transactions herein or therein contemplated, performance of or compliance with
the terms and conditions hereof or thereof by any Loan Party or to ensure the
legality, validity, binding effect, enforceability or admissibility in evidence
hereof or thereof.
4.05. Absence of Conflicts. Neither the execution and delivery
of any Loan Document by any Loan Party, nor consummation by any Loan Party of
the transactions herein or therein contemplated, nor performance of or
compliance with the terms and conditions hereof or thereof by any Loan Party
does or will
(a) violate or conflict with any Law, or
(b) violate, conflict with or result in a breach of any term
or condition of, or constitute a default under, or result in (or give rise to
any right, contingent or otherwise, of any Person to cause) any termination,
cancellation, prepayment or acceleration of performance of, or result in the
creation or imposition of (or give rise to any obligation, contingent or
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otherwise, to create or impose) any Lien upon any property of any Loan Party or
any Subsidiary thereof pursuant to, or otherwise result in (or give rise to any
right, contingent or otherwise, of any Person to cause) any change in any right,
power, privilege, duty or obligation of any Loan Party or any Subsidiary thereof
under or in connection with (other than any such event which could not
reasonably be expected to have a Material Adverse Effect),
(i) the certificate of incorporation or by-laws (or other
constituent documents) of any Loan Party or any Subsidiary thereof,
(ii) any material agreement or instrument creating, evidencing
or securing any Indebtedness or Guaranty Equivalent to which any Loan
Party or any Subsidiary thereof is a party or by which any of them or
any of their respective properties (now owned or hereafter acquired)
may be subject or bound, or
(iii) any other material agreement or instrument to which any
Loan Party or any Subsidiary thereof is a party or by which any of them
or any of their respective properties (now owned or hereafter acquired)
may be subject or bound.
As of the date of this Agreement, neither Loan Party nor any Subsidiary thereof
is a party to, or otherwise subject to any provision contained in, any
instrument evidencing Indebtedness of such Person, any agreement relating
thereto or any other contract or agreement (including its charter) which limits
the amount of, or otherwise imposes restrictions on the incurring of,
Indebtedness of the Borrower of the type to be evidenced by the Revolving Credit
Note.
4.06. Audited Financial Statements. The Loan Parties have
heretofore furnished to the Lender consolidated balance sheets of the Guarantor
and its consolidated Subsidiaries as of March 31, 1998, and March 31, 1997, and
the related consolidated statements of operations, cash flows and changes in
stockholders' equity for the fiscal years then ended, as examined and reported
on by Arthur Andersen LLP, independent certified public accountants for the
Guarantor, who delivered an unqualified opinion in respect thereof. Such
financial statements (including the notes thereto) present fairly the financial
condition of the Guarantor and its consolidated Subsidiaries as of the end of
each such fiscal year and the results of their operations and their cash flows
for the fiscal years then ended, all in conformity with GAAP.
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4.07. Absence of Undisclosed Liabilities. As of the date of
this Agreement, neither Loan Party nor any Subsidiary thereof has any material
liability or obligation of any nature whatever (whether absolute, accrued,
contingent or otherwise, whether or not due), forward or long-term commitments
or unrealized or anticipated losses from unfavorable commitments, except as
disclosed in the financial statements referred to in Section 4.06 hereof and the
notes thereto.
4.08. Absence of Material Adverse Changes. Since March 31,
1998, there has been no material adverse change in the business, operations,
condition (financial or otherwise), or prospects of the Guarantor and the
Subsidiaries of the Guarantor taken as a whole, except as disclosed in the
financial statements referred to in Section 4.06 hereof or otherwise disclosed
in writing to the Lender.
4.09. Accurate and Complete Disclosure. All information
heretofore, contemporaneously or hereafter provided (orally or in writing) by or
on behalf of any Loan Party or any Subsidiary of any Loan Party to the Lender
pursuant to or in connection with any Loan Document or any transaction
contemplated hereby or thereby is or will be (as the case may be) true and
accurate in all material respects on the date as of which such information is
dated (or, if not dated, when received by the Lender) and does not or will not
(as the case may be) omit to state any material fact necessary to make such
information not misleading at such time in light of the circumstances in which
it was provided.
4.10. Margin Regulations. No part of the proceeds of any
Revolving Credit Loan hereunder will be used for the purpose of buying or
carrying any "margin stock," as such term is used in Regulations G and U of the
Board of Governors of the Federal Reserve System, as amended from time to time,
or to extend credit to others for the purpose of buying or carrying any "margin
stock." Neither Loan Party nor any Subsidiary thereof is engaged in the business
of extending credit to others for the purpose of buying or carrying "margin
stock." Neither Loan Party nor any Subsidiary thereof owns any "margin stock."
Neither the making of any Revolving Credit Loan nor any use of proceeds of any
such Revolving Credit Loan will violate or conflict with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System,
as amended from time to time.
4.11. Subsidiaries. Schedule 4.11 hereof states as of the date
of this Agreement the authorized capitalization of each Subsidiary of the
Guarantor, the number of shares of each class of capital stock issued and
outstanding of each such Subsidiary, and
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the number and percentage of outstanding shares of each such class of capital
stock owned by each Loan Party and by each Subsidiary thereof. The outstanding
shares of each Subsidiary of each Loan Party have been duly authorized and
validly issued and are fully paid and nonassessable. Each Loan Party and each
Subsidiary thereof owns beneficially and of record and has good title to all of
the shares it is listed as owning in such Schedule 4.11, free and clear of any
Lien.
4.12. Partnerships, etc. Neither Loan Party nor any Subsidiary
thereof is a partner (general or limited) of any partnership, is a party to any
joint venture or owns (beneficially or of record) any equity or similar interest
in any Person (including but not limited to any interest pursuant to which such
Loan Party or Subsidiary has or may in any circumstance have an obligation to
make capital contributions to, or be generally liable for or on account of the
liabilities, acts or omissions of such other Person), except for (x) capital
stock of Subsidiaries referred to in Section 4.11 hereof, (y) equity investments
permitted under Section 7.07 hereof and (z) matters set forth in Schedule 4.12
hereof.
4.13. Ownership and Control. Schedule 4.13 hereof states as of
the date of this Agreement the authorized capitalization of each Loan Party and
the number of shares of each class of capital stock issued and outstanding of
each Loan Party. All of the issued and outstanding shares of capital stock of
the Borrower are owned beneficially and of record by a Subsidiary of the
Guarantor and the Guarantor owns all of the issued and outstanding shares of
capital stock of such Subsidiary. The outstanding shares of capital stock of
each Loan Party have been duly authorized and validly issued and are fully paid
and nonassessable. Except as set forth in Schedule 4.13 hereof, there are no
options, warrants, calls, subscriptions, conversion rights, exchange rights,
preemptive rights or other rights, agreements or arrangements (contingent or
otherwise) which may in any circumstances now or hereafter obligate a Subsidiary
of the Guarantor to issue any shares of its capital stock.
4.14. Litigation. There is no pending or (to a Loan Party's
knowledge after due inquiry) threatened action, suit, proceeding or
investigation by or before any Governmental Authority against or affecting any
Loan Party or any Subsidiary thereof, except for (a) matters that if adversely
decided, individually or in the aggregate, could not have a Material Adverse
Effect and (b) the matters set forth on Schedule 4.14 hereof.
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4.15. Absence of Events of Default. No event has occurred and
is continuing and no condition exists which constitutes an Event of Default or
Potential Default.
4.16. Absence of Other Conflicts. Neither any Loan Party nor
any Subsidiary thereof is in violation of or conflict with, or is subject to any
contingent liability on account of any violation of or conflict with:
(a) any Law,
(b) its certificate of incorporation or by-laws (or other
constituent documents), or
(c) any agreement or instrument to which it is party or by
which it or any of its properties (now owned or hereafter acquired) may be
subject or bound, except for matters that, individually or in the aggregate,
could not have a Material Adverse Effect.
4.17. Insurance. Each Loan Party and each Subsidiary thereof
maintains with financially sound and reputable insurers insurance with respect
to its properties and business and against at least such liabilities, casualties
and contingencies and in at least such types and amounts as is customary in the
case of corporations engaged in the same or a similar business or having similar
properties similarly situated.
4.18. Title to Property. Each Loan Party and each Subsidiary
thereof has good and marketable title in fee simple to all real property owned
or purported to be owned by it and good title to all other property of whatever
nature owned or purported to be owned by it, including but not limited to all
property reflected in the most recent audited balance sheet referred to in
Section 4.06 hereof or submitted pursuant to Section 6.01(a) hereof, as the case
may be (except as sold or otherwise disposed of in the ordinary course of
business after the date of such balance sheet), in each case free and clear of
all Liens, except for Liens permitted by Section 7.04.
4.19. Intellectual Property. Each Loan Party and each
Subsidiary thereof owns, or is licensed or otherwise has the right to use, all
the patents, trademarks, service marks, names (trade, service, fictitious or
otherwise), copyrights, technology (including but not limited to computer
programs and software), processes, data bases and other rights, free from
burdensome restrictions, necessary to own and operate its properties and to
carry on its business as presently conducted and presently planned
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to be conducted without material conflict with the rights of others.
4.20. Taxes. All tax and information returns required to be
filed by or on behalf of any Loan Party or any Subsidiary thereof have been
properly prepared, executed and filed. All taxes, assessments, fees and other
governmental charges upon any Loan Party or any Subsidiary thereof or upon any
of their respective properties, incomes, sales or franchises which are due and
payable have been paid.
4.21. Employee Benefits. No accumulated funding deficiency (as
defined in section 302 of ERISA and section 412 of the Code), whether or not
waived, exists with respect to any Plan. No liability to the PBGC has been or is
expected by a Loan Party or any Controlled Group Member to be incurred with
respect to any Plan by a Loan Party, any Subsidiary thereof or any Controlled
Group Member which does or would have a Material Adverse Effect. Neither Loan
Party, any Subsidiary thereof nor any Controlled Group Member has contributed or
presently contributes to any Multiemployer Plan. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby will
be exempt from, or will not involve any transaction which is subject to, the
prohibitions of section 406 of ERISA and will not involve any transaction in
connection with which a penalty could be imposed under section 502(i) of ERISA
or a tax could be imposed pursuant to section 4975 of the Code. A copy of the
most recent Annual Report (5500 Series Form) as of the date hereof including all
attachments thereto as filed with the Internal Revenue Service for each Plan has
been provided to the Lender and fairly presents the funding status of each Plan.
There has been no material deterioration in any Plan's funding status since the
date of such Annual Report. Schedule 4.21 hereof sets forth as of the date
hereof a list of all Plans and Multiemployer Plans, and all information
available to a Loan Party with respect to the direct, indirect or potential
withdrawal liability to any Multiemployer Plan of any Loan Party or any
Controlled Group Member. Except as set forth in Schedule 4.21 hereof, no Loan
Party and no Subsidiary thereof has any liability (contingent or otherwise) for,
or in connection with, and none of their respective properties is subject to a
Lien in connection with, any Pension-Related Event. No Loan Party and no
Subsidiary thereof has any liability (contingent or otherwise) for, or in
connection with, any Postretirement Benefits. The PBGC premiums and
contributions required to meet the minimum funding requirements of ERISA and the
Code for all Plans have not exceeded $1,000,000 on an annual basis for any of
the past three (3) years. The amount of unfunded benefit liabilities (as defined
in Section 4001(a)(16) of ERISA),
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as certified to by the Plan's actuary, for any Plan do not exceed $1,000,000 and
for all Plans do not exceed $1,000,000.
4.22. Environmental Matters.
(a) Each Loan Party and each Subsidiary thereof and each of
their respective Environmental Affiliates is and has been in full compliance
with all applicable Environmental Laws, except for matters which, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect. There are no circumstances that may prevent or interfere with such full
compliance in the future.
(b) Each Loan Party and each Subsidiary thereof and their
respective Environmental Affiliates have all Environmental Approvals necessary
for the ownership and operation of their respective properties, facilities and
businesses as presently owned and operated and as presently proposed to be owned
and operated, except for such Environmental Approvals the absence of which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
(c) There is no Environmental Claim pending or to the
knowledge of any Loan Party after due inquiry threatened, and, to the knowledge
of any Loan Party, there are no past or present acts, omissions, events or
circumstances that could form the basis of any Environmental Claim, against any
Loan Party or any Subsidiary thereof or any of their respective Environmental
Affiliates, except for matters which, if adversely decided, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(d) No facility or property now or previously owned, operated
or leased by any Loan Party or any Subsidiary thereof or any of their respective
Environmental Affiliates is an Environmental Cleanup Site. To the knowledge of
any Loan Party, neither any Loan Party nor any Subsidiary thereof nor any of
their respective Environmental Affiliates has directly transported or directly
arranged for the transportation of any Environmental Concern Materials to any
Environmental Cleanup Site. No Lien exists, and no condition exists which could
result in the filing of a Lien, against any property of any Loan Party or any
Subsidiary thereof or any of their respective Environmental Affiliates, under
any Environmental Law.
4.23. Solvency. On and as of the Closing Date, after
consummation of the transactions contemplated herein and after giving effect to
all Revolving Credit Loans, Letters of Credit and other obligations and
liabilities being incurred on such date in
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connection therewith, and on the date of each subsequent Revolving Credit Loan,
issuance of a Letter of Credit or other extension of credit hereunder and after
giving effect to application of the proceeds thereof in accordance with the
terms of the Loan Documents, each Loan Party is and will be Solvent.
4.24. Regulatory Status. Neither Loan Party nor any Subsidiary
thereof is (a) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, (b) a "holding company" or a "subsidiary company" or an "affiliate"
of a "holding company" or a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Act of 1935, as amended, or (c) a "public
utility" within the meaning of the Federal Power Act, as amended.
4.25. Permits and Other Operating Rights. Each Loan Party and
each Subsidiary thereof has all such valid and sufficient certificates of
convenience and necessity, franchises, licenses, permits, operating rights and
other authorizations from federal, state, regional, municipal or other
governmental bodies having jurisdiction over such Person or any of its
respective properties, as are necessary for the ownership, operation and
maintenance of its businesses and properties, subject to exceptions and
deficiencies which do not materially affect the business and operations of such
Person or any material part thereof, and such certificates of convenience and
necessity, franchises, licenses, permits, operating rights and other
authorizations from federal, state, regional, municipal and other local
regulatory bodies or administrative agencies or other governmental bodies having
jurisdiction over such Person or any of its properties are free from burdensome
restrictions or conditions of an unusual character or restrictions or conditions
materially adverse the business or operations of such Person, and none of such
Persons is in violation of any thereof in any material respect.
4.26. Year 2000 Compliance. The Guarantor has reviewed its
operations and those of its Subsidiaries with a view to assessing whether their
businesses, taken as a whole, will be vulnerable to a Year 2000 Problem. As of
the date of this Agreement, the Guarantor has a reasonable basis to believe
that, solely with respect to the internal operations of the Guarantor and its
Subsidiaries under the direct control of such Person, and in view of the efforts
of such Person to date to address a potential Year 2000 Problem and its ongoing
remediation program, neither the Guarantor nor any of its Subsidiaries will
experience a Year 2000 Problem that will have a Material Adverse Effect;
provided, however, that nothing contained herein shall be deemed
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to be a representation or warranty that the operations, hardware, software,
embedded chips or other systems of third parties with whom the Guarantor or any
of its Subsidiaries interact will not cause a Year 2000 Problem that will have a
Material Adverse Effect. "Year 2000 Problem" means any significant risk that
computer hardware, software or equipment containing embedded microchips of the
Guarantor or any of its Subsidiaries which is essential to their business
operations will not, in the case of dates occurring after December 31, 1999,
function at least as reliably as in the case of dates occurring before January
1, 2000, including the making of accurate leap year calculations, provided that
all third party hardware, software, systems or equipment containing embedded
microchips interacting with the Guarantor's or its Subsidiaries' computer
hardware, software or equipment containing embedded microchips is also able to
function in the same manner with respect to such dates and calculations.
ARTICLE V
CONDITIONS OF LENDING
5.01. Conditions to Initial Revolving Credit Loans. The
obligation of the Lender to make Revolving Credit Loans or to issue Letters of
Credit on the Closing Date is subject to the satisfaction, immediately prior to
or concurrently with the making of such Revolving Credit Loan or the issuance of
Letters of Credit, of the following conditions precedent, in addition to the
conditions precedent set forth in Section 5.02 hereof:
(a) Agreement; Revolving Credit Note. The Lender shall have
received an executed counterpart of this Agreement, duly executed by each Loan
Party, and the Revolving Credit Note conforming to the requirements hereof, duly
executed on behalf of the Borrower.
(b) Corporate Proceedings. The Lender shall have received
certificates by the Secretary or Assistant Secretary of each Loan Party dated as
of the Closing Date as to (i) true copies of the certificates of incorporation
and by-laws of each Loan Party in effect on such date, (ii) true copies of all
corporate action taken by each Loan Party relative to this Agreement and the
other Loan Documents and (iii) the incumbency and signature of the respective
officers of each Loan Party executing this Agreement and the other Loan
Documents to which such Loan Party is a party, together with satisfactory
evidence of the incumbency of such Secretary or Assistant Secretary. The Lender
shall have received certificates from the appropriate Secretaries of State or
other applicable Governmental Authorities dated not more than thirty
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(30) days before the Closing Date showing the good standing of each Loan Party
in its state of incorporation.
(c) Legal Opinion of Counsel to the Loan Parties. The Lender
shall have received an opinion addressed to the Lender, dated the Closing Date,
of counsel to each of the Loan Parties as to such matters as may be requested by
the Lender and in form and substance satisfactory to the Lender.
(d) Fees, Expenses, etc. The Borrower shall have paid all
out-of-pocket costs and expenses incurred by the Lender in connection with the
preparation, execution and delivery of this Agreement and the other Loan
Documents and in connection with the transactions contemplated hereby and
thereby, including without limitation attorney's fees and costs, lien search
fees, filing fees and appraisal costs.
(e) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other matters in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be satisfactory in form and substance to the Lender.
5.02. Conditions to All Revolving Credit Loans. The obligation
of the Lender to make any Revolving Credit Loan or to issue any Letter of Credit
is subject to performance by each of the Loan Parties of their respective
obligations to be performed hereunder or under the other Loan Documents on or
before the date of such Revolving Credit Loan or the issuance of such Letter of
Credit, satisfaction of the conditions precedent set forth herein and in the
other Loan Documents and to satisfaction of the following further conditions
precedent:
(a) Notice. Appropriate notice of such Revolving Credit Loan
or Letter of Credit shall have been given by the Borrower as provided in Article
II hereof or Article III hereof, as the case may be.
(b) Representations and Warranties. Each of the
representations and warranties made by each Loan Party herein and in each other
Loan Document shall be true and correct in all material respects on and as of
such date as if made on and as of such date (except for representations and
warranties made as of the date of this Agreement, which need to be true and
correct in all material respects only as of the date of this Agreement), both
before and after giving effect to the Revolving Credit Loans requested to be
made or the Letters of Credit requested to be issued on such date.
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(c) No Defaults. No Event of Default or Potential Default
shall have occurred and be continuing on such date or after giving effect to the
Revolving Credit Loans requested to be made or the Letters of Credit requested
to be issued on such date.
(d) No Violations of Law, etc. Neither the making nor use of
the Revolving Credit Loans nor the issuance of the Letters of Credit shall cause
the Lender to violate or conflict with any Law.
(e) No Material Adverse Change. There shall not have occurred,
or be threatened, a material adverse change in the business, operations, assets
or condition (financial or otherwise) or prospects of any Loan Party since the
Closing Date.
Each request by the Borrower for any Revolving Credit Loan or Letter of Credit
shall constitute a representation and warranty by the Loan Parties that the
conditions set forth in this Section 5.02 have been satisfied as of the date of
such request. Failure of the Lender to receive notice from any Loan Party to the
contrary before such Revolving Credit Loan is made or such Letter of Credit is
issued shall constitute a further representation and warranty by the Loan
Parties that the conditions referred to in this Section 5.02 have been satisfied
as of the date such Revolving Credit Loan is made or such Letter of Credit is
issued.
ARTICLE VI
AFFIRMATIVE COVENANTS
The Loan Parties hereby covenant to the Lender as follows:
6.01. Basic Reporting Requirements.
(a) Annual Audit Reports. As soon as practicable, and in any
event within one hundred twenty (120) days after the close of each fiscal year
of the Guarantor, the Loan Parties shall furnish to the Lender consolidated
statements of income, cash flows and changes in stockholders' equity of the
Guarantor and its consolidated Subsidiaries for such fiscal year and a
consolidated balance sheet of the Guarantor and its consolidated Subsidiaries as
of the close of such fiscal year, and notes to each, all in reasonable detail,
setting forth in comparative form the corresponding figures for the preceding
fiscal year. Such financial statements shall be accompanied by an opinion of
independent certified public accountants of recognized national standing
selected by the Guarantor and reasonably satisfactory to the Lender. Such
opinion shall be free of exceptions or
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qualifications not acceptable to the Lender and in any event shall be free of
any exception or qualification which is of "going concern" or like nature or
which relates to a limited scope of examination. Such opinion in any event shall
contain a written statement of such accountants substantially to the effect that
(i) such accountants examined such financial statements in accordance with
generally accepted auditing standards and accordingly made such tests of
accounting records and such other auditing procedures as such accountants
considered necessary in the circumstances and (ii) in the opinion of such
accountants such financial statements present fairly the financial position of
the Guarantor and its consolidated Subsidiaries as of the end of such fiscal
year and the results of their operations and their cash flows and changes in
stockholders' equity for such fiscal year, in conformity with GAAP.
(b) Quarterly Consolidated Reports. As soon as practicable,
and in any event within sixty (60) days after the close of each fiscal quarter
of each fiscal year of the Guarantor, the Loan Parties shall furnish to the
Lender unaudited consolidated statements of income, cash flows and changes in
stockholders' equity of the Guarantor and its consolidated Subsidiaries for such
fiscal quarter and for the period from the beginning of such fiscal year to the
end of such fiscal quarter and an unaudited consolidated balance sheet of the
Guarantor and its consolidated Subsidiaries as of the close of such fiscal
quarter, all in reasonable detail, setting forth in comparative form the
corresponding figures for the same periods or as of the same date during the
preceding fiscal year (except for the consolidated balance sheet, which shall
set forth in comparative form the corresponding balance sheet as of the prior
fiscal year end). Such financial statements shall be certified by a Responsible
Officer of the Guarantor as presenting fairly the financial position of the
Guarantor and its consolidated Subsidiaries as of the end of such fiscal quarter
and the results of their operations and their cash flows and changes in
stockholders' equity for such fiscal year, in conformity with GAAP, subject to
normal and recurring year-end audit adjustments.
(c) Consolidating Reports. As soon as practicable, and in any
event within sixty (60) days after the close of each of the first three fiscal
quarters of each fiscal year of the Guarantor and one hundred twenty (120) days
after the close of each fiscal year of the Guarantor, the Loan Parties shall
furnish to the Lender unaudited consolidating statements of income of the
Guarantor and each of its Subsidiaries for such fiscal quarter or fiscal year,
as the case may be, and unaudited consolidating balance sheets of the Guarantor
and each of its Subsidiaries as of the close of such fiscal quarter or fiscal
year, as the case may be, all in reasonable detail. Such statements shall be
certified by a Responsible Officer of the Guarantor as presenting fairly the
financial position of the Guarantor and each of its Subsidiaries as of the end
of such fiscal quarter or fiscal year, as the case may
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be, and the results of their operations for such fiscal quarter or fiscal year,
as the case may be, in conformity with GAAP (exclusive of principles of
consolidation), subject (in the case of quarterly reports) to normal and
recurring year-end audit adjustments.
(d) Quarterly Compliance Certificates. The Loan Parties shall
deliver to the Lender a Quarterly Compliance Certificate (herein so defined),
duly completed and signed by a Responsible Officer of the Guarantor concurrently
with the delivery of the financial statements referred to in subsections (a) and
(b) of this Section 6.01. The Quarterly Compliance Certificate will state, among
other reasonable items: (i) that as of the date thereof no Event of Default or
Potential Default has occurred and is continuing or exists, or if an Event of
Default or Potential Default has occurred and is continuing or exists,
specifying in detail the nature and period of existence thereof and any action
with respect thereto taken or contemplated to be taken by the Loan Parties and
(ii) in reasonable detail the information and calculations necessary to
establish compliance with the provisions of Sections 7.01, 7.02 and 7.03 hereof
and (iii) in reasonable detail the information and calculations necessary to
determine the Applicable Tier.
(e) Accountants' Certificate. Each set of financial statements
delivered pursuant to Section 6.01(a) hereof shall be accompanied by (i) a
certificate or report dated the date of such statements and balance sheet by the
independent certified public accountants who opined on such financial statements
stating in substance that they have reviewed this Agreement and that in making
the examination necessary for their certification of such statements and balance
sheet they did not become aware of any Event of Default or Potential Default, or
if they did become so aware, such certificate or report shall state the nature
and period of existence thereof, and (ii) a certificate or report dated as of
the date of such financial statements by such accountants stating in reasonable
detail the information and calculations necessary to establish compliance with
the covenants set forth in Article VII hereof.
(f) Projections. As soon as practicable and in any event
within thirty (30) days after the close of each fiscal year of the Guarantor,
the Loan Parties shall furnish to the Lender a certificate signed by a
Responsible Officer on behalf of the Guarantor containing a consolidated
projection of the revenues,
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expenditures (capital or otherwise) and results of operations and cash position
of the Guarantor and each Subsidiary of the Guarantor and the amounts and ratios
described in Sections 7.01, 7.02 and 7.03 hereof as of the end of each month or,
in the case of such amounts and ratios, as of the end of each fiscal quarter in
the forthcoming fiscal year, together with a statement of the assumptions and
estimates upon which such projections are based. Such projections, estimates and
assumptions, as of the date of preparation thereof, shall be reasonable, made in
good faith, shall be consistent with the Loan Documents, and shall represent the
Guarantor's best judgment as to such matters.
(g) Certain Other Reports and Information. Promptly upon their
becoming available to a Loan Party, such Loan Party shall deliver to the Lender
a copy of (i) all regular or special reports, registration statements and
amendments to the foregoing which such Loan Party or any Subsidiary of such Loan
Party shall file with the Securities and Exchange Commission (or any successor
thereto) or any securities exchange, (ii) all reports, proxy statements,
financial statements and other information distributed by such Loan Party to its
stockholders, bondholders or the financial community generally, and (iii) all
accountants' management letters pertaining to, all other reports submitted by
accountants in connection with any audit of, and all other reports from outside
accountants with respect to, such Loan Party or any of its Subsidiaries.
(h) Further Information. Each Loan Party shall promptly
furnish to the Lender such other information and in such form as the Lender may
reasonably request from time to time.
(i) Notice of Certain Events. Promptly after a Responsible
Officer's knowledge of any of the following, a Loan Party shall give the Lender
notice thereof, together with a written statement of a Responsible Officer of
such Loan Party setting forth the details thereof and any action with respect
thereto taken or proposed to be taken by such Loan Party:
(i) Any Event of Default or Potential Default.
(ii) Any material adverse change in the business, operations
or condition (financial or otherwise) or prospects of a Loan Party and
its Subsidiaries taken as a whole.
(iii) Any pending or threatened action, suit, proceeding or
investigation by or before any Governmental Authority against or
affecting such Loan Party or any Subsidiary of such Loan Party, except
for matters that if adversely
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decided, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(iv) Any material violation, breach or default by such Loan
Party or any Subsidiary of such Loan Party of or under any agreement or
instrument material to the business, operations, condition (financial
or otherwise) or prospects of such Loan Party and its Subsidiaries
taken as a whole.
(v) Any Pension-Related Event. Such notice shall be
accompanied by: (A) a copy of any notice, request, return, petition or
other document received by such Loan Party or any Controlled Group
Member from any Person, or which has been or is to be filed with or
provided to any Person (including without limitation the Internal
Revenue Service, PBGC or any Plan participant, beneficiary, alternate
payee or employer representative), in connection with such
Pension-Related Event, and (B) in the case of any Pension-Related Event
with respect to a Plan, the most recent Annual Report (5500 Series),
with attachments thereto, and the most recent actuarial valuation
report, for such Plan.
(vi) Any Environmental Claim pending or threatened against
such Loan Party or any Subsidiary of such Loan Party or any of their
respective Environmental Affiliates, or any past or present acts,
omissions, events or circumstances (including but not limited to any
dumping, leaching, deposition, removal, abandonment, escape, emission,
discharge or release of any Environmental Concern Material at, on or
under any facility or property now or previously owned, operated or
leased by such Loan Party or any Subsidiary of such Loan Party or any
of their respective Environmental Affiliates) that could form the basis
of such Environmental Claim, which Environmental Claim, if adversely
resolved, individually or in the aggregate, could have a Material
Adverse Effect.
(vii) The expiration or earlier termination of the License
Agreement.
(vii) The occurrence of a Change of Control Event.
(j) Visitation; Verification. Each Loan Party shall permit
such Persons as the Lender may designate from time to time, at such Loan Party's
expense while an Event of Default is continuing and otherwise at the Lender's
expense, to visit and inspect any of the properties of such Loan Party and of
any Subsidiary of such Loan Party, to examine their respective books and records
and take copies and extracts therefrom and to discuss
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their respective affairs with their respective directors, officers, key
employees and independent accountants at such times and as often as the Lender
may request. Each Loan Party hereby authorizes such officers, key employees and
independent accountants to discuss with the Lender the affairs of such Loan
Party and its Subsidiaries. The Lender shall have the right to examine and
verify accounts, inventory and other properties and liabilities of each Loan
Party and its Subsidiaries from time to time, and each Loan Party shall
cooperate, and shall cause each of its Subsidiaries to cooperate, with the
Lender in such verification.
6.02. Insurance. Each Loan Party shall, and shall cause each
of its Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business and against such
liabilities, casualties and contingencies and of such types and in such amounts
as is customary in the case of corporations engaged in the same or similar
businesses or having similar properties similarly situated.
6.03. Payment of Taxes and Other Potential Charges and
Priority Claims. Each Loan Party shall, and shall cause each of its Subsidiaries
to, pay or discharge
(a) on or prior to the date on which penalties attach thereto,
all taxes, assessments and other governmental charges imposed upon it or any of
its properties;
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other like Persons
which, if unpaid, might result in the creation of a Lien upon any such property;
and
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such property
or which, if unpaid, might give rise to a claim entitled to priority over
general creditors of such Loan Party or Subsidiary in a case under Title 11
(Bankruptcy) of the United States Code, as amended;
provided, that unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced, such Loan Party or Subsidiary need not
pay or discharge any such tax, assessment, charge or claim so long as (x) the
validity thereof is contested in good faith and by appropriate proceedings
diligently conducted, (y) such reserves or other appropriate provisions as may
be required by GAAP shall have been made therefor.
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6.04. Preservation of Corporate Status. Each Loan Party shall,
and shall cause each of its Subsidiaries to, maintain its status as a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and to be duly qualified to do business as
a foreign corporation and in good standing in all jurisdictions in which the
ownership of its properties or the nature of its business or both make such
qualification necessary or advisable; provided, however, that a Subsidiary of a
Loan Party (other than another Loan Party) may merge out of existence,
liquidate, wind-up or dissolve if such merger, liquidation, winding-up or
dissolution would not be disadvantageous, in any material respect, to a Loan
Party and its Subsidiaries taken as a whole (as determined in good faith by the
Guarantor) and will not adversely affect the Lender (as reasonably determined by
the Lender).
6.05. Governmental Approvals and Filings. Each Loan Party
shall, and shall cause each of its Subsidiaries to, keep and maintain in full
force and effect all Governmental Actions necessary or advisable in connection
with the execution and delivery of any Loan Document by any Loan Party,
consummation by any Loan Party of the transactions herein or therein
contemplated, performance of or compliance with the terms and conditions hereof
or thereof by any Loan Party or to ensure the legality, validity, binding
effect, enforceability or admissibility in evidence hereof or thereof.
6.06. Maintenance of Properties. Each Loan Party shall, and
shall cause each of its Subsidiaries to, maintain or cause to be maintained in
good repair, working order and condition the properties now or hereafter owned,
leased or otherwise possessed by it (ordinary wear and tear excepted) and shall
make or cause to be made all needful and proper repairs, renewals, replacements
and improvements thereto so that the business carried on in connection therewith
may be properly and advantageously conducted at all times. Each Loan Party
shall, and shall cause each of its Subsidiaries to, procure and maintain in full
force and effect all franchises, patents, trademarks, trade names, service
marks, copyrights, licenses and other rights, in each case, that are necessary
in any material respect for the business and operation of the Guarantor and its
Subsidiaries, taken as a whole.
6.07. Avoidance of Other Conflicts. A Loan Party shall not,
and shall not permit any of its Subsidiaries to, violate or conflict with, be in
violation of or conflict with, or be or remain subject to any liability
(contingent or otherwise) on account of any violation or conflict with
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(a) any Law,
(b) its certificates of incorporation of by-laws (or other
constituent documents), or
(c) any agreement or instrument to which it is party or by
which any of them or any of their respective Subsidiaries is a party or by which
any of them or any of their respective properties (now owned or hereafter
acquired) may be subject or bound,
except for matters that could not reasonably be expected , individually or in
the aggregate, to have a Material Adverse Effect.
Each Loan Party shall, and shall cause each of its
Subsidiaries and each of its Environmental Affiliates to, comply with, or
operate pursuant to valid waivers of, applicable Environmental Laws, including,
without limitation, to the extent required by applicable Environmental Laws,
conducting, on a timely basis, periodic tests and monitoring for contamination
of ground water, surface water, air and land and for biological toxicity and
completing proper, thorough and effective clean-up, removal, remediation and/or
restoration, except to the extent that failure so to comply with any
Environmental Law does not have a Material Adverse Effect, and except that, with
respect to any testing, monitoring, clean-up, removal, remediation or other such
action required pursuant to such Environmental Laws, neither a Loan Party nor
any of its Subsidiaries or Environmental Affiliates shall be required to perform
any such action if the applicability or validity thereof is being contested in
good faith by appropriate proceedings and adequate reserves have been
established in accordance with GAAP.
6.08. Financial Accounting Practices. Each Loan Party shall,
and shall cause each of its Subsidiaries to, make and keep books, records and
accounts which, in reasonable detail, accurately and fairly reflect its
transactions and dispositions of its assets and maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (a)
transactions are executed in accordance with management's general or specific
authorization, (b) transactions are recorded as necessary (i) to permit
preparation of financial statements in conformity with GAAP and (ii) to maintain
accountability for assets, (c) access to assets is permitted only in accordance
with management's general or specific authorization and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
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6.09. Use of Proceeds. The Borrower shall use the proceeds of
the Revolving Credit Loans and the Letters of Credit for general corporate
purposes and shall not use any such proceeds directly or indirectly for any
unlawful purpose, in any manner inconsistent with Section 4.10 hereof, or
inconsistent with any other provision of any Loan Document.
6.10. Continuation of or Change in Business. Each Loan Party
and each of its Subsidiaries shall continue to engage in its business
substantially as conducted and operated during the present and preceding fiscal
year, and a Loan Party shall not, and shall not permit any of its Subsidiaries
to, engage in any other business.
6.11. Consolidated Tax Return. A Loan Party shall not, and
shall not suffer any of its Subsidiaries to, file or consent to the filing of
any consolidated income tax return with any Person other than the Guarantor, the
Borrower and their respective Subsidiaries.
6.12. Fiscal Year. The Loan Parties shall not, and shall not
suffer any of their respective Subsidiaries to, change their respective fiscal
year or fiscal quarter (except to conform to the fiscal year of the Loan
Parties).
6.13. Covenant to Secure Note Equally. If a Loan Party or any
Subsidiary of a Loan Party shall create or assume any Lien upon any of its
property or assets, whether now owned or hereafter acquired, other than Liens
permitted by the provisions of Section 7.04 (unless prior written consent to the
creation or assumption thereof shall have been obtained pursuant to Section
10.03), it will make or cause to be made effective provision satisfactory in
form and substance to the Lender (including, without limitation, opinions of
counsel relating thereto) whereby the Revolving Credit Note and the
Reimbursement Obligations will be secured by such Lien equally and ratably with
any and all other Indebtedness thereby secured so long as any such other
Indebtedness shall be so secured. Securing the Revolving Credit Note as provided
in this Section 6.13 shall not permit the existence of any Lien not permitted by
Section 7.04.
ARTICLE VII
NEGATIVE COVENANTS
The Loan Parties hereby covenant to the Lender as follows:
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7.01. Consolidated Net Worth. Consolidated Net Worth of the
Guarantor shall not at any time during a fiscal year of the Guarantor be less
than the sum of (x) $100,000,000 plus (y) 50% of the Guarantor's Consolidated
Net Income for the immediately preceding fiscal year.
7.02. Leverage. As of the last day of each fiscal quarter, the
Consolidated Leverage Ratio shall not be greater than 3.0 to 1.0.
7.03. Cash Flow. As of the last day of each fiscal quarter,
the Consolidated Cash Flow Coverage Ratio shall not be less than 1.25 to 1.0.
7.04. Liens. A Loan Party shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Lien on any of its property (now owned or hereafter acquired), except for the
following:
(a) Liens existing on the date hereof securing obligations
existing on the date hereof, as such Liens and obligations are listed in
Schedule 7.04 hereto (and extension, renewal and replacement Liens upon the same
property theretofor subject to a listed Lien, provided the amount secured by
each Lien constituting such an extension, renewal or replacement Lien shall not
exceed the amount secured by the Lien theretofor existing);
(b) Liens arising from taxes, assessments, charges or claims
described in Section 6.03 hereof that are not yet due or that remain payable
without penalty or to the extent permitted to remain unpaid under the proviso to
such Section 6.03;
(c) Liens incurred or deposits or pledges of cash or
securities in the ordinary course of business to secure (i) workmen's
compensation, unemployment insurance or other social security obligations, (ii)
performance of bids, tenders, trade contracts (other than for payment of money)
or leases, (iii) stay, surety or appeal bonds, or (iv) other obligations of a
like nature incurred in the ordinary course of business;
(d) Liens by a Loan Party or a Subsidiary of a Loan Party on
property securing all or part of the purchase price thereof and Liens (whether
or not assumed) existing in property at the time of purchase thereof by a Loan
Party or a Subsidiary of a Loan Party, provided that (i) such Lien is created
before or substantially simultaneously with the purchase of such property by
such Loan Party or such Subsidiary, (ii) such Lien is confined solely to the
property so purchased, improvements thereto and proceeds thereof and (iii) the
aggregate amount secured by all
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Liens described in this Section 7.04(d) shall not at any time exceed
$10,000,000;
(e) Liens by a foreign Subsidiary of any Loan Party securing
Indebtedness of such foreign Subsidiary permitted by Section 7.05(c) hereof;
(f) Liens resulting from the recharacterization of any Capital
Lease permitted by Section 7.05(d) hereof;
(g) Judgment liens fully bonded or stayed pending appeal;
(h) Liens in favor of the United States which arise in the
ordinary course of business resulting from progress payments or partial payments
under United States government contracts or subcontracts thereunder;
(i) Zoning restrictions, easements, minor restrictions on the
use of real property, minor irregularities in the title thereto and other minor
Liens that do not secure the payment of money or the performance of an
obligation and that do not individually or in the aggregate materially detract
from the value of a property or asset to, or materially impair its use in the
business of, a Loan Party and its Subsidiaries, taken as a whole; and
(j) Liens securing Indebtedness in an amount not in excess of
$1,000,000 at any one time outstanding.
7.05. Indebtedness. A Loan Party shall not, and shall not
permit any of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Indebtedness, except:
(a) Indebtedness to the Lender pursuant to this Agreement and
the other Loan Documents;
(b) Indebtedness of the Guarantor and its Subsidiaries
existing on the date hereof and listed in Schedule 7.05 hereof, but not any
extensions, renewals or refinancings thereof;
(c) Indebtedness for borrowed money incurred by the Guarantor
and its Subsidiaries from time to time; provided, that the aggregate principal
amount of such Indebtedness shall not exceed $10,000,000 at any time;
(d) Indebtedness incurred by a Loan Party or any Subsidiary of
a Loan Party from a Loan Party or Subsidiary of a Loan Party, provided that (i)
any Subsidiary involved in any such
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lending arrangement be consolidated, for financial statement reporting purposes,
with the Guarantor, (ii) any lending Person involved in any such lending
arrangement be Solvent at the time of such lending arrangement and after giving
effect thereto and (iii) the aggregate principal amount of Indebtedness under
this Section 7.05(d) shall not exceed (y) $10,000,000 to any one Person and (z)
and $30,000,000 in the aggregate to all such Persons;
(e) Capitalized Lease Obligations of the Guarantor and its
Subsidiaries in an aggregate amount not in excess of $10,000,000 at any one
time, provided that such Capitalized Leases are otherwise permitted by Section
7.13; and
(f) Indebtedness for borrowed money in the form of a note or
notes payable by the Borrower to the order of BBox Holding Company, a Delaware
corporation (the "Holding Company"), issued in connection with a Stock Payment
made to the Holding Company or in connection with the payment of interest with
respect to any such note or notes, which note or notes (i) shall be
substantially in the form attached hereto as Exhibit D, or otherwise in form and
substance satisfactory to the Lender and the Borrower, the Lender hereby
agreeing that any such note or notes may have a stated term of seven (7) years,
but be payable on demand and require the payment of interest on an annual basis,
and (ii) shall be subordinated to the Revolving Credit Note on the terms
identified in Exhibit E attached hereto; provided however, that this
subparagraph shall be applicable only so long as the Holding Company is wholly
owned, directly or indirectly, by the Guarantor;
provided, however, that Indebtedness borrowed by the Borrower from any Affiliate
of the Borrower shall be subordinated to the Revolving Credit Note on the terms
identified in Exhibit E attached hereto.
7.06. Guarantees, Indemnities of the Borrower, etc. The Loan
Parties shall not, and shall not permit any of their respective Subsidiaries to,
be or become subject to or bound by any Guaranty Equivalent, except for the
Obligations owed to the Lender under the Loan Documents and:
(a) Contingent liabilities arising from the endorsement of
negotiable or other instruments for deposit or collection or similar
transactions in the ordinary course of business;
(b) Guaranty Equivalents securing Assured Obligations not in
excess of $10,000,000 at any one time;
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(c) Indemnities of the liabilities of its directors, officers
and employees in their capacities as such as permitted by Law;
(d) Guaranty Equivalents constituting usual and customary
indemnities with respect to liabilities (other than Indebtedness) in connection
with an acquisition or disposition of stock or assets by any Loan Party or any
Subsidiary of a Loan Party; and
(e) Guaranty Equivalents by any Loan Party or a Subsidiary of
any Loan Party from time to time of Assured Obligations constituting
Indebtedness permitted under Section 7.05(c) or (d).
7.07. Loans, Advances and Investments. The Loan Parties shall
not, and shall not permit any of their respective Subsidiaries to, at any time
make or suffer to exist or remain outstanding any loan or advance to, or
purchase, acquire or own (beneficially or of record) any stock, bonds, notes or
securities of, or any partnership interest (whether general or limited) in, or
any other interest in, or make any capital contribution to or other investment
in, any other Person, except:
(a) The capital stock of a Subsidiary of a Loan Party owned on
the date hereof and listed on Schedule 4.11 hereto and the matters set forth on
Schedule 4.12 hereto;
(b) Loans or advances, so long as no Event of Default or
Potential Default shall have occurred and be continuing or shall occur after
giving effect thereto, permitted under Section 7.05(d);
(c) So long as no Event of Default or Potential Default shall
have occurred and be continuing or shall occur after giving effect thereto,
additional capital stock of any of the Subsidiaries listed on Schedule 4.11
hereto and additional interests with respect to those matters set forth on
Schedule 4.12 hereto or the capital stock of any new wholly owned Subsidiary of
any Loan Party or of any existing wholly owned Subsidiary of a Loan Party;
provided, that the acquisition of such additional interests shall not require
the expenditure of more than $10,000,000 in the aggregate;
(d) So long as no Event of Default or Potential Default shall
have occurred and be continuing or shall occur after giving effect thereto,
investments in any other Person where (i) such Person is in the same or a
similar line of business as any Loan Party or any Subsidiary of a Loan Party,
(ii) such investment is in the form of an Acquisition and (iii) the investment
in such
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Person shall not exceed $50,000,000; provided, that where the consideration
payable in connection with such Acquisition consists of any consideration other
than the capital stock of the Guarantor, such investment in such Person shall
not exceed $20,000,000 and in any fiscal year of the Guarantor, the commitments
to make such non-stock Acquisitions shall not exceed $30,000,000 in the
aggregate; and
(e) Cash Equivalent Investments.
7.08. Dividends and Related Distributions. A Loan Party shall
not, and shall not permit any of its Subsidiaries to, declare or make any Stock
Payment if an Event of Default or Potential Default shall have occurred and is
continuing or if the same shall occur after giving effect thereto.
7.09. Sale-Leasebacks. A Loan Party shall not, and shall not
permit any of its Subsidiaries to, at any time enter into or suffer to remain in
effect any transaction to which such Loan Party or Subsidiary is a party
involving the sale, transfer or other disposition by such Loan Party or
Subsidiary of any property (now owned or hereafter acquired), with a view
directly or indirectly to the leasing back of any part of the same property or
any other property used for the same or a similar purpose or purposes.
7.10. Mergers, Acquisitions, etc. A Loan Party shall not, and
shall not permit any of its Subsidiaries to (v) merge with or into or
consolidate with any other Person, (w) liquidate, wind-up, dissolve or divide,
(x) acquire all or any substantial portion of the properties of any going
concern or going line of business, or (y) acquire all or any substantial portion
of the properties of any other Person other than in the ordinary course of
business, except:
(a) Acquisitions (as defined herein) that satisfy the
conditions set forth in Section 7.07(c) or (d) hereof.
(b) Provided that no Event of Default or Potential Default
shall occur and be continuing or shall exist at such time or after giving effect
to such transaction, a Subsidiary of a Loan Party (other than another Loan
Party) may merge out of existence, liquidate, wind-up or dissolve if such
merger, liquidation, winding-up or dissolution (i) would not disadvantageous, in
any material respect, to a Loan Party and its Subsidiaries taken as a whole (as
determined in good faith by the Guarantor) and (ii) would not adversely affect
the Lender (as reasonably determined by the Lender).
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7.11. Dispositions of Properties. A Loan Party shall not, and
shall not permit any of its Subsidiaries to, sell, convey, assign, lease,
transfer, abandon or otherwise dispose of, voluntarily or involuntarily, any of
its properties, except:
(a) Each Loan Party and each Subsidiary of each Loan Party may
sell inventory in the ordinary course of business; and
(b) Each Loan Party and each Subsidiary of each Loan Party may
dispose of equipment which is obsolete or no longer useful in the business of
the Borrower or such Subsidiary;
provided, however, that a Loan Party will not, and will not permit any of its
Subsidiaries to, sell, convey, assign, lease, license, transfer or otherwise
permit use of, by any Person other than the Guarantor or any of its
Subsidiaries, any customer or mailing list owned by a Loan Party or any of its
Subsidiaries.
7.12. Dealings with Affiliates. A Loan Party shall not permit
any of its Subsidiaries to, directly or indirectly deal with, in the ordinary
course of business or otherwise, any Affiliate, except (a) any Affiliate who is
a natural person may serve as an employee, officer, consultant and/or director
of a Loan Party or any Subsidiary of a Loan Party and receive reasonable
compensation for his or her services in such capacity, (b) in transactions which
are pursuant to the reasonable requirements of such Person's business operations
and which are on no less favorable terms to such Person than would be the case
with a similar transaction with an unaffiliated Person negotiated at arm's
length.
7.13. Capital Expenditures. A Loan Party shall not, and shall
not permit any of its Subsidiaries to, make any Capital Expenditures on or after
the date hereof if an Event of Default or Potential Default shall have occurred
and is continuing or if the same shall occur after giving effect thereto.
7.14. Limitation on Other Restrictions on Liens. The Loan
Parties shall not, and shall not permit any of their Subsidiaries to, enter
into, become or remain subject to any agreement or instrument to which such
Person is a party or by which such Person or any of its properties (now owned or
hereafter acquired) may be subject or bound that would prohibit the grant of any
Lien upon any of its properties (now owned or hereafter acquired) or the payment
of any Stock Payment, except the Loan Documents.
7.15 License Agreement. Without the prior written consent of
the Lender, the Borrower shall not amend, modify or
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supplement the License Agreement in any manner that would be materially
disadvantageous to the Borrower nor exercise any right to terminate the License
Agreement.
ARTICLE VIII
DEFAULTS
8.01. Events of Default. An Event of Default shall mean the
occurrence or existence of one or more of the following events or conditions
(for any reason, whether voluntary, involuntary or effected or required by Law):
(a) Any Loan Party shall fail to pay when due principal of or
interest on any Revolving Credit Loan, any Reimbursement Obligation, any fees,
indemnity or expenses, or any other amount due hereunder or under any other Loan
Document.
(b) Any representation or warranty made or deemed made by any
Loan Party or any Subsidiary of any Loan Party in or pursuant to or in
connection with any Loan Document, or any statement made by any Loan Party or
any Subsidiary of any Loan Party in any financial statement, certificate,
report, exhibit or document furnished by any Loan Party or any Subsidiary of any
Loan Party to the Lender pursuant to or in connection with any Loan Document,
shall prove to have been false or misleading in any material respect as of the
time when made or deemed made (including by omission of material information
necessary to make such representation, warranty or statement not misleading).
(c) Any Loan Party shall default in the performance or
observance of any covenant contained in Article VII hereof or the covenant
contained in Section 6.01(i) hereof.
(d) Any Loan Party shall default in the performance or
observance of any other material covenant, agreement or duty under this
Agreement or any other Loan Document and such default shall have continued for a
period of ten (10) Business Days.
(e) Any Loan Party or any Subsidiary of any Loan Party shall
default beyond any applicable cure period in the payment of principal or
interest on any obligation for borrowed money in excess of $500,000 or in the
performance of any provision contained in any instrument under which any such
obligation for borrowed money is created or secured (including the breach of any
covenant thereunder) if an effect of such default is to cause, or permit any
Person to cause such obligation to become due prior to its stated maturity,
unless, solely with respect to a non-payment default (i) such Loan Party or such
Subsidiary is actively and
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diligently contesting the existence of such default and (ii) the obligee has not
taken any action to accelerate the maturity of such obligation or to exercise
any other remedy available to it under such instrument.
(f) One or more judgments for the payment of money shall have
been entered against any Loan Party or any Subsidiary of any Loan Party, which
judgment or judgments exceed $2,000,000 in the aggregate, and such judgment or
judgments shall have remained undischarged and unstayed for a period of thirty
(30) consecutive days.
(g) Any one or more Pension-Related Events referred to in
subsection (a)(ii), (b) or (e) of the definition of "Pension-Related Event"
shall have occurred; or any one or more other Pension-Related Events shall have
occurred and the Lender shall determine in good faith (which determination shall
be conclusive) that such other Pension-Related Events, individually or in the
aggregate, could have a Material Adverse Effect.
(h) There shall have occurred a material adverse change in the
business, condition (financial or otherwise), results of operations or prospects
of any Loan Party.
(i) A proceeding shall have been instituted in respect of any
Loan Party or any Subsidiary of any Loan Party
(i) seeking to have an order for relief entered in respect of
such Person, or seeking a declaration or entailing a finding that such
Person is insolvent or a similar declaration or finding, or seeking
dissolution, winding-up, charter revocation or forfeiture, liquidation,
reorganization, arrangement, adjustment, composition or other similar
relief with respect to such Person, its assets or its debts under any
Law relating to bankruptcy, insolvency, relief of debtors or protection
of creditors, termination of legal entities or any other similar Law
now or hereafter in effect, or
(ii) seeking appointment of a receiver, trustee, liquidator,
assignee, sequestrator or other custodian for such Person or for all or
any substantial part of its property
and such proceeding shall result in the entry, making or grant of any such order
for relief, declaration, finding, relief or appointment, or such proceeding
shall remain undismissed and unstayed for a period of thirty (30) consecutive
days.
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(j) Any Loan Party or any Subsidiary of any Loan Party shall
become insolvent; shall fail to pay, become unable to pay, or state that it is
or will be unable to pay, its debts as they become due; shall voluntarily
suspend transaction of its or his business; shall make a general assignment for
the benefit of creditors; shall institute (or fail to controvert in a timely and
appropriate manner) a proceeding described in Section 8.01(i)(i) hereof, or
(whether or not any such proceeding has been instituted) shall consent to or
acquiesce in any such order for relief, declaration, finding or relief described
therein; shall institute (or fail to controvert in a timely and appropriate
manner) a proceeding described in Section 8.01(i)(ii) hereof, or (whether or not
any such proceeding has been instituted) shall consent to or acquiesce in any
such appointment or to the taking of possession by any such custodian of all or
any substantial part of its or his property; shall dissolve, wind-up, revoke or
forfeit its charter (or other constituent documents) or liquidate itself or any
substantial part of its property other than proceedings for the voluntary
liquidation and dissolution of a Subsidiary of the Guarantor permitted by
Section 6.04 hereof; or shall take any action in furtherance of any of the
foregoing.
(k) The expiration or earlier termination of the License
Agreement.
(l) Any provision of Article IX hereof shall cease to be in
full force and effect, or the Guarantor shall deny or disaffirm its obligations
thereunder.
(m) The Guarantor shall cease to own, directly or indirectly,
one hundred percent (100%) of the outstanding capital stock of the Borrower.
(n) A Change of Control Event shall occur.
8.02. Consequences of an Event of Default.
(a) If an Event of Default specified in subsections (a)
through (n) of Section 8.01 hereof shall occur and be continuing or shall exist,
then, in addition to all other rights and remedies which the Lender may have
hereunder or under any other Loan Document, at law, in equity or otherwise, the
Lender shall be under no further obligation to make Revolving Credit Loans or to
issue Letters of Credit hereunder, and the Lender may by notice to the Borrower,
from time to time do any or all of the following:
(i) Declare the Revolving Credit Commitment terminated,
whereupon the Revolving Credit Commitment will terminate and any fees
hereunder shall be immediately due and payable
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without presentment, demand, protest or further notice of any kind, all
of which are hereby waived, and an action therefor shall immediately
accrue.
(ii) Declare the unpaid principal amount of the Revolving
Credit Loans, interest accrued thereon and all other Obligations to be
immediately due and payable without presentment, demand, protest or
further notice of any kind, all of which are hereby waived, and an
action therefor shall immediately accrue.
(b) If an Event of Default specified in subsection (i) or (j)
of Section 8.01 hereof shall occur or exist, then, in addition to all other
rights and remedies which the Lender may have hereunder or under any other Loan
Document, at law, in equity or otherwise, the Revolving Credit Commitment shall
automatically terminate and the Lender shall be under no further obligation to
make Revolving Credit Loans or to issue Letters of Credit, and the unpaid
principal amount of the Revolving Credit Loans, interest accrued thereon and all
other Obligations shall become immediately due and payable without presentment,
demand, protest or notice of any kind, all of which are hereby waived, and an
action therefor shall immediately accrue.
ARTICLE IX
GUARANTY AND SURETYSHIP
9.01. Guaranty and Suretyship. The Guarantor hereby
absolutely, unconditionally and irrevocably guarantees and becomes surety for
the full and punctual payment and performance of the Guaranteed Obligations as
and when such payment or performance shall become due (at scheduled maturity, by
acceleration or otherwise) in accordance with the terms of the Loan Documents.
The obligations of the Guarantor hereunder constitute an agreement of suretyship
as well as of guaranty, are a guarantee of payment and performance and not
merely of collectability, and are in no way conditioned upon any attempt to
collect from or proceed against the Borrower or any other Person or any other
event or circumstance. The obligations of the Guarantor hereunder are direct and
primary obligations of the Guarantor and are independent of the Guaranteed
Obligations, and a separate action or actions may be brought against the
Guarantor regardless of whether action is brought against the Borrower or any
other Person or whether the Borrower or any other Person is joined in any such
action or actions.
9.02. Obligations Absolute. The Guarantor agrees that the
Guaranteed Obligations will be paid and performed strictly in
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accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting the
Guaranteed Obligations, any of the terms of the Loan Documents or the rights of
the Lender or any other Person with respect thereto. The obligations of the
Guarantor hereunder shall be absolute, unconditional and irrevocable,
irrespective of any of the following:
(a) Any lack of genuineness, legality, validity,
enforceability or allowability (in a bankruptcy, insolvency, reorganization or
similar proceeding, or otherwise), or any avoidance or subordination, in whole
or in part, of any Loan Document or any of the Guaranteed Obligations.
(b) Any increase, decrease or change in the amount, nature,
type or purpose of any of the Guaranteed Obligations (whether or not
contemplated by the Loan Documents as presently constituted); any change in the
time, manner, method or place of payment or performance of, or in any other term
of, any of the Guaranteed Obligations; any execution or delivery of any
additional Loan Documents; or any amendment, modification or supplement to, or
refinancing or refunding of, any Loan Document or any of the Guaranteed
Obligations.
(c) Any failure to assert any breach of or default under any
Loan Document or any of the Guaranteed Obligations; any extensions of credit in
excess of the amount committed under or contemplated by the Loan Documents, or
in circumstances in which any condition to such extensions of credit has not
been satisfied; any other exercise or non-exercise, or any other failure,
omission, breach, default, delay or wrongful action in connection with any
exercise or non-exercise, of any right or remedy against the Borrower or any
other Person under or in connection with any Loan Document or any of the
Guaranteed Obligations; any refusal of payment or performance of any of the
Guaranteed Obligations, whether or not with any reservation of rights against
the Guarantor; or any application of collections (including but not limited to
collections resulting from realization upon any direct or indirect security for
the Guaranteed Obligations) to other obligations, if any, not entitled to the
benefits of this Agreement, in preference to Guaranteed Obligations entitled to
the benefits of this Agreement, or if any collections are applied to Guaranteed
Obligations, any application to particular Guaranteed Obligations.
(d) Any taking, exchange, amendment, modification, supplement,
termination, subordination, release, loss or impairment of, or any failure to
protect, perfect, or preserve the value of, or any enforcement of, realization
upon, or exercise of
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rights or remedies under or in connection with, or any failure, omission,
breach, default, delay or wrongful action by the Lender or any other Person in
connection with the enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or any other action or inaction by the
Lender or any other Person in respect of, any direct or indirect security for
any of the Guaranteed Obligations. As used in this Agreement, "direct or
indirect security" for the Guaranteed Obligations, and similar phrases, includes
but is not limited to any collateral security, guaranty, suretyship, letter of
credit, capital maintenance agreement, put option, subordination agreement or
other right or arrangement of any nature providing direct or indirect assurance
of payment or performance of any of the Guaranteed Obligations, made or on
behalf of any Person.
(e) Any merger, consolidation, liquidation, dissolution,
winding-up, charter revocation or forfeiture, or other change in, restructuring
or termination of the corporate structure or existence of, the Borrower or any
other Person; any bankruptcy, insolvency, reorganization or similar proceeding
with respect to the Borrower or any other Person; or any action taken or
election made by the Lender (including but not limited to any election under
Section 1111(b)(2) of the United States Bankruptcy Code), the Borrower or any
other Person in connection with any such proceeding.
(f) Any defense, setoff or counterclaim (excluding only the
defense of full, strict and indefeasible payment and performance), which may at
any time be available to or be asserted by the Borrower or any other Person with
respect to any Loan Document or any of the Guaranteed Obligations; or any
discharge by operation of law or release of the Borrower or any other Person
from the performance or observance of any Loan Document or any of the Guaranteed
Obligations.
(g) Any other event or circumstance, whether similar or
dissimilar to the foregoing, and whether known or unknown, which might otherwise
constitute a defense available to, or limit the liability of, the Guarantor, a
guarantor or a surety, excepting only full, strict and indefeasible payment and
performance of the Guaranteed Obligations in full.
9.03. Waivers, etc. The Guarantor hereby waives any defense to
or limitation on its obligations under this Agreement arising out of or based on
any event or circumstance referred to in Section 9.02 hereof. Without
limitation, the Guarantor waives each of the following:
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(a) All notices, disclosures and demands of any nature which
otherwise might be required from time to time to preserve intact any rights
against the Guarantor, including without limitation the following: any notice of
any event or circumstance described in Section 9.02 hereof; any notice required
by any law, regulation or order now or hereafter in effect in any jurisdiction;
any notice of nonpayment, nonperformance, dishonor, or protest under any Loan
Document or any of the Guaranteed Obligations; any notice of the incurrence of
any Guaranteed Obligation; any notice of any default or any failure on the part
of the Borrower or any other Person to comply with any Loan Document or any of
the Guaranteed Obligations or any direct or indirect security for any of the
Guaranteed Obligations; and any notice of any information pertaining to the
business, operations, condition (financial or otherwise) or prospects of the
Borrower or any other Person.
(b) Any right to any marshalling of assets, to the filing of
any claim against the Borrower or any other Person in the event of any
bankruptcy, insolvency, reorganization or similar proceeding, or to the exercise
against the Borrower or any other Person of any other right or remedy under or
in connection with any Loan Document or any of the Guaranteed Obligations or any
direct or indirect security for any of the Guaranteed Obligations; any
requirement of promptness or diligence on the part of the Lender or any other
Person; any requirement to exhaust any remedies under or in connection with, or
to mitigate the damages resulting from default under, any Loan Document or any
of the Guaranteed Obligations or any direct or indirect security for any of the
Guaranteed Obligations; any benefit of any statute of limitations; and any
requirement of acceptance of this Agreement, and any requirement that the
Guarantor receive notice of such acceptance.
(c) Any defense or other right arising by reason of any law
now or hereafter in effect in any jurisdiction pertaining to election of
remedies (including but not limited to anti-deficiency laws, "one action" laws
or the like), or by reason of any election of remedies or other action or
inaction by the Lender (including but not limited to commencement or completion
of any judicial proceeding or nonjudicial sale or other action in respect of
collateral security for any of the Guaranteed Obligations), which results in
denial or impairment of the right of the Lender to seek a deficiency against the
Borrower or any other Person or which otherwise discharges or impairs any of the
Guaranteed Obligations.
9.04. Reinstatement. The obligations of the Guarantor
hereunder shall continue to be effective, or be automatically reinstated, as the
case may be, if at any time payment of any of
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the Guaranteed Obligations is avoided, rescinded or must otherwise be returned
by the Lender for any reason (including, without limitation, by reason of such
payment being a preference or fraudulent conveyance), all as though such payment
had not been made.
9.05. No Stay. Without limitation of any other provision
hereof, if any declaration of default or acceleration or other exercise or
condition to exercise of rights or remedies under or with respect to any
Guaranteed Obligation shall at any time be stayed, enjoined or prevented for any
reason (including but not limited to stay or injunction resulting from of the
pendency against the Borrower or any other Person of a bankruptcy, insolvency,
reorganization or similar proceeding), the Guarantor agrees that, for purposes
of this Agreement and its obligations hereunder, the Guaranteed Obligations
shall be deemed to have been declared in default or accelerated, and such other
exercise or conditions to exercise shall be deemed to have been taken or met.
9.06. Payments. All payments to be made by Guarantor pursuant
to the provisions hereof shall be made at the times and in the manner prescribed
for payments in Section 2.09 hereof, without setoff, counterclaim, withholding
or other deduction of any nature.
9.07. Subrogation, etc. The Guarantor hereby agrees that any
and all rights it now has or hereafter may have (known and unknown, whether
arising by operation of law, by agreement or otherwise) against the Borrower or
any other Person arising from the existence, payment, performance or enforcement
of any of the obligations of the Guarantor hereunder or in connection herewith,
including without limitation any and all rights of subrogation, reimbursement,
exoneration, contribution and indemnity or similar rights which the Guarantor
may have against the Borrower at any time, shall be subordinate in any and all
events to any and all rights which the Lender may have against the Borrower in
respect of the Guaranteed Obligations, and the Guarantor will not enforce any
such right until the Guaranteed Obligations have been paid and performed in full
and all commitments to extend credit under the Loan Documents have been fully
terminated.
9.08. Continuing Guaranty. The obligations of the Guarantor
hereunder constitute a continuing agreement and shall continue in full force and
effect (notwithstanding that no Guaranteed Obligations may be outstanding from
time to time, or any other event or circumstance) until all Guaranteed
Obligations and all other amounts payable under this Agreement have been paid
and performed in full, and all commitments to extend credit under the Loan
Documents have terminated, subject in any event to
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reinstatement in accordance with Section 9.04 hereof. Any purported termination,
revocation or discharge of the obligations of the Guarantor hereunder shall be
void and of no effect. For purposes hereof, the Guaranteed Obligations shall not
be deemed to have been paid in full until the Lender shall have received payment
of the Guaranteed Obligations in full and in cash and all commitments to extend
credit under the Loan Documents have terminated.
9.09. Subordination. The Guarantor further agrees that any and
all present and future debts and obligations of the Borrower, any endorser, or
any guarantor of any part or all of the Guaranteed Obligations to the Guarantor
and any and all claims of the Guarantor against the Borrower, any endorser, or
any guarantor of any part or all of the Guaranteed Obligations, or any of their
respective properties, howsoever arising, shall be subordinate and subject in
right of payment to the prior payment, in full, of the Guaranteed Obligations
and as security for the obligations of the Guarantor hereunder, the Guarantor
hereby assigns to the Lender all claims of any nature which the Guarantor may
now or hereafter have against the Borrower.
ARTICLE X
MISCELLANEOUS
10.01. Holidays. Whenever any payment or action to be made or
taken hereunder or under any other Loan Document shall be stated to be due on a
day which is not a Business Day, such payment or action shall be made or taken
on the next following Business Day and such extension of time shall be included
in computing interest or fees, if any, in connection with such payment or
action.
10.02. Records. The unpaid principal amount of the Revolving
Credit Loans, the unpaid interest accrued thereon, the interest rate or rates
applicable to such unpaid principal amount, the duration of such applicability,
and the accrued and unpaid Revolving Credit Commitment Fees and fees pursuant to
Section 3.02 hereof shall at all times be ascertained from the records of the
Lender, which shall be conclusive absent manifest error.
10.03. Amendments and Waivers. Neither this Agreement nor any
Loan Document may be amended, modified or supplemented except by an agreement in
writing signed by the party against whom enforcement of any such amendment,
modification or supplement is sought.
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10.04. No Implied Waiver; Cumulative Remedies. No course of
dealing and no delay or failure of the Lender in exercising any right, power or
privilege under this Agreement or any other Loan Document shall affect any other
or future exercise thereof or exercise of any other right, power or privilege;
nor shall any single or partial exercise of any such right, power or privilege
or any abandonment or discontinuance of steps to enforce such a right, power or
privilege preclude any further exercise thereof or of any other right, power or
privilege. The rights and remedies of the Lender under this Agreement and any
other Loan Document are cumulative and not exclusive of any rights or remedies
which the Lender would otherwise have hereunder or thereunder, at law, in equity
or otherwise.
10.05. Notices.
(a) Except to the extent otherwise expressly permitted
hereunder or thereunder, all notices, requests, demands, directions and other
communications (collectively "notices") under this Agreement or any other Loan
Document shall be in writing (including telecopied communication) and shall be
sent by first-class mail, or by nationally-recognized overnight courier, or by
telecopier (with confirmation in writing mailed first-class or sent by such an
overnight courier), or by personal delivery. All notices shall be sent to the
applicable party at the address stated on the signature pages hereof or in
accordance with the last unrevoked written direction from such party to the
other parties hereto, in all cases with postage or other charges prepaid. Any
such properly given notice shall be effective on the earliest to occur of
receipt, telephone confirmation of receipt of telex or telecopy communication,
one (1) Business Day after delivery to a nationally-recognized overnight
courier, or three (3) Business Days after deposit in the mail, except Standard
Notice, which shall be effective when received by the Lender.
(b) The Lender may rely on any notice (whether or not such
notice is made in a manner permitted or required by this Agreement or any Loan
Document) purportedly made by or on behalf of the Borrower or any other Loan
Party, and the Lender shall have no duty to verify the identity or authority of
any Person giving such notice.
10.06. Expenses; Taxes; Indemnity.
(a) The Borrower agrees to pay or cause to be paid and to save
the Lender harmless against liability for the payment of all reasonable
out-of-pocket costs and expenses (including but not limited to reasonable fees
and expenses of counsel, including local counsel, auditors, consulting
engineers, appraisers, and all
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other professional, accounting, evaluation and consulting costs) incurred by the
Lender from time to time arising from or relating to (i) the negotiation,
preparation, execution, delivery, administration and performance of this
Agreement and the other Loan Documents, (ii) any requested amendments,
modifications, supplements, waivers or consents (whether or not ultimately
entered into or granted) to this Agreement or any Loan Document, and (iii) the
enforcement or preservation of rights under this Agreement or any Loan Document
(including but not limited to any such costs or expenses arising from or
relating to (A) collection or enforcement of an outstanding Revolving Credit
Loan, Reimbursement Obligation or any other amount owing hereunder or thereunder
by the Lender and (B) any litigation, proceeding, dispute, work-out,
restructuring or rescheduling related in any way to this Agreement or the Loan
Documents).
(b) The Borrower hereby agrees to pay all stamp, document,
transfer, recording, filing, registration, search, sales and excise fees and
taxes and all similar impositions now or hereafter determined by the Lender to
be payable in connection with this Agreement or any other Loan Document or any
other documents, instruments or transactions pursuant to or in connection
herewith or therewith, and the Borrower agrees to save the Lender harmless from
and against any and all present or future claims, liabilities or losses with
respect to or resulting from any omission to pay or delay in paying any such
fees, taxes or impositions.
(c) The Borrower hereby agrees to reimburse and indemnify each
of the Indemnified Parties from and against any and all losses, liabilities,
claims, damages, expenses, obligations, penalties, actions, judgments, suits,
costs or disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnified Party in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnified
Party shall be designated a party thereto) that may at any time be imposed on,
asserted against or incurred by such Indemnified Party as a result of, or
arising out of, or in any way related to or by reason of, this Agreement or any
other Loan Document, any transaction from time to time contemplated hereby or
thereby, or any transaction financed in whole or in part or directly or
indirectly with the proceeds of any Revolving Credit Loan (and without in any
way limiting the generality of the foregoing, including any violation or breach
of any Environmental Law or any other Law by any Loan Party or any Subsidiary of
any Loan Party or any Environmental Affiliate of any of them; any Environmental
Claim arising out of the management, use, control, ownership or operation of
property by any of such Persons,
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including all on-site and off-site activities involving Environmental Concern
Materials; or any exercise by the Lender of any of its rights or remedies under
this Agreement or any other Loan Document); but excluding any such losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements resulting solely from the gross
negligence or willful misconduct of such Indemnified Party, as finally
determined by a court of competent jurisdiction. If and to the extent that the
foregoing obligations of the Borrower under this subsection (c), or any other
indemnification obligation of the Borrower hereunder or under any other Loan
Document, are unenforceable for any reason, the Borrower hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable Law.
10.07. Severability. The provisions of this Agreement are
intended to be severable. If any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
10.08. Prior Understandings. This Agreement and the other Loan
Documents supersede all prior and contemporaneous understandings and agreements,
whether written or oral, among the parties hereto relating to the transactions
provided for herein and therein.
10.09. Duration; Survival. All representations and warranties
of the each Loan Party contained herein or in any other Loan Document or made in
connection herewith or therewith shall survive the making of, and shall not be
waived by the execution and delivery, of this Agreement or any other Loan
Document, any investigation by or knowledge of the Lender, the making of any
Revolving Credit Loan, the issuance of any Letter of Credit or any other event
or condition whatever. All covenants and agreements of each Loan Party contained
herein or in any other Loan Document shall continue in full force and effect
from and after the date hereof so long as the Borrower may borrow hereunder or
request the issuance of Letters of Credit hereunder and until payment in full of
all Obligations. Without limitation, all obligations of the Borrower hereunder
or under any other Loan Document to make payments to or indemnify the Lender
shall survive the payment in full of all other Obligations, termination of the
Borrower's right to borrow or to request the issuance of Letters of Credit
hereunder, and all other events and conditions whatever.
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10.10. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an original, but
all such counterparts shall constitute but one and the same instrument.
10.11. Limitation on Payments. The parties hereto intend to
conform to all applicable Laws in effect from time to time limiting the maximum
rate of interest that may be charged or collected. Accordingly, notwithstanding
any other provision hereof or of any other Loan Document, the Borrower shall not
be required to make any payment to or for the account of the Lender, and the
Lender shall refund any payment made by the Borrower, to the extent that such
requirement or such failure to refund would violate or conflict with nonwaivable
provisions of applicable Laws limiting the maximum amount of interest which may
be charged or collected by the Lender.
10.12. Set-Off. Each Loan Party hereby agrees that, to the
fullest extent permitted by law, if an Event of Default shall occur and be
continuing, and if any Obligation of such Loan Party shall be due and payable
(by acceleration or otherwise), the Lender shall have the right, without notice
to such Loan Party, to set-off against and to appropriate and apply to such
Obligation any indebtedness, liability or obligation of any nature owing to such
Loan Party by the Lender, including but not limited to all deposits (whether
time or demand, general or special, provisionally credited or finally credited,
whether or not evidenced by a certificate of deposit) now or hereafter
maintained by such Loan Party with the Lender. If an Event of Default shall
occur and be continuing, such right shall be absolute and unconditional in all
circumstances and, without limitation, shall exist whether or not the Lender or
any other Person shall have given notice or made any demand to the such Loan
Party or any other Person, whether such indebtedness, obligation or liability
owed to such Loan Party is contingent, absolute, matured or unmatured (it being
agreed that the Lender may deem such indebtedness, obligation or liability to be
then due and payable at the time of such setoff), and regardless of the
existence or adequacy of any collateral, guaranty or any other security, right
or remedy available to the Lender or any other Person. Each Loan Party hereby
agrees that, to the fullest extent permitted by law, any Participant and any
branch, subsidiary or affiliate of the Lender or any Participant shall have the
same rights of set-off as the Lender as provided in this Section (regardless of
whether such Participant, branch, subsidiary or affiliate would otherwise be
deemed in privity with or a direct creditor of such Loan Party). The rights
provided by this Section are in addition to all other rights of set-off and
banker's lien and all other rights and
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remedies which the Lender (or any such Participant, branch, subsidiary or
affiliate) may otherwise have under this Agreement, any other Loan Document, at
law or in equity, or otherwise, and nothing in this Agreement or any Loan
Document shall be deemed a waiver or prohibition of or restriction on the rights
of set-off or bankers' lien of any such Person.
10.13. Successors and Assigns; Participations.
(a) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Loan Parties, the Lender, all future
holders of the Revolving Credit Note, and their respective successors and
assigns, except that neither the Lender nor any Loan Party may assign or
transfer any of its rights hereunder or interests herein without the prior
written consent of the other party (which consent shall not be unreasonably
withheld or delayed) and any purported assignment without such consent shall be
void.
(b) Participations. The Lender may, in the ordinary course of
its commercial banking business and in accordance with applicable Law, at any
time sell participations to one or more commercial banks or other Persons (each
a "Participant") in all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of the Revolving Credit Commitment and the Revolving Credit Loans owing
to it and the Revolving Credit Note); provided, that
(i) the Lender's obligations under this Agreement and the
other Loan Documents shall remain unchanged,
(ii) the Lender shall remain solely responsible to the Loan
Parties for the performance of such obligations,
(iii) each Loan Party shall continue to deal solely and
directly with the Lender in connection with the Lender's rights and
obligations under this Agreement and each of the other Loan Documents,
and
(iv) the Lender may enter into any amendment to this Agreement
or to any of the other Loan Documents without the prior consent of any
such Participant, except any amendment which would (A) increase the
Revolving Credit Committed Amount, (B) extend the maturity of the
principal of or any interest on any amount owed to the Lender by the
Loan Parties under this Agreement or any of the other Loan Documents,
(C) reduce the principal amount of or the rate of interest on any
amount owed to the Lender by the Loan Parties under this
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<PAGE> 83
Agreement or any of the other Loan Documents, (D) waive any Event of
Default under this Agreement, or (E) release the Guarantor from any
obligation hereunder.
Each Loan Party agrees that any such Participant shall be entitled to the
benefits of Sections 2.10, 2.11 and 10.06 hereof with respect to its
participation in the Revolving Credit Commitment and the Revolving Credit Loans
outstanding from time to time; provided, that no such Participant shall be
entitled to receive any greater amount pursuant to such Sections than the Lender
would have been entitled to receive in respect of the amount of the
participation transferred to such Participant had no such transfer occurred.
(c) Financial and Other Information. Each Loan Party
authorizes the Lender to disclose to any Participant and any prospective
transferee any and all financial and other information in the Lender's
possession concerning any Loan Party and their respective Subsidiaries and
affiliates which has been or may be delivered to the Lender by or on behalf of
any Loan Party in connection with this Agreement or any other Loan Document or
the Lender's credit evaluation of any Loan Party and their respective
Subsidiaries and affiliates.
10.14. Governing Law; Submission to Jurisdiction: Waiver of
Jury Trial; Limitation of Liability.
(a) Governing Law. THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS
(EXCEPT TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER LOAN
DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE COMMONWEALTH OF PENNSYLVANIA, WITHOUT REGARD TO CHOICE OF LAW
PRINCIPLES.
(b) Certain Waivers. EACH LOAN PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING
IN CONNECTION HEREWITH OR THEREWITH (COLLECTIVELY, "RELATED
LITIGATION") MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION SITTING IN ALLEGHENY COUNTY, PENNSYLVANIA, SUBMITS TO THE
JURISDICTION OF SUCH COURTS, AND TO THE FULLEST EXTENT PERMITTED BY LAW
AGREES THAT IT WILL NOT BRING ANY RELATED LITIGATION IN ANY OTHER FORUM
(BUT NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE LENDER TO BRING ANY
ACTION, SUIT OR PROCEEDING IN ANY OTHER FORUM);
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<PAGE> 84
(ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE
LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT,
WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH RESPECT TO
ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH COURT DOES
NOT HAVE JURISDICTION OVER SUCH PERSON;
(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY REGISTERED OR
CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE LOAN PARTY AT THE ADDRESS
FOR NOTICES DESCRIBED IN SECTION 10.05 HEREOF, AND CONSENTS AND AGREES
THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID AND EFFECTIVE
SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR EFFECTIVENESS
OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW); AND
(iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED
LITIGATION.
(c) Limitation of Liability. TO THE FULLEST EXTENT PERMITTED
BY LAW, NO CLAIM MAY BE MADE BY A LOAN PARTY AGAINST THE LENDER OR ANY
AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF THE LENDER FOR ANY
SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF
ANY CLAIM ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN
CONNECTION HEREWITH OR THEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT OR ANY
OTHER THEORY OF LIABILITY). EACH LOAN PARTY HEREBY WAIVES, RELEASES AND AGREES
NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER SUCH CLAIM PRESENTLY
EXISTS OR ARISES HEREAFTER AND WHETHER OR NOT SUCH CLAIM IS KNOWN OR SUSPECTED
TO EXIST IN ITS FAVOR.
10.15. Termination of Existing Revolving Credit Facilities.
Upon the execution and delivery of this Agreement by each of the parties hereto
and the satisfaction of each of the other conditions set forth in Section 5.01
hereof, the Existing Revolving Credit Facilities and the Security Documents (as
defined therein) and the obligations of the Lender to make Revolving Credit
Extensions of Credit thereunder shall be, and hereby are, terminated and the
Lender shall cause any Liens securing the Obligations thereunder to be
terminated or released. Notwithstanding the foregoing, to the extent that any
Revolving Credit Extensions of Credit or any other Obligations remain
outstanding under any of the Existing Revolving Credit Facilities (including
without limitation Letters of Credit), the Loan Parties hereby acknowledge and
agree that such Revolving Credit Extensions
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<PAGE> 85
of Credit and other Obligations shall constitute Obligations of the Loan Parties
hereunder and not under any of the Existing Revolving Credit Facilities.
10.16. Confidentiality. In accordance with its usual and
customary practices, the Lender shall maintain the confidentiality of
Confidential Information (as hereinafter defined). "Confidential Information"
means any materials, documents or information furnished by or on behalf of the
Borrower in connection with this Agreement designated by or on behalf of any
Loan Party as confidential, except that Confidential Information shall not
include materials, documents or information that (a) is or becomes publicly
available other than as a result of a breach of this Agreement, (b) becomes
available to the Lender on a non-confidential basis from third party or (c) was
available to the Lender on a non-confidential basis.
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<PAGE> 86
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed and delivered this Agreement as of the
date first above written.
BLACK BOX CORPORATION OF PENNSYLVANIA
By: /s/ Anna M. Baird
--------------------------
Title: Chief Financial Officer
--------------------------
Address for Notices:
1000 Park Drive
Pittsburgh, PA 15241
Attn: Anna M. Baird
Telephone: 412/873-6750
Telecopier: 412/873-6784
BLACK BOX CORPORATION
By: /s/ Anna M. Baird
--------------------------
Title: Chief Financial Officer
--------------------------
Address for Notices:
1000 Park Drive
Pittsburgh, PA 15241
Attn: Anna M. Baird
Telephone: 412/873-6750
Telecopier: 412/873-6784
MELLON BANK, N.A.
By: /s/ Mark Latterner
--------------------------
Title: Vice President
--------------------------
Address for Notices:
230 Two Mellon Bank Center
Pittsburgh, PA 15259
Attn: Mark T. Latterner
Telephone: 412/236-1226
Telecopier: 412/234-9010
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<PAGE> 87
ANNEX A To Omnibus Credit Facility Agreement
<TABLE>
<CAPTION>
----------------------------------------- --------------------------------------- --------------------------------------
Applicable Tier Applicable Margin Commitment Fee Rate
----------------------------------------- --------------------------------------- --------------------------------------
<S> <C> <C>
Tier I .5000% .2000%
----------------------------------------- --------------------------------------- --------------------------------------
Tier II .6250% .2500%
----------------------------------------- --------------------------------------- --------------------------------------
Tier III .7500% .3125%
----------------------------------------- --------------------------------------- --------------------------------------
Tier IV .8750% .3125%
----------------------------------------- --------------------------------------- --------------------------------------
Tier V 1.000% .3750%
----------------------------------------- --------------------------------------- --------------------------------------
</TABLE>
As used in this Agreement, the term "Applicable Tier" means,
on any date, whichever of Tier I, Tier II, Tier III, Tier IV or Tier V applies
on such date. Subject to the other provisions of this definition, on the Closing
Date the Applicable Tier shall be Tier I. Thereafter, subject to the other
provisions of this definition, (a) following the end of each fiscal quarter of
the Guarantor, the Loan Parties shall prepare and deliver to the Lender in
accordance with Section 6.01(d) a Quarterly Compliance Certificate, duly
completed and signed by a Responsible Officer, computing which of the financial
tests in the table set forth below the Loan Parties satisfy as of the last day
of such fiscal quarter and (b) the Applicable Tier corresponding to such
financial test shall take effect on the first day of the month following the
month in which the Lender receives such Quarterly Compliance Certificate, and
such Applicable Tier shall continue in effect until reset in accordance with
this definition. If a Quarterly Compliance Certificate is not received by the
Lender by the last day of the month in which it is required to be delivered
under Section 6.01(d), then, without limiting any other rights and remedies of
the Lender, the Applicable Tier shall be deemed to be Tier V for each day from
and including the first day of the month in which such Quarterly Compliance
Certificate was required to be delivered to and including the fifth day after
the date on which such Quarterly Compliance Certificate is received by the
Lender. Notwithstanding anything to the contrary in this definition, the
Applicable Tier shall be deemed to be Tier V in each day on which an Event of
Default has occurred and is continuing.
- i -
<PAGE> 88
For purposes of the foregoing, the "Applicable Tier" shall be
determined by using the following chart:
<TABLE>
<CAPTION>
------------------------------------------------------------- ----------------------------------------------------------
Applicable Tier Consolidated Leverage Ratio
------------------------------------------------------------- ----------------------------------------------------------
<S> <C>
Tier 1 Less than or equal to 1.00 to 1
------------------------------------------------------------- ----------------------------------------------------------
Tier II Less than or equal to 1.50 and greater than 1.00 to
------------------------------------------------------------- ----------------------------------------------------------
Tier III Less than or equal to 2.00 and greater than 1.50 to 1
------------------------------------------------------------- ----------------------------------------------------------
Tier IV Less than or equal to 2.50 and greater than 2.00 to 1
------------------------------------------------------------- ----------------------------------------------------------
Tier V Less than or equal to 3.00 and greater than 2.50 to 1
------------------------------------------------------------- ----------------------------------------------------------
</TABLE>
[END OF ANNEX A]