$20,000,000 REVOLVING CREDIT FACILITY
$5,000,000 TERM LOAN
CREDIT AGREEMENT
by and among
COMPUDYNE CORPORATION
as the Borrower
and
the GUARANTORS
and
the BANKS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION, as Agent
Dated November 16, 2001
Table of Contents
1. CERTAIN DEFINITIONS
1.1 Certain Definitions
1.2 Construction
1.2.1 Number; Inclusion
1.2.2 Determination
1.2.3 Agent's Discretion and Consent
1.2.4 Documents Taken as a Whole
1.2.5 Headings
1.2.6 Implied References to this Agreement
1.2.7 Persons
1.2.8 Modifications to Documents
1.2.9 From, To and Through
1.2.10 Shall; Will
1.3 Accounting Principles
1.4 Concerning Corporate Terms
2. REVOLVING CREDIT FACILITY
2.1 Revolving Credit Commitments
2.2 Nature of Banks' Obligations with Respect to Revolving Credit
Loans
2.3 Commitment Fees
2.4 Revolving Credit Loan Requests
2.5 Making Revolving Credit Loans
2.6 Revolving Credit Notes
2.7 Use of Proceeds
2.8 Letter of Credit Subfacility
2.8.1 Issuance of Letter of Credit
2.8.2 Letter of Credit Fees
2.8.3 Disbursements, Reimbursement
2.8.4 Repayment of Participation Advances
2.8.5 Documentation
2.8.6 Determinations to Honor Drawing Requests
2.8.7 Nature of Participation and Reimbursement Obligations
2.8.8 Indemnity
2.8.9 Liability for Acts and Omissions
2.9 Borrowings to Repay Swing Line Loans
3. TERM LOANS
3.1 Term Loan Commitments
3.2 Nature of Banks' Obligations with Respect to Term Loans
3.3 Term Loan Notes
3.4 Use of Proceeds
4. INTEREST RATES
4.1 Interest Rate Options
4.1.1 Revolving Credit Interest Rate Options
4.1.2 Term Loan Interest Rate Options
4.1.3 Rate Quotations
4.2 Interest Periods
4.2.1 Amount of Borrowing Tranche
4.2.2 Renewals
4.3 Interest After Default
4.3.1 Letter of Credit Fees, Interest Rate
4.3.2 Other Obligations
4.3.3 Acknowledgment
4.4 Euro-Rate Unascertainable; Illegality; Increased Costs;
Deposits Not Available
4.4.1 Unascertainable
4.4.2 Illegality; Increased Costs; Deposits Not Available
4.4.3 Agent's and Bank's Rights
4.5 Selection of Interest Rate Options
5. PAYMENTS
5.1 Payments
5.2 Pro Rata Treatment of Banks
5.3 Interest Payment Dates
5.4 Voluntary Prepayments
5.4.1 Right to Prepay
5.4.2 Replacement of a Bank
5.4.3 Change of Lending Office
5.5 Mandatory Prepayments
5.5.1 Excess Outstandings
5.5.2 Application Among Interest Rate Options
5.6 Additional Compensation in Certain Circumstances
5.6.1 Increased Costs or Reduced Return Resulting from Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc.
5.6.2 Indemnity
6. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties
6.1.1 Organization and Qualification
6.1.2 Capitalization and Ownership
6.1.3 Subsidiaries
6.1.4 Power and Authority
6.1.5 Validity and Binding Effect
6.1.6 No Conflict
6.1.7 Litigation
6.1.8 Title to Properties
6.1.9 Financial Statements
6.1.10 Use of Proceeds; Margin Stock; Section 20 Subsidiaries
6.1.11 Full Disclosure
6.1.12 Taxes
6.1.13 Consents and Approvals
6.1.14 No Event of Default; Compliance with Instruments
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.
6.1.16 Security Interests
6.1.17 Status of the Pledged Collateral
6.1.18 Insurance
6.1.19 Compliance with Laws
6.1.20 Material Contracts; Burdensome Restrictions
6.1.21 Investment Companies; Regulated Entities
6.1.22 Plans and Benefit Arrangements
6.1.23 Employment Matters
6.1.24 Environmental Matters
6.1.25 Senior Debt Status
6.2 Updates to Schedules
7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
7.1 First Loans and Letters of Credit
7.1.1 Officer's Certificate
7.1.2 Secretary's Certificate
7.1.3 Delivery of Loan Documents
7.1.4 Opinion of Counsel
7.1.5 Legal Details
7.1.6 Payment of Fees
7.1.7 Projections
7.1.8 Consents
7.1.9 Excess Availability
7.1.10 No Violation of Laws
7.1.11 No Actions or Proceedings
7.1.12 Insurance Policies; Certificates of Insurance;
Endorsements
7.1.13 Filing Receipts
7.1.14 Title Insurance
7.1.15 Landlord's Waiver
7.1.16 Existing Indebtedness
7.1.17 Secondary Offering Completed
7.2 Each Additional Loan or Letter of Credit
8. COVENANTS
8.1 Affirmative Covenants
8.1.1 Preservation of Existence, Etc.
8.1.2 Payment of Liabilities, Including Taxes, Etc.
8.1.3 Maintenance of Insurance
8.1.4 Maintenance of Properties and Leases
8.1.5 Maintenance of Patents, Trademarks, Etc.
8.1.6 Visitation Rights
8.1.7 Keeping of Records and Books of Account
8.1.8 Plans and Benefit Arrangements
8.1.9 Compliance with Laws
8.1.10 Use of Proceeds
8.1.11 Further Assurances
8.1.12 Subordination of Intercompany Loans
8.1.13 Interest Rate Hedging
8.1.14 Regarding Tiburon
8.2 Negative Covenants
8.2.1 Indebtedness
8.2.2 Liens
8.2.3 Guaranties
8.2.4 Loans and Investments
8.2.5 Dividends and Related Distributions
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions
8.2.7 Dispositions of Assets or Subsidiaries
8.2.8 Affiliate Transactions
8.2.9 Subsidiaries, Partnerships and Joint Ventures
8.2.10 Continuation of or Change in Business
8.2.11 Plans and Benefit Arrangements
8.2.12 Fiscal Year
8.2.13 Issuance of Stock
8.2.14 Changes in Organizational Documents
8.2.15 Capital Expenditures and Leases
8.2.16 Minimum Fixed Charge Coverage Ratio
8.2.17 Maximum Leverage Ratio
8.2.18 Minimum Net Worth
8.3 Reporting Requirements
8.3.1 Quarterly Financial Statements
8.3.2 Annual Financial Statements
8.3.3 Certificate of the Borrower
8.3.4 Borrowing Base Certificate
8.3.5 Notice of Default
8.3.6 Notice of Litigation
8.3.7 Certain Events
8.3.8 Budgets, Forecasts, Other Reports and Information
8.3.9 Notices Regarding Plans and Benefit Arrangements
9. DEFAULT
9.1 Events of Default
9.1.1 Payments Under Loan Documents
9.1.2 Breach of Warranty
9.1.3 Breach of Negative Covenants or Visitation Rights
9.1.4 Breach of Other Covenants
9.1.5 Defaults in Other Agreements or Indebtedness
9.1.6 Final Judgments or Orders
9.1.7 Loan Document Unenforceable
9.1.8 Uninsured Losses; Proceedings Against Assets
9.1.9 Notice of Lien or Assessment
9.1.10 Insolvency
9.1.11 Events Relating to Plans and Benefit Arrangements
9.1.12 Cessation of Business
9.1.13 Change of Control
9.1.14 Involuntary Proceedings
9.1.15 Voluntary Proceedings
9.2 Consequences of Event of Default
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings
9.2.3 Set-off
9.2.4 Suits, Actions, Proceedings
9.2.5 Application of Proceeds
9.2.6 Other Rights and Remedies
9.3 Notice of Sale
10. THE AGENT
10.1 Appointment
10.2 Delegation of Duties
10.3 Nature of Duties; Independent Credit Investigation
10.4 Actions in Discretion of Agent; Instructions From the Banks
10.5 Reimbursement and Indemnification of Agent by the Borrower
10.6 Exculpatory Provisions; Limitation of Liability
10.7 Reimbursement and Indemnification of Agent by Banks
10.8 Reliance by Agent
10.9 Notice of Default
10.10 Notices
10.11 Banks in Their Individual Capacities; Agent in its Individual
Capacity
10.12 Holders of Notes
10.13 Equalization of Banks
10.14 Successor Agent
10.15 Agent's Fee and Agent's Letter
10.16 Availability of Funds
10.17 Calculations
10.18 Beneficiaries
11.MISCELLANEOUS
11.1 Modifications, Amendments or Waivers
11.1.1 Increase of Commitment; Extension of Expiration Date
11.1.2 Extension of Payment; Reduction of Principal Interest
or Fees; Modification of Terms of Payment
11.1.3 Release of Collateral or Guarantor
11.1.4 Miscellaneous
11.2 No Implied Waivers; Cumulative Remedies; Writing Required
11.3 Reimbursement and Indemnification of Banks by the Borrower;
Taxes
11.4 Holidays
11.5 Funding by Branch, Subsidiary or Affiliate
11.5.1 Notional Funding
11.5.2 Actual Funding
11.6 Notices
11.7 Severability
11.8 Governing Law
11.9 Prior Understanding
11.10 Duration; Survival
11.11 Successors and Assigns
11.12 Confidentiality
11.12.1 General
11.12.2 Sharing Information With Affiliates of the Banks
11.13 Counterparts
11.14 Agent's or Bank's Consent
11.15 Exceptions
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL
11.17 Tax Withholding Clause
11.18 Joinder of Guarantors
LIST OF SCHEDULES AND EXHIBITS
------------------------------
SCHEDULES
---------
SCHEDULE 1.1(B) - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
SCHEDULE 1.1(I) - PERMITTED INVESTMENTS
SCHEDULE 1.1(L) - EXISTING LETTERS OF CREDIT
SCHEDULE 1.1(P) - PERMITTED LIENS
SCHEDULE 6.1.1 - QUALIFICATIONS TO DO BUSINESS
SCHEDULE 6.1.2 - CAPITALIZATION
SCHEDULE 6.1.3 - SUBSIDIARIES
SCHEDULE 6.1.7 - LITIGATION
SCHEDULE 6.1.8 - OWNED AND LEASED REAL PROPERTY
SCHEDULE 6.1.13 - CONSENTS AND APPROVALS
SCHEDULE 6.1.15 - PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.
SCHEDULE 6.1.17 - PARTNERSHIP AGREEMENTS; LLC AGREEMENTS
SCHEDULE 6.1.18 - INSURANCE POLICIES
SCHEDULE 6.1.20 - MATERIAL CONTRACTS
SCHEDULE 6.1.22 - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 6.1.24 - ENVIRONMENTAL DISCLOSURES
SCHEDULE 8.2.1 - PERMITTED INDEBTEDNESS
EXHIBITS
--------
EXHIBIT 1.1(A) - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(B) - BORROWING BASE CERTIFICATE
EXHIBIT 1.1(G) - GUARANTOR JOINDER
EXHIBIT 1.1(R) - REVOLVING CREDIT NOTE
EXHIBIT 1.1(SN) - SWING LINE NOTE
EXHIBIT 1.1(SW) - SWING LINE PROVISIONS
EXHIBIT 1.1(T) - TERM NOTE
EXHIBIT 2.4 - LOAN REQUEST
EXHIBIT 7.1.15 - LANDLORDS WAIVER
EXHIBIT 8.2.6 - ACQUISITION COMPLIANCE CERTIFICATE
EXHIBIT 8.3.3 - QUARTERLY COMPLIANCE CERTIFICATE
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated November 16, 2001 and is made by and
among COMPUDYNE CORPORATION, a Nevada corporation (the "Borrower" or the
"Company"), each of the Guarantors (as hereinafter defined), the BANKS
(as hereinafter defined), and PNC BANK, NATIONAL ASSOCIATION, in its
capacity as agent for the Banks under this Agreement (hereinafter
referred to in such capacity as the "Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Banks to provide (i) a
revolving credit facility to the Borrower in an aggregate principal
amount not to exceed $20,000,000 and (ii) a $5,000,000 term loan
facility; and
WHEREAS, the revolving credit and term loan facilities shall be
used to refinance the Existing Facility, replace the Existing Letters
of Credit and issue other Letters of Credit and other general corporate
purposes; and
WHEREAS, the Banks are willing to provide such credit upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants and agreements hereinafter set forth and intending to
be legally bound hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
1.1 Certain Definitions.
In addition to words and terms defined elsewhere in this Agreement,
including Exhibit 1.1(SW) with respect to the Swing Line Provisions, the
following words and terms shall have the following meanings,
respectively, unless the context hereof clearly requires otherwise:
Account shall mean any account, contract right, general intangible,
chattel paper, instrument or document representing any right to payment
for goods sold or services rendered, whether or not earned by
performance and whether or not evidenced by a contract, instrument or
document, which is now owned or hereafter acquired by a Loan Party.
Account Debtor shall mean any person which is or which may become
obligated to a Loan Party under, with respect to, or on account of, an
Account.
Affiliate as to any Person shall mean any other Person (i) which
directly or indirectly controls, is controlled by, or is under common
control with such Person, (ii) which beneficially owns or holds 5% or
more of any class of the voting or other equity interests of such
Person, or (iii) 5% or more of any class of voting interests or other
equity interests of which is beneficially owned or held, directly or
indirectly, by such Person. Control, as used in this definition, shall
mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise,
including the power to elect a majority of the directors or trustees of
a corporation or trust, as the case may be.
Agent shall mean PNC Bank, National Association, and its successors
and assigns.
Agent's Fee shall have the meaning assigned to that term in Section
10.15.
Agent's Letter shall have the meaning assigned to that term in
Section 10.15.
Agreement shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time, including all schedules and
exhibits.
Annual Statements shall have the meaning assigned to that term in
Section 6.1.9((i)).
Applicable Margin shall mean with reference to Loans to which the
Base Rate Option or the Euro-Rate Option applies, an amount in excess of
the Base Rate or Euro-Rate, as appropriate, calculated in respect of the
most-recently reported Leverage Ratio commencing with the fiscal quarter
ending December 31, 2001 according to the table set forth below.
Applicable Margin shall change five (5) days after internally-prepared
financial statements for the period ending December 31, 2001 are
delivered and, thereafter, Applicable Margin shall change five (5) days
after the day financial statements are due to be delivered pursuant to
Sections 8.3.1 [Quarterly Financial Statements] and 8.3.2 [Annual
Financial Statements] and if information necessary to make such
determination is not timely delivered pursuant to such sections,
Applicable Margin shall be at "Level V" in the following table until
such information is delivered.
APPLICABLE MARGIN
-----------------
Applicable Applicable Applicable Applicable
Margin for Margin for Commitment Margin for Margin for
Euro-Rate Base Rate Fee Euro-Rate Base Rate
Leverage Loans (%) Loans (%) Applicable Loans % Loans %
Level Ratio (Revolver) (Revolver) ▇▇▇▇▇▇ (%) (TERM) (TERM)
----- ----- ---------- ---------- ---------- ------- --------
I less 1.50 .25 .25 1.75 .5
than
1.25
-to-
1.0
II Greater 1.75 .50 .30 2.0 .75
than
or equal to-
1.25-to-1.0 but
less than 1.5-
to-1.0
III Greater 2.00 .75 .35 2.25 1.0
than
or equal to
1.50-to-1.0 but
less than 2.0-
to-1.0
IV Greater 2.25 1.0 .40 2.50 1.25
than
or equal to
2.0-to-1.0 but
less than 2.5
to 1.0
V Greater 2.50 1.25 .50 2.75 1.5
than
or equal to
2.5-to-1.0
For periods prior to the date in respect of which the Applicable
Margin is first calculated according to the table set forth above, the
Applicable Margin shall be at "Level III" shown on the chart above.
Assignment and Assumption Agreement shall mean an Assignment and
Assumption Agreement by and among a Purchasing Bank, a Transferor Bank
and the Agent, as Agent and on behalf of the remaining Banks,
substantially in the form of Exhibit 1.1(A).
Authorized Officer shall mean those individuals, designated by
written notice to the Agent from the Borrower, authorized to execute
notices, reports and other documents on behalf of the Loan Parties
required hereunder. The Borrower may amend such list of individuals
from time to time by giving written notice of such amendment to the
Agent.
Banks shall mean the financial institutions named on Schedule
1.1(B) and their respective successors and assigns as permitted
hereunder, each of which is referred to herein as a Bank.
Base Rate shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office
as its then prime rate, which rate may not be the lowest rate then being
charged commercial borrowers by the Agent, or (ii) the Federal Funds
Effective Rate plus .5% per annum.
Base Rate Option shall mean either the Revolving Credit Base Rate
Option or the Term Loan Base Rate Option.
Benefit Arrangement shall mean at any time an "employee benefit
plan," within the meaning of Section 3(3) of ERISA, which is neither a
Plan nor a Multiemployer Plan and which is maintained, sponsored or
otherwise contributed to by any member of the ERISA Group.
▇▇▇▇▇ Subordinated Debt shall mean the indebtedness owing to
▇▇▇▇▇▇▇ ▇▇▇▇▇ Mezzanine Capital Fund II, L.P. pursuant to the Senior
Subordinated Term Note due December 31, 2005 and repaid in full prior
to the Closing Date.
Borrower shall mean CompuDyne Corporation, a corporation organized
and existing under the laws of the State of Nevada.
Borrowing Base shall mean at any time an amount in Dollars equal
to the sum of (x) fifty percent (50%) of Qualified Inventory, (y) 80%
of Qualified Accounts and (z) 60% of Qualified Bookings as any of the
foregoing is modified from time to time pursuant to Section 2.1;
provided that until the earlier of (A) the completion of the Tiburon
Transaction and (B) January 10, 2002, the Borrowing Base shall be as
follows: an amount in Dollars equal to the sum of (w) fifty percent
(50%) of Qualified Inventory, (x) 80% of Qualified Accounts
(y) 60% of Qualified Bookings and (z) $3,000,000 in respect of shares
of Tiburon in which the Agent has a perfected first lien security
interest. Each such advance rate is subject to periodic review and
analysis by the Banks and is therefore subject to change from time to
time or any time.
Borrowing Base Certificate shall mean the Borrowing Base
Certificate given by the Borrower to the Banks on the Closing Date and
from time to time pursuant to Section 8.3.2 in the form of Exhibit
1.1(B).
Borrowing Date shall mean, with respect to any Loan, the date for
the making thereof or the renewal or conversion thereof at or to the
same or a different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of Loans
outstanding as follows: (i) any Loans to which a Euro-Rate Option
applies which become subject to the same Interest Rate Option under the
same Loan Request by the Borrower and which have the same Interest
Period shall constitute one Borrowing Tranche, and (ii) all Loans to
which a Base Rate Option applies shall constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or Sunday or
a legal holiday on which commercial banks are authorized or required to
be closed for business in Pittsburgh, Pennsylvania and if the applicable
Business Day relates to any Loan to which the Euro-Rate Option applies,
such day must also be a day on which dealings are carried on in the
London interbank market.
Capital Expenditures shall mean any and all payments on account of
the purchase or lease of any assets which if purchased would constitute
fixed assets or which if leased would constitute a capitalized lease,
all determined in accordance with GAAP but excluding such payments made
with casualty insurance proceeds and condemnation awards to the extent
used to replace the property to which such proceeds or awards pertain.
Cash Flow from Operations for any period of determination shall
mean (i) EBITDA minus Capital Expenditures, cash taxes and distributions
for the previous four (4) quarters.
Closing Date shall mean the Business Day on which the first Loan
shall be made, which shall be the date hereof. The closing shall take
place at _____ a.m., __________ time, on the Closing Date at the
offices of ▇▇▇▇▇▇▇▇ Ingersoll Professional Corporation in _________,
Pennsylvania or at such other time and place as the parties agree.
Collateral shall mean the Pledged Collateral, the UCC Collateral
and the Intellectual Property Collateral.
Commercial Letter of Credit shall mean any Letter of Credit which
is a commercial letter of credit issued in respect of the purchase of
goods or services by one or more of the Loan Parties in the ordinary
course of their business.
Commitment shall mean as to any Bank the aggregate of its Revolving
Credit Commitment and Term Loan Commitment, and Commitments shall mean
the aggregate of the Revolving Credit Commitments, and Term Loan
Commitments of all of the Banks.
Commitment Fee shall have the meaning assigned to that term in
Section 2.3.
Compliance Certificate shall have the meaning assigned to such term
in Section 8.3.3.
Consideration shall mean with respect to any Permitted Acquisition,
the aggregate of (i) the cash paid by any of the Loan Parties, directly
or indirectly, to the seller in connection therewith, (ii) the
Indebtedness incurred or assumed by any of the Loan Parties, whether
in favor of the seller or otherwise and whether fixed or contingent,
(iii) any Guaranty given or incurred by any Loan Party in connection
therewith, and (iv) any other consideration given or obligation incurred
by any of the Loan Parties in connection therewith.
Contamination shall mean the presence or release or threat of
release of Regulated Substances in, on, under or emanating to or from
the Property, which pursuant to Environmental Laws requires
notification or reporting to an Official Body, or which pursuant to
Environmental Laws requires the investigation, cleanup, removal,
remediation, containment, abatement of or other response action or
which otherwise constitutes a violation of Environmental Laws.
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful
money of the United States of America.
Drawing Date shall have the meaning assigned to that term in
Section 2.8.3.2.
EBITDA shall mean net income plus non-cash extraordinary or
non-cash unusual items, depreciation, amortization, interest expense and
income tax expense calculated in respect of the prior four (4)
consecutive fiscal quarters in each case of the Borrower on a
consolidated basis and determined and consolidated in accordance with
GAAP and (x) shall be calculated to include any business acquired in a
Permitted Acquisition if either (1) the Borrower provides to the Banks
audited financial statements of such business, acceptable to Required
Banks, and such business (if it is a legal entity) becomes a Guarantor
contemporaneously with such Permitted Acquisition or (2) Required Banks
have consented to such inclusions and (y) shall be calculated to exclude
any portion of the net earnings of any Subsidiary that is not a
Guarantor or that, by reason of any contract or charter restriction or
applicable law or regulation, is unavailable for payment of dividends to
any Guarantor.
Environmental Complaint shall mean any written complaint by any
Person or Official Body setting forth a cause of action for personal
injury or property damage, natural resource damage, contribution or
indemnity for response costs, civil or administrative penalties,
criminal fines or penalties, or declaratory or equitable relief arising
under any Environmental Laws or any order, notice of violation,
citation, subpoena, request for information or other written notice or
demand of any type issued by an Official Body pursuant to any
Environmental Laws.
Environmental Laws shall mean all federal, state, local and foreign
Laws and any consent decrees, settlement agreements, judgments, orders,
directives, policies or programs issued by or entered into with an
Official Body pertaining or relating to: (i) pollution or pollution
control; (ii) protection of human health or the environment; (iii)
employee safety in the workplace; (iv) the presence, use, management,
generation, manufacture, processing, extraction, treatment, recycling,
refining, reclamation, labeling, transport, storage, collection,
distribution, disposal or release or threat of release of Regulated
Substances; (v) the presence of Contamination; (vi) the protection of
endangered or threatened species; and (vii) the protection of
Environmentally Sensitive Areas.
Environmentally Sensitive Area shall mean (i) any wetland as
defined by applicable Environmental Laws; (ii) any area designated as a
coastal zone pursuant to applicable Laws, including Environmental Laws;
(iii) any area of historic or archeological significance or scenic area
as defined or designated by applicable Laws, including Environmental
Laws; (iv) habitats of endangered species or threatened species as
designated by applicable Laws, including Environmental Laws; or (v) a
flood plain or other flood hazard area as defined pursuant to any
applicable Laws.
ERISA shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and
any successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
ERISA Group shall mean, at any time, the Borrower and all members
of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other
entities which, together with the Borrower, are treated as a single
employer under Section 414 of the Internal Revenue Code.
Euro-Rate shall mean, with respect to the Loans comprising any
Borrowing Tranche to which the Euro-Rate Option applies for any Interest
Period, the interest rate per annum determined by the Agent by
dividing (the resulting quotient rounded upwards, if necessary, to the
nearest 1/100th of 1% per annum) (i) the rate of interest determined by
the Agent in accordance with its usual procedures (which determination
shall be conclusive absent manifest error) to be the average of the
London interbank offered rates for U.S. Dollars quoted by the British
Bankers' Association as set forth on Dow ▇▇▇▇▇ Markets Service (formerly
known as Telerate) (or appropriate successor or, if the British Bankers'
Association or its successor ceases to provide such quotes, a comparable
replacement determined by the Agent) display page 3750 (or such other
display page on the Dow ▇▇▇▇▇ Markets Service system as may replace
display page 3750) two (2) Business Days prior to the first day of such
Interest Period for an amount comparable to such Borrowing Tranche and
having a borrowing date and a maturity comparable to such Interest
Period by (ii) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage. The Euro-Rate may also be expressed by the following
formula:
Average of London interbank offered rates quoted
by BBA or appropriate successor as shown on
Euro-Rate = Dow ▇▇▇▇▇ Markets Service display page 3750
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Loan to which
the Euro-Rate Option applies that is outstanding on the effective date
of any change in the Euro-Rate Reserve Percentage as of such effective
date. The Agent shall give prompt notice to the Borrower of the
Euro-Rate as determined or adjusted in accordance herewith, which
determination shall be conclusive absent manifest error.
Euro-Rate Option shall mean either the Revolving Credit Euro-Rate
Option or the Term Loan Euro-Rate Option.
Euro-Rate Reserve Percentage shall mean as of any day the maximum
percentage in effect on such day, as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including supplemental, marginal
and emergency reserve requirements) with respect to eurocurrency funding
(currently referred to as "Eurocurrency Liabilities").
Event of Default shall mean any of the events described in Section
9.1 and referred to therein as an "Event of Default."
Existing Facility shall mean the term loan and revolving credit
facility aggregating approximately $21,500,000 provided by LaSalle Bank
National Association and SunTrust, Inc. pursuant to the credit
agreement dated November 30, 1998 and repaid in full on the Closing
Date.
Existing IRB shall mean the existing financing arrangement pursuant
to which the Industrial Development Board of the City of Montgomery,
Alabama issued certain industrial development revenue bonds pursuant
to a Trust Indenture dated as of August 1, 1999 for the purpose of
financing certain improvements to real property beneficially owned by
▇▇▇▇▇▇▇ Security Group, Inc. in Montgomery, Alabama.
Existing Letters of Credit shall mean the Letters of credit issued
under the Existing Facility and listed on Schedule 1.1(L).
Expiration Date shall mean, with respect to the Revolving Credit
Commitments, November 16, 2004.
Federal Funds Effective Rate for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded
upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank
of New York (or any successor) on such day as being the weighted average
of the rates on overnight federal funds transactions arranged by federal
funds brokers on the previous trading day, as computed and announced by
such Federal Reserve Bank (or any successor) in substantially the same
manner as such Federal Reserve Bank computes and announces the weighted
average it refers to as the "Federal Funds Effective Rate" as of
the date of this Agreement; provided, if such Federal Reserve Bank (or
its successor) does not announce such rate on any day, the "Federal
Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
Financial Projections shall have the meaning assigned to that term
in Section 6.1.9((ii)).
Fixed Charge Coverage Ratio shall mean the ratio of Cash Flow From
Operations to Fixed Charges.
Fixed Charges shall mean for any period of determination the sum
of interest expense and scheduled principal installments on Indebtedness
(as adjusted for prepayments) for the prior four (4) fiscal quarters
in each case of the Borrower and its Subsidiaries for such period
determined and consolidated in accordance with GAAP.
GAAP shall mean generally accepted accounting principles as are in
effect from time to time, subject to the provisions of Section 1.3, and
applied on a consistent basis both as to classification of items and
amounts.
Governmental Acts shall have the meaning assigned to that term in
Section 2.8.8.
Guarantor shall mean each of the parties to this Agreement which is
designated as a "Guarantor" on the signature page hereof and each other
Person which joins this Agreement as a Guarantor after the date hereof
pursuant to Section 11.18.
Guarantor Joinder shall mean a joinder by a Person as a Guarantor
under this Agreement, the Guaranty Agreement and the other Loan
Documents in the form of Exhibit 1.1(G).
Guaranty of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of
any other Person in any manner, whether directly or indirectly,
including any agreement to indemnify or hold harmless any other Person,
any performance bond or other suretyship arrangement and any other form
of assurance against loss, except endorsement of negotiable or other
instruments for deposit or collection in the ordinary course of
business.
Guaranty Agreement shall mean the Guaranty and Suretyship Agreement
dated the Closing Date executed and delivered by each of the Guarantors
to the Agent for the benefit of the Banks.
Guaranty Security Agreement shall mean the Guaranty Security
Agreement dated the Closing Date and executed and delivered by the
Guarantors to the Agent for the benefit of the Banks.
Historical Statements shall have the meaning assigned to that term
in Section 6.1.9((i)).
Indebtedness shall mean, as to any Person at any time, any and all
indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent,
or joint or several) of such Person for or in respect of: (i) borrowed
money, (ii) amounts raised under or liabilities in respect of any note
purchase or acceptance credit facility, (iii) reimbursement obligations
(contingent or otherwise) under any letter of credit, currency swap
agreement, interest rate swap, cap, collar or floor agreement or
other interest rate management device, (iv) any other transaction
(including forward sale or purchase agreements, capitalized leases and
conditional sales agreements) having the commercial effect of a
borrowing of money entered into by such Person to finance its operations
or capital requirements (but not including trade payables and accrued
expenses incurred in the ordinary course of business which are not
represented by a promissory note or other evidence of indebtedness and
which are not more than thirty (30) days past due), or (v) any Guaranty
of Indebtedness for borrowed money.
Ineligible Security shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System
under Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24,
Seventh), as amended.
Insolvency Proceeding shall mean, with respect to any Person, (a)
a case, action or proceeding with respect to such Person (i) before any
court or any other Official Body under any bankruptcy, insolvency,
reorganization or other similar Law now or hereafter in effect, or (ii)
for the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator, conservator (or similar official) of any Loan
Party or otherwise relating to the liquidation, dissolution, winding-up
or relief of such Person, or (b) any general assignment for the
benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of such Person's creditors
generally or any substantial portion of its creditors; undertaken under
any Law.
Intellectual Property Collateral shall mean all of the property
described in the Patent, Trademark and Copyright Security Agreement.
Intercompany Subordination Agreement shall mean a Subordination
Agreement among the Loan Parties and executed and delivered to the
Agent on the Closing Date.
Interest Period shall mean the period of time selected by the
Borrower in connection with (and to apply to) any election permitted
hereunder by the Borrower to have Revolving Credit Loans or Term Loans
bear interest under the Euro-Rate Option. Subject to the last sentence
of this definition, such period shall be (i) one Month if Borrower
selects the Euro-Rate Option during the Syndications Period and (ii)
one, two, three or six Months if Borrower selects the Euro-Rate Option
after the Syndications Period has ended. Such Interest Period shall
commence on the effective date of such Interest Rate Option, which shall
be (i) the Borrowing Date if the Borrower is requesting new Loans, or
(ii) the date of renewal of or conversion to the Euro-Rate Option if the
Borrower is renewing or converting to the Euro-Rate Option applicable to
outstanding Loans. Notwithstanding the second sentence hereof: (A) any
Interest Period which would otherwise end on a date which is not a
Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day,
and (B) the Borrower shall not select, convert to or renew an Interest
Period for any portion of the Loans that would end after the Expiration
Date.
Interest Rate Option shall mean any Euro-Rate Option or Base Rate
Option.
Interim Statements shall have the meaning assigned to that term in
Section 6.1.9((i)).
Internal Revenue Code shall mean the Internal Revenue Code of 1986,
as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations
thereunder, as from time to time in effect.
Labor Contracts shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among
any Loan Party or Subsidiary of a Loan Party and its employees.
Law shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling,
order, injunction, writ, decree, bond, judgment, authorization or
approval, lien or award of or settlement agreement with any Official
Body.
Letter of Credit shall have the meaning assigned to that term in
Section 2.8.1.
Letter of Credit Borrowing shall have the meaning assigned to such
term in Section 2.8.3.4.
Letter of Credit Fee shall have the meaning assigned to that term
in Section 2.8.2.
Letter of Credit Outstanding shall mean at any time the sum of (i)
the aggregate undrawn face amount of outstanding Letters of Credit and
(ii) the aggregate amount of all unpaid and outstanding Reimbursement
Obligations and Letter of Credit Borrowings.
Leverage Ratio shall mean the ratio of (x) consolidated
Indebtedness for borrowed money, capital leases, Guaranties of borrowed
money and reimbursement obligations in respect of letters of credit of
the Borrower and its Subsidiaries to (y) EBITDA.
Lien shall mean any mortgage, deed of trust, pledge, lien, security
interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given,
including any conditional sale or title retention arrangement, and any
assignment, deposit arrangement or lease intended as, or having the
effect of, security and any filed financing statement (other than
precautionary financing statements filed in respect or operating leases)
or other notice of any of the foregoing (whether or not a lien or other
encumbrance is created or exists at the time of the filing).
LLC Interests shall have the meaning given to such term in Section
6.1.3.
Loan Documents shall mean this Agreement, the Agent's Letter, the
Security Agreement, the Guaranty Agreement, the Guaranty Security
Agreement, the Intercompany Subordination Agreement, the Swing Line
Agreements, the Notes, the Patent, Trademark and Copyright Security
Agreement, the Pledge Agreement, the Mortgage and any other instruments,
certificates or documents delivered or contemplated to be delivered
hereunder or thereunder or in connection herewith or therewith, as the
same may be supplemented or amended from time to time in accordance
herewith or therewith, and Loan Document shall mean any of the Loan
Documents.
Loan Parties shall mean the Borrower and the Guarantors.
Loan Request shall have the meaning given to such term in Section
2.4.
Loans shall mean collectively and Loan shall mean separately all
Revolving Credit Loans and the Term Loans or any Revolving Credit Loan
or any Term Loan and all Swing Line Loans pursuant to Schedule 1.1(SW).
Material Adverse Change shall mean any set of circumstances or
events which (a) has or could reasonably be expected to have any
material adverse effect whatsoever upon the validity or enforceability
of this Agreement or any other Loan Document, (b) is or could reasonably
be expected to be material and adverse to the business, properties,
assets, financial condition, results of operations or prospects of the
Loan Parties taken as a whole, (c) impairs materially or could
reasonably be expected to impair materially the ability of the Loan
Parties taken as a whole to duly and punctually pay or perform its
Indebtedness, or (d) impairs materially or could reasonably be expected
to impair materially the ability of the Agent or any of the Banks, to
the extent permitted, to enforce their legal remedies pursuant to this
Agreement or any other Loan Document.
Month, with respect to an Interest Period under the Euro-Rate
Option, shall mean the interval between the days in consecutive calendar
months numerically corresponding to the first day of such Interest
Period. If any Euro-Rate Interest Period begins on a day of a calendar
month for which there is no numerically corresponding day in the month
in which such Interest Period is to end, the final month of such
Interest Period shall be deemed to end on the last Business Day of such
final month.
Mortgage shall mean collectively the mortgages or deeds of trust
dated the Closing Date with respect to the Real Property executed and
delivered by one or more of the Loan Parties to the Agent for the
benefit of the Banks.
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 member of the ERISA
Group is then making or accruing an obligation to make contributions or,
within the preceding five Plan years, has made or had an obligation to
make such contributions.
Multiple Employer Plan shall mean a Plan which has two or more
contributing sponsors (including the Borrower or any member of the ERISA
Group) at least two of whom are not under common control, as such a plan
is described in Sections 4063 and 4064 of ERISA.
Net Worth shall mean "net worth" of the Borrower and its
Subsidiaries, consolidated and determined in accordance with GAAP.
Notes shall mean the Revolving Credit Notes, the Term Notes and the
Swing Line Note.
Notices shall have the meaning assigned to that term in Section
11.6.
Obligation shall mean any obligation or liability of any of the
Loan Parties to the Agent or any of the Banks, howsoever created,
arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due, under
or in connection with this Agreement, the Notes (including the Swing
Line Note), the Letters of Credit, the Agent's Letter or any other Loan
Document.
Official Body shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority,
board, bureau, central bank, commission, department or instrumentality
of either, or any court, tribunal, grand jury or arbitrator, in each
case whether foreign or domestic.
Participation Advance shall mean, with respect to any Bank, such
Bank's payment in respect of its participation in a Letter of Credit
Borrowing according to its Ratable Share pursuant to Section 2.8.3.4.
Partnership Interests shall have the meaning given to such term in
Section 6.1.3.
Patent, Trademark and Copyright Security Agreement shall mean the
Patent, Trademark and Copyright Security Agreement executed and
delivered by each of the Loan Parties to the Agent for the benefit of
the Banks.
PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any
successor.
Permitted Acquisitions shall have the meaning assigned to such
term in Section 8.2.6.
Permitted Investments shall mean:
(i) direct obligations of the United States of America or any
agency or instrumentality thereof or obligations backed by the full
faith and credit of the United States of America maturing in twelve (12)
months or less from the date of acquisition;
(ii) commercial paper maturing in 180 days or less rated not
lower than A-1, by Standard & Poor's or P-1 by ▇▇▇▇▇'▇ Investors
Service, Inc. on the date of acquisition;
(iii) demand deposits, time deposits or certificates of deposit
maturing within one year in commercial banks whose obligations are rated
A-1, A or the equivalent or better by Standard & Poor's on the date of
acquisition;
(iv) Investments in Permitted Acquisitions;
(v) Investments in Account Debtors received in settlement of
payment defaults or plans of reorganization;
(vi) Investments in Tiburon incident to the Tiburon Transaction;
and
(vii) The Investments listed on Schedule 1.1(I).
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges, incurred
in the ordinary course of business and which are not yet due and
payable;
(ii) Pledges or deposits made in the ordinary course of business
to secure payment of workmen's compensation, or to participate in any
fund in connection with workmen's compensation, unemployment insurance,
old-age pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen, carriers, or
other like Liens, securing obligations incurred in the ordinary course
of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and
payable or in default;
(iv) Good-faith pledges or deposits made in the ordinary course
of business to secure performance of bids, tenders, contracts (other
than for the repayment of borrowed money) or leases, not in excess of
the aggregate amount due thereunder, or to secure statutory obligations,
or surety, appeal, indemnity, performance or other similar bonds
required in the ordinary course of business;
(v) Encumbrances consisting of zoning restrictions, easements or
other restrictions on the use of real property, none of which materially
impairs the use of such property or the value thereof, and none of which
is violated in any material respect by existing or proposed structures
or land use;
(vi) Liens, security interests and mortgages in favor of the
Agent for the benefit of the Banks;
(vii) Liens on property leased by any Loan Party or Subsidiary
of a Loan Party under capital and operating leases permitted in Section
8.2.15 securing obligations of such Loan Party or Subsidiary to the
lessor under such leases;
(viii) Any Lien existing on the date of this Agreement and
described on Schedule 1.1(P), provided that the principal amount secured
thereby is not hereafter increased, and no additional assets become
subject to such Lien;
(ix) Purchase Money Security Interests, provided that the
aggregate amount of loans and deferred payments secured by such Purchase
Money Security Interests shall not exceed $500,000 (excluding for the
purpose of this computation any loans or deferred payments secured by
Liens described on Schedule 1.1(P)) or any refinancings thereof (provide
the principal amount thereof is not increased);
(x) Liens in favor of the Loan Parties' bonding companies
pursuant to arrangements described in detail on Schedule 1.1(P);
(xi) Liens on property acquired in a Permitted Acquisition;
(xii) Liens securing the Existing IRB or any refinancings thereof
(provide the principal amount thereof is not increased);
(xiii) Liens on the Real Property permitted by the Mortgage;
(xiv) Liens comprising financing statements remaining of record
not later than November 26, 2001 in respect of the Existing Facility
repaid on the Closing Date; and
(xv) The following, (A) if the validity or amount thereof is
being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have been
stayed and continue to be stayed or (B) if a final judgment is entered
and such judgment is discharged within thirty (30) days of entry, and
in either case they do not affect the Collateral or, in the aggregate,
materially impair the ability of any Loan Party to perform its
Obligations hereunder or under the other Loan Documents:
(1) Claims or Liens for taxes, assessments or charges due and
payable and subject to interest or penalty, provided that the applicable
Loan Party maintains such reserves or other appropriate provisions as
shall be required by GAAP and pays all such taxes, assessments or
charges forthwith upon the commencement of proceedings to foreclose any
such Lien;
(2) Claims, Liens or encumbrances upon, and defects of title
to, real or personal property other than the Collateral, including any
attachment of personal or real property or other legal process prior to
adjudication of a dispute on the merits;
(3) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens; or
(4) Liens resulting from final judgments or orders described
in Section 9.1.6.
Person shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political
subdivision or agency thereof, or any other entity.
Plan shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which
is covered by Title IV of ERISA or is subject to the minimum funding
standards under Section 412 of the Internal Revenue Code and either (i)
is maintained by any member of the ERISA Group for employees of any
member of the ERISA Group or (ii) has at any time within the preceding
five years been maintained by any entity which was at such time a member
of the ERISA Group for employees of any entity which was at such time a
member of the ERISA Group.
Pledge Agreement shall mean the Pledge Agreement dated the Closing
Date executed and delivered by the Borrower to the Agent for the benefit
of the Banks in respect of (i) all of the shares of the outstanding
capital outstanding stock of Tiburon owned by any Loan Party and (ii)
all of the shares of all of the Borrower's Subsidiaries.
Pledged Collateral shall mean the property of the Loan Parties in
which security interests are to be granted under the Pledge Agreement
or the Security Agreement.
PNC Bank shall mean PNC Bank, National Association, its successors
and assigns.
Potential Default shall mean any event or condition which with
notice, passage of time or a determination by the Agent or the Required
Banks, or any combination of the foregoing, would constitute an Event
of Default.
Principal Office shall mean the main banking office of the Agent
in Pittsburgh, Pennsylvania.
Prior Security Interest shall mean a valid and enforceable
perfected first-priority security interest under the Uniform Commercial
Code in the UCC Collateral and the Pledged Collateral which is subject
only to Liens for taxes not yet due and payable to the extent such
prospective tax payments are given priority by statute or Purchase Money
Security Interests as permitted hereunder.
Prohibited Transaction shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of
ERISA for which neither an individual nor a class exemption has been
issued by the United States Department of Labor.
Property shall mean all real property, both owned and leased, of
any Loan Party or Subsidiary of a Loan Party.
Purchasing Bank shall mean a Bank which becomes a party to this
Agreement by executing an Assignment and Assumption Agreement.
Purchase Money Security Interest shall mean Liens upon tangible
personal property securing loans to any Loan Party or Subsidiary of a
Loan Party or deferred payments by such Loan Party or Subsidiary for the
purchase of such tangible personal property.
Qualified Account shall mean any Account which the Banks, in their
sole discretion, determines to have met all of the following minimum
requirements:
(i) The Account represents a complete bona fide transaction for
goods sold and delivered or services rendered (but excluding any amount
in the nature of a service charge added to the amount due on an invoice
because the invoice has not been paid when due) which requires no
further act under any circumstances on the part of the Loan Parties to
make such Account payable by the Account Debtor; and the Account arises
from an arm's length transaction in the ordinary course of the Loan
Party's business between such a Loan Party and an Account Debtor which
is not an Affiliate, officer, or employee of a Loan Party, or a member
of the family of an Affiliate, officer, or employee of Loan Party;
(ii) The Account is not "cost in excess of ▇▇▇▇▇▇▇▇" or "bookings"
of the type described in the definition of "Qualified Bookings" or
"▇▇▇▇▇▇▇▇ in excess of costs";
(iii) The Account shall not (a) be delinquent more than ninety (90)
days after due date or one hundred twenty (120) days after invoice date,
whichever is sooner, or (b) unless the Account Debtor is the United
States of America, any state thereof or county therein or
instrumentalities thereof, be payable by an Account Debtor (1) more than
fifty percent (50%) of whose Accounts are delinquent more than ninety
(90) days after due date or 120 days after invoice date, whichever is
sooner (whether delinquent or not), or (2) whose Accounts constitute, in
the Banks' determination, an unduly high percentage of the aggregate
amount of all outstanding Accounts;
(iv) The goods the sale of which gave rise to the Account were
shipped or delivered or provided to the Account Debtor on an absolute
sale basis and not on a ▇▇▇▇-and-hold sale basis, a consignment sale
basis, a guaranteed sale basis, a sale-or-return basis, or on the basis
of any other similar understanding, and no part of such goods has been
returned or rejected;
(v) The Account is not evidenced by chattel paper or an instrument
of any kind;
(vi) The Account Debtor with respect to the Account (a) is not
insolvent, (b) is not the subject of any bankruptcy or insolvency
proceedings of any kind or of any other proceeding or action,
threatened or pending, which might have a materially adverse effect on
its business, and (c) is not, in the sole discretion of the Banks,
deemed ineligible for credit for other reasons (including, without
limitation, unsatisfactory past experience of a Loan Party or the Banks
with the Account Debtor or unsatisfactory reputation of the Account
Debtor);
(vii) (a) the Account Debtor is not located outside of the
continental United States of America, or (b) if the Account Debtor is
located outside of the continental United States, the Account is
supported by letters of credit or FCIA insurance deemed adequate and
acceptable by the Banks;
(viii) The Account is a valid, legally enforceable obligation of
the Account Debtor with respect thereto and is not pursuant to any
pre-billing arrangement, progress billing arrangement or warranty
billing arrangement (except to the extent of amounts which are, at the
time of determination, due and payable, such as, for example, a
progress payment which is billed and owing by the Account Debtor) or
subject to any dispute, condition, contingency, offset, recoupment,
reduction, claim for credit, allowance, adjustment, counterclaim or
defense on the part of such Account Debtor, and no facts exist which
may provide a basis for any of the foregoing in the present or future;
(ix) The Account is not subject to any Lien, claim, encumbrance or
security interest whatsoever other than Permitted Liens and is subject
to a fully-perfected, first-priority Lien in favor of the Agent, subject
only to Permitted Liens;
(x) The Account is evidenced by an invoice or other documentation
in form acceptable to the Banks and arises from a contract which is in
form and substance satisfactory to the Banks;
(xi) The Account is not subject to any provision prohibiting its
assignment or requiring notice of or consent to such assignment (other
than any notices under the Federal Assignment of Claims Act);
(xii) The goods giving rise to the Account were not, at the time of
sale thereof, subject to any Lien or encumbrance except the Banks' prior
security interest;
(xiii) The Account is payable in freely transferable United States
Dollars;
(xiv) The Account is not, or should not be, disqualified for any
other reason generally accepted in the commercial finance business; and
(xv) The Account is not owing by an Account Debtor to the
extent its obligations to a Borrower exceed 20% of all Qualified
Accounts unless such excess is supported by letters of credit or FCIA
insurance deemed adequate and acceptable by the Banks or owing by an
Account Debtor unacceptable to the Banks in their sole discretion.
In addition to the foregoing requirements, Accounts of any Account
Debtor which are otherwise qualified shall be reduced to the extent of
any "contra" accounts or accounts payable (including, without
limitation, the Banks' good faith estimate of any contingent
liabilities) by a Borrower to such Account Debtor, provided that the
Banks, in their sole discretion, may determine that none of the Accounts
in respect to such Account Debtor shall be Qualified Accounts in the
event that such contra accounts or accounts payable represent an
unreasonably large amount owing to such Account Debtor. In addition, the
Banks may in their sole discretion exclude Accounts owing to one or more
particular Account Debtors based on the creditworthiness or other
characteristics of such Account Debtor.
Qualified Bookings shall mean with reference to binding sales
contracts entered into with customers of a Loan Party for contract
costs in excess of or not including Accounts, the amount shown in
reports of the "costs in excess of ▇▇▇▇▇▇▇▇" item on the financial
statements delivered to the Bank together with the Borrowing Base
Certificate delivered pursuant to Section 8.3.4 of the Loan Agreement
where the costs are incurred and billed in accordance with such
contracts.
Qualified Inventory shall mean any Inventory which the Banks, in
their sole discretion, determines to have met all of the following
minimum requirements:
(i) the Inventory is either (a) finished goods, (b) completed
components or (c) raw materials, but excluding in all cases any work in
process and any goods which have been shipped, delivered, provided to,
purchased or sold by a Loan Party on a ▇▇▇▇-and-hold sale, consignment
sale, guaranteed sale, or sale-or-return basis, or any other similar
basis or understanding other than an absolute sale;
(ii) the Inventory is of new, good and merchantable quality and
which is of a type (determined by SKU) and is not obsolete or excess
inventory as shown on the Loan Parties' Financial Statements;
(iii) the Inventory is not stored with a bailee, warehouseman, or
similar party unless the Banks have given their prior written consent
and a Loan Party has caused such bailee, warehouseman, consignee or
similar party to issue and deliver to the Banks, in form and substance
acceptable to the Banks, warehouse receipts or similar type of
documentation therefor in the Banks' name or the Inventory is stored at
the Real Property or at a location subject to a Landlord Waiver
acceptable to the Banks;
(iv) the Inventory is intended for sale or lease by a Loan Party
in the ordinary course of business at regular prices;
(v) the Inventory is otherwise acceptable to the Banks in their
sole discretion;
(vi) the Inventory is not subject to any Lien, claim, encumbrance
or security interest whatsoever other than Permitted Liens and is
subject to a fully-perfected, first-priority Lien in favor of the Agent,
subject only to Permitted Liens; and
(vii) the Inventory has not been manufactured in violation of any
federal minimum wage or overtime laws, including, without limitation,
the Fair Labor Standards Act, 29 U.S.C. Section 215(a)(1).
Ratable Share shall mean the proportion that a Bank's Commitment
bears to the Commitments of all of the Banks. For purposes of this
definition, the undertaking to provide Swing Line Loans shall not be
separately considered in calculating Commitment or amounts outstanding.
Real Property shall mean the real estate owned by ▇▇▇▇▇▇▇ Security
Group, Inc. (f/k/a ▇▇▇▇▇▇▇ Industries, Inc.) and located in Montgomery,
Alabama, which shall be encumbered by the Mortgage.
Regulated Substances shall mean, without limitation, any substance,
material or waste, regardless of its form or nature, defined under
Environmental Laws as a "hazardous substance," "pollutant,"
"pollution," "contaminant," "hazardous or toxic substance," "extremely
hazardous substance," "toxic chemical," "toxic substance," "toxic
waste," "hazardous waste," "special handling waste," "industrial waste,"
"residual waste," "solid waste," "municipal waste," "mixed waste,"
"infectious waste," "chemotherapeutic waste," "medical waste," or
"regulated substance" or any other material, substance or waste,
regardless of its form or nature, which otherwise is regulated by
Environmental Laws.
Regulation U shall mean Regulation U, T or X as promulgated by the
Board of Governors of the Federal Reserve System, as amended from time
to time.
Reimbursement Obligation shall have the meaning assigned to such
term in Section 2.8.3.2.
Reportable Event shall mean a reportable event described in Section
4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.
Required Banks shall mean:
(i) if there are no Loans, Reimbursement Obligations or Letter of
Credit Borrowings outstanding, Banks whose Commitments aggregate at
least 66 2/3% of the Commitments of all of the Banks, or
(ii) if there are Loans, Reimbursement Obligations, or Letter of
Credit Borrowings outstanding, any Bank or group of Banks if the sum of
the Loans, Reimbursement Obligations and Letter of Credit Borrowings of
such Banks then outstanding aggregates at least 66 2/3% of the total
principal amount of all of the Loans, Reimbursement Obligations and
Letter of Credit Borrowings then outstanding. Reimbursement
Obligations and Letter of Credit Borrowings shall be deemed, for
purposes of this definition, to be in favor of the Agent and not a
participating Bank if such Bank has not made its Participation Advance
in respect thereof and shall be deemed to be in favor of such Bank to
the extent of its Participation Advance if it has made its Participation
Advance in respect thereof; provided however that if there are two (2)
or fewer Banks, Required Banks shall mean 100% of the Banks.
For purposes of this definition, the undertaking to provide Swing
Line Loans shall be considered part of the Revolving Credit Commitment
of the Bank providing the Swing Line.
Required Environmental Notices shall mean all notices, reports,
plans, forms or other filings which pursuant to Environmental Laws,
Required Environmental Permits or at the request or direction of an
Official Body either must be submitted to an Official Body or which
otherwise must be maintained.
Required Environmental Permits shall mean all permits, licenses,
bonds, consents, programs, approvals or authorizations required under
Environmental Laws to own, occupy or maintain the Property or which
otherwise are required for the operations and business activities of the
Borrower or Guarantors.
Required Net Worth shall mean the sum of $22,000,000 (x) plus (y)
85% of the increase in Tangible Net Worth incident to the Tiburon
Transaction as of the date of the effective of such transaction and (z)
50% of consolidated net income of the Borrower and its Subsidiaries for
each fiscal quarter in which net income was earned (as opposed to a net
loss) during the period from December 31, 2001 through the date of
determination.
Revolving Credit Base Rate Option shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and
under the terms and conditions set forth in Section 4.1.1((i)).
Revolving Credit Commitment shall mean, as to any Bank at any time,
the amount initially set forth opposite its name on Schedule 1.1(B) in
the column labeled "Amount of Commitment for Revolving Credit Loans,"
with respect to PNC Bank, "Revolving Credit Commitment" shall also
include its "Swing Line Loan Commitment" referred to in Exhibit 1.1(SW),
and thereafter on Schedule I to the most recent Assignment and
Assumption Agreement, and Revolving Credit Commitments shall mean the
aggregate Revolving Credit Commitments of all of the Banks.
Revolving Credit Euro-Rate Option shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and
under the terms and conditions set forth in Section 4.1.1((ii)).
Revolving Credit Loans shall mean collectively and Revolving Credit
Loan shall mean separately all Revolving Credit Loans or any Revolving
Credit Loan made by the Banks or one of the Banks to the Borrower
pursuant to Section 2.1 or 2.8.3.
Revolving Credit Notes shall mean collectively and Revolving Credit
Note shall mean separately all the Revolving Credit Notes of the
Borrower in the form of Exhibit 1.1(R) dated the Closing Date evidencing
the Revolving Credit Loans together with all amendments, extensions,
renewals, replacements, refinancings or refundings thereof in whole or
in part.
Revolving Facility Usage shall mean at any time the sum of the
Revolving Credit Loans outstanding and the Letter of Credit Outstanding.
Secondary Offering shall mean the sale by the Borrower and the
purchase by accredited investors shares of common stock and the receipt
of its portion of the proceeds of the sale shares (and related options
and rights) therefore owned by ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mezzanine Capital Fund II,
L.P. and its affiliates on or about October 29, 2001.
Section 20 Subsidiary shall mean the Subsidiary of the bank
holding company controlling any Bank, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities.
Security Agreement shall mean the Security Agreement dated the
Closing Date executed and delivered by the Borrower to the Agent for the
benefit of the Banks.
Shares shall have the meaning assigned to that term in Section
6.1.2.
Standard & Poor's shall mean Standard & Poor's Ratings Services, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
Standby Letter of Credit shall mean a Letter of Credit issued to
support obligations of one or more of the Loan Parties, contingent or
otherwise, which finance the working capital and business needs of the
Loan Parties incurred in the ordinary course of business.
Subordinated Debt shall mean the unsecured Indebtedness evidenced
by the $1,137,576 original principal amount Subordinated Unsecured
Promissory Note Due May 27, 2004 made by CorrLogic, Inc. and
dated May 27, 1999 and the $1,250,002.50 original principal amount
Subordinated Promissory Note due May 1, 2004 made by CompuDyne
Corporation and dated April 30, 2001 and subordinated by its terms to
the Obligations or terms acceptable to the Agent and including the ▇▇▇▇▇
Subordinated Debt.
Subsidiary of any Person at any time shall mean (i) any corporation
or trust of which 50% or more (by number of shares or number of votes)
of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or
trustees (regardless of any contingency which does or may suspend or
dilute the voting rights) is at such time owned directly or indirectly
by such Person or one or more of such Person's Subsidiaries, (ii) any
partnership of which such Person is a general partner or of which 50% or
more of the partnership interests is at the time directly or indirectly
owned by such Person or one or more of such Person's Subsidiaries, (iii)
any limited liability company of which such Person is a member or of
which 50% or more of the limited liability company interests is at the
time directly or indirectly owned by such Person or one or more of
such Person's Subsidiaries or (iv) any corporation, trust, partnership,
limited liability company or other entity which is controlled or capable
of being controlled by such Person or one or more of such Person's
Subsidiaries.
Subsidiary Shares shall have the meaning assigned to that term in
Section 6.1.3.
Swing Line shall mean the $2,000,000 Swing Line line of credit
made available under the Swing Line Commitment after the Closing Date
pursuant to this Agreement by PNC Bank, the obligations under which
are Obligation hereunder which are secured by the Collateral.
Swing Line Agreements shall mean the following, executed and
delivered in connection with the Swing Line: the Swing Line Note and
Working Cash, Line of Credit, Investment Sweep Rider, each in a form
acceptable to PNC Bank.
Swing Line Loans shall mean advances made by PNC Bank to the
Borrower under the Swing Line.
Swing Line Note shall mean the Swing Line Note in form of Exhibit
1.1 (SN) evidencing a loan under the Swing Line.
Swing Line Provisions shall mean the provisions relating to the
Swing Line set forth on Exhibit 1.1 (SW).
Syndications Period shall mean the period between the Closing Date
and the earlier of the following dates: (a) the date on which the
Commitment of PNC Bank has been reduced to or below $20,000,000, or
(b) the date which is one hundred twenty (120) days after the Closing
Date.
Tangible Net Worth shall mean as of any date of determination total
stockholders' equity less intangible assets of the Borrower and its
Subsidiaries as of such date determined and consolidated in accordance
with GAAP.
Term Loan shall have the meaning given to such term in Section 3.1;
Term Loans shall mean collectively all of the Term Loans.
Term Loan Base Rate Option shall mean the option of the Borrower to
have Term Loans bear interest at the rate and under the terms and
conditions set forth in Section 4.1.2((i)).
Term Loan Commitment shall mean, as to any Bank at any time, the
amount initially set forth opposite its name on Schedule 1.1(B) in the
column labeled "Amount of Commitment for Term Loans," and thereafter on
Schedule I to the most recent Assignment and Assumption Agreement, and
Term Loan Commitments shall mean the aggregate Term Loan Commitments of
all of the Banks.
Term Loan Euro-Rate Option shall mean the option of the Borrower to
have Term Loans bear interest at the rate and under the terms and
conditions set forth in Section 4.1.2((ii)).
Term Notes shall mean collectively and Term Note shall mean
separately all of the Term Notes of the Borrower dated the Closing Date
in the form of Exhibit 1.1(T) evidencing the Term Loans together with
all amendments, extensions, renewals, replacements, refinancings or
refunds thereof in whole or in part.
Tiburon shall mean Tiburon, Inc., a Virginia corporation.
Tiburon Transaction shall mean the merger of Tiburon with and into
New Tiburon, Inc., a wholly-owned Subsidiary of the Borrower pursuant to
the Agreement and Plan of Merger dated as of May 10, 2001.
Transferor Bank shall mean the selling Bank pursuant to an
Assignment and Assumption Agreement.
UCC Collateral shall mean the property of the Loan Parties in which
security interests are to be granted under the Security Agreement.
Uniform Commercial Code shall have the meaning assigned to that
term in Section 6.1.16.
Working Cash Line of Credit Investment Sweep Rider shall mean the
Investment Sweep Rider executed and delivered on the Closing Date by the
Borrower in connection with the Swing Line.
1.2 Construction.
Unless the context of this Agreement otherwise clearly requires,
the following rules of construction shall apply to this Agreement and
each of the other Loan Documents:
1.2.1 Number; Inclusion.
References to the plural include the singular, the plural, the part
and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase
"including without limitation";
1.2.2 Determination.
References to "determination" of or by the Agent or the Banks shall
be deemed to mean good-faith estimates by the Agent or the Banks (in the
case of quantitative determinations) and good-faith beliefs by the Agent
or the Banks (in the case of qualitative determinations) and such
determination shall be conclusive absent manifest error;
1.2.3 Agent's Discretion and Consent.
Whenever the Agent or the Banks are granted the right herein to act
in its or their sole discretion or to grant or withhold consent such
right shall be exercised in good faith;
1.2.4 Documents Taken as a Whole.
The words "hereof," "herein," "hereunder," "hereto" and similar
terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document as a whole and not to any
particular provision of this Agreement or such other Loan Document;
1.2.5 Headings.
The section and other headings contained in this Agreement or such
other Loan Document and the Table of Contents (if any), preceding this
Agreement or such other Loan Document are for reference purposes only
and shall not control or affect the construction of this Agreement or
such other Loan Document or the interpretation thereof in any respect;
1.2.6 Implied References to this Agreement.
Article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Loan Document, as the case may
be, unless otherwise specified;
1.2.7 Persons.
Reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement or such other Loan Document, as the case
may be, and reference to a Person in a particular capacity excludes
such Person in any other capacity;
1.2.8 Modifications to Documents.
Reference to any agreement (including this Agreement and any other
Loan Document together with the schedules and exhibits hereto or
thereto), document or instrument means such agreement, document or
instrument as amended, modified, replaced, substituted for, superseded
or restated;
1.2.9 From, To and Through.
Relative to the determination of any period of time, "from" means
"from and including," "to" means "to but excluding," and "through" means
"through and including"; and
1.2.10 Shall; Will.
References to "shall" and "will" are intended to have the same
meaning.
1.3 Accounting Principles.
Except as otherwise provided in this Agreement, all computations
and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall
be made and prepared in accordance with GAAP (including principles of
consolidation where appropriate), and all accounting or financial terms
shall have the meanings ascribed to such terms by GAAP; provided,
however, that all accounting terms used in Section 8.2 [Negative
Covenants] (and all defined terms used in the definition of any
accounting term used in Section 8.2 shall have the meaning given to
such terms (and defined terms) under GAAP as in effect on the date
hereof applied on a basis consistent with those used in preparing the
Annual Statements referred to in Section 6.1.9((i)) [Historical
Statements]. In the event of any change after the date hereof in GAAP,
and if such change would result in the inability to determine compliance
with the financial covenants set forth in Section 8.2 based upon the
Borrower's regularly prepared financial statements by reason of the
preceding sentence, then the parties hereto agree to endeavor, in good
faith, to agree upon an amendment to this Agreement that would adjust
such financial covenants in a manner that would not affect the substance
thereof, but would allow compliance therewith to be determined in
accordance with the Borrower's financial statements at that time.
1.4 Concerning Corporate Terms.
When terms such as "stock", "shares", "shareholders", "corporate",
"company" and similar terms generally associated with corporations are
used herein, they shall be deemed to refer to limited liability member
interests, owners of those interests and a limited liability
company or similar entity, as the context may require, and references to
corporate governance documents and procedures shall have their
appropriate and correlative meanings with respect to limited liability
companies, as the context may require.
2. REVOLVING CREDIT FACILITY
2.1 Revolving Credit Commitments.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank severally
agrees to make Loans to the Borrower at any time or from time to time
on or after the date hereof to the Expiration Date provided that after
giving effect to such Loan the aggregate amount of Loans from such Bank
shall not exceed (x) the lesser of (i) such Bank's Commitment or (ii)
such Bank's Ratable Share of the Borrowing Base minus (y) such Bank's
Ratable Share of Letter of Credit Outstandings and such Bank's
Ratable Shares of all Swing Loans not being repaid with the proceeds of
such Loans; provided however, that (x) advances in respect of Qualified
Bookings shall in no event exceed $6,000,000 and (y) advances in respect
of Qualified Inventory shall in no event exceed $2,500,000. Reference is
made to Exhibit 1.1(SW) with regard to PNC Bank's Swing Line Commitment.
Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrowers may borrow, repay and
reborrow pursuant to this Section 2.1. Notwithstanding anything to the
contrary herein, the Banks may, in their reasonable discretion at any
time hereafter, for good cause decrease the ratio of their advances
against Qualified Accounts, Qualified Bookings or Qualified Inventory
or increase the level of any reserves, or create or maintain such other
reserves, as the Banks may deem necessary or appropriate. Any such
change shall become effective immediately upon notice to the Borrower.
2.2 Nature of Banks' Obligations with Respect to Revolving Credit Loans.
Each Bank shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.4 [Revolving Credit Loan
Requests] in accordance with its Ratable Share. The aggregate of each
Bank's Revolving Credit Loans outstanding hereunder to the Borrower at
any time shall never exceed its Revolving Credit Commitment minus its
Ratable Share of the Letter of Credit Outstanding. The obligations of
each Bank hereunder are several. The failure of any Bank to perform its
obligations hereunder shall not affect the Obligations of the Borrower
to any other party nor shall any other party be liable for the failure
of such Bank to perform its obligations hereunder. The Banks shall have
no obligation to make Revolving Credit Loans hereunder on or after the
Expiration Date.
2.3 Commitment Fees.
Accruing from the date hereof until the Expiration Date, the
Borrower agrees to pay to the Agent for the account of each Bank, as
consideration for such Bank's Revolving Credit Commitment hereunder, a
nonrefundable commitment fee (the "Commitment Fee") equal to the
applicable percentage under the heading "Commitment Fee" Applicable
Margin in the definition of Applicable Margin" (computed on the basis of
a year of 365 or 366 days, as the case may be, and actual days elapsed)
on the average daily difference between the amount of (i) such Bank's
Revolving Credit Commitment as the same may be constituted from time to
time and the (ii) the sum of such Bank's Revolving Credit Loans
outstanding plus its Ratable Share of Letter of Credit Outstanding. All
Commitment Fees shall be payable in arrears on the first Business Day of
each April, July, October and January after the date hereof and on the
Expiration Date or upon acceleration of the Notes.
2.4 Revolving Credit Loan Requests.
Except as otherwise provided herein, the Borrower may from time to
time prior to the Expiration Date request the Banks to make Revolving
Credit Loans, or renew or convert the Interest Rate Option applicable to
existing Revolving Credit Loans or Term Loans pursuant to Section 4.2
[Interest Periods], by delivering to the Agent, not later than 10:00
a.m., Pittsburgh time, (i) three (3) Business Days prior to the proposed
Borrowing Date with respect to the making of Revolving Credit Loans to
which the Euro-Rate Option applies or the conversion to or the renewal
of the Euro-Rate Option for any Loans; and (ii) one (1) Business Day
prior to either the proposed Borrowing Date with respect to the making
of a Revolving Credit Loan to which the Base Rate Option applies or the
last day of the preceding Interest Period with respect to the
conversion to the Base Rate Option for any Loan, of a duly completed
request therefor substantially in the form of Exhibit 2.4 or a request
by telephone immediately confirmed in writing by letter or facsimile in
such form (each, a "Loan Request"), it being understood that the
Agent may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Loan Request shall be irrevocable and shall specify
(i) the proposed Borrowing Date; (ii) the aggregate amount of the
proposed Loans comprising each Borrowing Tranche, which shall be in
integral multiples of $500,000 and not less than $1,000,000 for each
Borrowing Tranche to which the Euro-Rate Option applies and not
less than the lesser of $100,000 or the maximum amount available for
Borrowing Tranches to which the Base Rate Option applies; (iii) whether
the Euro-Rate Option or Base Rate Option shall apply to the proposed
Loans comprising the applicable Borrowing Tranche; and (iv) in the
case of a Borrowing Tranche to which the Euro-Rate Option applies, an
appropriate Interest Period for the Loans comprising such Borrowing
Tranche.
2.5 Making Revolving Credit Loans.
The Agent shall, promptly after receipt by it of a Loan Request
pursuant to Section 2.4 [Revolving Credit Loan Requests], notify the
Banks of its receipt of such Loan Request specifying: (i) the proposed
Borrowing Date and the time and method of disbursement of the Revolving
Credit Loans requested thereby; (ii) the amount and type of each such
Revolving Credit Loan and the applicable Interest Period (if any); and
(iii) the apportionment among the Banks of such Revolving Credit Loans
as determined by the Agent in accordance with Section 2.2 [Nature of
Banks' Obligations]. Each Bank shall remit the principal amount of
each Revolving Credit Loan to the Agent such that the Agent is able to,
and the Agent shall, to the extent the Banks have made funds available
to it for such purpose and subject to Section 7.1.16 [Each Additional
Loan], fund such Revolving Credit Loans to the Borrower in U.S. Dollars
and immediately available funds at the Principal Office prior to 2:00
p.m., Pittsburgh time, on the applicable Borrowing Date, provided that
if any Bank fails to remit such funds to the Agent in a timely manner,
the Agent may elect in its sole discretion to fund with its own funds
the Revolving Credit Loans of such Bank on such Borrowing Date, and such
Bank shall be subject to the repayment obligation in Section 10.16
[Availability of Funds].
2.6 Revolving Credit Notes.
The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Bank,
together with interest thereon, shall be evidenced by a Revolving Credit
Note dated the Closing Date payable to the order of such Bank in a face
amount equal to the Revolving Credit Commitment of such Bank.
2.7 Use of Proceeds.
The proceeds of the Revolving Credit Loans shall be used to
refinance the Existing Facility, to support the issuance of Letters of
Credit and for other general corporate purposes and in accordance with
Section 8.1.10 [Use of Proceeds].
2.8 Letter of Credit Subfacility.
2.8.1 Issuance of Letter of Credit.
Borrower may request the issuance of a letter of credit (each a
"Letter of Credit") on behalf of itself or another Loan Party by
delivering to the Agent a completed application and agreement for
letters of credit in such form as the Agent may specify from time
to time by no later than 10:00 a.m., Pittsburgh time, at least three (3)
Business Days, or such shorter period as may be agreed to by the Agent,
in advance of the proposed date of issuance. Each Letter of Credit
shall be either a Standby Letter of Credit or a Commercial Letter of
Credit. Subject to the terms and conditions hereof and in reliance on
the agreements of the other Banks set forth in this Section 2.8, the
Agent will issue a Letter of Credit provided that each Letter of
Credit shall (A) have a maximum maturity of thirty-six (36) months from
the date of issuance, and (B) in no event expire later than ten (10)
Business Days prior to the Expiration Date and providing that in no
event shall (i) the Letter of Credit Outstanding exceed, at any one
time, $3,000,000 or (ii) the Revolving Facility Usage exceed, at any one
time, the Revolving Credit Commitments. The Existing Letters of Credit
will be cancelled on the Closing Date or replaced by Letters of Credit.
The Existing Letters of Credit are not "Letters of Credit" hereunder.
2.8.2 Letter of Credit Fees.
The Borrower shall pay (i) to the Agent for the ratable account of
the Banks a fee (the "Letter of Credit Fee") equal to an rate per annum
equal to the Applicable Margin then in effect for Revolving Credit Loans
under the Euro-Rate Option minus .25%, and (ii) to the Agent for its own
account a fronting fee equal to .125% per annum (computed on the basis
of a year of 360 days and actual days elapsed), which fees shall be
computed on the daily average Letter of Credit Outstanding and shall be
payable quarterly in arrears commencing with the first Business Day of
each April, July, October and January following issuance of each Letter
of Credit and on the Expiration Date. The Borrower shall also pay to
the Agent for the Agent's sole account the Agent's then in effect
customary fees and administrative expenses payable with respect to the
Letters of Credit as the Agent may generally charge or incur from time
to time in connection with the issuance, maintenance, modification (if
any), assignment or transfer (if any), negotiation, and administration
of Letters of Credit.
2.8.3 Disbursements, Reimbursement.
2.8.3.1 Immediately upon the Issuance of each Letter of Credit,
each Bank shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Agent a participation in such Letter of
Credit and each drawing thereunder in an amount equal to such Bank's
Ratable Share of the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively.
2.8.3.2 In the event of any request for a drawing under a Letter
of Credit by the beneficiary or transferee thereof, the Agent will
promptly notify the Borrower. Provided that it shall have received such
notice, the Borrower shall reimburse (such obligation to reimburse the
Agent shall sometimes be referred to as a "Reimbursement Obligation")
the Agent prior to 12:00 noon, Pittsburgh time on each date that an
amount is paid by the Agent under any Letter of Credit (each such date,
a "Drawing Date") in an amount equal to the amount so paid by
the Agent. In the event the Borrower fails to reimburse the Agent for
the full amount of any drawing under any Letter of Credit by 12:00 noon,
Pittsburgh time, on the Drawing Date, the Agent will promptly notify
each Bank thereof, and the Borrower shall be deemed to have requested
that Revolving Credit Loans be made by the Banks under the Base Rate
Option to be disbursed on the Drawing Date under such Letter of Credit,
subject to the amount of the unutilized portion of the Revolving Credit
Commitment and subject to the conditions set forth in Section 7.1.16
[Each Additional Loan] other than any notice requirements. Any notice
given by the Agent pursuant to this Section 2.8.3.2 may be oral if
immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or
binding effect of such notice.
2.8.3.3 Each Bank shall upon any notice pursuant to Section
2.8.3.2 make available to the Agent an amount in immediately available
funds equal to its Ratable Share of the amount of the drawing, whereupon
the participating Banks shall (subject to Section 2.8.3.4) each be
deemed to have made a Revolving Credit Loan under the Base Rate Option
to the Borrower in that amount. If any Bank so notified fails to make
available to the Agent for the account of the Agent the amount of such
Bank's Ratable Share of such amount by no later than 2:00 p.m.,
Pittsburgh time on the Drawing Date, then interest shall accrue on such
Bank's obligation to make such payment, from the Drawing Date to the
date on which such Bank makes such payment (i) at a rate per annum equal
to the Federal Funds Effective Rate during the first three days
following the Drawing Date and (ii) at a rate per annum equal to the
rate applicable to Loans under the Revolving Credit Base Rate Option on
and after the fourth day following the Drawing Date. The Agent will
promptly give notice of the occurrence of the Drawing Date, but failure
of the Agent to give any such notice on the Drawing Date or in
sufficient time to enable any Bank to effect such payment on such date
shall not relieve such Bank from its obligation under this Section
2.8.3.3.
2.8.3.4 With respect to any unreimbursed drawing that is not
converted into Revolving Credit Loans under the Base Rate Option to the
Borrower in whole or in part as contemplated by Section 2.8.3.2, because
of the Borrower's failure to satisfy the conditions set forth in Section
7.1.16 [Each Additional Loan] other than any notice requirements
or for any other reason, the Borrower shall be deemed to have incurred
from the Agent a borrowing (each a "Letter of Credit Borrowing") in the
amount of such drawing. Such Letter of Credit Borrowing shall be due
and payable on demand (together with interest) and shall bear
interest at the rate per annum applicable to the Revolving Credit Loans
under the Base Rate Option. Each Bank's payment to the Agent pursuant
to Section 2.8.3.3 shall be deemed to be a payment in respect of its
participation in such Letter of Credit Borrowing and shall constitute a
"Participation Advance" from such Bank in satisfaction of its
participation obligation under this Section 2.8.3.
2.8.4 Repayment of Participation Advances.
2.8.4.1 Upon (and only upon) receipt by the Agent for its account
of immediately available funds from the Borrower (i) in reimbursement of
any payment made by the Agent under the Letters of Credit with respect
to which any Bank has made a Participation Advance to the Agent, or (ii)
in payment of interest on such a payment made by the Agent under
such a Letters of Credit, the Agent will pay to each Bank, in the same
funds as those received by the Agent, the amount of such Bank's Ratable
Share of such funds, except the Agent shall retain the amount of the
Ratable Share of such funds of any Bank that did not make a
Participation Advance in respect of such payment by Agent.
2.8.4.2 If the Agent is required at any time to return to any Loan
Party, or to a trustee, receiver, liquidator, custodian, or any official
in any Insolvency Proceeding, any portion of the payments made by any
Loan Party to the Agent pursuant to Section 2.8.4.1 in reimbursement of
a payment made under the Letters of Credit or interest or fee thereon,
each Bank shall, on demand of the Agent, forthwith return to the Agent
the amount of its Ratable Share of any amounts so returned by the Agent
plus interest thereon from the date such demand is made to the date such
amounts are returned by such Bank to the Agent, at a rate per annum
equal to the Federal Funds Effective Rate in effect from time to time.
2.8.5 Documentation.
Each Loan Party agrees to be bound by the terms of the Agent's
application and agreement for letters of credit and the Agent's written
regulations and customary practices relating to letters of credit,
though such interpretation may be different from such Loan Party's own.
In the event of a conflict between such application or agreement and
this Agreement, this Agreement shall govern. It is understood and
agreed that, except in the case of gross negligence or willful
misconduct, the Agent shall not be liable for any error, negligence
and/or mistakes, whether of omission or commission, in following any
Loan Party's instructions or those contained in the Letters of Credit
or any modifications, amendments or supplements thereto.
2.8.6 Determinations to Honor Drawing Requests.
In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, the Agent shall be
responsible only to determine that the documents and certificates
required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of
such Letter of Credit.
2.8.7 Nature of Participation and Reimbursement Obligations.
Each Bank's obligation in accordance with this Agreement to make
the Revolving Credit Loans or Participation Advances, as contemplated
by Section 2.8.3, as a result of a drawing under a Letter of Credit, and
the Obligations of the Borrower to reimburse the Agent upon a draw under
a Letter of Credit, shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this
Section 2.8 under all circumstances, including the following
circumstances:
(i) any set-off, counterclaim, recoupment, defense or other right
which such Bank may have against the Agent, the Borrower or any other
Person for any reason whatsoever;
(ii) the failure of any Loan Party or any other Person to comply,
in connection with a Letter of Credit Borrowing, with the conditions set
forth in Section 2.1 [Revolving Credit Commitments], 2.4 [Revolving
Credit Loan Requests], 2.5 [Making Revolving Credit Loans] or 7.1.16
[Each Additional Loan] or as otherwise set forth in this Agreement for
the making of a Revolving Credit Loan, it being acknowledged that such
conditions are not required for the making of a Letter of Credit
Borrowing and the obligation of the Banks to make Participation Advances
under Section 2.8.3;
(iii) any lack of validity or enforceability of any Letter of
Credit;
(iv) the existence of any claim, set-off, defense or other right
which any Loan Party or any Bank may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons
for whom any such transferee may be acting), the Agent or any Bank or
any other Person or, whether in connection with this Agreement, the
transactions contemplated herein or any unrelated transaction (including
any underlying transaction between any Loan Party or Subsidiaries of a
Loan Party and the beneficiary for which any Letter of Credit was
procured);
(v) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect even if the Agent has been notified thereof;
(vi) payment by the Agent under any Letter of Credit against
presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;
(vii) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of any Loan
Party or Subsidiaries of a Loan Party;
(viii) any breach of this Agreement or any other Loan Document by
any party thereto;
(ix) the occurrence or continuance of an Insolvency Proceeding
with respect to any Loan Party;
(x) the fact that an Event of Default or a Potential Default
shall have occurred and be continuing;
(xi) the fact that the Expiration Date shall have passed or this
Agreement or the Commitments hereunder shall have been terminated; and
(xii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing.
2.8.8 Indemnity.
In addition to amounts payable as provided in Section 10.5
[Reimbursement of Agent by Borrower, Etc.], the Borrower hereby agrees
to protect, indemnify, pay and save harmless the Agent from and against
any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel) which
the Agent may incur or be subject to as a consequence, direct or
indirect, of the issuance of any Letter of Credit, other than as a
result of (A) the gross negligence or willful misconduct of the Agent as
determined by a final judgment of a court of competent jurisdiction or
(B) the wrongful dishonor by the Agent of a proper demand for payment
made under any Letter of Credit, except if such dishonor resulted from
any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority (all
such acts or omissions herein called "Governmental Acts").
2.8.9 Liability for Acts and Omissions.
As between any Loan Party and the Agent, such Loan Party assumes
all risks of the acts and omissions of, or misuse of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Agent shall not
be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for an issuance of any such Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged (even if the
Agent shall have been notified thereof); (ii) the validity or
sufficiency of any instrument transferring or assigning or purporting
to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) the
failure of the beneficiary of any such Letter of Credit, or any other
party to which such Letter of Credit may be transferred, to comply fully
with any conditions required in order to draw upon such Letter of Credit
or any other claim of any Loan Party against any beneficiary of such
Letter of Credit, or any such transferee, or any dispute between or
among any Loan Party and any beneficiary of any Letter of Credit or any
such transferee; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex or otherwise, whether or not they be in cipher; (v) errors in
interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any such Letter of Credit or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any such Letter of Credit
of the proceeds of any drawing under such Letter of Credit; or (viii)
any consequences arising from causes beyond the control of the Agent,
including any Governmental Acts, and none of the above shall affect or
impair, or prevent the vesting of, any of the Agent's rights or powers
hereunder. Nothing in the preceding sentence shall relieve the Agent
from liability for the Agent's gross negligence or willful misconduct
in connection with actions or omissions described in such clauses (i)
through (viii) of such sentence.
In furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by the Agent
under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted in
good faith, shall not put the Agent under any resulting liability to the
Borrower or any Bank.
2.9 Borrowings to Repay Swing Line Loans.
Any aggregate positive balance of cash over the targeted amount of
cash in the applicable accounts under the Swing Line shall, to the
extent available at the end of a Business Day, be automatically applied
to the repayment of the outstanding balance of the Swing Line Loans. In
addition to the repayments referred to in the preceding sentence, PNC
Bank may at its option at any time demand repayment of the Swing Line
Loans and upon any such demand, the Borrower shall pay, and if the
Borrower does not provide ready funds by 11:00 a.m. on the date of such
demand, each Bank shall make a Revolving Credit Loan in an amount equal
to such Bank's Ratable Share of the aggregate principal amount of such
outstanding Swing Line Loan, plus, if PNC Bank so requests, accrued
interest thereon, provided that no Bank shall be obligated in any event
to make Revolving Credit Loans in excess of its Revolving Credit
Commitment or its Ratable Share of the Borrowing Base, whichever is
less. Revolving Credit Loans made pursuant to the preceding sentence
shall bear interest at the Revolving Credit Base Rate Option and shall
be deemed to have been properly requested in accordance with Section 2.5
without regard to any of the requirements of that provision or other
provisions of the Agreement. PNC Bank shall provide notice to the Banks
(which may be telephonic or written notice by letter, facsimile or
telephone) that such Revolving Credit Loans are to be made under this
Section 2.8 and of the apportionment among the Banks, and the Banks
shall be unconditionally obligated to fund such Revolving Credit Loans
(whether or not the conditions specified in Section 7 are then
satisfied) by the time PNC Bank so requests, which may be on the
Business Day that the Banks receive such notice from PNC Bank.
3. TERM LOANS
3.1 Term Loan Commitments.
Subject to the terms and conditions hereof, and relying upon the
representations and warranties herein set forth, each Bank severally
agrees to make a term loan (the "Term Loan") to the Borrower on the
Closing Date in such principal amount as the Borrower shall request up
to, but not exceeding such Bank's Term Loan Commitment.
3.2 Nature of Banks' Obligations with Respect to Term Loans.
The obligations of each Bank to make Term Loans to the Borrower
shall be in the proportion that such Bank's Term Loan Commitment bears
to the Term Loan Commitments of all Banks to the Borrower, but each
Bank's Term Loan to the Borrower shall never exceed its Term Loan
Commitment. The failure of any Bank to make a Term Loan shall not
relieve any other Bank of its obligations to make a Term Loan nor shall
it impose any additional liability on any other Bank hereunder. The
Banks shall have no obligation to make Term Loans hereunder after the
Closing Date. The Term Loan Commitments are not revolving credit
commitments, and the Borrower shall not have the right to borrow, repay
and reborrow under Section 3.1 [Term Loan Commitments].
3.3 Term Loan Notes.
The Obligation of the Borrower to repay the unpaid principal amount
of the Term Loans made to it by each Bank, together with interest
thereon, shall be evidenced by a Term Note dated the Closing Date
payable to the order of each Bank in a face amount equal to the Term
Loan of such Bank. The principal amount as provided therein of the Term
Notes shall be payable in equal consecutive quarterly installments of
principal equal to 416,666.67, plus accrued interest thereon. All
outstanding principal and accrued interest shall be due and payable,
and the Term Loan shall mature, on November 16, 2004.
3.4 Use of Proceeds.
The proceeds of the Term Loans shall be used to repay the Existing
Facility and otherwise in accordance with Section 8.1.10 [Use of
Proceeds].
4. INTEREST RATES
4.1 Interest Rate Options.
The Borrower shall pay interest in respect of the outstanding
unpaid principal amount of the Loans as selected by it from the Base
Rate Option or Euro-Rate Option set forth below applicable to the Loans,
it being understood that, subject to the provisions of this Agreement,
the Borrower may select different Interest Rate Options and different
Interest Periods to apply simultaneously to the Loans comprising
different Borrowing Tranches and may convert to or renew one or more
Interest Rate Options with respect to all or any portion of the
Loans comprising any Borrowing Tranche, provided that there shall not be
at any one time outstanding more than five (5) Borrowing Tranches in the
aggregate among all of the Loans (excluding Swing Line Loans). If at
any time the designated rate applicable to any Loan made by any Bank
exceeds such Bank's highest lawful rate, the rate of interest on such
Bank's Loan shall be limited to such Bank's highest lawful rate. All
Swing Line Loans shall bear interest at the Base Rate Option.
4.1.1 Revolving Credit Interest Rate Options.
The Borrower shall have the right to select from the following
Interest Rate Options applicable to the Revolving Credit Loans:
(i) Revolving Credit Base Rate Option: A fluctuating rate per
annum (computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed) equal to the Base Rate plus the
Applicable Margin, such interest rate to change automatically from time
to time effective as of the effective date of each change in the
Base Rate; or
(ii) Revolving Credit Euro-Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days elapsed)
equal to the Euro-Rate plus the Applicable Margin.
4.1.2 Term Loan Interest Rate Options.
The Borrower shall have the right to select from the following
Interest Rate Options applicable to the Term Loans:
(i) Term Loan Base Rate Option: A fluctuating rate per annum
(computed on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed) equal to the Base Rate the Applicable
Margin, such interest rate to change automatically from time to time
effective as of the effective date of each change in the Base Rate; or
(ii) Term Loan Euro-Rate Option: A rate per annum (computed on
the basis of a year of 360 days and actual days elapsed) equal to the
Euro-Rate plus the Applicable Margin.
4.1.3 Rate Quotations.
The Borrower may call the Agent on or before the date on which a
Loan Request is to be delivered to receive an indication of the rates
then in effect, but it is acknowledged that such projection shall not
be binding on the Agent or the Banks nor affect the rate of interest
which thereafter is actually in effect when the election is made.
4.2 Interest Periods.
At any time when the Borrower shall select, convert to or renew a
Euro-Rate Option, the Borrower shall notify the Agent thereof at least
three (3) Business Days prior to the effective date of such Euro-Rate
Option by delivering a Loan Request. The notice shall specify an
Interest Period during which such Interest Rate Option shall apply.
Notwithstanding the preceding sentence, the following provisions shall
apply to any selection of, renewal of, or conversion to a Euro-Rate
Option:
4.2.1 Amount of Borrowing Tranche.
Each Borrowing Tranche of Euro-Rate Loans shall be in integral
multiples of $500,000 and not less than $1,000,000;
4.2.2 Renewals.
In the case of the renewal of a Euro-Rate Option at the end of an
Interest Period, the first day of the new Interest Period shall be the
last day of the preceding Interest Period, without duplication in
payment of interest for such day.
4.3 Interest After Default.
To the extent permitted by Law, upon the occurrence of an Event of
Default and until such time such Event of Default shall have been cured
or waived:
4.3.1 Letter of Credit Fees, Interest Rate.
The Letter of Credit Fees and the rate of interest for each Loan
otherwise applicable pursuant to Section 2.8.2 [Letter of Credit Fees]
or Section 4.1 [Interest Rate Options], respectively, shall be increased
by 2.0% per annum; and
4.3.2 Other Obligations.
Each other Obligation hereunder if not paid when due shall bear
interest at a rate per annum equal to the sum of the rate of interest
applicable under the Revolving Credit Base Rate Option plus an
additional 2% per annum from the time such Obligation becomes due and
payable and until it is paid in full.
4.3.3 Acknowledgment.
The Borrower acknowledges that the increase in rates referred to in
this Section 4.3 reflects, among other things, the fact that such Loans
or other amounts have become a substantially greater risk given their
default status and that the Banks are entitled to additional
compensation for such risk; and all such interest shall be payable by
Borrower upon demand by Agent.
4.4 Euro-Rate Unascertainable; Illegality; Increased Costs; Deposits
Not Available.
4.4.1 Unascertainable.
If on any date on which a Euro-Rate would otherwise be determined,
the Agent shall have determined that:
(i) adequate and reasonable means do not exist for ascertaining
such Euro-Rate, or
(ii) a contingency has occurred which materially and adversely
affects the London interbank eurodollar market relating to the
Euro-Rate, the Agent shall have the rights specified in Section 4.4.3.
4.4.2 Illegality; Increased Costs; Deposits Not Available.
If at any time any Bank shall have determined that:
(i) the making, maintenance or funding of any Loan to which a
Euro-Rate Option applies has been made impracticable or unlawful by
compliance by such Bank in good faith with any Law or any interpretation
or application thereof by any Official Body or with any request or
directive of any such Official Body (whether or not having the force
of Law), or
(ii) such Euro-Rate Option will not adequately and fairly reflect
the cost to such Bank of the establishment or maintenance of any such
Loan, or
(iii) after making all reasonable efforts, deposits of the
relevant amount in Dollars for the relevant Interest Period for a Loan,
or to banks generally, to which a Euro-Rate Option applies,
respectively, are not available to such Bank with respect to such Loan,
or to banks generally, in the interbank eurodollar market, then the
Agent shall have the rights specified in Section 4.4.3.
4.4.3 Agent's and Bank's Rights.
In the case of any event specified in Section 4.4.1 above, the
Agent shall promptly so notify the Banks and the Borrower thereof, and
in the case of an event specified in Section 4.4.2 above, such Bank
shall promptly so notify the Agent and endorse a certificate to
such notice as to the specific circumstances of such notice, and the
Agent shall promptly send copies of such notice and certificate to the
other Banks and the Borrower. 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 (A) the Banks, in the case of such notice
given by the Agent, or (B) such Bank, in the case of such notice given
by such Bank, to allow the Borrower to select, convert to or renew a
Euro-Rate Option shall be suspended until the Agent shall have later
notified the Borrower, or such Bank shall have later notified the Agent,
of the Agent's or such Bank's, as the case may be, determination that
the circumstances giving rise to such previous determination no longer
exist. If at any time the Agent makes a determination under Section
4.4.1 and the Borrower has previously notified the Agent of its
selection of, conversion to or renewal of a Euro-Rate Option and such
Interest Rate Option has not yet gone into effect, such notification
shall be deemed to provide for selection of, conversion to or renewal
of the Base Rate Option otherwise available with respect to such Loans.
If any Bank notifies the Agent of a determination under Section 4.4.2,
the Borrower shall, subject to the Borrower's indemnification
Obligations under Section 5.6.2 [Indemnity], as to any Loan of the Bank
to which a Euro-Rate Option applies, on the date specified in such
notice either convert such Loan to the Base Rate Option otherwise
available with respect to such Loan or prepay such Loan in accordance
with Section 5.4 [Voluntary Prepayments]. Absent due notice from the
Borrower of conversion or prepayment, such Loan shall automatically be
converted to the Base Rate Option otherwise available with respect to
such Loan upon such specified date.
4.5 Selection of Interest Rate Options.
If the Borrower fails to select a new Interest Period to apply to
any Borrowing Tranche of Loans under the Euro-Rate Option at the
expiration of an existing Interest Period applicable to such Borrowing
Tranche in accordance with the provisions of Section 4.2 [Interest
Periods], the Borrower shall be deemed to have converted such Borrowing
Tranche to the Revolving Credit Base Rate Option or Term Loan Base Rate
Option, as applicable, commencing upon the last day of the existing
Interest Period.
5. PAYMENTS
5.1 Payments.
All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, Agent's Fee or other
fees or amounts due from the Borrower hereunder shall be payable prior
to 11:00 a.m., Pittsburgh time, on the date when due without
presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived by the Borrower, and without set-off,
counterclaim or other deduction of any nature, and an action therefor
shall immediately accrue. Such payments shall be made to the Agent at
the Principal Office for the ratable accounts of the Banks with respect
to the Loans (or for the account of PNC Bank with respect to Swing Line
Loans) in U.S. Dollars and in immediately available funds, and the Agent
shall promptly distribute such amounts to the Banks in immediately
available funds, provided that in the event payments are received by
11:00 a.m., Pittsburgh time, by the Agent with respect to the Loans and
such payments are not distributed to the Banks on the same day received
by the Agent, the Agent shall pay the Banks the Federal Funds Effective
Rate with respect to the amount of such payments for each day held by
the Agent and not distributed to the Banks. The Agent's and each Bank's
statement of account, ledger or other relevant record shall, in the
absence of manifest error, be conclusive as the statement of the amount
of principal of and interest on the Loans and other amounts owing under
this Agreement and shall be deemed an "account stated."
5.2 Pro Rata Treatment of Banks.
Each borrowing shall be allocated to each Bank according to its
Ratable Share, and each selection of, conversion to or renewal of any
Interest Rate Option and each payment or prepayment by the Borrower with
respect to principal, interest, Commitment Fees, Letter of Credit Fees,
or other fees (except for the Agent's Fee) or amounts due from the
Borrower hereunder to the Banks with respect to the Loans, shall (except
as provided in Section 4.4.3 [Agent's and Bank's Rights] in the case of
an event specified in Section 4.4 [Euro-Rate Unascertainable; Etc.],
5.4.2 [Replacement of a Bank] or 5.6 [Additional Compensation in
Certain Circumstances]) be made in proportion to the applicable Loans
outstanding from each Bank and, if no such Loans are then outstanding,
in proportion to the Ratable Share of each Bank.
5.3 Interest Payment Dates.
Interest on Loans to which the Base Rate Option applies shall be
due and payable in arrears on the first Business Day of each April,
July, October and January after the date hereof and on the Expiration
Date or upon acceleration of the Notes. Interest on Loans to which the
Euro-Rate Option applies shall be due and payable on the last day of
each Interest Period for those Loans and, if such Interest Period is
longer than three (3) Months, also on the 90th day of such Interest
Period. Interest on mandatory prepayments of principal under Section
5.5 [Mandatory Prepayments] shall be due on the date such mandatory
prepayment is due. Interest on the principal amount of each Loan or
other monetary Obligation shall be due and payable on demand after such
principal amount or other monetary Obligation becomes due and payable
(whether on the stated maturity date, upon acceleration or otherwise).
5.4 Voluntary Prepayments.
5.4.1 Right to Prepay.
The Borrower shall have the right at its option from time to time
to prepay the Loans in whole or part without premium or penalty (except
as provided in Section 5.4.2 below or in Section 5.6 [Additional
Compensation in Certain Circumstances]):
(i) at any time with respect to any Loan to which the Base Rate
Option applies,
(ii) on the last day of the applicable Interest period with
respect to Loans to which a Euro-Rate Option applies
(iii) on the date specified in a notice by any Bank pursuant to
Section 4.4 [Euro-Rate Unascertainable, Etc.] with respect to any Loan
to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans, it
shall provide a prepayment notice to the Agent by 1:00 p.m. at least one
(1) Business Day prior to the date of prepayment of Loans setting forth
the following information:
(x) the date, which shall be a Business Day, on which the proposed
prepayment is to be made;
(y) a statement indicating the application of the prepayment
between the Revolving Credit Loans and Term Loans; and
(z) the total principal amount of such prepayment, which shall
not be less than $1,000,000 (with no minimum in the case of
Revolving Credit Loans, all Loans to which the Base Rate
Option applies and all Swing Line Loans).
All prepayment notices shall be irrevocable. The principal amount
of the Loans for which a prepayment notice is given, together with
interest on such principal amount except with respect to Loans to which
the Base Rate Option applies, shall be due and payable on the date
specified in such prepayment notice as the date on which the proposed
prepayment is to be made. All Term Loan prepayments permitted pursuant
to this Section 5.4.1 shall be applied to the unpaid installments of
principal of the Term Loans in the inverse order of scheduled
maturities. Except as provided in Section 4.4.3 [Agent's and Bank's
rights], if the Borrower prepays a Loan but fails to specify the
applicable Borrowing Tranche which the Borrower is prepaying, the
prepayment shall be applied (i) first to Revolving Credit Loans and then
to Term Loans; and (ii) after giving effect to the allocations in clause
(i) above and in the preceding sentence, first to Loans to which the
Base Rate Option applies, then to Loans to which the Euro-Rate Option
applies. Any prepayment hereunder shall be subject to the Borrower's
Obligation to indemnify the Banks under Section 5.6.2 [Indemnity].
5.4.2 Replacement of a Bank.
In the event any Bank (i) gives notice under Section 4.4 [Euro-Rate
Unascertainable, Etc.] or Section 5.6.1 [Increased Costs, Etc.], (ii)
does not fund Revolving Credit Loans because the making of such Loans
would contravene any Law applicable to such Bank, or (iii) becomes
subject to the control of an Official Body (other than normal and
customary supervision), then the Borrower shall have the right at its
option, with the consent of the Agent, which shall not be unreasonably
withheld, to prepay the Loans of such Bank in whole, together with all
interest accrued thereon, and terminate such Bank's Commitment within
ninety (90) days after (x) receipt of such Bank's notice under Section
4.4 [Euro-Rate Unascertainable, Etc.] or 5.6.1 [Increased Costs, Etc.],
(y) the date such Bank has failed to fund Revolving Credit Loans because
the making of such Loans would contravene Law applicable to such Bank,
or (z) the date such Bank became subject to the control of an Official
Body, as applicable; provided that the Borrower shall also pay to such
Bank at the time of such prepayment any amounts required under Section
5.6 [Additional Compensation in Certain Circumstances] and any accrued
interest due on such amount and any related fees; provided, however,
that the Commitment and any Term Loan of such Bank shall be provided by
one or more of the remaining Banks or a replacement bank acceptable to
the Agent (and the Agent agrees to use good faith efforts to identify
possible replacement Banks); provided, further, the remaining Banks
shall have no obligation hereunder to increase their Commitments.
Notwithstanding the foregoing, the Agent may only be replaced subject
to the requirements of Section 10.14 [Successor Agent] and provided that
all Letters of Credit have expired or been terminated or replaced.
5.4.3 Change of Lending Office.
Each Bank agrees that upon the occurrence of any event giving rise
to increased costs or other special payments under Section 4.4.2
[Illegality, Etc.] or 5.6.1 [Increased Costs, Etc.] with respect to such
Bank, it will if requested by the Borrower, use reasonable efforts
(subject to overall policy considerations of such Bank) to designate
another lending office for any Loans or Letters of Credit affected by
such event, provided that such designation is made on such terms that
such Bank and its lending office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event
giving rise to the operation of such Section. Nothing in this Section
5.4.3 shall affect or postpone any of the Obligations of the Borrower or
any other Loan Party or the rights of the Agent or any Bank
provided in this Agreement.
5.5 Mandatory Prepayments.
5.5.1 Excess Outstandings.
The Borrower shall make mandatory payments of principal (together
with accrued interest thereon) to the Agent to the extent by which the
Revolving Facility Usage exceeds at any time the lesser of (i) the
Revolving Credit Commitments and (ii) the Borrowing Base on the day
such excess is calculated.
5.5.2 Application Among Interest Rate Options.
All prepayments required pursuant to this Section 5.5 shall first
be applied among the Interest Rate Options to the principal amount of
the Loans subject to the Base Rate Option, then to Loans subject to a
Euro-Rate Option. In accordance with Section 5.6.2 [Indemnity], the
Borrower shall indemnify the Banks for any loss or expense, including
reimbursement for loss of margin, incurred with respect to any such
prepayments applied against Loans subject to a Euro-Rate Option on any
day other than the last day of the applicable Interest Period.
5.6 Additional Compensation in Certain Circumstances.
5.6.1 Increased Costs or Reduced Return Resulting from Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc.
If any Law, guideline or interpretation or any change in any Law,
guideline or interpretation or application thereof by any Official Body
charged with the interpretation or administration thereof or compliance
with any request or directive (whether or not having the force of Law)
of any central bank or other Official Body:
(i) subjects any Bank to any tax or changes the basis of taxation
with respect to this Agreement, the Notes, the Loans or payments by the
Borrower of principal, interest, Commitment Fees, or other amounts due
from the Borrower hereunder or under the Notes (except for taxes on the
overall net income of such Bank),
(ii) imposes, modifies or deems applicable any reserve, special
deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with
or for the account of, or other acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any capital adequacy
or similar requirement (A) against assets (funded or contingent) of, or
letters of credit, other credits or commitments to extend credit
extended by, any Bank, or (B) otherwise applicable to the obligations of
any Bank under this Agreement, and the result of any of the foregoing is
to increase the cost to, reduce the income receivable by, or impose any
expense (including loss of margin) upon any Bank with respect to this
Agreement, the Notes or the making, maintenance or funding of any part
of the Loans (or, in the case of any capital adequacy or similar
requirement, to have the effect of reducing the rate of return on any
Bank's capital, taking into consideration such Bank's customary policies
with respect to capital adequacy) by an amount which such Bank in its
sole discretion deems to be material, such Bank shall from time to time
notify the Borrower and the Agent of the amount determined in good
faith (using any averaging and attribution methods employed in good
faith) by such Bank to be necessary to compensate such Bank for such
increase in cost, reduction of income, additional expense or reduced
rate of return. Such notice shall set forth in reasonable detail the
basis for such determination. Such amount shall be due and payable by
the Borrower to such Bank ten (10) Business Days after such notice is
given.
5.6.2 Indemnity.
In addition to the compensation required by Section 5.6.1
[Increased Costs, Etc.], the Borrower shall indemnify each Bank against
all liabilities, losses or expenses (including loss of margin, any loss
or expense incurred in liquidating or employing deposits from third
parties and any loss or expense incurred in connection with funds
acquired by a Bank to fund or maintain Loans subject to a Euro-Rate
Option) which such Bank sustains or incurs as a consequence of any
(i) payment, prepayment, conversion or renewal of any Loan to
which a Euro-Rate Option applies on a day other than the last day
of the corresponding Interest Period (whether or not such payment or
prepayment is mandatory, voluntary or automatic and whether or not such
payment or prepayment is then due),
(ii) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any Loan Requests
under Section 2.4 [Revolving Credit Loan Requests] or Section 4.2
[Interest Periods] or notice relating to prepayments under Section 5.4
[Voluntary Prepayments], or
(iii) default by the Borrower in the performance or observance of
any covenant or condition contained in this Agreement or any other Loan
Document, including any failure of the Borrower to pay when due (by
acceleration or otherwise) any principal, interest, Commitment Fee or
any other amount due hereunder.
If any Bank sustains or incurs any such loss or expense, it shall
promptly notify the Borrower of the amount determined in good faith by
such Bank (which determination may include such assumptions, allocations
of costs and expenses and averaging or attribution methods as such Bank
shall deem reasonable) to be necessary to indemnify such Bank for such
loss or expense. Such notice shall set forth in reasonable detail the
basis for such determination. Such amount shall be due and payable by
the Borrower to such Bank ten (10) Business Days after such notice is
given.
6. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties.
The Loan Parties, jointly and severally, represent and warrant to
the Agent and each of the Banks as follows:
6.1.1 Organization and Qualification.
Each Loan Party and each Subsidiary of each Loan Party is a
corporation, partnership or limited liability company duly organized,
validly existing and in good standing under the laws of its jurisdiction
of organization. Each Loan Party and each Subsidiary of each Loan Party
has the lawful power to own or lease its properties and to engage in the
business it presently conducts or proposes to conduct. Each Loan Party
and each Subsidiary of each Loan Party is duly licensed or qualified and
in good standing in each jurisdiction listed on Schedule 6.1.1 and in
all other jurisdictions where the property owned or leased by it or the
nature of the business transacted by it or both makes such licensing or
qualification necessary.
6.1.2 Capitalization and Ownership.
The authorized capital stock of the Borrower consists of shares of
stock (referred to herein as the "Shares") which are described on
Schedule 6.1.2 which also describes generally the ownership of all
issued and outstanding Shares. All of the Shares have been validly
issued and are fully paid and nonassessable. There are no options,
warrants or other rights outstanding to purchase any such shares except
as indicated on Schedule 6.1.2.
6.1.3 Subsidiaries.
Schedule 6.1.3 states the name of each of the Borrower's
Subsidiaries, its jurisdiction of incorporation, its authorized capital
stock, the issued and outstanding shares (referred to herein as the
"Subsidiary Shares") and the owners thereof if it is a corporation, its
outstanding partnership interests (the "Partnership Interests") if it is
a partnership and its outstanding limited liability company interests,
interests assigned to managers thereof and the voting rights associated
therewith (the "LLC Interests") if it is a limited liability company.
The Borrower and each Subsidiary of the Borrower has good and marketable
title to all of the Subsidiary Shares, Partnership Interests and LLC
Interests it purports to own, free and clear in each case of any Lien.
All Subsidiary Shares, Partnership Interests and LLC Interests have been
validly issued, and all Subsidiary Shares are fully paid and
nonassessable. All capital contributions and other consideration
required to be made or paid in connection with the issuance of the
Partnership Interests and LLC Interests have been made or paid, as the
case may be. There are no options, warrants or other rights outstanding
to purchase any such Subsidiary Shares, Partnership Interests or LLC
Interests except as indicated on Schedule 6.1.3.
6.1.4 Power and Authority.
Each Loan Party has full power to enter into, execute, deliver and
carry out this Agreement and the other Loan Documents to which it is a
party, to incur the Indebtedness contemplated by the Loan Documents and
to perform its Obligations under the Loan Documents to which it is a
party, and all such actions have been duly authorized by all necessary
proceedings on its part.
6.1.5 Validity and Binding Effect.
This Agreement has been duly and validly executed and delivered by
each Loan Party, and each other Loan Document which any Loan Party is
required to execute and deliver on or after the date hereof will have
been duly executed and delivered by such Loan Party on the required date
of delivery of such Loan Document. This Agreement and each other
Loan Document constitutes, or will constitute, legal, valid and binding
obligations of each Loan Party which is or will be a party thereto on
and after its date of delivery thereof, enforceable against such Loan
Party in accordance with its terms, except to the extent that
enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting
the right of specific performance.
6.1.6 No Conflict.
Neither the execution and delivery of this Agreement or the other
Loan Documents by any Loan Party nor the consummation of the
transactions herein or therein contemplated or compliance with the terms
and provisions hereof or thereof by any of them will conflict with,
constitute a default under or result in any breach of (i) the terms and
conditions of the certificate of incorporation, bylaws, certificate of
limited partnership, partnership agreement, certificate of formation,
limited liability company agreement or other organizational documents
of any Loan Party or (ii) any Law or any material agreement or
instrument or order, writ, judgment, injunction or decree to which any
Loan Party or any of its Subsidiaries is a party or by which it or any
of its Subsidiaries is bound or to which it is subject, or result in the
creation or enforcement of any Lien, charge or encumbrance whatsoever
upon any property (now or hereafter acquired) of any Loan Party or any
of its Subsidiaries (other than Liens granted under the Loan Documents).
6.1.7 Litigation.
Except as shown on Schedule 6.1.7, there are no actions, suits,
proceedings or investigations pending or, to the knowledge of any Loan
Party, threatened against such Loan Party or any Subsidiary of such Loan
Party at law or equity before any Official Body which individually or in
the aggregate may result in any Material Adverse Change. None of the
Loan Parties or any Subsidiaries of any Loan Party is in violation of
any order, writ, injunction or any decree of any Official Body which may
result in any Material Adverse Change.
6.1.8 Title to Properties.
The real property owned or leased by each Loan Party and each
Subsidiary of each Loan Party is described on Schedule 6.1.8. Each Loan
Party and each Subsidiary of each Loan Party has good and marketable
title to or valid leasehold interest in all properties, assets and other
rights which it purports to own or lease or which are reflected as
owned or leased on its books and records, free and clear of all Liens
and encumbrances except Permitted Liens, and subject to the terms and
conditions of the applicable leases. All leases of property are in full
force and effect without the necessity for any consent which has not
previously been obtained upon consummation of the transactions
contemplated hereby.
6.1.9 Financial Statements.
(i) Historical Statements. The Borrower has delivered to the
Agent copies of its audited consolidated year-end financial statements
for and as of the end of the four (4) fiscal years ended December 31,
2000 (the "Annual Statements"). In addition, the Borrower has delivered
to the Agent copies of its unaudited consolidated interim financial
statements for the fiscal year to date and as of the end of the fiscal
quarter ended June 30, 2001 (the "Interim Statements") (the Annual and
Interim Statements being collectively referred to as the "Historical
Statements"). The Historical Statements were compiled from the books
and records maintained by the Borrower's management, are correct
and complete and fairly represent the consolidated financial condition
of the Borrower and its Subsidiaries as of their dates and the results
of operations for the fiscal periods then ended and have been prepared
in accordance with GAAP consistently applied, subject (in the case of
the Interim Statements) to normal year-end audit adjustments.
(ii) Financial Projections. The Borrower has delivered to the
Agent updated financial projections of the Borrower and its Subsidiaries
for the fiscal years 2001 through 2006 derived from various assumptions
of the Borrower's management (the "Financial Projections") and including
the items referred to in Section 7.1.7 [Projections]. The Financial
Projections represent a reasonable range of possible results in light of
the history of the business, present and foreseeable conditions and the
intentions of the Borrower's management. The Financial Projections
accurately reflect the liabilities of the Borrower and its Subsidiaries
upon consummation of the transactions contemplated hereby as of the
Closing Date.
(iii) Accuracy of Financial Statements. Neither the Borrower nor
any Subsidiary of the Borrower has any liabilities, contingent or
otherwise, or forward or long-term commitments that are not disclosed in
the Historical Statements or in the notes thereto, and except as
disclosed therein there are no unrealized or anticipated losses from
any commitments of the Borrower or any Subsidiary of the Borrower which
may cause a Material Adverse Change. Since December 31, 2000, no
Material Adverse Change has occurred.
6.1.10 Use of Proceeds; Margin Stock; Section 20 Subsidiaries.
6.1.10.1 General.
The Loan Parties intend to use the proceeds of the Loans in
accordance with Sections 2.7, 3.4 and 8.1.10.
6.1.10.2 Margin Stock.
None of the Loan Parties or any Subsidiaries of any Loan Party
engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose,
immediately, incidentally or ultimately, of purchasing or carrying
margin stock (within the meaning of Regulation U). No part of the
proceeds of any Loan has been or will be used, immediately, incidentally
or ultimately, to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock or
to refund Indebtedness originally incurred for such purpose, or for any
purpose which entails a violation of or which is inconsistent with the
provisions of the regulations of the Board of Governors of the Federal
Reserve System. None of the Loan Parties or any Subsidiary of any
Loan Party holds or intends to hold margin stock in such amounts that
more than 25% of the reasonable value of the assets of any Loan Party or
Subsidiary of any Loan Party are or will be represented by margin stock.
6.1.10.3 Section 20 Subsidiaries.
The Loan Parties do not intend to use and shall not use any portion
of the proceeds of the Loans, directly or indirectly, to purchase during
the underwriting period, or for thirty (30) days thereafter, Ineligible
Securities being underwritten by a Section 20 Subsidiary.
6.1.11 Full Disclosure.
Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other documents furnished to the
Agent or any Bank in connection herewith or therewith, contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein and therein,
in light of the circumstances under which they were made, not
misleading. There is no fact known to any Loan Party which materially
adversely affects the business, property, assets, financial condition,
results of operations or prospects of any Loan Party or Subsidiary of
any Loan Party which has not been set forth in this Agreement or in the
certificates, statements, agreements or other documents furnished in
writing to the Agent and the Banks prior to or at the date hereof in
connection with the transactions contemplated hereby.
6.1.12 Taxes.
All federal, state, local and other tax returns required to have
been filed with respect to each Loan Party and each Subsidiary of each
Loan Party have been filed, and payment or adequate provision has been
made for the payment of all taxes, fees, assessments and other
governmental charges which have or may become due pursuant to said
returns or to assessments received, except to the extent that such
taxes, fees, assessments and other charges are being contested in good
faith by appropriate proceedings diligently conducted and for which
such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made. There are no agreements or
waivers extending the statutory period of limitations applicable to any
federal income tax return of any Loan Party or Subsidiary of any Loan
Party for any period.
6.1.13 Consents and Approvals.
Except for the filing of financing statements and the Mortgage in
the state and county filing offices, no consent, approval, exemption,
order or authorization of, or a registration or filing with, any
Official Body or any other Person is required by any Law or any
agreement in connection with the execution, delivery and carrying out
of this Agreement and the other Loan Documents by any Loan Party, except
as listed on Schedule 6.1.13, all of which shall have been obtained or
made on or prior to the Closing Date except as otherwise indicated on
Schedule 6.1.13.
6.1.14 No Event of Default; Compliance with Instruments.
No event has occurred and is continuing and no condition exists or
will exist after giving effect to the borrowings or other extensions of
credit to be made on the Closing Date under or pursuant to the Loan
Documents which constitutes an Event of Default or Potential Default.
None of the Loan Parties or any Subsidiaries of any Loan Party is in
violation of (i) any term of its certificate of incorporation, bylaws,
certificate of limited partnership, partnership agreement, certificate
of formation, limited liability company agreement or other
organizational documents or (ii) any material agreement or instrument to
which it is a party or by which it or any of its properties may be
subject or bound where such violation would constitute a Material
Adverse Change.
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.
Each Loan Party and each Subsidiary of each Loan Party owns or
possesses all the material patents, trademarks, service marks, trade
names, copyrights, licenses, registrations, franchises, permits and
rights necessary to own and operate its properties and to carry on its
business as presently conducted and planned to be conducted by such Loan
Party or Subsidiary, without known possible, alleged or actual conflict
with the rights of others. All material patents, trademarks, service
marks, trade names, copyrights, licenses, registrations, franchises and
permits of each Loan Party and each Subsidiary of each Loan Party are
listed and described on Schedule 6.1.15.
6.1.16 Security Interests.
The Liens and security interests granted to the Agent for the
benefit of the Banks pursuant to the Security Agreement, the Patent,
Trademark and Copyright Security Agreement, the Pledge Agreement and
the Security Agreement in the Collateral constitute and will continue
to constitute Prior Security Interests under the Uniform Commercial
Code as in effect in each applicable jurisdiction (the "Uniform
Commercial Code") or other applicable Law entitled to all the rights,
benefits and priorities provided by the Uniform Commercial Code or
such Law. Upon the filing of financing statements relating to said
security interests in each office and in each jurisdiction where
required in order to perfect the security interests described above,
taking possession of any stock certificates or other certificates
evidencing the Pledged Collateral and recordation of the Patent,
Trademark and Copyright Security Agreement in the United States Patent
and Trademark Office and United States Copyright Office, as applicable,
all such action as is necessary or advisable to establish such rights of
the Agent will have been taken, and there will be upon execution and
delivery of the Security Agreement, the Patent, Trademark and Copyright
Security Agreement, the Pledge Agreement and the Security Agreement,
such filings and such taking of possession, no necessity for any further
action in order to preserve, protect and continue such rights, except
the filing of continuation statements with respect to such financing
statements within six months prior to each five-year anniversary
of the filing of such financing statements. All filing fees and other
expenses in connection with each such action have been or will be paid
by the Borrower. Without limiting the forgoing, the Liens granted to the
Agent for the benefit of the Banks pursuant to the Mortgage constitute a
valid first priority Lien under applicable law. All such action as will
be necessary or advisable to establish such Lien of the Agent and its
priority as described in the preceding sentence will be taken at or
prior to the time required for such purpose, and there will be as of the
date of execution and delivery of the Mortgage no necessity for any
further action in order to protect, preserve and continue such Lien and
such priority.
6.1.17 Status of the Pledged Collateral.
All the shares of capital stock, Partnership Interests or LLC
Interests included in the Pledged Collateral to be pledged pursuant to
the Pledge Agreement or the Security Agreement are or will be upon
issuance validly issued and nonassessable and owned beneficially and of
record by the pledgor free and clear of any Lien or restriction on
transfer, except as otherwise provided by the Pledge Agreement or the
Security Agreement and except as the right of the Banks to dispose of
the Shares, Partnership Interests or LLC Interests may be limited by the
Securities Act of 1933, as amended, and the regulations promulgated by
the Securities and Exchange Commission thereunder and by applicable
state securities laws. There are no shareholder, partnership, limited
liability company or other agreements or understandings with respect to
the shares of capital stock, Partnership Interests or LLC Interests
included in the Pledged Collateral except for the partnership agreements
and limited liability company agreements described on Schedule 6.1.17.
The Loan Parties have delivered true and correct copies of such
partnership agreements and limited liability company agreements to the
Agent.
6.1.18 Insurance.
Schedule 6.1.18 lists all insurance policies and other bonds to
which any Loan Party or Subsidiary of any Loan Party is a party, all of
which are valid and in full force and effect. No notice has been given
or claim made and no grounds exist to cancel or avoid any of such
policies or bonds or to reduce the coverage provided thereby. Such
policies and bonds provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets
and risks of each Loan Party and each Subsidiary of each Loan Party in
accordance with prudent business practice in the industry of the Loan
Parties and their Subsidiaries.
6.1.19 Compliance with Laws.
The Loan Parties and their Subsidiaries are in compliance in all
material respects with all applicable Laws (other than Environmental
Laws which are specifically addressed in Section 6.1.24 [Environmental
Matters]) in all jurisdictions in which any Loan Party or Subsidiary of
any Loan Party is presently or will be doing business except where the
failure to do so would not constitute a Material Adverse Change.
6.1.20 Material Contracts; Burdensome Restrictions.
Schedule 6.1.20 lists all material contracts relating to the
business operations of each Loan Party and each Subsidiary of any Loan
Party, including all employee benefit plans and Labor Contracts. All
such material contracts are valid, binding and enforceable upon such
Loan Party or Subsidiary and each of the other parties thereto in
accordance with their respective terms, and there is no default
thereunder, to the Loan Parties' knowledge, with respect to parties
other than such Loan Party or Subsidiary. None of the Loan Parties or
their Subsidiaries is bound by any contractual obligation, or subject to
any restriction in any organization document, or any requirement of Law
which could result in a Material Adverse Change.
6.1.21 Investment Companies; Regulated Entities.
None of the Loan Parties or any Subsidiaries of any Loan Party is
an "investment company" registered or required to be registered under
the Investment Company Act of 1940 or under the "control" of an
"investment company" as such terms are defined in the Investment Company
Act of 1940 and shall not become such an "investment company" or under
such "control." None of the Loan Parties or any Subsidiaries of any
Loan Party is subject to any other Federal or state statute or
regulation limiting its ability to incur Indebtedness for borrowed
money.
6.1.22 Plans and Benefit Arrangements.
Except as set forth on Schedule 6.1.22:
(i) The Borrower and each other member of the ERISA Group are in
compliance in all material respects with any applicable provisions of
ERISA with respect to all Benefit Arrangements, Plans and Multiemployer
Plans. There has been no Prohibited Transaction with respect to any
Benefit Arrangement or any Plan or, to the best knowledge of the
Borrower, with respect to any Multiemployer Plan or Multiple Employer
Plan, which could result in any material liability of the Borrower or
any other member of the ERISA Group. The Borrower and all other members
of the ERISA Group have made when due any and all payments required to
be made under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With respect to
each Plan and Multiemployer Plan, the Borrower and each other member of
the ERISA Group (i) have fulfilled in all material respects their
obligations under the minimum funding standards of ERISA, (ii) have not
incurred any liability to the PBGC, and (iii) have not had asserted
against them any penalty for failure to fulfill the minimum funding
requirements of ERISA.
(ii) To the best of the Borrower's knowledge, each Multiemployer
Plan and Multiple Employer Plan is able to pay benefits thereunder when
due.
(iii) Neither the Borrower nor any other member of the ERISA Group
has instituted or intends to institute proceedings to terminate any
Plan.
(iv) No event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur
with respect to any Plan, and no amendment with respect to which
security is required under Section 307 of ERISA has been made or is
reasonably expected to be made to any Plan.
(v) The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan, determined on a
plan termination basis, as disclosed in, and as of the date of, the
most recent actuarial report for such Plan, does not exceed the
aggregate fair market value of the assets of such Plan.
(vi) Neither the Borrower nor any other member of the ERISA Group
has incurred or reasonably expects to incur any material withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer
Plan. Neither the Borrower nor any other member of the ERISA Group has
been notified by any Multiemployer Plan or Multiple Employer Plan that
such Multiemployer Plan or Multiple Employer Plan has been terminated
within the meaning of Title IV of ERISA and, to the best knowledge of
the Borrower, no Multiemployer Plan or Multiple Employer Plan is
reasonably expected to be reorganized or terminated, within the meaning
of Title IV of ERISA.
(vii) To the extent that any Benefit Arrangement is insured, the
Borrower and all other members of the ERISA Group have paid when due all
premiums required to be paid for all periods through the Closing Date.
To the extent that any Benefit Arrangement is funded other than with
insurance, the Borrower and all other members of the ERISA Group have
made when due all contributions required to be paid for all periods
through the Closing Date.
(viii) All Plans, Benefit Arrangements and Multiemployer Plans
have been administered in accordance with their terms and applicable
Law.
6.1.23 Employment Matters.
Each of the Loan Parties and each of their Subsidiaries is in
compliance with the Labor Contracts and all applicable federal, state
and local labor and employment Laws including those related to equal
employment opportunity and affirmative action, labor relations,
minimum wage, overtime, child labor, medical insurance continuation,
worker adjustment and relocation notices, immigration controls and
worker and unemployment compensation, where the failure to comply would
constitute a Material Adverse Change. There are no outstanding
grievances, arbitration awards or appeals therefrom arising out of the
Labor Contracts or current or threatened strikes, picketing, handbilling
or other work stoppages or slowdowns at facilities of any of the Loan
Parties or any of their Subsidiaries which in any case would constitute
a Material Adverse Change. The Borrower has delivered to the Agent
true and correct copies of each of the Labor Contracts.
6.1.24 Environmental Matters.
Except as disclosed on Schedule 6.1.24:
(i) None of the Loan Parties has received any Environmental
Complaint, whether directed or issued to any Loan Party or relating
or pertaining to any prior owner, operator or occupant of the Property,
and has no reason to believe that it might receive an Environmental
Complaint.
(ii) No activity of any Loan Party at the Property is being or
has been conducted in violation of any Environmental Law or Required
Environmental Permit and to the knowledge of any Loan Party no activity
of any prior owner, operator or occupant of the Property was conducted
in violation of any Environmental Law.
(iii) There are no Regulated Substances present on, in, under, or
emanating from, or to any Loan Party's knowledge emanating to, the
Property or any portion thereof which result in Contamination.
(iv) Each Loan Party has all Required Environmental Permits and
all such Required Environmental Permits are in full force and effect.
(v) Each Loan Party has submitted to an Official Body and/or
maintains, as appropriate, all Required Environmental Notices.
(vi) No structures, improvements, equipment, fixtures,
impoundments, pits, lagoons or aboveground or underground storage tanks
located on the Property contain or use, except in compliance with
Environmental Laws and Required Environmental Permits, Regulated
Substances or otherwise are operated or maintained except in compliance
with Environmental Laws and Required Environmental Permits. To the
knowledge of each Loan Party, no structures, improvements, equipment,
fixtures, impoundments, pits, lagoons or aboveground or underground
storage tanks of prior owners, operators or occupants of the Property
contained or used, except in compliance with Environmental Laws,
Regulated Substances or otherwise were operated or maintained by any
such prior owner, operator or occupant except in compliance with
Environmental Laws.
(vii) To the knowledge of each Loan Party, no facility or site to
which any Loan Party, either directly or indirectly by a third party,
has sent Regulated Substances for storage, treatment, disposal or other
management has been or is being operated in violation of Environmental
Laws or pursuant to Environmental Laws is identified or proposed to be
identified on any list of contaminated properties or other properties
which pursuant to Environmental Laws are the subject of an
investigation, cleanup, removal, remediation or other response action
by an Official Body.
(viii) No portion of the Property is identified or to the
knowledge of any Loan Party proposed to be identified on any list of
contaminated properties or other properties which pursuant to
Environmental Laws are the subject of an investigation or remediation
action by an Official Body, nor to the knowledge of any Loan Party is
any property adjoining or in the proximity of the Property identified
or proposed to be identified on any such list.
(ix) No portion of the Property constitutes an Environmentally
Sensitive Area.
(x) No lien or other encumbrance authorized by Environmental Laws
exists against the Property and none of the Loan Parties has any reason
to believe that such a lien or encumbrance may be imposed.
6.1.25 Senior Debt Status.
The Obligations of each Loan Party under this Agreement, the Notes,
the Guaranty Agreement and each of the other Loan Documents to which it
is a party do rank and will rank at least pari passu in priority of
payment with all other Indebtedness of such Loan Party except
Indebtedness of such Loan Party to the extent secured by Permitted
Liens. There is no Lien upon or with respect to any of the properties
or income of any Loan Party or Subsidiary of any Loan Party which
secures indebtedness or other obligations of any Person except for
Permitted Liens.
6.2 Updates to Schedules.
Should any of the information or disclosures provided on any of the
Schedules attached hereto become outdated or incorrect in any material
respect, the Borrower shall provide to the Agent in writing
contemporaneously with the items delivered pursuant to Section 8.3.3
[Certificate of Borrower] with such revisions or updates to such
Schedule as may be necessary or appropriate to update or correct same;
provided, however, that no Schedule shall be deemed to have been
amended, modified or superseded by any such correction or update, nor
shall any breach of warranty or representation resulting from the
inaccuracy or incompleteness of any such Schedule be deemed to have
been cured thereby, unless and until the Required Banks, in their sole
and absolute discretion, shall have accepted in writing such revisions
or updates to such Schedule.
7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
The obligation of each Bank to make Loans and of the Agent to issue
Letters of Credit hereunder is subject to the performance by each of the
Loan Parties of its Obligations to be performed hereunder at or prior to
the making of any such Loans or issuance of such Letter of Credit and to
the satisfaction of the following further conditions:
7.1 First Loans and Letters of Credit.
On the Closing Date:
7.1.1 Officer's Certificate.
The representations and warranties of each of the Loan Parties
contained in Section 6 and in each of the other Loan Documents shall be
true and accurate on and as of the Closing Date with the same effect as
though such representations and warranties had been made on and as of
such date (except representations and warranties which relate solely to
an earlier date or time, which representations and warranties shall be
true and correct on and as of the specific dates or times referred to
therein), and each of the Loan Parties shall have performed and complied
with all covenants and conditions hereof and thereof, no Event of
Default or Potential Default shall have occurred and be continuing or
shall exist.
7.1.2 Secretary's Certificate.
There shall be delivered to the Agent for the benefit of each Bank
a certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each of the Loan Parties, certifying as
appropriate as to:
(i) all action taken by each Loan Party in connection with this
Agreement and the other Loan Documents;
(ii) the names of the officer or officers authorized to sign this
Agreement and the other Loan Documents and the true signatures of such
officer or officers and specifying the Authorized Officers permitted to
act on behalf of each Loan Party for purposes of this Agreement and the
true signatures of such officers, on which the Agent and each Bank may
conclusively rely; and
(iii) copies of its organizational documents, including its
certificate of incorporation, bylaws, certificate of limited
partnership, partnership agreement, certificate of formation, and
limited liability company agreement as in effect on the Closing Date
certified by the appropriate state official where such documents are
filed in a state office together with certificates from the appropriate
state officials as to the continued existence and good standing of each
Loan Party in each state where organized or qualified to do business.
7.1.3 Delivery of Loan Documents.
The Security Agreement, Guaranty Agreement, Guaranty Security
Agreement, Indemnity, Notes, Patent, Trademark and Copyright Security
Agreement, Pledge Agreement, Intercompany Subordination Agreement,
Mortgage and Security Agreement and the other Loan Documents shall have
been duly executed and delivered to the Agent for the benefit of the
Banks, together with all appropriate financing statements and
appropriate stock powers and certificates evidencing the Shares, the
Partnership Interests and the LLC Interests. Additionally, the Borrower
shall deliver on the Closing Date a duly completed Borrowing Base
Certificate.
7.1.4 Opinion of Counsel.
There shall be delivered to the Agent for the benefit of each Bank
a written opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇, LLP, counsel for the Loan
Parties (who may rely on the opinions of such other counsel as may be
acceptable to the Agent), dated the Closing Date and in form and
substance satisfactory to the Agent and its counsel as to such matters
incident to the transactions contemplated herein (including the Loans
and Loan Documents, perfection, Tiburon, and the Secondary Offering, for
example) as the Agent may request.
7.1.5 Legal Details.
All legal details and proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents
shall be in form and substance satisfactory to the Agent and counsel for
the Agent, and the Agent shall have received all such other counterpart
originals or certified or other copies of such documents and proceedings
in connection with such transactions, in form and substance satisfactory
to the Agent and said counsel, as the Agent or said counsel may
reasonably request.
7.1.6 Payment of Fees.
The Borrower shall have paid or caused to be paid to the Agent for
itself and for the account of the Banks to the extent not previously
paid all commitment and other fees accrued through or payable on the
Closing Date and the costs and expenses for which the Agent and the
Banks are entitled to be reimbursed.
7.1.7 Projections.
The Agent shall have received from the Borrower revised Financial
Projections for fiscal years 2001 through 2004 for the Borrower after
giving effect to the Secondary Offering and the Tiburon Transaction.
7.1.8 Consents.
All material consents required to effectuate the transactions
contemplated hereby as set forth on Schedule 6.1.13 shall have been
obtained.
7.1.9 Excess Availability.
The Borrower shall have on the Closing Date availability under the
Borrowing Base (after the payment of any fees and expenses and the
making of all Loans on the Closing Date) of not less than $3,000,000, as
demonstrated on the Borrowing Base Certificate delivered on the Closing
Date.
7.1.10 No Violation of Laws.
The making of the Loans and the issuance of the Letters of Credit
shall not contravene any Law applicable to any Loan Party or any of the
Banks.
7.1.11 No Actions or Proceedings.
No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit,
or to obtain damages in respect of, this Agreement, the other Loan
Documents or the consummation of the transactions contemplated
hereby or thereby or which, in the Agent's sole discretion, would make
it inadvisable to consummate the transactions contemplated by this
Agreement or any of the other Loan Documents.
7.1.12 Insurance Policies; Certificates of Insurance;
Endorsements.
The Loan Parties shall have delivered evidence acceptable to the
Agent that adequate insurance in compliance with Section 8.1.3
[Maintenance of Insurance] is in full force and effect and that all
premiums then due thereon have been paid, together with a certified
copy of each Loan Party's casualty insurance policy or policies
evidencing coverage satisfactory to the Agent, with additional insured,
mortgagee and lender loss payable special endorsements attached thereto
in form and substance satisfactory to the Agent and its counsel naming
the Agent as additional insured, mortgagee and lender loss payee.
7.1.13 Filing Receipts.
The Agent shall have received (1) copies of all filing receipts and
acknowledgments issued by any governmental authority to evidence any
recordation or filing necessary to perfect the Lien of the Banks on the
Collateral or other satisfactory evidence of such recordation and filing
and (2) evidence in a form acceptable to the Agent that such Lien
constitutes a Prior Security Interest in favor of the Agent and in the
case of the Mortgage, a valid and perfected first Lien.
7.1.14 Title Insurance.
The Loan Parties shall deliver a title insurance policy or policies
or binder or binders in favor of the Agent for the benefit of the Banks,
in customary ALTA current mortgagee's form, and in amounts not less than
$2,000,000, with premiums paid thereon, issued by a title insurance
company acceptable to the Agent and insuring the Mortgage as a valid
first priority Lien upon the applicable Loan Parties' fee simple title
to, or leasehold interest in, the Real Property Collateral and all
improvements and all appurtenances thereto (including such easements and
appurtenances as may be required by the Agent), free and clear of any
and all defects and encumbrances whatsoever, subject only to such
exceptions as may be approved in writing by the Agent, with endorsements
thereto as to such matters as the Agent may designate.
7.1.15 Landlord's Waiver.
The Loan Parties shall have delivered an executed Landlord's Waiver
in substantially the form of Exhibit 7.1.15 from the lessor for each
leased Collateral location, as listed on Schedule A to the Security
Agreement.
7.1.16 Existing Indebtedness.
All amounts outstanding under the Existing Facility and the ▇▇▇▇▇
Subordinated Debt shall have been repaid in full and liens associated
therewith satisfied and released of record and all Existing Letters of
Credit shall have been cancelled. (The Existing IRB will remain
outstanding.)
7.1.17 Secondary Offering Completed.
The Secondary Offering shall have been completed.
7.2 Each Additional Loan or Letter of Credit.
At the time of making any Loans or issuing any Letter of Credit
other than Loans made or Letters of Credit issued on the Closing Date
and after giving effect to the proposed extensions of credit: the
representations and warranties of the Loan Parties contained in Section
6 and in the other Loan Documents shall be true on and as of the
date of such additional Loan or Letter of Credit with the same effect as
though such representations and warranties had been made on and as of
such date (except representations and warranties which expressly relate
solely to an earlier date or time, which representations and warranties
shall be true and correct on and as of the specific dates or times
referred to therein) and the Loan Parties shall have performed and
complied with all covenants and conditions hereof; no Event of Default
or Potential Default shall have occurred and be continuing or shall
exist; the making of the Loans or issuance of such Letter of Credit
shall not contravene any Law applicable to any Loan Party or Subsidiary
of any Loan Party or any of the Banks; and the Borrower shall have
delivered to the Agent a duly executed and completed Loan Request or
application for a Letter of Credit as the case may be.
8. COVENANTS
8.1 Affirmative Covenants.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter
of Credit Borrowings, and interest thereon, expiration or termination of
all Letters of Credit, satisfaction of all of the Loan Parties'
other Obligations under the Loan Documents and termination of the
Commitments, the Loan Parties shall comply at all times with the
following affirmative covenants:
8.1.1 Preservation of Existence, Etc.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
maintain its legal existence as a corporation, limited partnership or
limited liability company and its license or qualification and good
standing in each jurisdiction in which its ownership or lease of
property or the nature of its business makes such license or
qualification necessary, except as otherwise expressly permitted in
Section 8.2.6 [Liquidations, Mergers, Etc.].
8.1.2 Payment of Liabilities, Including Taxes, Etc.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
duly pay and discharge all liabilities to which it is subject or which
are asserted against it, promptly as and when the same shall become due
and payable, including all taxes, assessments and governmental charges
upon it or any of its properties, assets, income or profits, prior to
the date on which penalties attach thereto, except to the extent that
such liabilities, including taxes, assessments or charges, are being
contested in good faith and by appropriate and lawful proceedings
diligently conducted and for which such reserve or other appropriate
provisions, if any, as shall be required by GAAP shall have been made,
but only to the extent that failure to discharge any such liabilities
would not result in any additional liability which would adversely
affect to a material extent the financial condition of any Loan Party
or Subsidiary of any Loan Party or which would affect the Collateral,
provided that the Loan Parties and their Subsidiaries will pay all such
liabilities forthwith upon the commencement of proceedings to foreclose
any Lien which may have attached as security therefor.
8.1.3 Maintenance of Insurance.
Each Loan Party shall, and shall cause each of its Subsidiaries to,
insure its properties and assets against loss or damage by fire and such
other insurable hazards as such assets are commonly insured (including
fire, extended coverage, property damage, workers' compensation, public
liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties
and assets are insured by prudent companies in similar circumstances
carrying on similar businesses, and with reputable and financially sound
insurers, including self-insurance to the extent customary, all as
reasonably determined by the Agent. At the request of the Agent, the
Loan Parties shall deliver to the Agent and each of the Banks (x) on the
Closing Date and annually thereafter an original certificate of
insurance signed by the Loan Parties' independent insurance broker
describing and certifying as to the existence of the insurance on the
Collateral required to be maintained by this Agreement and the other
Loan Documents, together with a copy of the endorsement described in
the next sentence attached to such certificate and (y) from time to time
a summary schedule indicating all insurance then in force with respect
to each of the Loan Parties. Such policies of insurance shall contain
special endorsements, in form and substance acceptable to the Agent,
which shall (i) specify the Agent as an additional insured, mortgagee
and lender loss payee as its interests may appear, with the
understanding that any obligation imposed upon the insured (including
the liability to pay premiums) shall be the sole obligation of the
applicable Loan Parties and not that of the Agent, (ii) provide, except
in the case of public liability insurance and workmen's compensation
insurance, that all insurance proceeds for losses of less than
$1,000,000 shall be adjusted with and payable to the applicable Loan
Parties and that all insurance proceeds for losses of $1,000,000 or
more shall be adjusted with and payable to the Agent, (iii) include
effective waivers by the insurer of all claims for insurance premiums
against the Agent, (iv) provide that no cancellation of such policies
for any reason (including non-payment of premium) nor any change therein
shall be effective until at least thirty (30) days after receipt by the
Agent of written notice of such cancellation or change, (v) be primary
without right of contribution of any other insurance carried by or on
behalf of any additional insureds with respect to their respective
interests in the Collateral, and (vi) provide that inasmuch as the
policy covers more than one insured, all terms, conditions, insuring
agreements and endorsements (except limits of liability) shall operate
as if there were a separate policy covering each insured. The applicable
Loan Parties shall notify the Agent promptly of any occurrence causing a
material loss or decline in value of the Collateral and the estimated
(or actual, if available) amount of such loss or decline. Any monies
received by the Agent constituting insurance proceeds or condemnation
proceeds (pursuant to the Mortgage) may, at the option of the Agent, (i)
be applied by the Agent to the payment of the Loans in such manner as
the Agent may reasonably determine, or (ii) be disbursed to the
applicable Loan Parties on such terms as are deemed appropriate by the
Agent for the repair, restoration and/or replacement of property in
respect of which such proceeds were received.
8.1.4 Maintenance of Properties and Leases.
Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain in good repair, working order and condition (ordinary wear
and tear excepted) in accordance with the general practice of other
businesses of similar character and size, all of those properties
useful or necessary to its business, and from time to time, such Loan
Party will make or cause to be made all appropriate repairs, renewals
or replacements thereof.
8.1.5 Maintenance of Patents, Trademarks, Etc.
Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain in full force and effect all patents, trademarks, service
marks, trade names, copyrights, licenses, franchises, permits and other
authorizations necessary for the ownership and operation of its
properties and business if the failure so to maintain the same would
constitute a Material Adverse Change.
8.1.6 Visitation Rights.
Each Loan Party shall, and shall cause each of its Subsidiaries
to, permit any of the officers or authorized employees or
representatives of the Agent or any of the Banks to visit and inspect
any of its properties and to examine and make excerpts from its books
and records and discuss its business affairs, finances and accounts with
its officers, all in such detail and at such times and as often as any
of the Banks may reasonably request, provided that each Bank shall
provide the Borrower and the Agent with reasonable notice prior to any
visit or inspection. In the event any Bank desires to conduct an audit
of any Loan Party, such Bank shall make a reasonable effort to conduct
such audit contemporaneously with any audit to be performed by the
Agent.
8.1.7 Keeping of Records and Books of Account.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, maintain and keep proper books of record and account which enable
the Borrower and its Subsidiaries to issue financial statements in
accordance with GAAP and as otherwise required by applicable Laws of any
Official Body having jurisdiction over the Borrower or any Subsidiary of
the Borrower, and in which full, true and correct entries shall be made
in all material respects of all its dealings and business and financial
affairs.
8.1.8 Plans and Benefit Arrangements.
The Borrower shall, and shall cause each other member of the ERISA
Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Plans and Benefit Arrangements except
where such failure, alone or in conjunction with any other failure,
would not result in a Material Adverse Change. Without limiting the
generality of the foregoing, the Borrower shall cause all of its Plans
and all Plans maintained by any member of the ERISA Group to be funded
in accordance with the minimum funding requirements of ERISA and shall
make, and cause each member of the ERISA Group to make, in a timely
manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans.
8.1.9 Compliance with Laws.
Each Loan Party shall, and shall cause each of its Subsidiaries
to, comply with all applicable Laws, including all Environmental Laws,
in all respects, provided that it shall not be deemed to be a violation
of this Section 8.1.9 if any failure to comply with any Law would not
result in fines, penalties, remediation costs, other similar
liabilities or injunctive relief which in the aggregate would constitute
a Material Adverse Change.
8.1.10 Use of Proceeds.
The Loan Parties will use the Letters of Credit and the proceeds
of the Loans only for (i) general corporate purposes and for working
capital, (ii) to finance Permitted Acquisitions, and (iii) to repay and
terminate Indebtedness outstanding under the Existing Facility. The
Loan Parties shall not use the Letters of Credit or the proceeds of the
Loans for any purposes which contravenes any applicable Law or any
provision hereof.
8.1.11 Further Assurances.
Each Loan Party shall, from time to time, at its expense,
faithfully preserve and protect the Agent's Lien on and Prior Security
Interest in the Collateral as a continuing first priority perfected
Lien, subject only to Permitted Liens, and shall do such other acts and
things as the Agent in its sole discretion may deem necessary or
advisable from time to time in order to preserve, perfect and protect
the Liens granted under the Loan Documents and to exercise and enforce
its rights and remedies thereunder with respect to the Collateral.
8.1.12 Subordination of Intercompany Loans.
Each Loan Party shall cause any intercompany Indebtedness, loans
or advances owed by any Loan Party to any other Loan Party to be
subordinated pursuant to the terms of the Intercompany Subordination
Agreement.
8.1.13 Interest Rate Hedging.
The Borrower shall enter into no later than sixty (60) days after
the Closing Date, an interest rate protection agreement or arrangement
with a term at least equal to the period remaining until the Expiration
Date on an ISDA standard form with one or more Banks or Affiliates
thereof or with counterparties reasonably acceptable to the Agent to
hedge the interest rate with respect to not less than 50% of the sum of
(x) the outstanding principal amount of the Terms Loans and (y)
Revolving Facility Usage in form and substance reasonably satisfactory
to the Agent.
8.1.14 Regarding Tiburon
On or before the effective date of the Tiburon Transaction, the
Borrower shall deliver to the Agent:
(i) a Landlord Waiver in respect of the main business location
of Tiburon;
(ii) updated financial statements of Tiburon; and
(iii) a Borrowing Base Certificate in respect of the assets
of Tiburon.
8.2 Negative Covenants.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter
of Credit Borrowings and interest thereon, expiration or termination of
all Letters of Credit, satisfaction of all of the Loan Parties' other
Obligations hereunder and termination of the Commitments, the Loan
Parties shall comply with the following negative covenants:
8.2.1 Indebtedness.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time create, incur, assume or suffer to exist
any Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on Schedule 8.2.1
(including any extensions or renewals thereof, provided there is no
increase in the amount thereof or other significant change in the terms
thereof unless otherwise specified on Schedule 8.2.1;
(iii) Capital Expenditures as and to the extent permitted under
Section 8.2.15 [Capital Expenditures and Leases];
(iv) Indebtedness incident to the obligations to bonding
companies described on Schedule 1.1(P);
(v) Indebtedness under interest rate hedging arrangements under
Section 8.1.13 [Interest Rate Hedging] other incidental hedging
arrangement entered into in the ordinary course of business;
Indebtedness of a Loan Party to another Loan Party which is subordinated
in accordance with the provisions of Section 8.1.12 [Subordination
of Intercompany Loans]; and
(vi) other Indebtedness not specified in items (i) through (vi)
not to exceed in the aggregate of $100,000.
8.2.2 Liens.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time create, incur, assume or suffer to exist
any Lien on any of its property or assets, tangible or intangible, now
owned or hereafter acquired, or agree or become liable to do so, except
Permitted Liens.
8.2.3 Guaranties.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time, directly or indirectly, become or be
liable in respect of any Guaranty, or assume, guarantee, become surety
for, endorse or otherwise agree, become or remain directly or
contingently liable upon or with respect to any obligation or liability
of any other Person, except for Guaranties of Indebtedness of the Loan
Parties permitted hereunder.
8.2.4 Loans and Investments.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, at any time make or suffer to remain outstanding any
loan or advance to, or purchase, acquire or own any stock, bonds, notes
or securities of, or any partnership interest (whether general or
limited) or limited liability company interest in, or any other
investment or interest in, or make any capital contribution to, any
other Person, or agree, become or remain liable to do any of the
foregoing, except:
(i) trade credit extended on usual and customary terms in the
ordinary course of business;
(ii) advances to employees to meet expenses incurred by such
employees in the ordinary course of business and non-cash advances to
finance the exercise of options by employees incident to the departure
of employees;
(iii) Permitted Investments; and
(iv) loans, advances and investments in other Loan Parties.
8.2.5 Dividends and Related Distributions.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, make or pay, or agree to become or remain liable to
make or pay, any dividend or other distribution of any nature (whether
in cash, property, securities or otherwise) on account of or in respect
of its shares of capital stock, partnership interests or limited
liability company interests on account of the purchase, redemption,
buy-backs, retirement or acquisition of its shares of capital stock (or
warrants, options or rights therefor), partnership interests or limited
liability company interests, except dividends or other distributions
payable to another Loan Party; except that the Borrower may repurchase
shares of its common stock in transaction valued at not more than
$3,000,000 in any one year provided that (A) before and immediately
after any of the foregoing: (i) the Leverage Ratio shall not be more
than 2.0-to-1.0, (ii) the Borrower would be able to borrow not less than
$3,000,000 under Section 2.1 [Revolving Credit Commitments] and (B) the
amount of such item and all other such items made since the Closing
Date shall not exceed in the aggregate $6,000,000. (Availability under
item (i) shall be calculated to include the portion of the Swing Line
which is unused at the time of calculation.)
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a
party to any merger or consolidation, or acquire by purchase, lease or
otherwise all or substantially all of the assets or capital stock of any
other Person, provided that
(1) any Loan Party other than the Borrower may consolidate or
merge into another Loan Party which is wholly-owned by one or more of
the other Loan Parties, and
(2) any Loan Party may acquire, whether by purchase or by merger,
(A) all of the ownership interests of another Person or (B)
substantially all of assets of another Person or of a business or
division of another Person (each an "Permitted Acquisition"), provided
that, if the Consideration therein consists of cash or exceeds
$5,000,000, each of the following requirements is met:
(i) if the Loan Parties are acquiring the ownership interests
in such Person, such Person shall execute a Guarantor Joinder and join
this Agreement as a Guarantor pursuant to Section 11.18 [Joinder of
Guarantors] on or before the date of such Permitted Acquisition;
(ii) the Loan Parties, such Person and its owners, as
applicable, shall grant Liens in the assets of or acquired from and
stock or other ownership interests in such Person and otherwise comply
with Section 11.18 [Joinder of Guarantors] on or before the date of such
Permitted Acquisition;
(iii) the board of directors or other equivalent governing
body of such Person shall have approved such Permitted Acquisition and,
if the Loan Parties shall use any portion of the Loans to fund such
Permitted Acquisition, the Loan Parties also shall have delivered to the
Banks written evidence of the approval of the board of directors (or
equivalent body) of such Person for such Permitted Acquisition;
(iv) the business acquired, or the business conducted by
the Person whose ownership interests are being acquired, as applicable,
shall be profitable for the prior fiscal year and as of the date of
acquisition as shown on financial statements acceptable to Required
Banks, be substantially the same as one or more line or lines of
business conducted by the Loan Parties or reasonably related thereto
and shall comply with Section 8.2.10 [Continuation of or Change in
Business];
(v) no Potential Default or Event of Default shall exist
immediately prior to and after giving effect to such Permitted
Acquisition;
(vi) the Borrower shall demonstrate that it shall be in
compliance with the covenants contained in Section 8.2.16 [Minimum Fixed
Charge Coverage Ratio] and Section 8.2.17 [Maximum Leverage Ratio] and
Section 8.2.18 [Minimum Net Worth], and also demonstrate that the
Borrower would be able to borrow not less than $5,000,000 under Section
2.1 [Revolving Credit Commitment], all after giving effect to such
Permitted Acquisition by delivering at least five (5) Business Days
prior to such Permitted Acquisition a certificate in the form of Exhibit
8.2.6 evidencing such compliance (such demonstration being subject to
review by field audits or other means); and
(3) the Consideration paid by the Loan Parties for all Permitted
Acquisitions made during the current fiscal year of the Loan Parties
shall not exceed the following limits:
(A) for the cash portion of Consideration in Permitted
Acquisitions: $5,000,000 in any fiscal year and $10,000,000 in the
aggregate after the Closing Date;
(B) for the non-cash Consideration in Permitted Acquisitions:
$20,000,000 in any single transaction; $25,000,000 in any fiscal year
and $50,000,000 in the aggregate after the Closing Date; and
(4) the Loan Parties shall deliver to the Agent at least five (5)
Business Days before such Permitted Acquisition copies of any agreements
entered into or proposed to be entered into by such Loan Parties in
connection with such Permitted Acquisition and shall deliver to the
Agent such other information about such Person or its assets as any Loan
Party may reasonably require.
(Availability under item 2(vi) above shall be calculated to include the
portion of the Swing Ling which is unused at the time of calculation.)
8.2.7 Dispositions of Assets or Subsidiaries.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, sell, convey, assign, lease, abandon or otherwise
transfer or dispose of, voluntarily or involuntarily, any of its
properties or assets, tangible or intangible (including sale,
assignment, discount or other disposition of accounts, contract rights,
chattel paper, equipment or general intangibles with or without recourse
or of capital stock, shares of beneficial interest, partnership
interests or limited liability company interests of a Subsidiary of such
Loan Party), except:
(i) transactions involving the sale of inventory in the ordinary
course of business;
(ii) any sale, transfer or lease of assets in the ordinary course
of business which are no longer necessary or required in the conduct of
such Loan Party's or such Subsidiary's business;
(iii) any sale, transfer or lease of assets by any wholly owned
Subsidiary of such Loan Party to another Loan Party;
(iv) any sale, transfer or lease of assets in the ordinary
course of business which are replaced by substitute assets acquired or
leased within the parameters of Section 8.2.15 [Capital Expenditures and
Leases], provided such substitute assets are subject to the Banks' Prior
Security Interest; or
(v) any sale, transfer or lease of assets, other than those
specifically excepted pursuant to clauses (i) through (iv) above, which
is approved by the Required Banks so long as the after-tax proceeds (as
reasonably estimated by the Borrower) are applied as a mandatory
prepayment of the Term Loans in accordance with the provisions of
Section 5.5.1 [Sale of Assets] above.
8.2.8 Affiliate Transactions.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, enter into or carry out any transaction (including
purchasing property or services from or selling property or services to
any Affiliate of any Loan Party or other Person) unless such transaction
is not otherwise prohibited by this Agreement, is entered into in the
ordinary course of business upon fair and reasonable arm's-length terms
and conditions which are fully disclosed to the Agent and is in
accordance with all applicable Law.
8.2.9 Subsidiaries, Partnerships and Joint Ventures.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, own or create directly or indirectly any Subsidiaries
other than (i) any Subsidiary which has joined this Agreement as
Guarantor on the Closing Date; and (ii) any Subsidiary formed after the
Closing Date which joins this Agreement as a Guarantor pursuant to
Section 11.18 [Joinder of Guarantors], provided that (unless such
Subsidiary is formed solely to make a Permitted Acquisition) the
Required Banks shall have consented to such formation and joinder and
that such Subsidiary and the Loan Parties, as applicable, shall grant
and cause to be perfected first priority Liens to the Agent for the
benefit of the Banks in the assets held by, and stock of or other
ownership interests in, such Subsidiary. Each of the Loan Parties shall
not become or agree to (1) become a general or limited partner in any
general or limited partnership, except that the Loan Parties may be
general or limited partners in other Loan Parties, (2) become
a member or manager of, or hold a limited liability company interest
in, a limited liability company, except that the Loan Parties may be
members or managers of, or hold limited liability company interests in,
other Loan Parties, or (3) become a joint venturer or hold a joint
venture interest in any joint venture.
8.2.10 Continuation of or Change in Business.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, engage in any business other than physical and
electronic security and technology-based integrated justice system
solutions substantially as conducted and operated by such Loan Party or
Subsidiary during the present fiscal year, or is reasonably related
thereto, and such Loan Party or Subsidiary shall not permit any material
change in such business.
8.2.11 Plans and Benefit Arrangements.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to:
(i) fail to satisfy the minimum funding requirements of ERISA and
the Internal Revenue Code with respect to any Plan;
(ii) request a minimum funding waiver from the Internal Revenue
Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with any Plan, Benefit
Arrangement or Multiemployer Plan which, alone or in conjunction with
any other circumstances or set of circumstances resulting in liability
under ERISA, would constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan, determined on a
plan termination basis, as disclosed in the most recent actuarial report
completed with respect to such Plan, to exceed, as of any actuarial
valuation date, the fair market value of the assets of such Plan;
(v) fail to make when due any contribution to any Multiemployer
Plan that the Borrower or any member of the ERISA Group may be required
to make under any agreement relating to such Multiemployer Plan, or any
Law pertaining thereto;
(vi) withdraw (completely or partially) from any Multiemployer Plan
or withdraw (or be deemed under Section 4062(e) of ERISA to withdraw)
from any Multiple Employer Plan, where any such withdrawal is likely to
result in a material liability of the Borrower or any member of the
ERISA Group;
(vii) terminate, or institute proceedings to terminate, any
Plan, where such termination is likely to result in a material
liability to the Borrower or any member of the ERISA Group;
(viii) make any amendment to any Plan with respect to which
security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices and make all disclosures
and governmental filings required under ERISA or the Internal
Revenue Code, where such failure is likely to result in a Material
Adverse Change.
8.2.12 Fiscal Year.
The Borrower shall not, and shall not permit any Subsidiary of the
Borrower to, change its fiscal year from the twelve-month period ending
December 31.
8.2.13 Issuance of Stock.
None of the Borrower's Subsidiaries shall issue any additional
shares of its capital stock or any options, warrants or other rights
in respect thereof.
8.2.14 Changes in Organizational Documents.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, amend in any respect its certificate of incorporation
(including any provisions or resolutions relating to capital stock),
by-laws, certificate of limited partnership, partnership agreement,
certificate of formation, limited liability company agreement
or other organizational documents without providing at least thirty (30)
calendar days' prior written notice to the Agent and the Banks and, in
the event such change would be adverse to the Banks as determined by the
Agent in its sole discretion, obtaining the prior written consent of the
Required Banks.
8.2.15 Capital Expenditures and Leases.
Each of the Loan Parties shall not, and shall not permit any of its
Subsidiaries to, make any Capital Expenditures exceeding $5,000,000 in
the aggregate in any fiscal year. All such capital expenditures and
leases shall be made under usual and customary terms and in the ordinary
course of business.
8.2.16 Minimum Fixed Charge Coverage Ratio.
The Loan Parties shall not permit the Fixed Charge Coverage Ratio,
calculated as of the end of each fiscal quarter for the four (4) fiscal
quarters then ended, to be less than 1.2 to 1.0.
8.2.17 Maximum Leverage Ratio.
The Loan Parties shall not at any time permit the Leverage Ratio to
exceed the ratio set forth below during any quarter during the periods
specified below:
Period Ending Ratio
------------- -----
December 31, 2001, Less than 2.50
March 31, 2002,
June 30, 2002,
September 30, 2002
December 31, 2002 Less than 2.25
and each quarter thereafter
8.2.18 Minimum Net Worth.
The Borrower shall not at any time permit Net Worth to be less
than Required Net Worth.
8.3 Reporting Requirements.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter
of Credit Borrowings and interest thereon, expiration or termination of
all Letters of Credit, satisfaction of all of the Loan Parties' other
Obligations hereunder and under the other Loan Documents and termination
of the Commitments, the Loan Parties will furnish or cause to be
furnished to the Agent and each of the Banks:
8.3.1 Quarterly Financial Statements.
As soon as available and in any event within forty-five (45)
calendar days after the end of each of the first three fiscal quarters
in each fiscal year, financial statements of the Borrower, consisting of
a consolidated and consolidating balance sheet as of the end of such
fiscal quarter and related consolidated and consolidating statements of
income, stockholders' equity and cash flows for the fiscal quarter then
ended and the fiscal year through that date, all in reasonable detail
and certified (subject to normal year-end audit adjustments) by the
Chief Executive Officer, President or Chief Financial Officer of the
Borrower as having been prepared in accordance with GAAP, consistently
applied, and setting forth in comparative form the respective financial
statements for the corresponding date and period in the previous fiscal
year.
8.3.2 Annual Financial Statements.
As soon as available and in any event within ninety (90) days after
the end of each fiscal year of the Borrower, financial statements of the
Borrower consisting of a consolidated and consolidating balance sheet as
of the end of such fiscal year, and related consolidated and
consolidating statements of income, stockholders' equity and cash flows
for the fiscal year then ended, all in reasonable detail and setting
forth in comparative form the financial statements as of the end of and
for the preceding fiscal year, and certified by independent certified
public accountants of nationally recognized standing satisfactory to the
Agent. The certificate or report of accountants shall be free of
material qualifications (other than any consistency qualification that
may result from a change in the method used to prepare the financial
statements as to which such accountants concur) and shall not indicate
the occurrence or existence of any event, condition or contingency which
would materially impair the prospect of payment or performance of any
covenant, agreement or duty of any Loan Party under any of the Loan
Documents. The Loan Parties shall deliver with such financial
statements and certification by their accountants a letter of such
accountants to the Agent and the Banks substantially (i) to the effect
that, based upon their ordinary and customary examination of the
affairs of the Borrower, performed in connection with the preparation of
such consolidated financial statements, and in accordance with generally
accepted auditing standards, they are not aware of the existence of any
condition or event which constitutes an Event of Default or
Potential Default or, if they are aware of such condition or event,
stating the nature thereof and confirming the Borrower's calculations
with respect to the certificate to be delivered pursuant to Section
8.3.3 [Certificate of the Borrower] with respect to such financial
statements and (ii) to the effect that the Banks are intended to rely
upon such accountant's certification of the annual financial statements
and that such accountants authorize the Loan Parties to deliver such
reports and certificate to the Banks on such accountants' behalf.
8.3.3 Certificate of the Borrower.
Concurrently with the financial statements of the Borrower
furnished to the Agent and to the Banks pursuant to Sections 8.3.1
[Quarterly Financial Statements] and 8.3.2 [Annual Financial
Statements], a certificate (each a "Compliance Certificate") of the
Borrower signed by the Chief Executive Officer, President or Chief
Financial Officer of the Borrower, in the form of Exhibit 8.3.3, to the
effect that, except as described pursuant to Section 8.3.5 [Notice of
Default], (i) the representations and warranties of the Borrower
contained in Section 6 and in the other Loan Documents are true on and
as of the date of such certificate with the same effect as though such
representations and warranties had been made on and as of such date
(except representations and warranties which expressly relate solely to
an earlier date or time) and the Loan Parties have performed and
complied with all covenants and conditions hereof, (ii) no Event of
Default or Potential Default exists and is continuing on the date of
such certificate and (iii) containing calculations in sufficient detail
to demonstrate compliance as of the date of such financial statements
with all financial covenants contained in Section 8.2 [Negative
Covenants]. With each such quarterly certificate, the Borrower shall
deliver a report of all pending jobs of the Loan Parties with a value
in excess of $2,500,000.
8.3.4 Borrowing Base Certificate.
On or before the first (1st) Business Day of each calendar month,
the Borrowers shall deliver to the Bank a Borrowing Base Certificate.
The Borrowing Base Certificate shall reflect the Borrower's calculation
of the Borrowing Base as of the last day of the preceding calendar
month, and a comparison of such number to the Commitment and to the
amount of outstanding Obligations. Together with each such Borrowing
Base Certificate, the Borrower shall deliver a calculation of Qualified
Bookings.
8.3.5 Notice of Default.
Promptly after any officer of any Loan Party has learned of the
occurrence of an Event of Default or Potential Default, a certificate
signed by the Chief Executive Officer, President or Chief Financial
Officer of such Loan Party setting forth the details of such Event of
Default or Potential Default and the action which the such Loan Party
proposes to take with respect thereto.
8.3.6 Notice of Litigation.
Promptly after the commencement thereof, notice of all actions,
suits, proceedings or investigations before or by any Official Body or
any other Person against any Loan Party or Subsidiary of any Loan Party
which relate to the Collateral, involve a claim or series of claims in
excess of $1,000,000 or which if adversely determined would constitute
a Material Adverse Change.
8.3.7 Certain Events.
Written notice to the Agent:
(i) at least thirty (30) calendar days prior thereto, with
respect to any proposed sale or transfer of assets pursuant to Section
8.2.7((iv)) or ((v)); and
(ii) within the time limits set forth in Section 8.2.14 [Changes
in Organizational Documents], any amendment to the organizational
documents of any Loan Party.
8.3.8 Budgets, Forecasts, Other Reports and Information.
Promptly upon their becoming available to the Borrower:
(i) the annual budget and any forecasts or projections of the
Borrower, to be supplied not later than thirty (30) days prior to
commencement of the fiscal year to which any of the foregoing may be
applicable,
(ii) any reports including management letters submitted to the
Borrower by independent accountants in connection with any annual,
interim or special audit,
(iii) any reports, notices or proxy statements generally
distributed by the Borrower to its stockholders on a date no later than
the date supplied to such stockholders,
(iv) regular or periodic reports, including Forms 10-K, 10-Q and
8-K, registration statements and prospectuses, filed by the Borrower
with the Securities and Exchange Commission,
(v) a copy of any material order in any proceeding to which the
Borrower or any of its Subsidiaries is a party issued by any Official
Body, and
(vi) such other reports and information as any of the Banks may
from time to time reasonably request. The Borrower shall also notify
the Banks promptly of the enactment or adoption of any Law which may
result in a Material Adverse Change.
8.3.9 Notices Regarding Plans and Benefit Arrangements.
8.3.9.1 Certain Events.
Promptly upon becoming aware of the occurrence thereof, notice
(including the nature of the event and, when known, any action taken
or threatened by the Internal Revenue Service or the PBGC with respect
thereto) of:
(i) any Reportable Event with respect to the Borrower or any other
member of the ERISA Group (regardless of whether the obligation to
report said Reportable Event to the PBGC has been waived),
(ii) any Prohibited Transaction which could subject the Borrower
or any other member of the ERISA Group to a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of
the Internal Revenue Code in connection with any Plan, any Benefit
Arrangement or any trust created thereunder,
(iii) any assertion of material withdrawal liability with respect
to any Multiemployer Plan,
(iv) any partial or complete withdrawal from a Multiemployer Plan
by the Borrower or any other member of the ERISA Group under Title IV
of ERISA (or assertion thereof), where such withdrawal is likely to
result in material withdrawal liability,
(v) any cessation of operations (by the Borrower or any other
member of the ERISA Group) at a facility in the circumstances described
in Section 4062(e) of ERISA,
(vi) withdrawal by the Borrower or any other member of the ERISA
Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any other member of the ERISA
Group to make a payment to a Plan required to avoid imposition
of a Lien under Section 302(f) of ERISA,
(viii) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA, or
(ix) any change in the actuarial assumptions or funding
methods used for any Plan, where the effect of such change is to
materially increase or materially reduce the unfunded benefit liability
or obligation to make periodic contributions.
8.3.9.2 Notices of Involuntary Termination and Annual Reports.
Promptly after receipt thereof, copies of (a) all notices received
by the Borrower or any other member of the ERISA Group of the PBGC's
intent to terminate any Plan administered or maintained by the Borrower
or any member of the ERISA Group, or to have a trustee appointed to
administer any such Plan; and (b) at the request of the Agent or any
Bank each annual report (IRS Form 5500 series) and all accompanying
schedules, the most recent actuarial reports, the most recent financial
information concerning the financial status of each Plan administered or
maintained by the Borrower or any other member of the ERISA Group, and
schedules showing the amounts contributed to each such Plan by or on
behalf of the Borrower or any other member of the ERISA Group in which
any of their personnel participate or from which such personnel may
derive a benefit, and each Schedule B (Actuarial Information) to the
annual report filed by the Borrower or any other member of the ERISA
Group with the Internal Revenue Service with respect to each such Plan.
8.3.9.3 Notice of Voluntary Termination.
Promptly upon the filing thereof, copies of any Form 5310, or any
successor or equivalent form to Form 5310, filed with the PBGC in
connection with the termination of any Plan.
9. DEFAULT
9.1 Events of Default.
An Event of Default shall mean the occurrence or existence of any
one or more of the following events or conditions (whatever the reason
therefor and whether voluntary, involuntary or effected by operation of
Law):
9.1.1 Payments Under Loan Documents.
The Borrower shall fail to pay any principal of any Loan (including
scheduled installments, mandatory prepayments or the payment due at
maturity), Reimbursement Obligation or Letter of Credit Borrowing when
due, or shall fail to pay three (3) Business Days after any interest on
any Loan, Reimbursement Obligation or Letter of Credit Borrowing or any
other amount owing hereunder or under the other Loan Documents after
such principal, interest or other amount becomes due in accordance with
the terms hereof or thereof;
9.1.2 Breach of Warranty.
Any representation or warranty made at any time by any of the Loan
Parties herein or by any of the Loan Parties in any other Loan Document,
or in any certificate, other instrument or statement furnished pursuant
to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or
furnished;
9.1.3 Breach of Negative Covenants or Visitation Rights.
Any of the Loan Parties shall default in the observance or
performance of any covenant contained in Section 8.1.6 [Visitation
Rights] or Section 8.2 [Negative Covenants];
9.1.4 Breach of Other Covenants.
Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of
any other Loan Document and such default shall continue unremedied for
a period of ten (10) Business Days after any officer of any Loan Party
becomes aware of the occurrence thereof (such grace period to be
applicable only in the event such default can be remedied by corrective
action of the Loan Parties as determined by the Agent in its sole
discretion);
9.1.5 Defaults in Other Agreements or Indebtedness.
A default or event of default shall occur at any time under the
terms of any other agreement involving borrowed money or the extension
of credit or any other Indebtedness under which any Loan Party or
Subsidiary of any Loan Party may be obligated as a borrower or guarantor
in excess of $500,000 in the aggregate, and such breach, default or
event of default consists of the failure to pay (beyond any period of
grace permitted with respect thereto, whether waived or not) any
indebtedness when due (whether at stated maturity, by acceleration or
otherwise) or if such breach or default permits or causes the
acceleration of any indebtedness (whether or not such right shall have
been waived) or the termination of any commitment to lend;
9.1.6 Final Judgments or Orders.
Any final judgments or orders for the payment of money in excess
of $1,000,000 in the aggregate shall be entered against any Loan Party
by a court having jurisdiction in the premises, which judgment is not
discharged, vacated, bonded or stayed pending appeal within a period of
thirty (30) days from the date of entry;
9.1.7 Loan Document Unenforceable.
Any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against the party executing the same or
such party's successors and assigns (as permitted under the Loan
Documents) in accordance with the respective terms thereof or shall in
any way be terminated (except in accordance with its terms) or become or
be declared ineffective or inoperative or shall in any way be challenged
or contested or cease to give or provide the respective Liens, security
interests, rights, titles, interests, remedies, powers or privileges
intended to be created thereby;
9.1.8 Uninsured Losses; Proceedings Against Assets.
There shall occur any material uninsured damage to or loss, theft
or destruction of any of the Collateral in excess of $1,000,000 or the
Collateral or any other of the Loan Parties' or any of their
Subsidiaries' assets are attached, seized, levied upon or subjected to
a writ or distress warrant; or such come within the possession of any
receiver, trustee, custodian or assignee for the benefit of creditors
and the same is not cured within thirty (30) days thereafter;
9.1.9 Notice of Lien or Assessment.
A notice of Lien or assessment in excess of $1,000,000 which is not
a Permitted Lien is filed of record with respect to all or any part of
any of the Loan Parties' or any of their Subsidiaries' assets by the
United States, or any department, agency or instrumentality thereof, or
by any state, county, municipal or other governmental agency, including
the PBGC, or any taxes or debts owing at any time or times hereafter to
any one of these becomes payable and the same is not paid within thirty
(30) days after the same becomes payable;
9.1.10 Insolvency.
Any Loan Party or any Subsidiary of a Loan Party ceases to be
solvent or admits in writing its inability to pay its debts as they
mature;
9.1.11 Events Relating to Plans and Benefit Arrangements.
Any of the following occurs: (i) any Reportable Event, which the
Agent determines in good faith constitutes grounds for the termination
of any Plan by the PBGC or the appointment of a trustee to administer
or liquidate any Plan, shall have occurred and be continuing; (ii)
proceedings shall have been instituted or other action taken to
terminate any Plan, or a termination notice shall have been filed with
respect to any Plan; (iii) a trustee shall be appointed to administer
or liquidate any Plan; (iv) the PBGC shall give notice of its intent
to institute proceedings to terminate any Plan or Plans or to appoint
a trustee to administer or liquidate any Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, the Agent determines in
good faith that the amount of the Borrower's liability is likely to
exceed 10% of its Tangible Net Worth; (v) the Borrower or any member of
the ERISA Group shall fail to make any contributions when due to a Plan
or a Multiemployer Plan; (vi) the Borrower or any other member of the
ERISA Group shall make any amendment to a Plan with respect to which
security is required under Section 307 of ERISA; (vii) the Borrower or
any other member of the ERISA Group shall withdraw completely or
partially from a Multiemployer Plan; (viii) the Borrower or any other
member of the ERISA Group shall withdraw (or shall be deemed under
Section 4062(e) of ERISA to withdraw) from a Multiple Employer Plan; or
(ix) any applicable Law is adopted, changed or interpreted by any
Official Body with respect to or otherwise affecting one or more Plans,
Multiemployer Plans or Benefit Arrangements and, with respect to
any of the events specified in (v), (vi), (vii), (viii) or (ix), the
Agent determines in good faith that any such occurrence would be
reasonably likely to materially and adversely affect the total
enterprise represented by the Borrower and the other members of the
ERISA Group;
9.1.12 Cessation of Business.
Any Loan Party or Subsidiary of a Loan Party ceases to conduct its
business as contemplated, except as expressly permitted under Section
8.2.6 [Liquidations, Mergers, Etc.] or 8.2.7, or any Loan Party or
Subsidiary of a Loan Party is enjoined, restrained or in any way
prevented by court order from conducting all or any material part of its
business and such injunction, restraint or other preventive order is not
dismissed within thirty (30) days after the entry thereof;
9.1.13 Change of Control.
(i) Any person or group of persons (within the meaning of Sections
13(d) or 14(a) of the Securities Exchange Act of 1934, as amended) shall
have acquired beneficial ownership of (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act)
50% or more of the voting capital stock of the Borrower; or (ii) within
a period of twelve (12) consecutive calendar months, individuals who
were directors of the Borrower on the first day of such period shall
cease to constitute a majority of the board of directors of the
Borrower;
9.1.14 Involuntary Proceedings.
A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in
respect of any Loan Party or Subsidiary of a Loan Party in an
involuntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, or for
the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of any Loan Party or
Subsidiary of a Loan Party for any substantial part of its property, or
for the winding-up or liquidation of its affairs, and such proceeding
shall remain undismissed or unstayed and in effect for a period of
thirty (30) consecutive days or such court shall enter a decree or order
granting any of the relief sought in such proceeding; or
9.1.15 Voluntary Proceedings.
Any Loan Party or Subsidiary of a Loan Party shall commence a
voluntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, shall
consent to the entry of an order for relief in an involuntary case under
any such law, or shall consent to the appointment or taking possession
by a receiver, liquidator, assignee, custodian, trustee, sequestrator,
conservator (or other similar official) of itself or for any substantial
part of its property or shall make a general assignment for the benefit
of creditors, or shall fail generally to pay its debts as they become
due, or shall take any action in furtherance of any of the foregoing.
9.2 Consequences of Event of Default.
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings.
If an Event of Default specified under Sections 9.1.1 through
9.1.13 shall occur and be continuing, the Banks and the Agent shall be
under no further obligation to make Loans or issue Letters of Credit, or
make any Swing Line Loans, as the case may be, and the Agent may, and
upon the request of the Required Banks, shall (i) by written notice to
the Borrower, declare the unpaid principal amount of the Notes then
outstanding and all interest accrued thereon, any unpaid fees and all
other Indebtedness of the Borrower to the Banks hereunder and thereunder
to be forthwith due and payable, and the same shall thereupon become
and be immediately due and payable to the Agent for the benefit of each
Bank without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived, and (ii) require the
Borrower to, and the Borrower shall thereupon, deposit in a non-
interest-bearing account with the Agent, as cash collateral for its
Obligations under the Loan Documents, an amount equal to the maximum
amount currently or at any time thereafter available to be drawn on all
outstanding Letters of Credit, and the Borrower hereby pledges to the
Agent and the Banks, and grants to the Agent and the Banks a security
interest in, all such cash as security for such Obligations. Upon the
curing of all existing Events of Default to the satisfaction of the
Required Banks, the Agent shall return such cash collateral to the
Borrower; and
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings.
If an Event of Default specified under Section 9.1.14 [Involuntary
Proceedings] or 9.1.15 [Voluntary Proceedings] shall occur, the Banks
shall be under no further obligations to make Loans hereunder and the
unpaid principal amount of the Loans then outstanding and all interest
accrued thereon, any unpaid fees and all other Indebtedness of the
Borrower to the Banks hereunder and thereunder shall be immediately due
and payable, without presentment, demand, protest or notice of any kind,
all of which are hereby expressly waived; and
9.2.3 Set-off.
If an Event of Default shall occur and be continuing, any Bank to
whom any Obligation is owed by any Loan Party hereunder or under any
other Loan Document or any participant of such Bank which has agreed in
writing to be bound by the provisions of Section 10.13 [Equalization of
Banks] and any branch, Subsidiary or Affiliate of such Bank or
participant anywhere in the world shall have the right, in addition to
all other rights and remedies available to it, without prior notice to
such Loan Party, to set-off against and apply to the then unpaid balance
of all the Loans and all other Obligations of the Borrower and the other
Loan Parties hereunder or under any other Loan Document any debt owing
to, and any other funds held in any manner for the account of, the
Borrower or such other Loan Party by such Bank or participant or by such
branch, Subsidiary or Affiliate, including all funds in all deposit
accounts (whether time or demand, general or special, provisionally
credited or finally credited, or otherwise) now or hereafter maintained
by the Borrower or such other Loan Party for its own account (but not
including funds held in custodian or trust accounts) with such Bank or
participant or such branch, Subsidiary or Affiliate. Such right shall
exist whether or not any Bank or the Agent shall have made any demand
under this Agreement or any other Loan Document, whether or not such
debt owing to or funds held for the account of the Borrower or such
other Loan Party is or are matured or unmatured and regardless of the
existence or adequacy of any Collateral, Guaranty or any other security,
right or remedy available to any Bank or the Agent; and
9.2.4 Suits, Actions, Proceedings.
If an Event of Default shall occur and be continuing, and whether
or not the Agent shall have accelerated the maturity of Loans pursuant
to any of the foregoing provisions of this Section 9.2, the Agent or any
Bank, if owed any amount with respect to the Loans, may proceed to
protect and enforce its rights by suit in equity, action at law and/or
other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Agreement or the other Loan
Documents, including as permitted by applicable Law the obtaining of the
ex parte appointment of a receiver, and, if such amount shall have
become due, by declaration or otherwise, proceed to enforce the payment
thereof or any other legal or equitable right of the Agent or such Bank;
and
9.2.5 Application of Proceeds.
From and after the date on which the Agent has taken any action
pursuant to this Section 9.2 and until all Obligations of the Loan
Parties have been paid in full, any and all proceeds received by the
Agent from any sale or other disposition of the Collateral, or any part
thereof, or the exercise of any other remedy by the Agent, shall be
applied as follows:
(i) first, to reimburse the Agent and the Banks for out-of-pocket
costs, expenses and disbursements, including reasonable attorneys' and
paralegals' fees and legal expenses, incurred by the Agent or the Banks
in connection with realizing on the Collateral or collection of any
Obligations of any of the Loan Parties under any of the Loan Documents,
including advances made by the Banks or any one of them or the Agent for
the reasonable maintenance, preservation, protection or enforcement of,
or realization upon, the Collateral, including advances for taxes,
insurance, repairs and the like and reasonable expenses incurred to sell
or otherwise realize on, or prepare for sale or other realization on,
any of the Collateral;
(ii) second, to the repayment of all Indebtedness then due and
unpaid of the Loan Parties to the Banks incurred under this Agreement or
any of the other Loan Documents, whether of principal, interest, fees,
expenses or otherwise, in such manner as the Agent may determine in its
discretion; and
(iii) the balance, if any, to Borrower or otherwise as required by
Law.
9.2.6 Other Rights and Remedies.
In addition to all of the rights and remedies contained in this
Agreement or in any of the other Loan Documents (including the
Mortgage), the Agent shall have all of the rights and remedies of a
secured party under the Uniform Commercial Code or other applicable
Law, all of which rights and remedies shall be cumulative and
non-exclusive, to the extent permitted by Law. The Agent may, and upon
the request of the Required Banks shall, exercise all post-default
rights granted to the Agent and the Banks under the Loan Documents or
applicable Law.
9.3 Notice of Sale.
Any notice required to be given by the Agent of a sale, lease, or
other disposition of the Collateral or any other intended action by the
Agent, if given ten (10) days prior to such proposed action, shall
constitute commercially reasonable and fair notice thereof to the
Borrower.
10. THE AGENT
10.1 Appointment.
Each Bank hereby irrevocably designates, appoints and authorizes
PNC Bank to act as Agent for such Bank under this Agreement and to
execute and deliver or accept on behalf of each of the Banks the other
Loan Documents. Each Bank hereby irrevocably authorizes, and each
holder of any Note by the acceptance of a Note shall be deemed
irrevocably to authorize, the Agent to take such action on its behalf
under the provisions of this Agreement and the other Loan Documents and
any other instruments and agreements referred to herein, and to exercise
such powers and to perform such duties hereunder as are specifically
delegated to or required of the Agent by the terms hereof, together with
such powers as are reasonably incidental thereto. PNC Bank agrees to
act as the Agent on behalf of the Banks to the extent provided in this
Agreement.
10.2 Delegation of Duties.
The Agent may perform any of its duties hereunder by or through
agents or employees (provided such delegation does not constitute a
relinquishment of its duties as Agent) and, subject to Sections 10.5
[Reimbursement of Agent by Borrower, Etc.] and 10.6, shall be entitled
to engage and pay for the advice or services of any attorneys,
accountants or other experts concerning all matters pertaining to its
duties hereunder and to rely upon any advice so obtained.
10.3 Nature of Duties; Independent Credit Investigation.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants,
functions, responsibilities, duties, obligations, or liabilities shall
be read into this Agreement or otherwise exist. The duties of the Agent
shall be mechanical and administrative in nature; the Agent shall not
have by reason of this Agreement a fiduciary or trust relationship in
respect of any Bank; and nothing in this Agreement, expressed or
implied, is intended to or shall be so construed as to impose upon the
Agent any obligations in respect of this Agreement except as expressly
set forth herein. Without limiting the generality of the foregoing, the
use of the term "agent" in this Agreement with reference to the Agent is
not intended to connote any fiduciary or other implied (or express)
obligations arising under agency doctrine of any applicable Law.
Instead, such term is used merely as a matter of market custom, and is
intended to create or reflect only an administrative relationship
between independent contracting parties. Each Bank expressly
acknowledges (i) that the Agent has not made any representations or
warranties to it and that no act by the Agent hereafter taken, including
any review of the affairs of any of the Loan Parties, shall be deemed to
constitute any representation or warranty by the Agent to any Bank; (ii)
that it has made and will continue to make, without reliance upon the
Agent, its own independent investigation of the financial condition and
affairs and its own appraisal of the creditworthiness of each of the
Loan Parties in connection with this Agreement and the making and
continuance of the Loans hereunder; and (iii) except as expressly
provided herein, that the Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Bank with any
credit or other information with respect thereto, whether coming into
its possession before the making of any Loan or at any time or times
thereafter.
10.4 Actions in Discretion of Agent; Instructions From the Banks.
The Agent agrees, upon the written request of the Required Banks,
to take or refrain from taking any action of the type specified as being
within the Agent's rights, powers or discretion herein, provided that
the Agent shall not be required to take any action which exposes the
Agent to personal liability or which is contrary to this Agreement or
any other Loan Document or applicable Law. In the absence of a request
by the Required Banks, the Agent shall have authority, in its sole
discretion, to take or not to take any such action, unless this
Agreement specifically requires the consent of the Required Banks or all
of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to
Section 10.6 [Exculpatory Provisions, Etc.]. Subject to the provisions
of Section 10.6, no Bank shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from
acting hereunder in accordance with the instructions of the Required
Banks, or in the absence of such instructions, in the absolute
discretion of the Agent.
10.5 Reimbursement and Indemnification of Agent by the Borrower.
The Borrower unconditionally agrees to pay or reimburse the Agent
and hold the Agent harmless against (a) liability for the payment of all
reasonable out-of-pocket costs, expenses and disbursements, including
fees and expenses of counsel (including the allocated costs of staff
counsel), appraisers and environmental consultants, incurred by the
Agent (i) in connection with the development, negotiation, preparation,
printing, execution, administration, syndication, interpretation and
performance of this Agreement and the other Loan Documents, (ii)
relating to any requested amendments, waivers or consents pursuant
to the provisions hereof, (iii) in connection with the enforcement of
this Agreement or any other Loan Document or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (iv) in any
workout or restructuring or in connection with the protection,
preservation, exercise or enforcement of any of the terms hereof or of
any rights hereunder or under any other Loan Document or in connection
with any foreclosure, collection or bankruptcy proceedings, and (b) all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the
Agent, in its capacity as such, in any way relating to or arising out of
this Agreement or any other Loan Documents or any action taken or
omitted by the Agent hereunder or thereunder, provided that the Borrower
shall not be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements if the same results from the Agent's gross negligence
or willful misconduct, or if the Borrower was not given notice of the
subject claim and the opportunity to participate in the defense thereof,
at its expense (except that the Borrower shall remain liable to the
extent such failure to give notice does not result in a loss to the
Borrower), or if the same results from a compromise or settlement
agreement entered into without the consent of the Borrower, which shall
not be unreasonably withheld. In addition, the Borrower agrees to
reimburse and pay all reasonable out-of-pocket expenses of the Agent's
regular employees and agents engaged periodically to perform audits of
the Loan Parties' books, records and business properties.
10.6 Exculpatory Provisions; Limitation of Liability.
Neither the Agent nor any of its directors, officers, employees,
agents, attorneys or Affiliates shall (a) be liable to any Bank for any
action taken or omitted to be taken by it or them hereunder, or in
connection herewith including pursuant to any Loan Document, unless
caused by its or their own gross negligence or willful misconduct, (b)
be responsible in any manner to any of the Banks for the effectiveness,
enforceability, genuineness, validity or the due execution of this
Agreement or any other Loan Documents or for any recital,
representation, warranty, document, certificate, report or statement
herein or made or furnished under or in connection with this Agreement
or any other Loan Documents, or (c) be under any obligation to any of
the Banks to ascertain or to inquire as to the performance or observance
of any of the terms, covenants or conditions hereof or thereof on the
part of the Loan Parties, or the financial condition of the Loan
Parties, or the existence or possible existence of any Event of Default
or Potential Default. No claim may be made by any of the Loan Parties,
any Bank, the Agent or any of their respective Subsidiaries against the
Agent, any Bank or any of their respective directors, officers,
employees, agents, attorneys or Affiliates, or any of them, for any
special, indirect or consequential damages or, to the fullest extent
permitted by Law, for any punitive damages in respect of any claim or
cause of action (whether based on contract, tort, statutory liability,
or any other ground) based on, arising out of or related to any Loan
Document or the transactions contemplated hereby or any act, omission or
event occurring in connection therewith, including the negotiation,
documentation, administration or collection of the Loans, and each of
the Loan Parties, (for itself and on behalf of each of its
Subsidiaries), the Agent and each Bank hereby waive, releases and agree
never to ▇▇▇ upon any claim for any such damages, whether such claim
now exists or hereafter arises and whether or not it is now known or
suspected to exist in its favor. Each Bank agrees that, except for
notices, reports and other documents expressly required to be furnished
to the Banks by the Agent hereunder or given to the Agent for the
account of or with copies for the Banks, the Agent and each of its
directors, officers, employees, agents, attorneys or Affiliates shall
not have any duty or responsibility to provide any Bank with an credit
or other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of the
Loan Parties which may come into the possession of the Agent or any of
its directors, officers, employees, agents, attorneys or Affiliates.
10.7 Reimbursement and Indemnification of Agent by Banks.
Each Bank agrees to reimburse and indemnify the Agent (to the
extent not reimbursed by the Borrower and without limiting the
Obligation of the Borrower to do so) in proportion to its Ratable Share
from and against all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements,
including attorneys' fees and disbursements (including the allocated
costs of staff counsel), and costs of appraisers and environmental
consultants, of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent, in its capacity as such, in
any way relating to or arising out of this Agreement or any other Loan
Documents or any action taken or omitted by the Agent hereunder or
thereunder, provided that no Bank shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a) if the same
results from the Agent's gross negligence or willful misconduct, or
(b) if such Bank was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense
(except that such Bank shall remain liable to the extent such failure
to give notice does not result in a loss to the Bank), or (c) if the
same results from a compromise and settlement agreement entered into
without the consent of such Bank, which shall not be unreasonably
withheld. In addition, each Bank agrees promptly upon demand to
reimburse the Agent (to the extent not reimbursed by the Borrower and
without limiting the Obligation of the Borrower to do so) in proportion
to its Ratable Share for all amounts due and payable by the Borrower to
the Agent in connection with the Agent's periodic audit of the Loan
Parties' books, records and business properties.
10.8 Reliance by Agent.
The Agent shall be entitled to rely upon any writing, telegram,
telex or teletype message, resolution, notice, consent, certificate,
letter, cablegram, statement, order or other document or conversation
by telephone or otherwise believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons, and
upon the advice and opinions of counsel and other professional advisers
selected by the Agent. The Agent shall be fully justified in failing or
refusing to take any action hereunder unless it shall first be
indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
10.9 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Agent
has received written notice from a Bank or the Borrower referring to
this Agreement, describing such Potential Default or Event of Default
and stating that such notice is a "notice of default."
10.10 Notices.
The Agent shall promptly send to each Bank a copy of all notices
received from the Borrower pursuant to the provisions of this Agreement
or the other Loan Documents promptly upon receipt thereof. The Agent
shall promptly notify the Borrower and the other Banks of each change in
the Base Rate and the effective date thereof.
10.11 Banks in Their Individual Capacities; Agent in its Individual
Capacity.
With respect to its Revolving Credit Commitment, the Revolving
Credit Loans, the Term Loan Commitment and the Term Loan made by it and
any other rights and powers given to it as a Bank hereunder or under any
of the other Loan Documents, the Agent shall have the same rights and
powers hereunder as any other Bank and may exercise the same as though
it were not the Agent, and the term "Bank" and "Banks" shall, unless the
context otherwise indicates, include the Agent in its individual
capacity. PNC Bank and its Affiliates and each of the Banks and their
respective Affiliates may, without liability to account, except as
prohibited herein, make loans to, issue letters of credit for the
account of, acquire equity interests in, accept deposits from, discount
drafts for, act as trustee under indentures of, and generally engage in
any kind of banking, trust, financial advisory, underwriting or other
business with, the Loan Parties and their Affiliates, in the case of the
Agent, as though it were not acting as Agent hereunder and in the case
of each Bank, as though such Bank were not a Bank hereunder, in each
case without notice to or consent of the other Banks. The Banks
acknowledge that, pursuant to such activities, the Agent or its
Affiliates may (i) receive information regarding the Loan Parties or
any of their Subsidiaries or Affiliates (including information that may
be subject to confidentiality obligations in favor of the Loan Parties
or such Subsidiary or Affiliate) and acknowledge that the Agent shall be
under no obligation to provide such information to them, and (ii) accept
fees and other consideration from the Loan Parties for services in
connection with this Agreement and otherwise without having to account
for the same to the Banks.
10.12 Holders of Notes.
The Agent may deem and treat any payee of any Note as the owner
thereof for all purposes hereof unless and until written notice of the
assignment or transfer thereof shall have been filed with the Agent.
Any request, authority or consent of any Person who at the time of
making such request or giving such authority or consent is the holder
of any Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in
exchange therefor.
10.13 Equalization of Banks.
The Banks and the holders of any participations in any Notes agree
among themselves that, with respect to all amounts received by any Bank
or any such holder for application on any Obligation hereunder or under
any Note or under any such participation, whether received by voluntary
payment, by realization upon security, by the exercise of the right of
set-off or banker's lien, by counterclaim or by any other non-pro rata
source, equitable adjustment will be made in the manner stated in the
following sentence so that, in effect, all such excess amounts will be
shared ratably among the Banks and such holders in proportion to their
interests in payments under the Notes, except as otherwise provided in
Section 4.4.3 [Agent's and Bank's Rights], 5.4.2 [Replacement of a Bank]
or 5.6 [Additional Compensation in Certain Circumstances]. The Banks or
any such holder receiving any such amount shall purchase for cash from
each of the other Banks an interest in such Bank's Loans in such amount
as shall result in a ratable participation by the Banks and each such
holder in the aggregate unpaid amount under the Notes, provided that if
all or any portion of such excess amount is thereafter recovered from
the Bank or the holder making such purchase, such purchase shall be
rescinded and the purchase price restored to the extent of such
recovery, together with interest or other amounts, if any, required by
law (including court order) to be paid by the Bank or the holder making
such purchase.
10.14 Successor Agent.
The Agent (i) may resign as Agent or (ii) shall resign if such
resignation is requested by the Required Banks (if the Agent is a Bank,
the Agent's Loans and its Commitment shall be considered in determining
whether the Required Banks have requested such resignation) or required
by Section 5.4.2 [Replacement of a Bank], in either case of (i) or (ii)
by giving not less than thirty (30) days' prior written notice to the
Borrower. If the Agent shall resign under this Agreement, then either
(a) the Required Banks shall appoint from among the Banks a successor
agent for the Banks, subject to the consent of the Borrower, such
consent not to be unreasonably withheld, or (b) if a successor agent
shall not be so appointed and approved within the thirty (30) day period
following the Agent's notice to the Banks of its resignation, then the
Agent shall appoint, with the consent of the Borrower, such consent not
to be unreasonably withheld, a successor agent who shall serve as Agent
until such time as the Required Banks appoint and the Borrower consents
to the appointment of a successor agent. Upon its appointment pursuant
to either clause (a) or (b) above, such successor agent shall succeed to
the rights, powers and duties of the Agent, and the term "Agent" shall
mean such successor agent, effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated
without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement and any such successor
Agent shall give notice to the Borrower of its status as successor
Agent. After the resignation of any Agent hereunder, the provisions of
this Section 10 shall inure to the benefit of such former Agent and such
former Agent shall not by reason of such resignation be deemed to be
released from liability for any actions taken or not taken by it while
it was an Agent under this Agreement.
10.15 Agent's Fee and Agent's Letter.
The Borrower shall pay to the Agent a nonrefundable fee (the
"Agent's Fee") under the terms of a letter (the "Agent's Letter")
between the Borrower and Agent, as amended from time to time. The
provisions of the Agent's Letter, including any relating to changes in
structure, pricing or attributes of the Loans, shall remain in effect in
accordance with the terms thereof beyond the end of the Syndications
Period.
10.16 Availability of Funds.
The Agent may assume that each Bank has made or will make the
proceeds of a Loan available to the Agent unless the Agent shall have
been notified by such Bank on or before the later of (1) the close of
Business on the Business Day preceding the Borrowing Date with
respect to such Loan or two (2) hours before the time on which the Agent
actually funds the proceeds of such Loan to the Borrower (whether using
its own funds pursuant to this Section 10.16 or using proceeds deposited
with the Agent by the Banks and whether such funding occurs before or
after the time on which Banks are required to deposit the proceeds of
such Loan with the Agent). The Agent may, in reliance upon such
assumption (but shall not be required to), make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Bank, the Agent shall be
entitled to recover such amount on demand from such Bank (or, if such
Bank fails to pay such amount forthwith upon such demand from the
Borrower) together with interest thereon, in respect of each day during
the period commencing on the date such amount was made available to the
Borrower and ending on the date the Agent recovers such amount, at a
rate per annum equal to (i) the Federal Funds Effective Rate during the
first three (3) days after such interest shall begin to accrue and (ii)
the applicable interest rate in respect of such Loan after the end of
such three-day period.
10.17 Calculations.
In the absence of gross negligence or willful misconduct, the Agent
shall not be liable for any error in computing the amount payable to any
Bank whether in respect of the Loans, fees or any other amounts due to
the Banks under this Agreement. In the event an error in computing any
amount payable to any Bank is made, the Agent, the Borrower and each
affected Bank shall, forthwith upon discovery of such error, make such
adjustments as shall be required to correct such error, and any
compensation therefor will be calculated at the Federal Funds Effective
Rate.
10.18 Beneficiaries.
Except as expressly provided herein, the provisions of this Section
10 are solely for the benefit of the Agent and the Banks, and the Loan
Parties shall not have any rights to rely on or enforce any of the
provisions hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Banks and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any of the Loan Parties.
11. MISCELLANEOUS
11.1 Modifications, Amendments or Waivers.
With the written consent of the Required Banks, the Agent, acting
on behalf of all the Banks, and the Borrower, on behalf of the Loan
Parties, may from time to time enter into written agreements amending or
changing any provision of this Agreement or any other Loan Document or
the rights of the Banks or the Loan Parties hereunder or thereunder, or
may grant written waivers or consents to a departure from the due
performance of the Obligations of the Loan Parties hereunder or
thereunder. Any such agreement, waiver or consent made with such
written consent shall be effective to bind all the Banks and the Loan
Parties; provided, that, without the written consent of all the Banks,
no such agreement, waiver or consent may be made which will:
11.1.1 Increase of Commitment; Extension of Expiration Date.
Increase the amount of the Revolving Credit Commitment or Term Loan
Commitment of any Bank hereunder or extend the Expiration Date;
11.1.2 Extension of Payment; Reduction of Principal Interest or
Fees; Modification of Terms of Payment.
Whether or not any Loans are outstanding, extend the time for
payment of principal or interest of any Loan (excluding the due date of
any mandatory prepayment of a Loan or any mandatory Commitment reduction
in connection with such a mandatory prepayment hereunder except for
mandatory reductions of the Commitments on the Expiration Date), the
Commitment Fee or any other fee payable to any Bank, or reduce the
principal amount of or the rate of interest borne by any Loan or reduce
the Commitment Fee or any other fee payable to any Bank, or otherwise
affect the terms of payment of the principal of or interest of any Loan,
the Commitment Fee or any other fee payable to any Bank;
11.1.3 Release of Collateral or Guarantor.
Except for sales of assets permitted by Section 8.2.7 [Disposition
of Assets or Subsidiaries], release any Collateral consisting of capital
stock or other ownership interests of any Loan Party or its Subsidiary
or substantially all of the assets of any Loan Party, any Guarantor from
its Obligations under the Guaranty Agreement or any other security for
any of the Loan Parties' Obligations; or
11.1.4 Miscellaneous.
Amend Section 5.2 [Pro Rata Treatment of Banks], 10.6 [Exculpatory
Provisions, Etc.] or 10.13 [Equalization of Banks] or this Section 11.1,
alter any provision regarding the pro rata treatment of the Banks,
change the definition of Required Banks, or change any requirement
providing for the Banks or the Required Banks to authorize the taking of
any action hereunder; provided, further, that no agreement, waiver or
consent which would modify the interests, rights or obligations of the
Agent in its capacity as Agent or as the issuer of Letters of Credit or
the provider of the Swing Line Loans shall be effective without the
written consent of the Agent.
11.2 No Implied Waivers; Cumulative Remedies; Writing Required.
No course of dealing and no delay or failure of the Agent or any
Bank in exercising any right, power, remedy or privilege under this
Agreement or any other Loan Document shall affect any other or future
exercise thereof or operate as a waiver thereof, nor shall any single or
partial exercise thereof or any abandonment or discontinuance of steps
to enforce such a right, power, remedy or privilege preclude any further
exercise thereof or of any other right, power, remedy or privilege. The
rights and remedies of the Agent and the Banks under this Agreement and
any other Loan Documents are cumulative and not exclusive of any rights
or remedies which they would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of any Bank of
any breach or default under this Agreement or any such waiver of any
provision or condition of this Agreement must be in writing and shall be
effective only to the extent specifically set forth in such writing.
11.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes.
The Borrower agrees unconditionally upon demand to pay or reimburse
to each Bank (other than the Agent, as to which the Borrower's
Obligations are set forth in Section 10.5 [Reimbursement of Agent By
Borrower, Etc.]) and to save such Bank harmless against (i) liability
for the payment of all reasonable out-of-pocket costs, expenses and
disbursements (including fees and expenses of counsel (including
allocated costs of staff counsel) for each Bank except with respect to
(a) and (b) below), incurred by such Bank (a) in connection with the
administration and interpretation of this Agreement, and other
instruments and documents to be delivered hereunder, (b) relating to any
amendments, waivers or consents pursuant to the provisions hereof, (c)
in connection with the enforcement of this Agreement or any other Loan
Document, or collection of amounts due hereunder or thereunder or the
proof and allowability of any claim arising under this Agreement or any
other Loan Document, whether in bankruptcy or receivership proceedings
or otherwise, and (d) in any workout or restructuring or in connection
with the protection, preservation, exercise or enforcement of any of the
terms hereof or of any rights hereunder or under any other Loan Document
or in connection with any foreclosure, collection or bankruptcy
proceedings, or (ii) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against such Bank, in its capacity as such, in any way relating
to or arising out of this Agreement or any other Loan Documents or any
action taken or omitted by such Bank hereunder or thereunder, provided
that the Borrower shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (A) if the same
results from such Bank's gross negligence or willful misconduct, or (B)
if the Borrower was not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense
(except that the Borrower shall remain liable to the extent such
failure to give notice does not result in a loss to the Borrower), or
(C) if the same results from a compromise or settlement agreement
entered into without the consent of the Borrower, which shall not be
unreasonably withheld. The Banks will attempt to minimize the fees and
expenses of legal counsel for the Banks which are subject to
reimbursement by the Borrower hereunder by considering the usage of
one law firm to represent the Banks and the Agent if appropriate under
the circumstances. The Borrower agrees unconditionally to pay all
stamp, document, transfer, recording or filing taxes or fees and similar
impositions now or hereafter determined by the Agent or any Bank to be
payable in connection with this Agreement or any other Loan Document,
and the Borrower agrees unconditionally to save the Agent and the Banks
harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to
pay or delay in paying any such taxes, fees or impositions.
11.4 Holidays.
Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on
the next Business Day (except as provided in Section 4.2 [Interest
Periods] with respect to Interest Periods under the Euro-Rate Option)
and such extension of time shall be included in computing interest and
fees, except that the Loans shall be due on the Business Day preceding
the Expiration Date if the Expiration Date is not a Business Day.
Whenever any payment or action to be made or taken hereunder (other
than payment of the Loans) shall be stated to be due on a day which is
not a Business Day, such payment or action shall be made or taken on the
next following Business Day, and such extension of time shall not be
included in computing interest or fees, if any, in connection with
such payment or action.
11.5 Funding by Branch, Subsidiary or Affiliate.
11.5.1 Notional Funding.
Each Bank shall have the right from time to time, without notice to
the Borrower, to deem any branch, Subsidiary or Affiliate (which for the
purposes of this Section 11.5 shall mean any corporation or association
which is directly or indirectly controlled by or is under direct or
indirect common control with any corporation or association which
directly or indirectly controls such Bank) of such Bank to have made,
maintained or funded any Loan to which the Euro-Rate Option applies at
any time, provided that immediately following (on the assumption that a
payment were then due from the Borrower to such other office), and as
a result of such change, the Borrower would not be under any greater
financial obligation pursuant to Section 5.6 [Additional Compensation in
Certain Circumstances] than it would have been in the absence of such
change. Notional funding offices may be selected by each Bank
without regard to such Bank's actual methods of making, maintaining or
funding the Loans or any sources of funding actually used by or
available to such Bank.
11.5.2 Actual Funding.
Each Bank shall have the right from time to time to make or
maintain any Loan by arranging for a branch, Subsidiary or Affiliate of
such Bank to make or maintain such Loan subject to the last sentence of
this Section 11.5.2. If any Bank causes a branch, Subsidiary or
Affiliate to make or maintain any part of the Loans hereunder, all
terms and conditions of this Agreement shall, except where the context
clearly requires otherwise, be applicable to such part of the Loans to
the same extent as if such Loans were made or maintained by such Bank,
but in no event shall any Bank's use of such a branch, Subsidiary or
Affiliate to make or maintain any part of the Loans hereunder cause such
Bank or such branch, Subsidiary or Affiliate to incur any cost or
expenses payable by the Borrower hereunder or require the Borrower to
pay any other compensation to any Bank (including any expenses incurred
or payable pursuant to Section 5.6 [Additional Compensation in Certain
Circumstances]) which would otherwise not be incurred.
11.6 Notices.
Any notice, request, demand, direction or other communication (for
purposes of this Section 11.6 only, a "Notice") to be given to or made
upon any party hereto under any provision of this Agreement shall be
given or made by telephone or in writing (which includes means of
electronic transmission (i.e., "e-mail") or facsimile transmission or by
setting forth such Notice on a site on the World Wide Web (a "Website
Posting") if Notice of such Website Posting (including the information
necessary to access such site) has previously been delivered to the
applicable parties hereto by another means set forth in this Section
11.6) in accordance with this Section 11.6. Any such Notice must be
delivered to the applicable parties hereto at the addresses and numbers
set forth under their respective names on Schedule 1.1(B) hereof or in
accordance with any subsequent unrevoked Notice from any such party that
is given in accordance with this Section 11.6. Any Notice shall be
effective:
(i) In the case of hand-delivery, when delivered;
(ii) If given by mail, four days after such Notice is deposited
with the United States Postal Service, with first-class postage prepaid,
return receipt requested;
(iii) In the case of a telephonic Notice, when a party is
contacted by telephone, if delivery of such telephonic Notice is
confirmed no later than the next Business Day by hand delivery, a
facsimile or electronic transmission, a Website Posting or overnight
courier delivery of a confirmatory notice (received at or before noon
on such next Business Day);
(iv) In the case of a facsimile transmission, when sent to
the applicable party's facsimile machine's telephone number if the party
sending such Notice receives confirmation of the delivery thereof from
its own facsimile machine;
(v) In the case of electronic transmission, when actually
received;
(vi) In the case of a Website Posting, upon delivery of a Notice
of such posting (including the information necessary to access such web
site) by another means set forth in this Section 11.6; and
(vii) If given by any other means (including by overnight
courier), when actually received. Any Bank giving a Notice to a Loan
Party shall concurrently send a copy thereof to the Agent, and the Agent
shall promptly notify the other Banks of its receipt of such Notice.
11.7 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.
11.8 Governing Law.
Each Letter of Credit and Section 2.8 [Letter of Credit
Subfacility] shall be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be revised or amended from time to
time, and to the extent not inconsistent therewith, the internal laws of
the Commonwealth of Pennsylvania without regard to its conflict of laws
principles, and the balance of this Agreement shall be deemed to be a
contract under the Laws of the Commonwealth of Pennsylvania and for all
purposes shall be governed by and construed and enforced in accordance
with the internal laws of the Commonwealth of Pennsylvania without
regard to its conflict of laws principles.
11.9 Prior Understanding.
This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the
parties hereto and thereto relating to the transactions provided for
herein and therein, including any prior confidentiality agreements and
commitments.
11.10 Duration; Survival.
All representations and warranties of the Loan Parties contained
herein or made in connection herewith shall survive the making of Loans
and issuance of Letters of Credit and shall not be waived by the
execution and delivery of this Agreement, any investigation by the
Agent or the Banks, the making of Loans, issuance of Letters of Credit,
or payment in full of the Loans. All covenants and agreements of the
Loan Parties contained in Sections 8.1 [Affirmative Covenants], 8.2
[Negative Covenants] and 8.3 [Reporting Requirements] herein shall
continue in full force and effect from and after the date hereof so long
as the Borrower may borrow or request Letters of Credit hereunder and
until termination of the Commitments and payment in full of the Loans
and expiration or termination of all Letters of Credit. All covenants
and agreements of the Borrower contained herein relating to the payment
of principal, interest, premiums, additional compensation or expenses
and indemnification, including those set forth in the Notes, Section 5
[Payments] and Sections 10.5 [Reimbursement of Agent by Borrower,
Etc.], 10.7 [Reimbursement of Agent by Banks, Etc.] and 11.3
[Reimbursement of Banks by Borrower; Etc.], shall survive payment
in full of the Loans, expiration or termination of the Letters of Credit
and termination of the Commitments.
11.11 Successors and Assigns.
(i) This Agreement shall be binding upon and shall inure to the
benefit of the Banks, the Agent, the Loan Parties and their respective
successors and assigns, except that none of the Loan Parties may assign
or transfer any of its rights and Obligations hereunder or any interest
herein. Each Bank may, at its own cost, make assignments of or sell
participations in all or any part of its Commitments and the Loans made
by it to one or more banks or other entities, subject to the consent of
the Borrower and the Agent with respect to any assignee, such consent
not to be unreasonably withheld, provided that (1) no consent of the
Borrower shall be required (A) if an Event of Default exists and is
continuing, or (B) in the case of an assignment by a Bank to an
Affiliate of such Bank, and (2) any assignment by a Bank to a Person
other than an Affiliate of such Bank may not be made in amounts less
than the lesser of $5,000,000 or the amount of the assigning Bank's
Commitment. In the case of an assignment, upon receipt by the Agent of
the Assignment and Assumption Agreement, the assignee shall have, to the
extent of such assignment (unless otherwise provided therein), the same
rights, benefits and obligations as it would have if it had been a
signatory Bank hereunder, the Commitments shall be adjusted accordingly,
and upon surrender of any Note subject to such assignment, the Borrower
shall execute and deliver a new Note to the assignee in an amount
equal to the amount of the Revolving Credit Commitment or Term Loan
assumed by it and a new Revolving Credit Note or Term Note to the
assigning Bank in an amount equal to the Revolving Credit Commitment or
Term Loan retained by it hereunder. Any Bank which assigns any or all
of its Commitment or Loans to a Person other than an Affiliate of such
Bank shall pay to the Agent a service fee in the amount of $3,500 for
each assignment. In the case of a participation, the participant shall
only have the rights specified in Section 9.2.3 [Set-off] (the
participant's rights against such Bank in respect of such participation
to be those set forth in the agreement executed by such Bank in favor of
the participant relating thereto and not to include any voting rights
except with respect to changes of the type referenced in Sections 11.1.1
[Increase of Commitment, Etc.], 11.1.2 [Extension of Payment, Etc.], or
11.1.3 [Release of Collateral or Guarantor]), all of such Bank's
obligations under this Agreement or any other Loan Document shall remain
unchanged, and all amounts payable by any Loan Party hereunder or
thereunder shall be determined as if such Bank had not sold such
participation.
(ii) Any assignee or participant which is not incorporated under
the Laws of the United States of America or a state thereof shall
deliver to the Borrower and the Agent the form of certificate described
in Section 11.17 [Tax Withholding Clause] relating to federal income tax
withholding. Each Bank may furnish any publicly available information
concerning any Loan Party or its Subsidiaries and any other information
concerning any Loan Party or its Subsidiaries in the possession of such
Bank from time to time to assignees and participants (including
prospective assignees or participants), provided that such assignees and
participants agree to be bound by the provisions of Section 11.12
[Confidentiality].
(iii) Notwithstanding any other provision in this Agreement, any
Bank may at any time pledge or grant a security interest in all or any
portion of its rights under this Agreement, its Note and the other Loan
Documents to any Federal Reserve Bank in accordance with Regulation A of
the FRB or U.S. Treasury Regulation 31 CFR Section 203.14 without notice
to or consent of the Borrower or the Agent. No such pledge or grant of
a security interest shall release the transferor Bank of its obligations
hereunder or under any other Loan Document.
11.12 Confidentiality.
11.12.1 General.
The Agent and the Banks each agree to keep confidential all
information obtained from any Loan Party or its Subsidiaries which is
nonpublic and confidential or proprietary in nature (including any
information the Borrower specifically designates as confidential),
except as provided below, and to use such information only in connection
with their respective capacities under this Agreement and for the
purposes contemplated hereby. The Agent and the Banks shall be
permitted to disclose such information (i) to outside legal counsel,
accountants and other professional advisors who need to know such
information in connection with the administration and enforcement of
this Agreement, subject to agreement of such Persons to maintain the
confidentiality, (ii) to assignees and participants as contemplated by
Section 11.11, and prospective assignees and participants, (iii) to the
extent requested by any bank regulatory authority or, with notice to the
Borrower, as otherwise required by applicable Law or by any subpoena or
similar legal process, or in connection with any investigation or
proceeding arising out of the transactions contemplated by this
Agreement, (iv) if it becomes publicly available other than as a result
of a breach of this Agreement or becomes available from a source not
known to be subject to confidentiality restrictions, or (v) if the
Borrower shall have consented to such disclosure.
11.12.2 Sharing Information With Affiliates of the Banks.
Each Loan Party acknowledges that from time to time financial
advisory, investment banking and other services may be offered or
provided to the Borrower or one or more of its Affiliates (in connection
with this Agreement or otherwise) by any Bank or by one or more
Subsidiaries or Affiliates of such Bank and each of the Loan Parties
hereby authorizes each Bank to share any information delivered to such
Bank by such Loan. Party and its Subsidiaries pursuant to this
Agreement, or in connection with the decision of such Bank to enter into
this Agreement, to any such Subsidiary or Affiliate of such Bank, it
being understood that any such Subsidiary or affiliate of any Bank
receiving such information shall be bound by the provisions of Section
11.12.1 as if it were a Bank hereunder. Such Authorization shall
survive the repayment of the Loans and other Obligations and the
termination of the Commitments.
11.13 Counterparts.
This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and
delivered, shall be an original, and all such counterparts shall
together constitute one and the same instrument.
11.14 Agent's or Bank's Consent.
Whenever the Agent's or any Bank's consent is required to be
obtained under this Agreement or any of the other Loan Documents as a
condition to any action, inaction, condition or event, the Agent and
each Bank shall be authorized to give or withhold such consent in its
sole and absolute discretion and to condition its consent upon the
giving of additional collateral, the payment of money or any other
matter.
11.15 Exceptions.
The representations, warranties and covenants contained herein
shall be independent of each other, and no exception to any
representation, warranty or covenant shall be deemed to be an exception
to any other representation, warranty or covenant contained herein
unless expressly provided, nor shall any such exceptions be deemed to
permit any action or omission that would be in contravention of
applicable Law.
11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY AND THE
UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA,
AND WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS
THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL
DIRECTED TO SUCH LOAN PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION
11.6 AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL
RECEIPT THEREOF. EACH LOAN PARTY WAIVES ANY OBJECTION TO JURISDICTION
AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND
AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE.
EACH LOAN PARTY, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY JURY IN
ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF
OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE COLLATERAL
TO THE FULL EXTENT PERMITTED BY LAW.
11.17 Tax Withholding Clause.
Each Bank or assignee or participant of a Bank that is not
incorporated under the Laws of the United States of America or a state
thereof (and, upon the written request of the Agent, each other Bank or
assignee or participant of a Bank) agrees that it will deliver to each
of the Borrower and the Agent two (2) duly completed appropriate valid
Withholding Certificates (as defined under Section 1.1441-1(c)(16) of
the Income Tax Regulations ("Regulations")) certifying its status (i.e.,
U.S. or foreign person) and, if appropriate, making a claim of reduced,
or exemption from, U.S. withholding tax on the basis of an income tax
treaty or an exemption provided by the Internal Revenue Code. Such
delivery may be made by electronic transmission as described in Section
1.1441-1(e)(4)(iv) of the Regulations if the Agent establishes an
electronic delivery system. The term "Withholding Certificate" means a
Form W-9; a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related
statements and certifications as required under Section 1.1441-1(e)(3)
of the Regulations; a statement described in Section 1.871-14(c)(2)(v)
of the Regulations; or any other certificates under the Code or
Regulations that certify or establish the status of a payee or
beneficial owner as a U.S. or foreign person. Each Bank, assignee or
participant required to deliver to the Borrower and the Agent a valid
Withholding Certificate pursuant to the preceding sentence shall deliver
such valid Withholding Certificate as follows: (A) each Bank which is a
party hereto on the Closing Date shall deliver such valid Withholding
Certificate at least five (5) Business Days prior to the first date on
which any interest or fees are payable by the Borrower hereunder for
the account of such Bank; (B) each assignee or participant shall deliver
such valid Withholding Certificate at least five (5) Business Days
before the effective date of such assignment or participation (unless
the Agent in its sole discretion shall permit such assignee or
participant to deliver such Withholding Certificate less than five (5)
Business Days before such date in which case it shall be due on the date
specified by the Agent). Each Bank, assignee or participant which so
delivers a valid Withholding Certificate further undertakes to deliver
to each of the Borrower and the Agent two (2) additional copies of such
Withholding Certificate (or a successor form) on or before the date that
such Withholding Certificate expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent
Withholding Certificate so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the
Borrower or the Agent. Notwithstanding the submission of a Withholding
Certificate claiming a reduced rate of, or exemption from, United States
withholding tax, the Agent shall be entitled to withhold United States
federal income taxes at the full 30% withholding rate if in its
reasonable judgment it is required to do so under the due diligence
requirements imposed upon a withholding agent under Section 1.1441-7(b)
of the Regulations. Further, the Agent is indemnified under Section
1.1461-1(e) of the Regulations against any claims and demands of any
Bank or assignee or participant of a Bank for the amount of any tax it
deducts and withholds in accordance with regulations under Section 1441
of the Internal Revenue Code.
11.18 Joinder of Guarantors.
Any Subsidiary of the Borrower which is required to join this
Agreement as a Guarantor pursuant to Section 8.2.9 [Subsidiaries,
Partnerships and Joint Ventures] shall execute and deliver to the Agent
(i) a Guarantor Joinder pursuant to which it shall join as a Guarantor
each of the documents to which the Guarantors are parties; (ii)
documents in the forms described in Section 7.1 [First Loans] modified
as appropriate to relate to such Subsidiary; and (iii) documents
necessary to grant and perfect Prior Security Interests to the Agent for
the benefit of the Banks in all Collateral held by such Subsidiary. The
Loan Parties shall deliver such Guarantor Joinder and related documents
to the Agent within five (5) Business Days after the date of the filing
of such Subsidiary's articles of incorporation if the Subsidiary is a
corporation, the date of the filing of its certificate of limited
partnership if it is a limited partnership or the date of its
organization if it is an entity other than a limited partnership or
corporation.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year
first above written.
ATTEST: COMPUDYNE CORPORATION,
a Nevada corporation
By: _____/s/__________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Treasurer
CORRLOGIC, INC.,
a Nevada corporation
By: _____/s/__________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
FIBER SENSYS, INC.,
an Oregon corporation
By: _____/s/__________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
NEW TIBURON, INC.,
a Virginia corporation
By: _____/s/__________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ SECURITY GROUP, INC.,
a Delaware corporation
By: _____/s/__________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
NORSHIELD CORPORATION,
an Alabama corporation
By: _____/s/__________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
QUANTA SYSTEMS CORPORATION,
a Connecticut corporation
By: ____/s/__________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President
SYSCO SECURITY SYSTEMS, INC.,
a Nevada corporation
By: ____/s/___________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION,
as a Bank and as Agent
By: ____/s/__________________
▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: ______________________
SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Page 1 of 2
Part 1 - Commitments of Banks and Addresses for Notices to Banks
Amount of
Commitment
for Revolving
Bank Credit Loans
---- ------------
Name: PNC Bank, National Association $20,000,000
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (717) 2387
TOTAL $20,000,000
===========
Amount of Amount of
Commitment Commitment
for Term for Swing Total Ratable
Loan Loan* Commitment Share
---- ----- ---------- -----
$5,000,000 $2,000,000 $25,000,000 100%
TOTAL $5,000,000 $ N/A $25,000,000 100%
========== ===== =========== ====
* The Swing Line is shown as a part of the Revolving Credit Commitment
of PNC Bank and is not separately combined in calculating total
Commitments in the table.
SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Page 2 of 2
Part 2 - Addresses for Notices to Borrower and Guarantors:
AGENT:
Name: PNC Bank, National Association
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
BORROWER:
Name: CompuDyne Corporation
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
GUARANTORS:
In each case:
c/o CompuDyne Corporation
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Name: Fiber Sensys, Inc.
Address:
Attention:
Telephone: (____) -
Telecopy: (____) -
Name: New Tiburon, Inc.
Address:
Attention:
Telephone: (____) -
Telecopy: (____) -
Name: ▇▇▇▇▇▇▇ Security Group, Inc.
Address:
Attention:
Telephone: (____) -
Telecopy: (____) -
Name: Norshield Corporation
Address:
Attention:
Telephone: (____) -
Telecopy: (____) -
Name: Sysco Security Systems, Inc.
Address:
Attention:
Telephone: (____) -
Telecopy: (____) -
Name: Quanta Systems Corporation
Address:
Attention:
Telephone: (____) -
Telecopy: (____) -
EXHIBIT 1.1 (B)
FORM OF
BORROWING BASE CERTIFICATE
______________, 200_
▇▇▇▇▇ ▇. ▇▇▇▇▇
PNC Bank, National Association
PNC Bank, National Association
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇:
I refer to the Credit Agreement dated November 16, 2001 (the
"Credit Agreement") by and between COMPUDYNE CORPORATION (the
"Borrower"), the several banks and other financial institutions from
time to time parties thereto (the "Banks") and PNC BANK, NATIONAL
ASSOCIATION, as agent for the Banks.
Unless otherwise defined herein, terms defined in the Credit
Agreement are used herein with the same meanings. I, _______________
Chief Executive Officer, President or Chief Financial Officer of the
Borrower, do hereby certify on behalf of the Borrower as of the
end of the month ended _________________, 200__ (the "Report Date"),
that the components of the "Borrowing Base" are as follows:
A. Qualified Inventory
1. Qualified Inventory $__________
2. 50% of Item A(1) $__________
3. Lesser of Item (A)(2) and $2,500,000 $__________
B. Qualified Accounts
1. Qualified Accounts $__________
2. 80% of Item B (1) $__________
C. Qualified Bookings
1. Qualified Bookings $__________
2. 60% of Item C(1) $__________
3. Lesser of Item C(2) and $6,000,000 $__________
D. Amount in respect of Tiburon Stock
(if applicable) $3,000,000
E. Borrowing Base
Item A (3) plus Item B (2) plus
Item C (3) plus Item D $__________
F. Outstandings
1. Facilities Usage Outstanding
(a) Principal Amount of Loans Outstanding $__________
(b) Amount of Letter of Credit Borrowings $__________
(c) Facility Usage Outstanding
F(1)(a) plus F(1)(b) $__________
2. Letters of Credit
(a) Amount of Letters of Credit Outstanding $__________
3. Total Usage $__________
Sum of F (1)(c) and F (2)(a) $__________
G. Compliance
1. Facilities Usage Outstanding
(a) Excess of Item F(3) over Item E $__________
(b) If Item G(1)(a) is greater than
zero ($0), amount of mandatory
prepayment due $__________
H. Other Matters
The undersigned further certifies as follows:
1. The Borrower is in compliance with, and since the most recent
prior Report Date has at all times complied with, the provisions of the
Credit Agreement.
2. No event has occurred that is continuing which constitutes an
Event of Default or Potential Default.
3. With respect to all financial statements delivered by or on
behalf of the Borrower contemporaneously herewith, such statements are
true and correct and prepared in accordance with the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Borrowing
Base Certificate this ___ day of _____________, 200_.
COMPUDYNE CORPORATION
By: _________________
Name:
Title: Chief Executive Officer, President
or Chief Financial Officer
WORKSHEET No. 1
Qualified Inventory - - CompuDyne
New, good and merchantable quality Inventory
which is either (a) finished goods, (b) completed
components or (c) raw materials and is intended
for sale or lease by a Loan Party in the
ordinary course of business at regular
prices; provided that it: $_________________
(a) less is not obsolete or "excess
inventory," (to the extent included above)
and is not which in process or goods which
have been shipped, delivered, provided to,
purchased or sold by a Loan Party on a
▇▇▇▇-and-hold sale, consignment sale,
guaranteed sale, or sale-or-return basis,
or any other similar basis or understanding
other than an absolute sale: AGREE _____
(b) is either stored at the Real
Property or is not with a bailee, warehouseman,
or similar party EXCEPT Inventory described in
this item (b) as to which the Banks have given
their prior written consent and a Loan Party has
caused such bailee, warehouseman, consignee or
similar party to issue and deliver to the Banks,
in form and substance acceptable to the Banks,
warehouse receipts or similar type of documentation
therefor in the Banks' name: AGREE _____
(c) is not subject to any Lien, claim,
encumbrance or security interest whatsoever
other than Permitted Liens and is subject
to a fully-perfected, first-priority Lien
in favor of the Agent, except to Permitted
Liens: AGREE _____
(d) has not been manufactured in violation
of any federal minimum wage or overtime laws,
including, without limitation, the Fair Labor
Standards Act, 29 U.S.C. Section 215(a)(1): AGREE _____
(e) is not otherwise excluded from
Qualified Inventory pursuant to the terms
of the Agreement. AGREE _____
WORKSHEET No. 2
Qualified Accounts - - CompuDyne:
(i) Each Account which represents a
complete bona fide transaction for goods
sold and delivered or services rendered (but
excluding any amount in the nature of a service
charge added to the amount due on an invoice
because the invoice has not been paid when
due) which requires no further act under any
circumstances on the part of the Loan Parties
to make such Account payable by the Account
Debtor; and the Account arises from an arm's
length transaction in the ordinary course of
the Loan Party's business between such a Loan
Party and an Account Debtor which is not an
Affiliate, officer, or employee of a Loan
Party, or a member of the family of an Affiliate,
officer, or employee of Loan Party and the
Account is a valid, legally enforceable
obligation of the Account Debtor with respect
thereto and is not pursuant to any progress
billing or warranty billing arrangement
or subject to any dispute, condition,
contingency, offset, recoupment, reduction,
claim for credit, allowance, adjustment,
counterclaim or defense on the part of such
Account Debtor, and no facts exist which
may provide a basis for any of the foregoing
in the present or future and the Account is
evidenced by an invoice or other documentation
in form acceptable to the Banks and arises from
a contract which is in form and substance
satisfactory to the Banks; provided that they: $____________
(a) are not delinquent more than ninety
(90) days after due date or 120 days after
invoice date, whichever is sooner: AGREE ______
(b) are not Accounts payable by an
Account Debtor more than fifty percent (50%)
of whose Accounts are delinquent more than
ninety (90) days except government Accounts: AGREE ______
(c) are not Accounts payable by an
Account Debtor whose Accounts constitute,
in the Banks' determination, an unduly
high percentage of the aggregate amount
of all outstanding Accounts except
government Accounts: AGREE ______
(d) are not Accounts as to which the
goods the sale of which gave rise to the
Account were not shipped or delivered or
provided to the Account Debtor on an
absolute sale basis (such as on a
▇▇▇▇-and-hold sale basis, a consignment
sale basis, a guaranteed sale basis, a
sale-or-return basis, or on the basis
of any other similar understanding): AGREE ______
(e) are not Accounts as to which the
goods the sale of which gave rise to the
Account have not been returned or rejected: AGREE ______
(f) are not Account evidenced by
chattel paper or an instrument of any kind: AGREE ______
(g) are not Accounts the Account Debtor
of which (a) is insolvent, (b) is the subject
of any bankruptcy or insolvency proceedings of
any kind or of any other proceeding or action,
threatened or pending, which might have a
materially adverse effect on its business, and
(c) is in the sole discretion of the Banks, deemed
ineligible for credit for other reasons (including,
without limitation, unsatisfactory past experience
of a Loan Party or the Banks with the Account
Debtor or unsatisfactory reputation of the Account
Debtor): AGREE ______
(h) are not Accounts the Account Debtor of
which is located outside of the continental United
States of America unless they are accounts referred
to in item (h) but the Account is supported by
letters of credit or FCIA insurance deemed adequate
and acceptable by the Banks: AGREE ______
(i) are not Accounts to the extent included
above which are "cost in excess of ▇▇▇▇▇▇▇▇,"
"bookings" (including Qualified Bookings) or
"▇▇▇▇▇▇▇▇ in excess of costs": AGREE _____
(j) are not Accounts subject to any Lien,
claim, encumbrance or security interest whatsoever
other than Permitted Liens and otherwise not
subject to a fully-perfected, first-priority Lien
in favor of the Agent, subject only to Permitted
Liens: AGREE _____
(k) are not Accounts subject to any provision
prohibiting its assignment or requiring notice
(except Assignment of Claim Act notices) of or
consent to such assignment or which are not
payable in freely transferable United States
Dollars: AGREE _____
(l) are not Accounts as to which the goods
giving rise to the Account were not, at the time
of sale thereof, subject to any Lien or encumbrance
except the Banks' prior security interest: AGREE _____
(m) are not Accounts which are or should
not be, disqualified for any other reason
generally accepted in the commercial finance
business: AGREE _____
(n) are not Accounts owing by an Account
Debtor to the extent its obligations to a
Borrower exceed 20% of all Qualified Accounts
unless such excess is supported by letters of
credit or FCIA insurance deemed adequate and
acceptable by the Banks or owing by an Account
Debtor unacceptable to the Banks in their
sole discretion: AGREE _____
(o) are not Accounts to the extent of any
"contra" accounts or accounts payable (including,
without limitation, the Banks' good faith
estimate of any contingent liabilities) by
a Borrower to such Account Debtor: AGREE _____
(p) are not Accounts otherwise excluded
pursuant to the Agreement: AGREE _____
TOTAL $
EXHIBIT 1.1 (SW)
SWING LINE PROVISIONS
1. Introduction.
Reference is made to the Credit Agreement dated November 16, 2001
to which this Exhibit is attached and of which it is a part. Section
references are to such Credit Agreement and capitalized terms used
herein and not otherwise defined shall have the meaning provided in the
Credit Agreement.
2. Swing Line Loan Commitment.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, and in order to
facilitate loans and repayments between Settlement Dates, PNC Bank may,
at its option, cancelable at any time for any reason whatsoever, make
swing loans (the "Swing Line Loans") to the Borrowers at any time or
from time to time after the date following the Closing Date which is
requested by the Borrower, but not including, the Expiration Date, in an
aggregate principal amount up to but not in excess of $2,000,000 (the
"Swing Line Loan Commitment"), provided that the aggregate principal
amount of PNC Bank's Swing Line Loans, the face amount of all
outstanding Letters of Credit, and the Revolving Credit Loans of all the
Banks at any one time outstanding shall not exceed the Revolving Credit
Commitments of all the Banks or the Borrowing Base, whichever is less.
Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrowers may borrow, repay and
reborrow pursuant to Section 2.1 and this Item 2.
3. Making Swing Line Loans.
If at any time on any Business Day the target balance of cash to
be held in the Borrowers' accounts with PNC Bank maintained under the
Swing Line as agreed upon by the Borrowers and PNC Bank shall exceed the
actual balance in such accounts (such excess shall be referred to as
the "Deficit Balance"), PNC Bank may, on behalf of the Borrowers and
without the requirement that the Borrowers deliver any written request
therefor, make a Swing Line Loan to the Borrowers in an amount which
shall not exceed the lesser of (i) the Deficit Balance, and (ii) the
amount, if any, available under the Swing Line Loan Commitment, which
amount shall be deposited in an account under the Swing Line. The
aggregate amount of all disbursements of Swing Line Loans made and shown
on PNC Bank's electronic data processing equipment, over all of the
payments of principal made by the Borrowers and recorded on PNC Bank's
electronic data processing equipment shall be prima facie evidence of
the outstanding principal balance due under the Swing Line Loan Note
absent manifest error.
4. Swing Line Loan Note.
The Obligation of the Borrowers to repay the unpaid principal
amount of the Swing Line Loans made to them by PNC Bank together with
interest thereon shall be evidenced by the Swing Line Loan Note.
5. Settlement Date Procedures.
In order to minimize the transfer of funds between the Banks and
the Agent, the Borrowers may borrow, repay and re-borrow Swing Line
Loans and PNC Bank may make Swing Line Loans as provided in Item 3 above
hereof during the period between Settlement Dates. Not later than 11:00
a.m. on each Settlement Date, the Agent shall notify each Bank of its
Ratable Share of the total of the Revolving Credit Loans to be made in
respect of each Swing Line Loan (each a "Required Share") to repay such
Swing Line Loan. Prior to 2:00 p.m. Philadelphia time, on such
Settlement Date, each Bank shall pay to the Agent the amount equal
to the difference between its Required Share and its Revolving Credit
Loans, and the Agent shall pay to each Bank its Ratable Share of all
payments made by the Borrowers to the Agent with respect to the
Revolving Credit Loans. The Agent shall also effect settlement in
accordance with the foregoing sentence on the proposed Borrowing Dates
for Revolving Credit Loans and may at its option effect settlement on
any other Business Day. These settlement procedures are established
solely as a matter of administrative convenience, and nothing
contained in this Item 5 shall relieve the Banks of their obligations
to fund Revolving Credit Loans on dates other than a Settlement Date
pursuant to Section 2.9. The Agent may at any time at its option for
any reason whatsoever require each Bank to pay immediately to the Agent
such Bank's Ratable Share of the outstanding Revolving Credit Loans and
each Bank may at any time require the Agent to pay immediately to such
Bank its Ratable Share of all payments made by the Borrowers to the
Agent with respect to the Revolving Credit Loans. The second (2nd)
Business day of each week and any other on which the Agent elects to
effect settlement pursuant to this Item 5 shall be a "Settlement Date."