EXHIBIT 10(bb)
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
Dated as of May 16, 2002
among
MARLTON TECHNOLOGIES, INC.
SPARKS EXHIBITS & ENVIRONMENTS CORP.
SPARKS EXHIBITS & ENVIRONMENTS, INC.
SPARKS EXHIBITS HOLDING CORPORATION
SPARKS EXHIBITS & ENVIRONMENTS, LTD.
SPARKS EXHIBITS & ENVIRONMENTS INCORPORATED
DMS STORE FIXTURES LLC
SPARKS EXHIBITS & ENVIRONMENTS COMPANY
collectively, the Borrowers
and
The Banks named herein
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
formerly known as First Union National Bank, as Agent
TABLE OF CONTENTS
Page
Article I DEFINITIONS AND ACCOUNTING TERMS......................................................2
SECTION 1.1 Certain Defined Terms........................................................2
SECTION 1.2 Accounting Terms............................................................17
Article II THE REVOLVING CREDIT FACILITY.........................................................17
SECTION 2.1 The Revolving Credit Commitment.............................................17
SECTION 2.2 Revolving Credit Advances...................................................19
SECTION 2.3 Lending Offices; Bank Obligations...........................................20
SECTION 2.4 The Revolving Credit Notes..................................................20
SECTION 2.5 Upfront Fee.................................................................21
SECTION 2.6 Repayment...................................................................21
SECTION 2.7 Interest; Conversions; Continuations........................................21
SECTION 2.8 Computation of Interest.....................................................22
SECTION 2.9 Payments....................................................................22
SECTION 2.10 Payment on Non-Business Days................................................22
SECTION 2.11 Reimbursement to the Banks for Cost Increases Imposed by Law................22
SECTION 2.12 Reimbursement to the Banks for Increased Costs Due to
Capital Adequacy Requirements ..............................................23
SECTION 2.13 Illegality..................................................................24
SECTION 2.14 Interest and Commissions After Event of Default.............................24
SECTION 2.15 Special Provisions for LIBOR Loans..........................................24
SECTION 2.16 Prepayment; Funding Loss Indemnification....................................24
SECTION 2.17 Letters of Credit...........................................................25
SECTION 2.18 Taxes.......................................................................27
SECTION 2.19 Additional Borrowers........................................................28
SECTION 2.20 Interest Rate Swap Facility.................................................28
Article III COLLATERAL............................................................................29
SECTION 3.1 Security....................................................................29
SECTION 3.2 Financing Statements; Certificates of Title.................................30
SECTION 3.3 Landlord's Waiver...........................................................31
SECTION 3.4 Places of Business; Location of Collateral; etc.............................31
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SECTION 3.5 Agent's Rights With Respect to Accounts, Chattel Paper,
Instruments and General Intangibles.........................................31
SECTION 3.6 Accounts....................................................................32
SECTION 3.7 Letters of Credit, Chattel Paper and Instruments............................33
SECTION 3.8 Equipment and Inventory.....................................................33
SECTION 3.9 Condition of Inventory......................................................33
SECTION 3.10 Expenses of the Agent.......................................................33
SECTION 3.11 Notices.....................................................................34
SECTION 3.12 Insurance; Discharge of Taxes, etc..........................................34
SECTION 3.13 Waiver and Release by Borrower..............................................34
SECTION 3.14 Access to Inventory.........................................................34
SECTION 3.15 Records and Reports.........................................................35
SECTION 3.16 Further Assurances..........................................................35
SECTION 3.17 Application of Proceeds of Collateral.......................................35
SECTION 3.18 Continuing Collateral.......................................................35
SECTION 3.19 Investment Property and Deposit Accounts....................................35
SECTION 3.20 Collateral In Possession of Third Parties...................................35
SECTION 3.21 Commercial Tort Claims......................................................35
SECTION 3.22 Return of Inventory.........................................................36
SECTION 3.23 Defense of Agent's Rights...................................................36
SECTION 3.24 Cash Management.............................................................36
Article IV CONDITIONS OF LENDING.................................................................36
SECTION 4.1 Conditions Precedent to the Loans...........................................36
SECTION 4.2 Conditions Precedent to All Revolving Credit Advances.......................38
Article V REPRESENTATIONS AND WARRANTIES........................................................39
SECTION 5.1 Existence...................................................................39
SECTION 5.2 Authorization...............................................................39
SECTION 5.3 Validity....................................................................39
SECTION 5.4 Financial Information.......................................................39
TABLE OF CONTENTS
(continued)
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SECTION 5.5 Litigation..................................................................39
SECTION 5.6 Contingent Liabilities......................................................40
SECTION 5.7 Taxes.......................................................................40
SECTION 5.8 Encumbrances................................................................40
SECTION 5.9 Consents....................................................................40
SECTION 5.10 ERISA.......................................................................40
SECTION 5.11 Ownership...................................................................41
SECTION 5.12 Subsidiaries and Ownership of Stock.........................................41
SECTION 5.13 Margin Stock; Regulation U, Etc.............................................41
SECTION 5.14 Environmental Matters.......................................................41
SECTION 5.15 Debt and Guarantees.........................................................42
SECTION 5.16 Credit Arrangements.........................................................42
SECTION 5.17 Licenses, Permits, Etc......................................................42
SECTION 5.18 Compliance with Laws........................................................42
SECTION 5.19 Labor Matters...............................................................42
SECTION 5.20 Outstanding Judgments or Orders.............................................42
SECTION 5.21 No Defaults on Other Agreements.............................................43
SECTION 5.22 Public Utility Holding Company Act..........................................43
SECTION 5.23 Patents.....................................................................43
SECTION 5.24 Names Used by Borrowers.....................................................43
SECTION 5.25 Full Disclosure.............................................................43
Article VI COVENANTS OF THE BORROWERS.............................................................43
SECTION 6.1 Financial Statements........................................................43
SECTION 6.2 Insurance...................................................................44
SECTION 6.3 Taxes.......................................................................45
SECTION 6.4 Encumbrances................................................................45
SECTION 6.5 Compliance with Laws........................................................46
SECTION 6.6 Inspection by the Agent.....................................................46
SECTION 6.7 Reports.....................................................................46
TABLE OF CONTENTS
(continued)
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SECTION 6.8 ERISA.......................................................................47
SECTION 6.9 Environmental Matters.......................................................49
SECTION 6.10 Change of Business..........................................................49
SECTION 6.11 Regulation U................................................................49
SECTION 6.12 Disposal of Assets..........................................................49
SECTION 6.13 Loans, Investments, and Contingent Liabilities..............................49
SECTION 6.14 Maintenance of Property.....................................................50
SECTION 6.15 Transactions with Affiliates and Subsidiaries...............................50
SECTION 6.16 Restriction on Acquisitions; Merger; Corporate Structure....................50
SECTION 6.17 Dividends and Distributions.................................................50
SECTION 6.18 Other Indebtedness..........................................................50
SECTION 6.19 Licenses, Permits...........................................................51
SECTION 6.20 Fiscal Year.................................................................51
SECTION 6.21 Banking Relationships.......................................................51
SECTION 6.22 Ownership of Borrowers Other than MTI.......................................51
SECTION 6.23 RICO........................................................................51
SECTION 6.24 Minimum Tangible Net Worth..................................................51
SECTION 6.25 Fixed Charge Coverage Ratio.................................................51
SECTION 6.26 Subordinated Debt...........................................................52
Article VII DEFAULT................................................................................52
SECTION 7.1 Events of Default...........................................................52
SECTION 7.2 Termination of Revolving Commitment; Acceleration...........................54
SECTION 7.3 Remedies....................................................................55
Article VIII AGENCY PROVISIONS......................................................................55
SECTION 8.1 Authorization and Action....................................................55
SECTION 8.2 Liability of Agent..........................................................56
SECTION 8.3 Rights of Agent as a Bank...................................................56
SECTION 8.4 Independent Credit Decisions................................................56
SECTION 8.5 Indemnification.............................................................57
TABLE OF CONTENTS
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SECTION 8.6 Successor Agent.............................................................57
SECTION 8.7 Sharing of Payments, Etc....................................................57
Article IX MISCELLANEOUS..........................................................................58
SECTION 9.1 No Waiver; Cumulative Remedies..............................................58
SECTION 9.2 Arbitration.................................................................58
SECTION 9.3 CONFESSION OF JUDGMENT......................................................59
SECTION 9.4 Set-Off.....................................................................61
SECTION 9.5 Amendments, Etc.............................................................61
SECTION 9.6 Notices.....................................................................61
SECTION 9.7 Nature of Obligations.......................................................62
SECTION 9.8 Costs and Expenses..........................................................62
SECTION 9.9 Counterparts................................................................62
SECTION 9.10 Binding Effect..............................................................62
SECTION 9.11 Governing Law...............................................................63
SECTION 9.12 Headings....................................................................63
SECTION 9.13 Usury.......................................................................63
SECTION 9.14 Assignments; Participations.................................................63
SECTION 9.15 Appointment of Borrower Agent...............................................64
SECTION 9.16 Survival; Indemnification...................................................64
SECTION 9.17 Entire Agreement............................................................65
SECTION 9.18 WAIVER OF JURY TRIAL........................................................65
Schedules:
---------
2.1 Revolving Credit Commitments
3.4 Collateral Locations
5.1 Existence
5.5 Litigation
5.12 Subsidiaries and Stock Ownership
5.15 Debt and Guarantees
5.16 Credit Arrangements
5.24 Names Used by Borrowers
5.25 Full Disclosure
Exhibits:
--------
1.1 Borrowing Base Certificate
2.4 Revolving Credit Note
6.1 Compliance Certificate
SECOND AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT,
dated as of May 16, 2002, among MARLTON TECHNOLOGIES, INC., a Pennsylvania
corporation, successor to Marlton Technologies, Inc., a New Jersey corporation
("MTI"), SPARKS EXHIBITS & ENVIRONMENTS CORP. f/k/a Sparks Exhibits Corp., a
Pennsylvania corporation ("SPARKS"), SPARKS EXHIBITS & ENVIRONMENTS, INC. f/k/a
Sparks Exhibits, Inc., a Georgia corporation ("EXHIBITS"), SPARKS EXHIBITS
HOLDING CORPORATION, a Delaware corporation ("SEH"), SPARKS EXHIBITS &
ENVIRONMENTS, LTD. f/k/a Sparks Exhibits, Ltd., a California corporation
("LIMITED"), SPARKS EXHIBITS & ENVIRONMENTS, INCORPORATED f/k/a Piper
Productions, Inc., a Florida corporation ("PIPER"), DMS STORE FIXTURES LLC, a
Pennsylvania limited liability company ("DMS"), SPARKS EXHIBITS & ENVIRONMENTS
COMPANY, an Illinois corporation ("COMPANY") and any other Person (as herein
defined) that hereafter becomes a Borrower hereunder pursuant to Section 2.19
(MTI, Sparks, Exhibits, SEH, Limited, Piper, DMS, Company and each such other
Person that becomes a Borrower hereunder pursuant to Section 2.19 are each
hereinafter referred to as a "Borrower" and collectively as the "Borrowers");
MARLTON TECHNOLOGIES, INC., as agent for the Borrowers (in such capacity, the
"Borrower Agent"); and WACHOVIA BANK, NATIONAL ASSOCIATION, formerly known as
First Union National Bank, a national banking association and any bank joining
this Agreement hereafter (said banks being hereinafter referred to collectively
as "Banks" and individually as a "Bank"); and WACHOVIA BANK, NATIONAL
ASSOCIATION, formerly known as First Union National Bank, a national banking
association, in its capacity as agent for the Banks (the "Agent").
BACKGROUND
On December 31, 1997, certain of the Borrowers and Wachovia Bank,
National Association, when it was known as First Union National Bank ("First
Union") entered into a Loan and Security Agreement pursuant to which agreement
First Union agreed to make loans to such Borrowers (such agreement, as amended,
the "Original Agreement"). On January 21, 2000, certain of the Borrowers and
their Affiliates (the "Existing Borrowers") and First Union entered into an
Amended and Restated Revolving Credit and Security Agreement pursuant to which
agreement First Union agreed to provide a $30,000,000 revolving credit facility
to the Existing Borrowers, on the terms and conditions therein contained (such
agreement, as amended, the "Existing Agreement"). The Existing Agreement
contemplated a possible increase of such facility to $35,000,000. On April 16,
2001, the Existing Borrowers and First Union entered into Amendment No. 2 and
Waiver to the Existing Agreement, and the parties thereto agreed to reduce the
amount of the revolving credit facility under the Existing Agreement to
$25,000,000 and to eliminate any reference to the possible increase of such
facility, on the terms and conditions therein contained. On December 17, 2001,
the Existing Borrowers requested that First Union further reduce the amount of
the revolving credit facility under the Existing Agreement to $15,000,000, and
First Union acknowledged and agreed to such reduction.
The Borrowers have requested that First Union, now known as Wachovia
Bank, National Association ("Wachovia Bank") further reduce the amount of the
revolving credit facility under the Existing Agreement to $12,000,000 and
Wachovia Bank has agreed to so reduce such facility, on the terms and conditions
herein contained (the "Facility"). The Facility is to be used to refinance
existing debt under the Existing Agreement, to finance working capital and
capital expenditures permitted hereunder and for other permitted general
corporate purposes.
NOW THEREFORE, the Borrowers, jointly and severally, and the Banks, and
the Agent, intending to be legally bound, agree to amend and restate the
Existing Agreement to read in full as follows:
DEFINITIONS AND ACCOUNTING TERMS
Certain Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"AAA" has the meaning given to such term in Section 9.2(A) hereof.
"Adjusted Base Rate" means the Base Rate plus the Applicable Margin for
Base Rate Loans. The Adjusted Base Rate shall change simultaneously with each
change in the Base Rate or the Federal Funds Rate.
"Adjusted LIBOR" means the LIBOR plus the Applicable Margin for LIBOR
Loans.
"Affiliate" of a Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing.
"Agent" has the meaning given to such term in the introductory
paragraph hereof, and shall include any successor in such capacity.
"Agreement" means this Second Amended and Restated Revolving Credit and
Security Agreement, as such document may be modified, amended, refinanced,
refunded, extended or otherwise changed from time to time.
"Applicable Margin" means, with respect to Base Rate Loans, 0.75%, and
with respect to LIBOR Loans, 3.25%.
"Arbitration Rules" has the meaning given to such term in Section
9.2(A) hereof.
"Bank" or "Banks" has the meaning given to such term in the
introductory paragraph hereof and shall include all successors and assigns, and
lenders joining this Agreement as a "Bank".
"Base Rate" means the rate which is at all times equal to the higher of
(a) the Prime Rate or (b) 1/2 of 1% per annum in excess of the Federal Funds
Rate.
"Base Rate Loan" means a Loan to which the Adjusted Base Rate applies.
"Borrower," "Borrower Agent" and "Borrowers" have the meanings given to
such terms in the introductory paragraph hereof, and each shall include
successors and permitted assigns.
"Borrowing Base" means a sum equal to: (A) 80% of Qualified Accounts as
calculated from time to time plus (B) the lesser of $2,000,000 or 30% of
Qualified Inventory as calculated from time to time at the lower of cost or
market, on a first-in, first-out basis; provided however that, the Agent may, in
its sole discretion, adjust the advance rates set forth above, set up reserves
or change the definition of Qualified Accounts or Qualified Inventory from time
to time as the Agent determines is necessary or desirable.
"Borrowing Base Certificate" means the certificate in the form attached
hereto as Exhibit 1.1.
"Business Day" means any day other than a Saturday, Sunday, or other
day on which commercial banks in Philadelphia, Pennsylvania are authorized or
required to close under the laws of the Commonwealth of Pennsylvania; provided
that, if such term is used in connection with a borrowing of, a payment or
prepayment of principal of or interest on, or the Interest Period for, any
Eurodollar Loan or a notice by a Borrower with respect to any such borrowing,
payment, prepayment or Interest Period, "Business Day" shall include any day on
which ordinary dealings are carried out in the London interbank market in
Dollars.
"Capital Expenditures" means expenditures for fixed assets or
improvements, replacements, substitutions, or additions thereto which have a
useful life of more than one year, including assets acquired pursuant to a
Capital Lease; provided that for the purposes of this Agreement, expenditures
for exhibit product inventory purchased and capitalized for rental purposes
shall not be considered Capital Expenditures.
"Capital Lease" means a lease of any Person for real, personal or mixed
use property which, according to GAAP should be capitalized on the books of such
Person.
"Cash Equivalents" means (A) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States
maturing within one year from the date of acquisition thereof, (B) marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within one year from the date of acquisition thereof and, at the time
of acquisition, having the highest rating obtainable from either Standard &
Poor's Ratings Group or ▇▇▇▇▇'▇ Investors Service, Inc., (C) commercial paper
maturing no more than one year from the date of creation thereof and, at the
time of acquisition, having the highest rating obtainable from either Standard &
Poor's Corporation or ▇▇▇▇▇'▇ Investors Service, Inc., (D) certificates of
deposit, demand accounts or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by the Banks or commercial banks
organized under the laws of the United States of America or any state thereof,
each having combined capital and surplus of not less than $500,000,000.00, and
(E) repurchase agreements and reverse repurchase agreements with securities
dealers of recognized national standing relating to any of the obligations
referred to in the foregoing clause (A); provided that the terms of such
agreement comply with the guidelines set forth in the Supervisory Policy; and
further provided that possession or control of the underlying securities is
established as provided in the Supervisory Policy.
"CERCLA" means the federal Comprehensive Environmental Response,
Compensation, and Liability Act, as amended from time to time.
"Change in Control" means the occurrence of any of the following
events:
(i) Any "person" or "group" (as either such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended)
other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as
amended, except that such person shall be deemed to have "beneficial ownership"
of all shares that any such person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or
indirectly, of more than 30% of the total voting stock of MTI; or
(ii) At any time after the date hereof, individuals who at the
date hereof constitute the Board of Directors of MTI (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the shareholders of MTI was approved by a vote of 66-2/3% of the
directors of MTI then still in office who were either directors at the date
hereof or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of MTI
then in office; or
(iii) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ cease to be the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, in the aggregate of at least 30% of the total voting
stock of MTI.
For purposes of this definition, "voting stock" means capital stock or other
ownership interests of any class or classes of a corporation or another entity
the holders of which are entitled to elect a majority of the corporate directors
or Persons performing similar functions.
"Closing Date" means the first date on which all of the conditions
precedent contained in Section 4.1 are satisfied.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" has the meaning given to such term in Section 3.1 hereof.
"Commitment" of any Bank means the maximum amount of Revolving Credit
Advances which such Bank has agreed to make, on an aggregate basis, pursuant to
the terms and conditions of this Agreement, as set forth opposite such Bank's
name on Schedule 2.1, attached hereto, as amended from time to time.
"Consolidated" refers to the consolidation of the accounts of MTI and
its Subsidiaries in accordance with GAAP, including principles of consolidation.
"Consolidating" refers to the separation of the accounts of MTI and its
Subsidiaries in accordance with GAAP.
"Controlled Group" means a group of employers, of which any Borrower is
a member and is treated as a single employer under:
(A) ss.414(b) of the Code and the Department of the Treasury
regulations thereunder); or
(B) solely for purposes of liability under ss.412(c)(11) of
the Code and ss.302(c)(11) of ERISA and the lien under ss.412(n) of the Code and
ss.302(f) of ERISA, ss.414(c) of the Code and the Department of the Treasury
regulations thereunder; or
(C) solely for purposes of liability under ss.412(c)(11) of
the Code and ss.302(c)(11) of ERISA and the lien under ss.412(n) of the Code and
ss.302(f) of ERISA, ss.414(m) of the Code and the Department of the Treasury
regulations thereunder; or
(D) any other entity required to be aggregated with any
Borrower pursuant to ss.414(o) of the Code and the Department of the Treasury
regulations thereunder.
"Credit Limit" means the lesser of (A) the Borrowing Base or (B) the
Revolving Credit Commitment.
"Current Maturities" means on any date those portions of Funded Debt
that are payable on demand or within one year of such date without giving effect
to any prospective renewal or extension of such Funded Debt.
"Default Rate" means the Interest Rate set forth in Section 2.14.
"Defined Benefit Pension Plan" means a defined benefit plan (other than
a Multiemployer Plan) as defined in ss.3(35) of ERISA, subject to Title IV of
ERISA.
"Defined Contribution Plan" means an individual account plan as defined
in ss.3(34) of ERISA.
"Delinquent Purchaser" means a Purchaser more than 50% of whose
aggregate Account indebtedness to Borrowers is more than 60 days past
contractual or specified due date or 120 days past date of original invoice.
"Dispute" has the meaning given to such term in Section 9.2(A) hereof.
"DMS Inventory" means any and all goods owned by DMS which DMS sells to
Purchasers in the ordinary course of its business which meets all of the
following specifications at the time of determination:
(A) it is finished goods under executed purchase orders, and
is not work-in-process or raw materials;
(B) it is located at one of the locations identified on
Exhibit 3.4 attached hereto (provided that the landlord, mortgagee, or other
lienholder if any, at such location has executed and delivered to the Agent a
waiver in form and substance acceptable to the Agent, unless the Agent has
notified the Borrower Agent otherwise in writing);
(C) it conforms in all respects to the representations and
warranties made herein relating thereto;
(D) it is in good condition and repair and is not damaged,
outdated, slow-moving or obsolete or otherwise deemed unsalable by the Agent in
its sole discretion;
(E) it is held for sale in the ordinary course of business of
DMS as conducted on the date hereof;
(F) it is not being held on consignment;
(G) it is not subject to a security interest or lien other
than in favor of the Agent, for the benefit of the Banks, and is subject to a
valid first priority perfected security interest in favor of the Agent, for the
benefit of the Banks;
(H) it is not stored with a bailee, consignee, warehouseman,
processor or similar party unless the applicable Borrower has caused such
bailee, consignee, warehouseman, processor or similar party to issue and deliver
to the Agent, in form and substance acceptable to the Agent, such Uniform
Commercial Code financing statements, warehouse receipts, waivers and other
documents as the Agent shall request; and
(I) it is otherwise acceptable to the Agent in its reasonable
discretion.
"Dollars" and the "$" mean lawful money of the United States of
America.
"EBITDA" means for any period of four fiscal quarters of MTI, Net
Income of MTI and its Subsidiaries on a Consolidated basis for such period plus
interest, taxes, depreciation and amortization deducted in computing Net Income,
minus the non-cash earnings related to income from Affiliates or other Persons
in which MTI and/or its Subsidiaries have an Investment.
"Effective Date" means, for Eurodollar Loans, the date the Borrower
Agent designates as the date on which a Eurodollar Interest Period is to
commence pursuant to Section 2.2, 2.7(C) or 2.7(D).
"Employee Benefit Plan" has the meaning given to such term in ss.3(3)
of ERISA.
"Environmental Law" means any federal, state, or local statute, law,
ordinance, regulation, rule, standard, permit or requirement, including but not
limited to those statutes, ordinances, laws, regulations, rules, standards,
permits and requirements promulgated under the laws of the United States of
America or any other nation, concerning or relating to the protection of the
environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations thereunder.
"Eurocurrency Reserve Requirement" means, for any day as applied to a
Eurodollar Loan, the aggregate of the rates (such aggregate being expressed as a
decimal) of reserve requirements in effect on such day (including, without
limitation, any basic, marginal, supplemental and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve System or other
governmental authority having jurisdiction with respect thereto, as now and from
time to time hereafter in effect) for eurocurrency funding (currently referred
to as "Eurocurrency liabilities" in Regulation D of such Board) maintained by a
member bank of the Federal Reserve System having deposits in an aggregate amount
at least equal to the aggregate amount of deposits held by Agent, but without
benefit of or credit for proration, exemptions, or offsets that might otherwise
be available to such member bank from time to time under Regulation D. Without
limiting the effect of the foregoing, the Eurocurrency Reserve Requirement shall
reflect any other reserves required to be maintained by such member bank against
(A) any category of liabilities which includes deposits by reference to which
the LIBOR for Eurodollar Loans is to be determined or (B) any category of
extension of credit or other assets that include Eurodollar Loans.
"Eurodollar Interest Period" means for each Eurodollar Loan a period of
time, beginning on an Effective Date, and ending on the numerically
corresponding day in the first, second, third, or sixth calendar month
thereafter (or if there is no numerically corresponding calendar day in such
calendar month, ending on the last day of such calendar month), selected by the
Borrower Agent by telephone or in writing (and if by telephone, confirmed by the
Borrower Agent promptly thereafter in writing), during which the Interest Rate
is the Adjusted LIBOR. If a Eurodollar Interest Period would otherwise end on a
day that is not a Business Day, such Eurodollar Interest Period shall be
extended to the next Business Day, unless such Business Day would fall in the
next calendar month, in which event such Eurodollar Interest Period shall end on
the immediately preceding Business Day; provided however that, in the event a
Eurodollar Interest Period is extended to the next Business Day in a month, the
succeeding Eurodollar Interest Period will end on the day it would have ended
had the preceding Eurodollar Interest Period not been so extended (e.g., if the
preceding period is extended to the 16th because the 15th is not a Business Day,
the succeeding period will end on the 15th as long as it is a Business Day).
"Eurodollar Loan" means any Loan denominated in Dollars when and to the
extent to which the Adjusted LIBOR applies.
"Event of Default" has the meaning given to such term in Section 7.1.
"Exhibits" has the meaning given to such term in the introductory
paragraph hereof.
"Existing Swap Agreement" means the International Swap Dealers, Inc.
Master Agreement dated as of December 11, 1997 between First Union (as successor
by merger to CoreStates Bank, N.A.) and MTI, together with all schedules,
exhibits and confirmations thereto, as amended and/or supplemented from time to
time.
"Facility" has the meaning given to such term in the Background
Section.
"Federal Funds Rate" means the rates shown as the Federal Funds Rate in
the Federal Reserve Statistical Release H.15 (519), Selected Interest Rates. In
the event that the Federal Reserve fails to publish such rate, "Federal Funds
Rate" shall mean the rate determined by the Agent in good faith.
"Fees" means all payments except for interest and principal which the
Borrowers are required to make to the Agent and/or the Banks hereunder and shall
include, without limitation, amounts owing in connection with any prepayment
under any Eurodollar Loan.
"Financial Statements" means the audited Consolidated balance sheet,
statement of income, statement of cash flow and statement of changes in
stockholders' equity, together with all notes pertaining thereto, and an
unaudited Consolidating balance sheet and statements of income of MTI and its
Subsidiaries, all as at and for a designated period and all in accordance with
GAAP.
"First Union" has the meaning given to such term in the Background
Section.
"Fixed Charges" means for any period the sum of (A) Total Debt Service,
plus (B) taxes paid in cash by the Borrowers during the relevant period, plus
(C) expenses paid by the Borrowers during such period for the rental of personal
or real property, plus (D) non-financed Capital Expenditures made by the
Borrowers during such period.
"Funded Debt" means at any time with respect to MTI and its
Subsidiaries on a Consolidated basis, without duplication, the sum of all
current outstandings under demand and overdraft facilities, plus the current
portion of long term Indebtedness and capital leases plus all Indebtedness that
has a final maturity more than one year after the date of issuance thereof (or
which is convertible, renewable or extendable into an obligation with such final
maturity) including all final and serial maturities, prepayments and sinking
fund payments required to be made within one year of the date of calculation
(notwithstanding the fact that any portion thereof may also be included in
current liabilities under GAAP).
"GAAP" means generally accepted accounting principles in the United
States in effect from time to time as promulgated in statements, opinions and
pronouncements by the American Institute of Certified Public Accountants, the
Financial Accounting Standards Board and any successor entities, consistently
applied.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to all
governmental bodies.
"Indebtedness" means, with respect to any Person:
(a) (i) all indebtedness, obligation or liability for borrowed money or
for the deferred purchase price of property, (ii) all lease obligations that
would, in accordance with GAAP, have been or should be capitalized, including
without limitation, sale-leaseback and synthetic lease obligations, (iii) all
obligations of such Person to purchase goods, property or services where payment
for such goods, property or services is required regardless of whether delivery
of such goods, property, or the performance of such services is ever made or
tendered; (iv) all obligations for the deferred purchase price of property or
services (including trade obligations other than those incurred in the ordinary
course of business and in accordance with customary terms); (v) all current
liabilities in respect of unfunded vested benefits under any Plan; (vi) all
obligations under letters of credit issued for the account of any Person; (vii)
all obligations arising under acceptance facilities; and (viii) the notional
amount of interest rate products and derivatives; and
(b) to the extent not included in the foregoing, all indebtedness,
obligations and liabilities secured by any mortgage, pledge, lien, conditional
sale or other title retention agreement or other security interest to which any
property or asset owned or held by such Person is subject, whether or not the
Indebtedness, obligations or liabilities secured thereby shall have been assumed
by such Person;
(c) to the extent not included in the foregoing, all indebtedness,
obligations and liabilities of others which such Person has directly or
indirectly guaranteed, endorsed (other than for collection or deposit in the
ordinary course of business), discounted, sold with recourse or for less than
face value or agreed (contingently or otherwise) to purchase or repurchase or
otherwise acquire or in respect of which such Person has agreed to supply or
advance funds or otherwise to become directly or indirectly liable; and
(d) all obligations or liabilities of such Person under or pursuant to
a letter of credit, interest rate protection agreement, surety bond, or similar
obligation.
"Intangibles" means any assets which are properly classified as
intangible assets in accordance with GAAP and including, but not limited to:
goodwill, patents, tradenames, trademarks, copyrights, franchises, experimental
expense, organization expense, unamortized debt discount and expenses, the
excess of shares acquired over book value of assets, and non-compete agreements.
"Interest Period" means a Eurodollar Interest Period or any period
during which the Interest Rate is the Adjusted Base Rate, as appropriate.
"Interest Rate" means the Adjusted LIBOR, Adjusted Base Rate or Default
Rate, as appropriate.
"Interim Financial Statements" means an unaudited Consolidated balance
sheet, statement of income and statement of cash flows of MTI and its
Subsidiaries all as, at and for a designated period, all in accordance with GAAP
subject only to usual year-end adjustments and the absence of footnotes.
"International Account" means an Account which arises out of a
transaction between a Borrower and a Purchaser who meets at least one of the
following criteria: (A) the Purchaser is a non-United States (1) government, (2)
governmental agency or (3) government-controlled business, (B) the Purchaser is
not subject to the jurisdiction of the court systems of the United States and
any state of the United States or (C) the Purchaser does not maintain in the
United States an office to which such Account is invoiced and tangible assets
with a book value equal to at least five (5) times the aggregate Accounts owed
by such Purchaser.
"Investment" means any loan or advance, or purchase or acquisition of
the securities or obligations of, any Person or the assumption of any liability
of another Person which in such case, did not arise from sales to such Person in
the ordinary course of business.
"Lending Office" means, with respect to any Bank, for each type of
Loan, the Lending Office of such Bank (or of an affiliate of such Bank)
designated for such type of Loan on the signature pages hereof or such other
office of such Bank (or of an affiliate of such Bank) as such Bank may from time
to time specify to the Borrowers and the Agent as the office at which its Loans
of such type are to be made and maintained.
"Letter of Credit" has the meaning given to such term in Section 2.17
hereof.
"Letter of Credit Liability" means, without duplication, at any time
and in respect of any Letter of Credit then outstanding the sum of (a) the
undrawn face amount of such Letter of Credit plus (b) the aggregate unpaid
principal amount of all Reimbursement Obligations at such time due and payable
in respect of all drawings made under such Letter of Credit.
"LIBOR Loan" means a Eurodollar Loan.
"LIBOR" means, with respect to each Interest Period pertaining to a
LIBOR Loan, the rate per annum (rounded upward, if necessary, to the nearest
1/16 of 1%) equal to the quotient of (A) the London Interbank Offered Rate for
such Eurodollar Loan for the applicable Eurodollar Interest Period for delivery
on the first day of such Interest Period divided by (B) a number equal to 1.00
minus the Eurocurrency Reserve Requirement on the day which is two Business Days
prior to the beginning of such Interest Period.
"Loan Document(s)" means this Agreement, the Notes, the Letters of
Credit, the Subrogation and Contribution Agreement, and all certificates,
agreements, instruments, schedules and exhibits delivered or to be delivered by
the Borrowers to the Agent or the Banks in connection with this Agreement, in
each case, as amended, refinanced, extended, modified or supplemented from time
to time. For the sake of clarity, Swap Agreements are not Loan Documents.
"Loans" means amounts advanced under the Facility, and shall have the
same meaning as Revolving Credit Advances.
"London Interbank Offered Rate" applicable to any elected Eurodollar
Interest Period for a Eurodollar Loan means the rate per annum (rounded upwards,
if necessary, to the nearest 1/16th of 1%) quoted at approximately 11:00 a.m.
London time, by the principal London branch of the Agent two London Business
Days prior to the first day of such Eurodollar Interest Period for the offering
to leading banks in the London interbank market of Dollar deposits in
immediately available funds for a period, and in an amount, comparable to the
Eurodollar Interest Period and principal amount of the Eurodollar Loan which
shall be outstanding during such Eurodollar Interest Period.
"Majority Banks" means at any time the Banks holding at least 51% of
the then aggregate unpaid principal amount of the Notes held by the Banks, or,
if no such principal amount is then outstanding, Banks having at least 51% of
the aggregate Commitments. Notwithstanding the foregoing, if there are two or
fewer Banks, the term "Majority Banks" shall mean all Banks.
"Margin Stock" has the same meaning that Regulation U of the Board of
Governors of the Federal Reserve System gives to that term.
"Material Adverse Effect" means any material adverse effect on:
(a) the business, condition (financial or otherwise), operations,
properties or prospects of MTI and its Subsidiaries, taken as a whole, or
(b) the ability of the Borrowers, taken as a whole, to perform their
obligations under the Loan Documents.
"Maturity Date" means the earlier of the date the Loans are accelerated
pursuant to Section 7.2 or January 1, 2004.
"MTI" has the meaning given to such term in the introductory paragraph
hereof.
"Multiemployer Plan" has the meaning given to such term in
ss.4001(a)(3) of ERISA.
"Net Income" means gross revenues and other proper income credits, less
all proper income charges, including taxes on income, all determined in
accordance with GAAP.
"Net Worth" means as of any date the amount by which Total Assets
exceed Total Liabilities.
"New Borrower" has the meaning given to such term in Section 2.19
hereof.
"Note(s)" means the Revolving Credit Note(s).
"Obligations" means all amounts payable to the Agent or the Banks under
this Agreement or the Notes, whether now or hereafter owing, including but not
limited to principal amounts, interest, fees, charges, indemnification
obligations, Reimbursement Obligations as to Letters of Credit, and all
obligations to reimburse Agent or any Bank for payments made by the Agent or any
Bank pursuant to interest rate protection agreements, or foreign exchange
contracts issued by any Bank for the benefit of a Borrower or Borrowers, and
including any guaranty or surety obligations of Borrowers owed to any Bank and
the undertakings of Borrowers to immediately pay to any Bank the amount of any
overdraft on any account of deposit maintained with any Bank.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" means any individual, corporation, partnership, joint venture,
limited liability company, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Plan" means (A) a Defined Benefit Pension Plan or Defined Contribution
Plan maintained for employees of a Borrower or any member of any Borrower's
Controlled Group, or (B) any other Employee Benefit Plan (other than a
Multiemployer Plan) maintained for employees of a Borrower or any member of any
Borrower's Controlled Group.
"Prime Rate" means the rate of interest for loans established and
publicly announced by the Agent at its Head Office from time to time as its
prime rate; the use of such terms shall not imply that such rate is the lowest
or best rate offered by the Agent or any of the Banks.
"Prohibited Transaction" has the meaning given to such term in ss.406
of ERISA, ss.4975(c) of the Code and any Treasury regulations issued thereunder.
"Properties" means any real estate owned or occupied by any Borrower or
any of its Subsidiaries or at which any Borrower or any of its Subsidiaries
conducts business operations, but excluding customer sites where the Borrowers'
only operation is the installation of exhibits.
"Purchaser" means a buyer of goods from a Borrower or a customer for
whom services have been rendered or materials furnished by a Borrower.
"Qualified Account" means any and all rights to the payment of money
for services rendered or goods sold, created in the ordinary course of business
in an arm's length transaction ("Account") which meets all of the following
specifications at the time of determination:
(1) the Account is lawfully owned by a Borrower free and clear
of all liens, security interests or prior assignments except as set forth in
subsection (2) hereof, and such Borrower has the right of assignment thereof and
the power to grant a security interest therein;
(2) the Account is subject to a valid first priority perfected
security interest in favor of the Agent, for the benefit of the Banks;
(3) the Account is valid and enforceable, representing the
undisputed indebtedness of the Purchaser to a Borrower;
(4) the Account is not subject to any defense, set-off,
counterclaim, warranty claim, credit, allowance or adjustment in an amount
greater than five percent (5%) of the amount of the Account;
(5) if the Account arises from the sale of goods by a
Borrower, the Purchaser thereof has accepted such goods and no part of such
goods have been returned, rejected, lost or damaged;
(6) if the Account arises from the sale of goods by a
Borrower, such sale was an absolute sale and not on consignment or on approval
or on a sale-or-return basis, nor subject to any other repurchase or return
agreements, and such goods have been either (i) shipped to the Purchaser
thereof; or (ii) billed on a straight line percentage of completion basis, but
Qualified Accounts under this subsection (ii) shall at no time exceed
$1,000,000;
(7) if the Account arises from the performance of services,
such services have actually been performed;
(8) the Account arose in the ordinary course of business of a
Borrower;
(9) no notice of the bankruptcy, receivership, reorganization
or insolvency of the Purchaser owing such Account has been received by the Agent
or any Bank or Borrower;
(10) the Account has remained unpaid for less than 60 days
from contractual or specified due date and less than 120 days from the date of
original invoice;
(11) the Purchaser is not a state or local government, or any
department, agency or instrumentality thereof, except to the extent the
applicable Borrower (a) assigns the Account to Agent, for the benefit of the
Banks, in a manner satisfactory to Agent, pursuant to, and in full compliance
with, any applicable state or local law comparable to the Federal Assignment of
Claims Act (e.g., any state or local law which prohibits, conditions or limits
the assignment of a claim against a state or local government, or any
department, agency or instrumentality thereof, or the rights of an assignee of
such a claim), and (b) demonstrates to Agent, in a manner satisfactory to Agent,
that no other such state or local law is applicable;
(12) the Purchaser is not the Federal government, or any
department, agency or instrumentality thereof, except to the extent (a) such
government, or department, agency or instrumentality thereof, as applicable, and
the subject Account are subject to the Federal Assignment of Claims Act, and (b)
such Account has been assigned to the Agent, for the benefit of the Banks, and
due notice has been given under the Federal Assignment of Claims Act;
(13) the Account is not an International Account, unless such
Account is a Secured Account, in which case such Account shall not be deemed an
International Account;
(14) the Purchaser for such Account has not submitted a medium
of payment therefor, or for any other Account for which such Purchaser is
indebted to a Borrower, which has been returned uncollected for any reason;
(15) the Purchaser owing such Account is not an Affiliate,
Subsidiary, director, officer, manager, employee, equity holder or supplier of a
Borrower;
(16) neither the Account, nor any other Account owed by the
same Purchaser or any Affiliate thereof, is subject to any chargeback, defense,
offset, credit, claim, dispute or set-off or is otherwise classifiable as a
"contra" account in an amount greater than five percent (5%) of the amount of
such Account;
(17) the Account is not owed by a Delinquent Purchaser or any
Subsidiary or Affiliate of a Delinquent Purchaser;
(18) the original invoice creating such Account was delivered
on the date the underlying goods or services were provided or within thirty-five
(35) days after such date;
(19) the credit-worthiness of the Purchaser is acceptable to
the Agent in its sole discretion; and
(20) such Account is otherwise acceptable to Agent in its
reasonable discretion.
In addition, not more than 25% of the aggregate Qualified Accounts at any one
time shall be owing from any one Purchaser or Purchasers which are Affiliates.
Any Account or portion of an Account in excess of the limitations set forth in
the preceding sentence shall not constitute a Qualified Account.
"Qualified Inventory" means all DMS Inventory, all Sparks Raw Materials
and all Sparks Work-In-Process Inventory.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as amended or supplemented from time to time.
"Reimbursement Obligations" shall mean, at any time, the obligations of
the Borrowers then outstanding, or that may thereafter arise in respect of all
Letters of Credit then outstanding, to reimburse amounts paid by the Agent in
respect of any drawings under a Letter of Credit.
"Reportable Event" has the meaning given to such term in ss.4043(b) of
ERISA.
"Revolving Credit Advances" means amounts advanced by the Agent and/or
the Banks under the revolving credit facility provided for in this Agreement and
shall have the same meaning as "Loans".
"Revolving Credit Commitment" means $12,000,000, as such amount may be
reduced pursuant to Section 2.1(C) hereof.
"Revolving Credit Notes" has the meaning given to such term in Section
2.4 hereof.
"RICO" means the Racketeer Influenced and Corrupt Organization Act, as
amended by the Comprehensive Act of 1984, 18 U.S.C. ss.ss.1961-68, as amended or
supplemented from time to time.
"Secured Account" means any Qualified Account of a Borrower which is
either (A) fully secured by an irrevocable letter of credit that is issued by an
institution and upon terms and conditions which are satisfactory to the Agent in
its sole discretion (provided that such letter of credit has been delivered and
properly assigned and/or endorsed to the Agent and consented to by the issuer
thereof in accordance with Section 3.7 hereof), or (B) insured under a foreign
credit insurance policy acceptable to the Agent with respect to such Qualified
Account in favor of such Borrower.
"Sparks Borrowers" means Sparks, Exhibits, SEH, Limited, Piper and
Company.
"Sparks Raw Materials" means any and all goods owned by a Sparks
Borrower which meets all of the following specifications at the time of
determination:
(A) it is raw materials (other than office supplies or packaging or
shipping materials), and is not work-in-process or finished goods;
(B) it is located at one of the locations identified on Exhibit 3.4
attached hereto (provided that the landlord, mortgagee, or other lienholder if
any, at such location has executed and delivered to the Agent a waiver in form
and substance acceptable to the Agent, unless the Agent has notified the
Borrower Agent otherwise in writing);
(C) it conforms in all respects to the representations and warranties
made herein relating thereto;
(D) it is in a usable condition;
(E) it is held by such Borrower for use in manufacturing goods;
(F) it is not being held on consignment;
(G) it is not subject to a security interest other than in favor of the
Agent, for the benefit of the Banks, and is subject to a valid first priority
perfected security interest in favor of the Agent, for the benefit of the Banks;
(H) it is not stored with a bailee, consignee, warehouseman, processor
or similar party unless the applicable Borrower has caused such bailee,
consignee, warehouseman, processor or similar party to issue and deliver to the
Agent, in form and substance acceptable to the Agent, such Uniform Commercial
Code financing statements, warehouse receipts, waivers and other documents as
the Agent shall request; and
(I) it is otherwise acceptable to the Agent in its reasonable
discretion.
"Sparks Work-In-Process Inventory" means any and all goods owned by a
Sparks Borrower which meets all of the following specifications at the time of
determination:
(A) it is work-in-process, and is not raw materials or finished goods;
(B) it is located at one of the locations identified on Exhibit 3.4
attached hereto (provided that the landlord, mortgagee, or other lienholder if
any, at such location has executed and delivered to the Agent a waiver in form
and substance acceptable to the Agent, unless the Agent has notified the
Borrower Agent otherwise in writing);
(C) it conforms in all respects to the representations and warranties
made herein relating thereto;
(D) it is not being held on consignment;
(E) it is not subject to a security interest other than in favor of the
Agent, for the benefit of the Banks, and is subject to a valid first priority
perfected security interest in favor of the Agent, for the benefit of the Banks;
(F) it is not stored with a bailee, consignee, warehouseman, processor
or similar party unless the applicable Borrower has caused such bailee,
consignee, warehouseman, processor or similar party to issue and deliver to the
Agent, in form and substance acceptable to the Agent, such Uniform Commercial
Code financing statements, warehouse receipts, waivers and other documents as
the Agent shall request; and
(G) it is otherwise acceptable to the Agent in its reasonable
discretion.
"Subordinated Debt" means any Indebtedness of the Borrowers that is
subordinated to the Obligations in accordance with a subordination agreement
acceptable to the Majority Banks in their sole discretion.
"Subrogation and Contribution Agreement" means that certain Amended and
Restated Subrogation and Contribution Agreement dated as of the Closing Date
executed by each Borrower, as amended, modified or supplemented from time to
time.
"Subsidiary" of any Person means any corporation or other entity, more
than 50% of the voting capital stock, partnership or other ownership interests
of which is owned, directly or indirectly, by such Person and/or one or more of
such Person's other subsidiaries.
"Supervisory Policy" means the Federal Financial Institutions
Examination Council Supervisory Policy-Repurchase Agreements of Depository
Institutions with Security Dealers and Others as adopted by the Comptroller of
the Currency on October 31, 1985, as amended or supplemented from time to time.
"Swap Agreement" means, collectively, any "swap agreement" as defined
in 11 U.S.C. ss.101 including, without limitation, any swap agreement entered
into by any Borrower with any Bank consistent with the terms of Section 2.20.
"Tangible Net Worth" means as of any date Net Worth minus Intangibles
plus Subordinated Debt.
"Total Assets" means as of any date all assets of MTI and its
Subsidiaries that would, in accordance with GAAP, be classified as assets
thereof on a Consolidated basis.
"Total Debt Service" for any period means Current Maturities as of the
last day of such period, plus interest expense in respect of Indebtedness of
Borrowers on a Consolidated basis during such period.
"Total Liabilities" means as of any date all liabilities of MTI and its
Subsidiaries on a Consolidated basis that would, in accordance with GAAP, be
classified as liabilities thereof on a Consolidated basis.
"Total Outstanding Revolving Credit" has the meaning given to such term
in Section 2.1.
"Uniform Commercial Code" shall mean the Uniform Commercial Code in
effect on the date hereof and as amended from time to time, and as enacted in
the Commonwealth of Pennsylvania or in any state or states which, pursuant to
the Uniform Commercial Code as enacted in the Commonwealth of Pennsylvania, has
jurisdiction with respect to all, or any portion of, the Collateral or this
Agreement, from time to time. It is the intent of the parties that terms used in
Article III which are defined in the Uniform Commercial Code should be construed
in their broadest sense so that Collateral will be construed in its broadest
sense. Accordingly if there are, from time to time, changes to defined terms in
the Uniform Commercial Code that broaden the definitions, they are incorporated
herein and if existing definitions in the Uniform Commercial Code are broader
than the amended definitions, the existing ones shall be controlling. Similarly,
where the phrase "as defined in the Uniform Commercial Code, including, but not
limited to . . ." is used, it means as defined in the Uniform Commercial Code
except that if any of the enumerated types of items specified thereafter would
not fall within the Uniform Commercial Code definition, they shall nonetheless
be included in the applicable definition for purposes of this Agreement. In
addition, terms used herein which are defined in the Uniform Commercial Code
shall be construed consistent with the foregoing whether or not such terms are
capitalized.
"Unmatured Event of Default" means and refers to any event, act or
occurrence which, with the passing of time or the giving of notice or both,
would constitute an Event of Default.
"Wachovia Bank" has the meaning given to such term in the Background
Section.
"Withdrawal Liability" has the meaning given to such term in ss.4201 of
ERISA.
Accounting Terms. All accounting terms not specifically defined herein, or
defined herein and not specifically provided as being construed in
accordance with GAAP, shall be construed, and all financial data submitted
pursuant to this Agreement shall be prepared, in accordance with GAAP.
THE REVOLVING CREDIT FACILITY
The Revolving Credit Commitment.
Subject to the terms and conditions set forth in this Agreement, each Bank
severally, but not jointly, agrees to make loans to any Borrower (as
directed by the Borrower Agent), from time to time up to such Bank's
Commitment, during the period from the date hereof until the Maturity Date,
such sums as the Borrower Agent may request (each such advance shall be a
"Revolving Credit Advance" or a "Loan"), provided that the sum of (a) the
total outstanding principal of Revolving Credit Advances plus (b) all
Letter of Credit Liabilities (such sum is hereinafter referred to as the
"Total Outstanding Revolving Credit") shall not at any time exceed the
Credit Limit. If at any time the Credit Limit is less than the Total
Outstanding Revolving Credit, then the Borrowers, without prior notice from
the Agent or any Bank, shall immediately repay the difference to the Agent,
to be applied in the Agent's discretion either to repayment of Loans or as
cash collateral for Letter of Credit Liabilities. The Borrowers shall use
Loans to refinance existing Obligations under the Existing Agreement, to
finance working capital and capital expenditures permitted hereunder and
for other permitted general corporate purposes and for no other purposes.
Each extension of credit under the Revolving Credit Commitment shall be made by
each Bank in the proportion which that Bank's Commitment bears to the total
Revolving Credit Commitment. Within the limits of the Revolving Credit
Commitment, the Borrowers may borrow, repay and reborrow under this
Section; provided that all of the Loans be paid in full on the Maturity
Date. The Borrowers shall pay interest on the principal amount of the
Revolving Credit Advances outstanding from time to time at the Interest
Rate applicable to each Loan in accordance with Section 2.7.
The Borrower Agent shall have the right at any time and from time to time, upon
at least three (3) Business Days prior written notice by the Borrower Agent
to the Agent, to terminate the Revolving Credit Commitment in whole or
reduce it in part, provided, however, that: (i) the Borrowers shall
simultaneously with each such reduction pay to the Agent, for the account
of the Banks (a) the amount by which the Total Outstanding Revolving Credit
exceeds the Revolving Credit Commitment as so reduced, to be applied in the
Agent's discretion either to repayment of Loans or as cash collateral for
Letter of Credit Liabilities, with such repaid principal to be applied
first against Base Rate Loans and thereafter against Eurodollar Loans in
accordance with Section 2.16(C), and (b) all accrued and unpaid interest on
the Loans so prepaid; and (ii) to the extent application of this subsection
requires a prepayment of any Eurodollar Loans prior to the end of the
applicable Interest Period(s), the Borrowers shall pay any prepayment
compensation required under Section 2.16 (whether or not the Banks shall
have actually funded a Loan with corresponding deposits). Any partial
reduction of the Revolving Credit Commitment made at the Borrower Agent's
option shall be in the minimum amount of Five Hundred Thousand Dollars
($500,000) or in multiples of Five Hundred Thousand Dollars ($500,000) in
excess thereof. Any termination or reduction of the Revolving Credit
Commitment hereunder shall be permanent, and the Revolving Credit
Commitment cannot thereafter be restored or increased without the written
consent of the Banks. Upon the termination of the Revolving Credit
Commitment in whole, the Borrowers shall repay the aggregate principal
amount of the Total Outstanding Revolving Credit together with interest
thereon and any other sums due hereunder, including, without limitation,
under Section 2.16.
The Borrowers may borrow, repay and reborrow under the Revolving Credit
Commitment until the Maturity Date subject to the terms and conditions of
this Agreement.
Revolving Credit Advances.
Borrower Agent Request. The Borrower Agent shall notify the Agent by telephone
no later than Noon Philadelphia time the day of the requested borrowing of
each proposed Base Rate Loan, specifying the date and amount of the
proposed Base Rate Loan. The Borrower Agent shall notify the Agent by
telephone no later than Noon Philadelphia time at least three (3) Business
Days in advance of each proposed Eurodollar Loan, specifying the date and
the amount of such proposed Loan and the length of the proposed Interest
Period. The Borrower Agent will confirm any telephonic notice of a proposed
Loan the same day by facsimile copy. Each Eurodollar Loan shall be in an
amount of Five Hundred Thousand Dollars ($500,000) or in multiples of One
Hundred Thousand Dollars ($100,000) in excess thereof. Each such notice
(whether or not actually confirmed by facsimile copy) shall constitute a
representation by all of the Borrowers that, at the time thereof and giving
effect to the Loan requested thereby, the conditions precedent for such
Loan as set forth in Section 4.2 hereof have all been satisfied.
Making Loans. Upon satisfaction of the conditions set forth herein, the Agent
shall promptly notify each Bank of each such notice. Not later than 2:00
p.m. Philadelphia time on the date of the requested Loan, each Bank will
make available to the Agent at the Agent's specified office in immediately
available funds, such Bank's pro rata share of such Loan. After the Agent's
receipt of such funds, not later than 4:00 p.m. on the date of such Loans
and upon satisfaction of the conditions set forth herein, the Agent shall
make the requested Revolving Credit Advance available to the Borrower Agent
(for the account of the relevant Borrower), in the Borrower Agent's account
maintained with the Agent. The Borrowers agree to hold the Agent and Banks
harmless from any liability for any loss resulting from the Agent's
reliance on any writing, facsimile copy or telephonic notice purportedly
made by an officer of the Borrower Agent, provided that the Agent has acted
in good faith in doing so. The Agent may assume that telephonic notice of a
request for a Loan is from an authorized officer of the Borrower Agent,
absent willful misconduct or gross negligence.
Non-Receipt of Funds by Agent.
Unless the Agent shall have received notice from a Bank prior to the date on
which such Bank is to provide funds to the Agent for a Loan to be made by
such Bank that such Bank will not make available to the Agent such funds,
the Agent may assume that such Bank has made such funds available to the
Agent on the date of such Loan in accordance with Section 2.2 and the Agent
in its sole discretion may, but shall not be obligated to, in reliance upon
such assumption, make available to the Borrowers on such date a
corresponding amount. If and to the extent such Bank shall not have so made
such funds available to the Agent, such Bank agrees to repay to the Agent
forthwith on demand such corresponding amount together with interest
thereon, for each day from the date such amount is made available to the
Borrowers until the date such amount is repaid to the Agent, at the
overnight federal funds rate calculated in the manner customary for the
correction of errors among banks for three Business Days and thereafter at
the Base Rate. If such Bank shall repay to the Agent such amount with
interest upon or prior to the Agent's demand therefor, such Bank shall be
deemed to have funds available as required under Section 2.2. If such Bank
does not pay such amount forthwith upon Agent's demand therefor, the Agent
shall promptly notify Borrowers, and Borrowers shall immediately pay such
corresponding amount to the Agent with interest thereon, for each day from
the date such amount is made available to the Borrowers until the date such
amount is repaid to the Agent, at the rate of interest applicable at the
time to such proposed Loan.
Unless the Agent shall have received notice from the Borrowers prior to the date
on which any payment is due to the Banks hereunder that the Borrowers will
not make such payment in full, the Agent may assume that the Borrowers have
made such payment in full to the Agent on such date and the Agent in its
sole discretion may, but shall not be obligated to, in reliance upon such
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due such Bank. If and to the extent the Borrowers
shall not have so made such payment in full to the Agent, each Bank shall
repay to the Agent forthwith on demand such amount distributed to such Bank
together with interest thereon, for each day from the date such amount is
distributed to such Bank until the date such Bank repays such amount to the
Agent, at the overnight federal funds rate calculated in the manner
customary for the correction of errors among banks for three Business Days
and thereafter at the Base Rate.
Lending Offices; Bank Obligations. Each type of Loan made and maintained by a
Bank shall be made and maintained at such Bank's Lending Office for such
type of Loan. The failure of any Bank to make any requested Revolving
Credit Loan to be made by it on the date specified for such Loan shall not
relieve any other Bank of its obligation (if any) to make such Loan on such
date, but no Bank shall be responsible for the failure of any other Bank to
make such Loans to be made by such other Bank.
The Revolving Credit Notes. All Loans made by each Bank under this Agreement
shall be evidenced by, and repaid with interest in accordance with, a
single promissory note of each of the Borrowers in substantially the form
of Exhibit 2.4 duly completed, in the principal amount equal to such Bank's
Commitment, dated the date of this Agreement, payable to such Bank for the
account of the applicable Lending Office and maturing as to principal on
the Maturity Date (said promissory note, as it may be hereafter amended,
renewed or extended, the "Revolving Credit Note"). Each Bank is hereby
authorized by the Borrowers to endorse on the schedule attached to the
Revolving Credit Note held by it, or on its records, the amount of each
Loan and each renewal, conversion, and payment of principal amount received
by such Bank for the account of the applicable Lending Office on account of
its Loans, which endorsement shall, in the absence of manifest error, be
conclusive as to the outstanding balance of the Loans made by such Bank;
provided, however, that the failure to make such notation with respect to
any Loan or renewal, conversion, or payment shall not limit or otherwise
affect the obligations of the Borrowers under this Agreement or the
Revolving Credit Note held by such Bank.
Upfront Fee. At Closing, the Borrowers shall pay to the Agent an upfront fee for
the account of the Banks in the amount of $40,000.
Repayment. The Total Outstanding Revolving Credit shall be repaid in full on the
Maturity Date, together with all accrued but unpaid interest and Fees. In
addition, the Borrowers shall pay all amounts necessary from time to time
to reduce the Total Outstanding Revolving Credit as the Revolving Credit
Commitment is periodically reduced pursuant to Section 2.1(C), so that the
Total Outstanding Revolving Credit never exceeds the Revolving Credit
Commitment, to be applied in the Agent's discretion either to repayment of
Loans or as cash collateral for Letter of Credit Liabilities.
Interest; Conversions; Continuations.
Base Rate Loans. The Borrowers shall pay to the Agent, for the benefit of the
Banks, interest at the Adjusted Base Rate in arrears on the unpaid
principal amount of each Base Rate Loan from the date on which such Base
Rate Loan is advanced or converted from a Eurodollar Loan until such
principal amount has been repaid in full or converted to a Eurodollar Loan
(1) monthly on the last day of each month commencing with the last day of
the first month after this Agreement is executed, (2) on the date of
payment in full of the Total Outstanding Revolving Credit and (3) on the
Maturity Date.
LIBOR Loans. The Borrowers shall pay interest in arrears on the unpaid principal
amount of each LIBOR Loan at the applicable Adjusted LIBOR, on the last day
of each Interest Period, with respect thereto and also, in the event that
the Interest Period is six (6) months in duration, the Borrowers shall pay
interest on the last day of the third month of such Interest Period.
Conversions to Eurodollar Loans. By notifying the Agent at least three Business
Days prior to an Effective Date, the Borrower Agent may convert into a
Eurodollar Loan any Base Rate Loan(s) in an aggregate principal amount of
Five Hundred Thousand Dollars ($500,000) and multiples of One Hundred
Thousand Dollars ($100,000) in excess thereof. At the end of the applicable
Eurodollar Interest Period, the Eurodollar Loan will convert back to a Base
Rate Loan unless the Borrower Agent otherwise elects to continue or convert
such Eurodollar Loan as provided herein.
Continuation of Loans. If any Loan shall be outstanding as a Eurodollar Loan,
then not later than 3:00 p.m. Philadelphia time on the date that is three
(3) Business Days prior to the last day of the current Interest Period for
such Loan, the Borrower may elect to continue such Loan as the same type of
Loan for a subsequent Interest Period as provided in this Section 2.7(D).
If the Borrower Agent elects to continue any such Loan as aforesaid, the
Borrower Agent shall give notice not later than the time set forth above, which
notice shall identify the type, amount and current Interest Period of the Loan
to be continued, and the duration of the new Interest Period for such Loan.
Limitation on Number of Interest Rate Tranches. At no time shall there be more
than six (6) different Interest Periods pertaining to the Eurodollar Loans.
Notices Irrevocable. All notices given under this Section shall be irrevocable
if reasonably relied upon by the Agent and such reliance leads to an
economic loss by the Agent and/or any Bank.
Computation of Interest. The interest on the Loans and other sums payable
hereunder shall be computed on the basis of a year of 360 days for the
actual number of days elapsed.
Payments.
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The Borrowers hereby authorize the Agent or any Bank to charge directly any
account maintained by the Borrowers or any entity comprising the Borrowers
with the Agent or any Bank for any payments of principal of the Loans,
interest and Fees, and any other amounts owing under this Agreement or
under the Note, as and when due. The Agent or any Bank shall promptly
notify the Borrower Agent (and Agent if notice is given by a Bank) whenever
any such account is so charged, which notice shall specify the amount so
charged and the obligations hereunder to which such amount was applied. In
the event that the Borrowers maintain insufficient funds in such account(s)
to meet the Borrowers' obligations hereunder when due, the Borrowers will
make all payments of principal of the Loans, all payments of interest on
the Loans and all payments of Fees, to the Agent, for the benefit of the
Banks, not later than 1:00 P.M. Philadelphia time on the applicable due
date in immediately available funds.
Any payment made after the time specified in subsection (A) shall be deemed to
have been made on the next succeeding Business Day.
After the occurrence of an Event of Default, the Agent shall apply all payments
and collections received by it as follows: first, to all of the reasonable
costs and expenses incurred in connection with the collection of such
payments; second, to accrued and unpaid Fees (other than attorneys' fees
and expenses already paid pursuant to "first" above); third, to accrued
interest; fourth, to the outstanding principal amount of the Loans; fifth,
to all other amounts which shall have come due hereunder, and sixth, to the
Borrowers.
Payment on Non-Business Days. Whenever any payment to be made hereunder shall be
stated to be due on a day that is not a Business Day, such payment shall be
made on the next succeeding Business Day, and, except as otherwise
specifically provided herein, such extension of time shall in such case be
included in the computation of payment of interest hereunder or under the
Note, as the case may be.
Reimbursement to the Banks for Cost Increases Imposed by Law.
If any change in existing law or regulation, any new law, change in regulatory
interpretation or change in any other factor having the force of law shall
impose or change any tax (other than taxes on income in general), reserve,
insurance, special deposit or similar requirements or charges with respect
to funds obtained by any Bank to make or maintain any of the Loans during
any Interest Period, and the result is to increase the cost to such Bank of
obtaining or maintaining such funds or to reduce the return to such Bank on
the Loans, the Borrowers shall pay to such Bank an amount sufficient to
compensate such Bank in full for such increased costs or such reduced
return.
A certificate of the affected Bank setting forth such amount or amounts as
shall be necessary to compensate such Bank or its holding company as
specified above shall be provided to the Agent and promptly forwarded by
the Agent to the Borrowers and shall be conclusive absent manifest error,
provided such determination is made on a reasonable basis. The Borrowers
shall pay the affected Bank the amount shown as due on any such certificate
delivered by such Bank within 10 days after its receipt of the same.
Reimbursement to the Banks for Increased Costs Due to Capital Adequacy
Requirements.
If any law or regulation or the interpretation thereof by any court or
administrative or governmental authority charged with the administration
thereof, or compliance by any Bank with any request or directive (whether
or not having the force of law) of any such authority, applicable from time
to time, shall after the date hereof (A) impose, modify, deem applicable or
result in the application of any capital maintenance, capital ratio or
similar requirements against loan commitments or other facilities made by
such Bank and the result thereof shall be to impose upon such Bank a fee or
a requirement to increase any capital requirement applicable as a result of
the making or maintenance of the Loans (which imposition of or increase in
capital requirements may be determined by such Bank's allocation of the
aggregate of such capital impositions or increases), or subject such Bank
to any tax, duty or other charge with respect to the Loans, such Bank's
Note, or its obligation to advance under the Revolving Credit Commitment,
or change the basis of taxation of payments to such Bank of the principal
of or interest on the Loans or any other amounts due under this Agreement
in respect of the Loans or its obligation to advance under the Revolving
Credit Commitment (including the imposition of any tax not previously in
effect on the net income of such Bank imposed by any jurisdiction in which
such Bank is obligated to pay taxes), then, upon demand by such Bank or the
Agent, the Borrowers shall immediately pay to such Bank from time to time
as specified by such Bank, such additional amounts or fees which shall be
sufficient to compensate such Bank for such impositions of or increases in
capital requirements or taxes from the date of such change.
A certificate of the affected Bank setting forth such amount or amounts as
shall be necessary to compensate such Bank or its holding company as
specified above shall be provided to the Agent and promptly forwarded by
the Agent to the Borrowers and shall be conclusive absent manifest error,
provided such determination is made on a reasonable basis. The Borrowers
shall pay the affected Bank the amount shown as due on any such certificate
delivered by such Bank within 10 days after its receipt of the same.
Failure on the part of a Bank to demand compensation for increased costs or
reduction in amounts received or receivable or reduction in return on
capital with respect to any period after the date hereof shall not
constitute a waiver of the Bank's right to demand compensation with respect
to such period or any other period during the term of this Agreement
provided that such demand is made prior to repayment of all credit extended
by the Banks under this Agreement.
Illegality. Notwithstanding any other provision in this Agreement, if the
adoption of any applicable law, rule, or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or its
lending office) with any request or directive (whether or not having the
force of law) of any such authority, central bank, or comparable agency
shall make it unlawful or impossible for such Bank (or its lending office)
to honor its obligation to make or maintain LIBOR Loans, then upon notice
to the Borrowers by the Agent at the request of such Bank such obligation
shall be suspended until such time as the applicable Bank may again make
and maintain LIBOR Loans of such type (and until such time, any Loans that
are outstanding as LIBOR Loans shall, upon the request of the Agent at the
request of such Bank, be automatically converted into Base Rate Loans and
the Borrowers shall not be required to pay any compensation due under
Section 2.16 in connection therewith).
Interest and Commissions After Event of Default. After the occurrence of any
Event of Default, the Agent shall have the right upon notice to the
Borrower Agent to change the Interest Rate on all Loans and other amounts
advanced and/or owing hereunder to be the applicable Interest Rate plus
three percent (3%) (the "Default Rate"), effective upon the giving of such
notice.
Special Provisions for LIBOR Loans.
Unavailability of Funds and Indeterminate Interest Rates. If on or before any
Effective Date for a Eurodollar Loan the Agent determines in good faith
that no adequate means exists to determine the LIBOR for such Interest
Period, then the Agent shall so notify the Borrowers on or before the
Effective Date and the Borrowers shall have one (1) Business Day after
notice to withdraw their request for such Loan. If the Borrowers do not
withdraw such request, such Loan shall bear interest (following the
expiration of the then applicable Interest Period, if any) at the rates
from time to time applicable to Base Rate Loans. Until such notice from the
Agent has been withdrawn, no further Eurodollar Loans shall be made, nor
shall the Borrowers have the right to convert a Base Rate Loan to a
Eurodollar Loan.
Discretion of the Agent as to Manner of Funding. Notwithstanding any other
provision of this Agreement, the Agent on behalf of the Banks may fund or
maintain its funding of all or any part of the Loans in any legal manner it
chooses and such manner of funding shall not in any way relieve the
Borrowers of their obligations to pay prepayment compensation in the event
of a prepayment as set forth in Section 2.16 hereof.
Prepayment; Funding Loss Indemnification.
The Borrowers may prepay Base Rate Loans in whole or in part at any time and
from time to time, without premium or penalty.
The Borrowers shall pay to the Agent, upon the request of any Bank(s), such
amount or amounts as shall be sufficient to compensate the Banks for any
loss, cost or expense (including, without limitation, costs or losses
associated with prepaying or redeploying deposits (whether or not the Banks
shall have actually funded a Loan with corresponding deposits)) which the
Agent determines is attributable to:
any payment, prepayment, conversion or continuation of a LIBOR Loan made by the
Banks on a date other than the last day of an Interest Period for such Loan
(whether by reason of acceleration or otherwise); or
any failure by the Borrowers to borrow, convert into or continue a LIBOR Loan
to be made, converted into or continued by the Agent on behalf of the Banks
on the date specified therefor pursuant to the Borrower Agent's prior
election.
A determination of the Agent as to the amounts payable pursuant to this
Section 2.16(B) shall be conclusive if made on a reasonable basis and in good
faith.
Provided that the Borrowers have not given the Agent written instructions to the
contrary, the Banks shall apply any voluntary principal prepayment first,
to repayment of the Base Rate Loans then outstanding, and second, to
repayment of any LIBOR Loans in such a manner as to minimize the Borrowers'
obligation to pay prepayment compensation under this Section 2.16.
No prepayment will affect the Borrowers' obligations to continue making payments
under any other obligation to any Bank.
Letters of Credit. Subject to the terms and conditions of this Agreement, the
Revolving Credit Commitment may be utilized, upon the request of the
Borrower Agent, in addition to the Revolving Credit Advances provided for
by Section 2.1, by the issuance by the Agent of letters of credit
(collectively, "Letters of Credit") for account of the Borrowers up to a
maximum aggregate stated amount of $3,000,000 at any one time outstanding,
provided that no Letter of Credit shall be requested by the Borrowers if
the Total Outstanding Revolving Credit (including the Letter of Credit
being requested) would exceed the aggregate Revolving Credit Commitment.
Each Letter of Credit shall provide that drafts drawn under it shall be
payable at sight and shall expire before the Maturity Date and not more
than 364 days after issuance. Letters of credit issued under the Existing
Agreement shall be deemed to be Letters of Credit under this Agreement. The
following additional provisions shall apply to Letters of Credit:
The Agent may decline to issue any Letter of Credit which it reasonably
believes to be in violation of applicable laws or regulations or the use of
which it determines to be unacceptable in its reasonable judgment. Upon
issuance of each Letter of Credit, the Agent will promptly notify the Banks
thereof, and each Bank shall immediately and automatically acquire (without
the need for the execution of any document or other act) a pro-rata risk
participation in the Letter of Credit based on its respective Commitment.
The Borrower Agent shall give the Agent at least three (3) Business Days
irrevocable prior notice (effective upon receipt) specifying the Business
Day each Letter of Credit is to be issued and the account party or parties
therefor and describing in reasonable detail the proposed terms of such
Letter of Credit (including the beneficiary thereof) and the nature of the
transactions or obligations proposed to be supported thereby (including
whether such Letter of Credit is to be a commercial letter of credit or a
standby letter of credit).
On each day during the period commencing with the issuance by the Agent of any
Letter of Credit and until such Letter of Credit shall have expired or been
terminated, the Revolving Credit Commitment shall be deemed to be utilized
for all purposes of this Agreement in an amount equal to the then undrawn
face amount of such Letter of Credit.
Upon receipt from the beneficiary of any Letter of Credit of any demand for
payment under such Letter of Credit, the Agent shall promptly notify the
Borrower Agent of the amount to be paid by the Agent as a result of such
demand and the date on which payment is to be made by the Agent to such
beneficiary in respect of such demand, provided that, failure to so notify
shall not affect the Borrowers' obligations hereunder. Notwithstanding the
identity of the account party of any Letter of Credit, the Borrowers hereby
jointly and severally and unconditionally agree to pay and reimburse the
Agent for the amount of each demand for payment under such Letter of Credit
that is in compliance with the provisions of such Letter of Credit at or
prior to the date on which payment is to be made by the Agent to the
beneficiary thereunder, without presentment, demand, protest or other
formalities of any kind.
Forthwith upon its receipt of a notice referred to in paragraph (D) of this
Section 2.17, the Borrower Agent shall advise the Agent whether or not a
Borrower intends to borrow hereunder to finance its obligation to reimburse
the Agent for the amount of the related demand for payment and, if it does,
submit a notice of such borrowing as provided in Section 2.2. If the
Borrowers neither borrow nor reimburse the Agent for the amount of the
related demand for payment, each Bank shall pay to the Agent a pro rata
share of the amount of the demand for payment, based on each Bank's pro
rata share of the Revolving Credit Commitment.
The Borrowers shall pay to the Agent a Letter of Credit fee equal to 2.00% per
annum multiplied by the face amount of such Letter of Credit on the date
any Letter of Credit is issued or renewed (calculated as of the date of
such issuance or renewal). The Letter of Credit fee shall be allocated as
follows: first, 0.125% per annum of the face amount of such Letter of
Credit shall be paid to the Agent, and the remaining amount of the Letter
of Credit fee shall be allocated among the Banks according to their
relative pro rata portion of the Revolving Credit Commitment. In addition,
the Borrowers shall pay to the Agent all commissions, charges, costs and
expenses in the amounts customarily charged by the Agent from time to time
in like circumstances with respect to the issuance of each Letter of Credit
and drawings and other transactions relating thereto.
The issuance by the Agent of each Letter of Credit shall, in addition to the
conditions precedent to the making of a Loan set forth in Article IV
hereof, be subject to the conditions precedent that (i) such Letter of
Credit shall be in such form, contain such terms and support such
transactions as shall be reasonably satisfactory to the Agent consistent
with its then current practices and procedures with respect to letters of
credit of the same type and (ii) the account party on such Letter of Credit
shall have executed and delivered such applications, agreements and other
instruments relating to such Letter of Credit as the Agent shall have
reasonably requested consistent with its then current practices and
procedures with respect to letters of credit of the same type, provided
that in the event of any conflict between any such application, agreement
or other instrument and the provisions of this Agreement, the provisions of
this Agreement shall control.
The issuance by the Agent of any modification, amendment, or supplement to any
Letter of Credit hereunder shall be subject to the same conditions
applicable under this Section 2.17 to the issuance of new Letters of
Credit.
The Borrowers hereby jointly and severally indemnify and hold harmless the
Agent and Banks from and against any and all claims and damages, losses,
liabilities, costs or expenses that the Agent or Banks may incur (or that
may be claimed against the Agent or Banks by any Person whatsoever) by
reason of or in connection with the execution and delivery or transfer of
or payment or refusal to pay by the Agent and Banks under any Letter of
Credit, other than such amounts arising due to the Agent's or any Bank's
gross negligence or willful misconduct.
Taxes.
All payment by any of the Borrowers of principal of, and interest on, the Loans
and all other amounts payable hereunder shall be made free and clear of and
without deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, United
States or foreign, but excluding franchise taxes and taxes imposed on or
measured by any Bank's net income or receipts (such non-excluded items
being called "Taxes"). In the event that any withholding or deduction from
any payment to be made by a Borrower hereunder is required in respect of
any Taxes pursuant to any applicable law, rule or regulation, then the
Borrowers jointly and severally agree to:
Pay directly to the relevant authority the full amount required to be so
withheld or deducted;
Promptly forward to the Agent an official receipt or other documentation
satisfactory to the Agent evidencing such payment to such authority; and
Pay to the Agent for the account of the Banks such additional amount or amounts
as is necessary to ensure that the net amount actually received by each
Bank will equal the full amount such Bank would have received had no such
withholding or deduction been required.
If any Taxes are directly asserted against the Agent or any Bank with respect
to any payment received by the Agent or such Bank hereunder, the Agent or
such Bank may pay such Taxes and the Borrowers jointly and severally agree
to promptly pay such additional amounts (including any penalties, interest
or expenses) as are necessary in order that the net amount received by such
Person after the payment of such Taxes (including any Taxes on such
additional amount) shall equal the amount such Person would have received
had not such Taxes been asserted. A certificate of the affected Bank
setting forth such amount or amounts as shall be necessary to compensate
such Bank or its holding company as specified above shall be provided to
the Agent and promptly forwarded by the Agent to the Borrowers and shall be
conclusive absent manifest error, provided such determination is made on a
reasonable basis. The Borrowers shall pay the affected Bank the amount
shown as due on any such certificate delivered by such Bank within 10 days
after its receipt of the same.
The Borrowers jointly and severally shall indemnify the Agent and the Banks for
any incremental Taxes, interest or penalties that may become payable by any
Bank as a result of any failure by any Borrower to pay any Taxes when due
to the appropriate taxing authority or to remit to the Agent, for the
account of the respective Banks, the required receipts or other required
documentary evidence.
Additional Borrowers. Any Subsidiary of a Borrower shall, unless otherwise
specifically agreed to in writing by the Agent, immediately upon becoming a
Subsidiary of a Borrower become a Borrower hereunder ("New Borrower") and
be jointly and severally obligated with each other Borrower under this
Agreement with respect to all of the obligations under this Agreement
stated to be obligations of the Borrower; and MTI shall cause each New
Borrower to execute and deliver to the Agent (i) an instrument in form and
substance reasonably satisfactory to the Agent pursuant to which each New
Borrower agrees to assume all of the obligations of a "Borrower" under this
Agreement, and (ii) such other documents as the Agent may reasonably
request, including, without limitation, UCC-1 financing statements. The
right of the New Borrower to receive the proceeds of a Loan hereunder shall
be subject to the delivery to the Agent of such proof of corporate action,
incumbency of officers, opinions of counsel and other documents as are
consistent with those delivered by each Borrower originally signatory
hereto pursuant to Section 4.1 as well as such other information or
documents as the Agent shall reasonably request.
Interest Rate Swap Facility. The Borrowers may hedge the floating interest
expense of the Loans for the full term of the Loans by maintaining one or
more Swap Agreements with any Bank (or another financial institution
approved by the Agent in writing) in an aggregate notional amount equal to
the outstanding principal balance of the Loans with the Borrowers making
fixed rate payments and receiving floating rate payments to offset changes
in the variable interest expense of the Loans, all upon such terms and
subject to such conditions as shall be acceptable to the Bank entering into
such transaction with the Borrowers (or if such transaction is with another
financial institution, all upon such terms and subject to such conditions
as shall be approved by the Agent in writing). In connection with the
foregoing, the Borrowers hereby acknowledge the continuing existence of the
Existing Swap Agreement, which remains in full force and effect.
COLLATERAL
Security. As security for the payment of all Obligations of Borrowers to the
Banks, each of the Borrowers hereby grant to the Agent, for the benefit of
the Banks, a security interest in and lien upon all of the following
property (the "Collateral"):
All of the Borrowers' existing and future accounts, contract rights, chattel
paper, instruments and documents and all other rights to the payment of
money whether or not yet earned, for services rendered or goods sold,
consigned, leased or furnished by the Borrowers or otherwise.
All of the Borrowers' present and future inventory (including, but not limited
to, goods held for sale or lease or furnished or to be furnished under
contracts for service, raw materials, work-in-process, finished goods and
goods used or consumed in the Borrowers' business) whether owned, consigned
or held on consignment (to the extent permitted by such consignment),
together with all of the Borrowers' merchandise, component materials,
supplies, packing, packaging and shipping materials, and all returned,
rejected or repossessed goods sold, consigned, leased or otherwise
furnished by the Borrowers.
All of the Borrowers' present and future general intangibles (including, but
not limited to, manufacturing and processing rights, designs, patent rights
and applications therefor, trademarks and registration or applications
therefor, tradenames, brand names, logos, inventions, copyrights and all
applications and registrations therefor) software and computer programs,
license rights, royalties, trade secrets, methods, processes, know-how,
formulas, drawings, specifications, descriptions, label designs, plans,
blueprints, patterns and all memoranda, notes and records with respect to
any research and development.
All of the Borrowers' present and future machinery, equipment, furniture,
fixtures, tools, dies, jigs, molds and other articles of tangible personal
property of every type, together with all parts, substitutions, accretions,
accessions, attachments, accessories, additions, components and
replacements thereof, and all manuals of operation, maintenance or repair.
All of the Borrowers' present and future general ledger sheets, files, records,
books of account, invoices, bills, certificates or documents of ownership,
bills of sale, business papers, correspondence, credit files, tapes, cards,
computer runs and all other data and data storage systems whether in the
possession of the Borrowers or any service bureau.
Borrowers' interest as tenant under that certain Lease for the premises located
at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ dated May 17, 1999, and
under any lease for any location, in any case as amended or replaced,
except to the extent that this clause violates any such lease and no waiver
or consent is obtained.
All deposits, funds, instruments, documents, policies and certificates of
insurance, securities, chattel paper and other assets of the Borrowers or
in which any of the entities comprising the Borrowers has an interest, now
or at any time hereafter on deposit with or in the possession or control of
any Bank or owing by any Bank to the Borrowers or in transit by mail or
carrier to such Bank or in the possession of any other Person acting on
such Bank's behalf, without regard to whether such Bank received the same
in pledge, for safekeeping, as agent for collection or otherwise, or
whether such Bank has conditionally released the same, and in all assets of
the Borrowers in which such Bank now has or may at any time hereafter
obtain a lien, mortgage, or security interest for any reason.
All of the Borrowers' deposit accounts, including but not limited to, all
demand, time, savings, passbook and similar accounts, wherever located.
All of the Borrowers' commercial tort claims (and Borrowers shall give notice
to Agent of any such claim hereafter held or acquired by any Borrower
pursuant to, and in compliance with, Section 3.21 hereof).
All of the Borrowers' investment property including, but not limited to, all
securities, whether certificated or uncertificated, all financial assets,
all security entitlements, all securities accounts, all commodity contracts
and all commodity accounts.
All of the Borrowers' letter-of-credit-rights including, but not limited to,
any right to payment or performance under a letter of credit, whether or
not the beneficiary has demanded or is at the time entitled to demand
payment or performance.
All proceeds of any of the foregoing Collateral including, but not limited to,
(i) any and all proceeds of any insurance (whether or not the Agent is
named as the loss payee thereof), indemnity, warranty or guaranty payable
to any Borrower or the Agent from time to time with respect to any of the
Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Borrower from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or
any part of the Collateral by any governmental authority (or any person
acting under color of governmental authority), (iii) any and all amounts
received when Collateral is sold, leased, licensed, exchanged, collected or
disposed of, (iv) any rights arising out of Collateral, and (v) any and all
other amounts from time to time paid or payable under or in connection with
any of the Collateral.
The above-described security interests shall not be rendered void by
the fact that no Obligations exist as of any particular date, but shall continue
in full force and effect until the indefeasible payment of all Obligations and
termination of the Revolving Credit Commitment. Upon the indefeasible payment of
all Obligations and termination of the Revolving Credit Commitment, at the
Borrowers' cost and expense, the Agent will deliver to the Borrowers such
termination statements as may be needed to terminate the effectiveness of the
financing statements filed to perfect the Agent's security interest in the
Collateral.
Financing Statements; Certificates of Title. The Borrowers will join with the
Agent in preparing and filing such financing statements and continuation
statements and amendments and supplements thereto (in form satisfactory to
Agent) under the Uniform Commercial Code as the Agent may specify, and will
pay the cost of filing the same in such public offices as the Agent shall
designate. Without limiting the obligation of the Borrowers set forth in
the preceding sentence, each Borrower hereby authorizes the Agent, and
appoints the Agent as its attorney-in-fact, to file in such office or
offices as the Agent deems necessary or desirable such financing and
continuation statements and amendments and supplements thereto, and such
other documents as the Agent may require to perfect, preserve and protect
the security interests granted herein and ratifies all such actions taken
by the Agent. The Borrowers shall have noted on the certificate of title of
any Collateral the liens created hereby and shall deliver to the Agent the
originals of each such certificate of title. Each Borrower agrees to take
whatever action the Agent reasonably requests to perfect and to continue
perfection of the Agent's security interest in the Collateral.
Landlord's Waiver. Each Borrower shall use its best efforts to cause the owners
of the locations identified on Schedule 3.4 and/or identified in Section
3.1(F) to execute and deliver to the Agent a landlord's waiver in form and
substance satisfactory to the Agent.
Places of Business; Location of Collateral; etc.
Each Borrower represents that Schedule 3.4 attached hereto lists such Borrower's
chief place of business, chief executive office, the place where it keeps
its books and records and the locations of substantially all of the
equipment or inventory serving as Collateral hereunder.
Each Borrower will notify the Agent at least thirty (30) days prior to (1) any
change in the location of the chief place of business or chief executive
office of such Borrower, (2) any change in the place where such Borrower
keeps its equipment and/or inventory or its books and records, (3) the
establishment of any new or the discontinuance of any existing place of
business, and (4) the establishment of any new or the discontinuance of any
location where inventory, equipment or books and records are kept.
No Borrower will permit its equipment to be removed from its current location
or any of its inventory serving as Collateral to be so removed without the
Agent's prior consent, except for sales of inventory in the ordinary course
of business.
Without providing at least 30 days prior written notice to the Agent, no
Borrower will change its name in any respect or its mailing address or
organizational identification number (if it has one). If any Borrower does
not have an organizational identification number and obtains one after the
date of this Agreement, such Borrower will forthwith notify the Agent in
writing of such organizational identification number. No Borrower will
change its type of organization, jurisdiction of organization or other
legal structure without at least thirty (30) days' prior written notice to
the Agent.
Agent's Rights With Respect to Accounts, Chattel Paper, Instruments and General
Intangibles. With respect to any account, chattel paper, instrument and
general intangible that is Collateral hereunder, the Agent for the benefit
of the Banks shall have the right at any time and from time to time,
without notice to the Borrowers, to: (A) if there then exists an Unmatured
Event of Default or Event of Default, endorse in the name of any Borrower
all proceeds of the accounts, chattel paper, instruments and general
intangibles payable to such Borrower that come to the Banks; (B) upon the
occurrence of an Unmatured Event of Default or an Event of Default and
during the continuance thereof, notify purchasers under the Borrowers'
accounts, chattel paper, instruments and general intangibles that such
accounts, chattel paper, instruments and general intangibles have been
assigned to the Agent for the account of the Banks, (C) upon the occurrence
of an Event of Default, and during the continuance thereof, compromise,
extend, or renew any account, chattel paper, instrument or general
intangible of any Borrower or deal with the Borrowers' accounts, chattel
paper, instruments and general intangibles as the Agent may reasonably deem
advisable; (D) whether or not there then exists an Unmatured Event of
Default, to make exchanges, substitutions, or surrenders of Collateral; and
(E) if there exists an Event of Default, take control of any cash or
non-cash proceeds of any account, chattel paper, instrument, and/or general
intangibles which funds shall then be applied to the Loans pursuant hereto.
Accounts. With respect to each account:
Each Borrower represents that: (1) such account is not evidenced by a judgment,
an instrument or chattel paper or secured by a letter of credit (except (a)
such judgment as has been assigned to the Agent, (b) such instrument or
chattel paper as has been endorsed and delivered to the Agent and (c) such
letter of credit as has been assigned and delivered to the Agent and as to
which the issuer thereof has consented to such assignment) and represents a
bona fide completed transaction; (2) the amount thereof shown on such
Borrower's books and records and on any list, invoice or statement
furnished to the Agent is owing to such Borrower; (3) the title of such
Borrower to the account is absolute; (4) the account has not been
transferred to any other Person, and, at the time such account is created,
no Person except the Borrowers have any claim thereto or; (5) no partial
payment against any account has been made by anyone; and (6) no material
set-off or counter-claim to such account exists, and no agreement has been
made with any Person under which any material deduction or discount may be
claimed.
Each Borrower will immediately notify the Agent if any material account arises
out of contracts with the United States or any department, agency or
instrumentality thereof, furnish the Agent with copies of each such
contract and execute any instruments and take any steps reasonably required
by the Agent in order that all moneys due and to become due under any such
contract shall be assigned to the Agent for the account of the Banks and
notice given under the Federal Assignment of Claims Act.
Each Borrower will (1) upon the Agent's reasonable request, furnish to the Agent
copies, with such duplicate copies as Agent may request, of any invoice
applicable to any of its accounts; (2) inform the Agent immediately of the
rejection of any goods represented by any of its accounts, or any material
delay in delivery or performance by such Borrower or any claim made in
regard to any of its accounts in an amount greater than five percent (5%)
of the amount of the account which is the subject of such claim; (3) make
no material change in the payment terms of any of its accounts without the
prior written consent of the Agent; (4) furnish the Agent upon the Agent's
request with all information received by such Borrower affecting the
financial standing of any Purchaser; (5) ▇▇▇▇ such Borrower's records
concerning each of its accounts in a manner satisfactory to the Agent so as
to show that each such account has been assigned to the Agent; and (6) if
requested by the Agent, furnish the Agent with evidence satisfactory to the
Agent of the shipment and receipt of any goods and the performance of any
services represented by any of its accounts.
Letters of Credit, Chattel Paper and Instruments. Each Borrower represents and
warrants to the Agent and the Banks that it has delivered to the Agent and
covenants that it will deliver to the Agent promptly on receipt all
counterparts designated as "originals" of (A) letters of credit securing
its accounts, (B) chattel paper and (C) instruments now in its possession
or hereafter acquired, each properly assigned and/or endorsed over to the
Agent, which letters of credit, chattel paper and instruments shall be held
by the Agent as security hereunder, or, at the Agent's option, endorsed for
payment. Each Borrower shall remain solely responsible for the observance
and performance of all of such Borrower's covenants and obligations under
all of its chattel paper and instruments, and neither the Agent nor any of
the Banks shall be required to observe or perform any such covenants or
obligations. To the extent that any Collateral consists of electronic
chattel paper, the applicable Borrower shall cause the underlying chattel
paper to be "marked" within the meaning of Section 9-105 of the Uniform
Commercial Code (or successor section thereto). To the extent that any
Collateral consists of letter-of-credit rights, the applicable Borrower
shall cause the issuer of each underlying letter of credit to consent to
the assignment thereof to the Agent.
Equipment and Inventory. Each Borrower represents, warrants and agrees that
except for leased equipment (A) such Borrower is the absolute owner of its
inventory and equipment, subject only to the security interests created
hereby and those permitted under Section 6.4(A); and (B) each Borrower will
sell its inventory only in the ordinary course of business; and (C) if any
inventory is or becomes represented by a document, the Agent may require
that such document be in such form as to permit the Agent or anyone to whom
the Agent may negotiate the same to obtain delivery to it of the inventory
represented thereby; and (D) after the occurrence of an Unmatured Event of
Default or an Event of Default, (1) the Agent shall have the right to take
possession of inventory of such Borrower and such Borrower hereby assigns
to the Agent, for the benefit of the Banks, such Borrower's right of
stoppage in transit with respect to such inventory, (2) such Borrower will
repay the Agent promptly for all reasonable costs of transportation,
packing, storage and insurance of any such possession, together with
interest at the highest rate payable hereunder, at the time the Agent pays
such costs, and (3) such Borrower's liability to the Agent for such
repayment with interest shall be included in the Obligations.
Condition of Inventory. Each Borrower will immediately notify the Agent of any
event of deterioration, loss or depreciation of value of any substantial
portion of its inventory and the amount of such deterioration, loss or
depreciation.
Expenses of the Agent. The Borrowers will reimburse the Agent on demand for all
reasonable expenses (including the reasonable fees and expenses of legal
counsel for the Agent) in connection with the enforcement of the Banks'
rights to take possession of the Collateral and the proceeds thereof and to
hold, collect, render in compliance with applicable environmental laws and
regulations, prepare for sale, sell and dispose of the Collateral.
Notices. If notice of sale, disposition or other intended action by the Agent
with respect to the Collateral is required by the Uniform Commercial Code
or other applicable law, any notice thereof sent to the Borrower Agent at
its address specified herein or such other address of the Borrower Agent as
may from time to time be shown on the records of the Agent at least five
(5) days prior to such action, shall constitute reasonable notice to the
Borrowers.
Insurance; Discharge of Taxes, etc. The Agent shall have the right at any time
and from time to time, with or without notice to the Borrowers, if the
Borrowers fail to do so, (A) obtain insurance covering any of the
Collateral, (B) discharge taxes, liens, security interests or other
encumbrances at any time levied or placed on any of the Collateral and (C)
pay for the maintenance and preservation of any of the Collateral. The
Borrowers will reimburse the Agent, on demand, with interest at the
Adjusted Base Rate for any payment the Agent makes, or any expense the
Agent incurs under this authorization. Each Borrower assigns to the Agent,
for the account of the Banks, all right to receive the proceeds of
insurance covering the Collateral, directs any insurer to pay all such
proceeds directly to the Agent, for the account of the Banks, and
authorizes the Agent to endorse in the name of the Borrowers any draft for
such proceeds. After deducting from such proceeds the expenses, if any,
incurred by the Agent in the collection or handling thereof, the Agent may,
at its option or at the direction of the Banks, apply such proceeds to the
reduction of the Obligations in accordance with Section 2.9(C) hereof, or
permit or require each Borrower to use such money, or any part thereof, to
replace, repair, restore or rebuild the Collateral in a diligent and
expeditious manner with materials and workmanship of substantially the same
quality as existed before the loss, damage or destruction. To the extent
not used to replace, repair, restore or rebuild the Collateral, such
insurance proceeds shall be applied in accordance with Section 2.9(C)
hereof.
Waiver and Release by Borrower. Each Borrower (A) waives protest of all
commercial paper at any time held by the Agent on which such Borrower is in
any way liable, notice of nonpayment at maturity of any and all accounts of
such Borrower and, except where required hereby or by law, notice of action
taken by the Agent, and (B) releases the Agent and the Banks from all
claims for loss or damage caused by any failure to collect any account or
by any act or omission on the part of the Agent or its officers, agents and
employees, except gross negligence and willful misconduct.
Access to Inventory. The Borrowers shall permit the Agent's representatives to
have access to their respective inventory from time to time, as requested
by the Agent, for purposes of audit, examination, inspection, and appraisal
thereof and verification of the Borrowers' records pertaining thereto.
Except after the occurrence of an Unmatured Event of Default or an Event of
Default, the Agent shall give the Borrowers at least same day telephone
notice before exercising the rights granted in the preceding sentence and
such rights shall be exercised during normal business hours. Upon demand by
the Agent, after the occurrence and during the continuation of an Event of
Default, each Borrower shall assemble its inventory which constitutes
Collateral hereunder and make it available to the Agent at such Borrower's
place of business. At the request of the Agent, after the occurrence and
during the continuance of an Event of Default, each Borrower shall provide
warehousing space in its own premises to the Agent for the purpose of
taking inventory into the custody of the Agent without removal thereof from
such premises and will erect such structures and post such signs as the
Agent may require in order to place such inventory under the exclusive
control of the Agent.
Records and Reports. Each Borrower shall keep accurate and complete records of
its accounts (and the collection thereof), general intangibles, chattel
paper, instruments, documents and inventory and furnish the Agent such
information about its accounts, general intangibles, chattel paper,
instruments, documents, and inventory as the Agent may reasonably request.
Further Assurances. From time to time each Borrower will execute and deliver to
the Agent such additional instruments as Agent may reasonably request to
effectuate the purposes of this Agreement and to assure to the Agent, as
secured party, a first priority, perfected security interest in the
Collateral. Each Borrower hereby irrevocably appoints the Agent as such
Borrower's attorney-in-fact (A) to take any action the Agent deems
reasonably necessary to perfect or maintain perfection of any security
interest granted to the Agent herein or in connection herewith, including
the execution of any document on such Borrower's behalf, and (B) to take
any other action to effectuate the rights granted in this Article III,
which power of attorney is coupled with an interest and irrevocable until
all of the Obligations are paid in full. Until all of the Obligations are
paid in full, after notice to the Borrower Agent, the Agent may, at any
time and from time to time, send to any account debtor under any account a
verification form, make such calls or otherwise contact such account
debtors of any Borrower as are necessary or desirable, in the Agent's
reasonable discretion, to verify accounts, instruments, chattel paper
and/or general intangibles that are Collateral and the balance due.
Application of Proceeds of Collateral. Following an Event of Default all
proceeds of Collateral shall be applied in accordance with Section 2.9(C)
hereof.
Continuing Collateral. The Agent shall be under no obligation to proceed first
against any part of the Collateral before proceeding against any other part
of the Collateral. It is expressly agreed that all of the Collateral stands
as equal security for all Obligations and the Agent shall have the right to
proceed against or sell any and/or all of the Collateral in any order, or
simultaneously, as it, in its sole discretion, shall determine.
Investment Property and Deposit Accounts. At the Agent's request, if there is
any investment property or deposit accounts included as Collateral that can
be perfected by "control" through an account control agreement, the
applicable Borrower shall cause such an account control agreement, in form
and substance in each case satisfactory to the Agent, to be entered into
and delivered to the Agent.
Collateral In Possession of Third Parties. The Borrowers will not permit any
Collateral (except rental assets in the ordinary course of business) to be
in the possession of a third party without the Agent's prior written
consent, which may be conditioned on prior receipt of agreement(s) executed
by the third party.
Commercial Tort Claims. If any Borrower shall at any time hold or acquire a
commercial tort claim, such Borrower shall immediately notify the Agent in
a writing signed by such Borrower of the particulars thereof and grant to
the Agent in such writing a security interest therein and in the proceeds
thereof, all upon the terms of this Article III, with such writing to be in
form and substance satisfactory to the Agent.
Return of Inventory. No Borrower shall return any inventory to the supplier
thereof, except for damaged or unsalable inventory or otherwise in the
ordinary course of such Borrower's business. Without limiting the
generality of the foregoing, in the event any Borrower becomes a "debtor in
possession" as defined in 11 U.S.C. ss.1101 (or any successor thereto),
such Borrower agrees not to move pursuant to 11 U.S.C. ss.546 (or any
successor thereto) for permission to return goods to any creditor which
shipped such goods to such Borrower without the Agent's written consent and
each Borrower hereby waives any rights to return such inventory arising
under 11 U.S.C. ss.546(h), or any successor section thereto.
Defense of Agent's Rights. Each Borrower warrants and will defend the Agent's
right, title and security interest in and to the Collateral against the
claims of any Persons.
Cash Management. At any time that the Agent so requests, the Borrowers will work
with the Agent to set up such lock boxes and segregated accounts as the
Agent may request in order to better perfect the security interest created
hereunder in proceeds of the Collateral.
CONDITIONS OF LENDING
Conditions Precedent to the Loans. The obligation of each Bank to make the
initial Revolving Credit Advances and the obligation of the Agent to issue
any Letters of Credit is subject to the Agent having received, on or before
the day on which such Loans are to be made and such Letters of Credit are
to be issued, all of the following which shall be in form and substance
satisfactory to the Agent and its counsel and (except for the Notes) in
sufficient copies for each Bank:
A copy, certified in writing as of the date hereof by the Secretary or
Assistant Secretary of each Borrower, of (1) resolutions of the Board of
Directors, Management Committee, Members or other governing body of such
Borrower evidencing approval of this Agreement and the Notes and other
matters contemplated hereby and (2) each document evidencing any other
necessary corporate, limited liability company or other organizational
action and any required approvals from governmental authorities for each
Borrower with respect to this Agreement or the Notes;
Favorable opinions of counsel for each Borrower acceptable to the Agent dated
the date hereof in form and substance reasonably satisfactory to the Agent;
A certificate dated the date hereof by the Secretary or an Assistant
Secretary of each Borrower as to the names and signatures of the officers
of such Borrower authorized to sign this Agreement, the Notes and the other
documents or certificates of such Borrower to be executed and delivered
pursuant hereto. The Banks may conclusively rely on, and shall be protected
in acting upon, such certificate until it shall receive a further
certificate by the Secretary or an Assistant Secretary of such Borrower
amending the prior certificate;
This Agreement duly executed by the Borrowers;
The Notes duly executed by the Borrowers;
Payment by the Borrowers of all Fees then due;
Copies of the Bylaws or Operating Agreements of each Borrower, together with all
amendments thereto, certified as true, correct and complete by such
Borrower's Secretary or Assistant Secretary on behalf of such Borrower;
With respect to each Borrower, certificates dated within thirty (30) days of the
date hereof for United States jurisdictions and, as the Agent may require,
for jurisdictions outside the United States, issued by the Secretary of
State (or similar official) of its jurisdiction of incorporation or
formation and each jurisdiction in which such Borrower is qualified to do
business, stating that such Borrower is a corporation or limited liability
company duly incorporated or formed or authorized to do business, as the
case may be, and in good standing under the laws of such jurisdiction;
For each Borrower, a certificate dated the date of this Agreement and executed
by the chief executive officer, in each case on behalf of such Borrower,
confirming that (1) no Event of Default or Unmatured Event of Default has
occurred or is continuing as of the Closing Date, (2) each of the
representations and warranties made in this Agreement by such entity are
true and correct in all material respects as of the date of this Agreement
and of the Closing Date (or, to the extent any such representation or
warranty expressly relates to a specific date, as of such specific date),
(3) such entity has fully performed each and every covenant to be performed
by such Borrower on or prior to the Closing Date and, for covenants
contained in Sections 6.24 and 6.25, computations demonstrating compliance
with such covenants, (4) that such Borrower is "solvent" (as defined in
such certificate) after giving effect to these transactions, and (5) such
entity has satisfied each of the conditions set forth in this Article IV
(to the extent required to be satisfied by such entity on or prior to the
Closing Date);
The results of Uniform Commercial Code, judgment, and bankruptcy searches of
the jurisdictions listed in Schedule 3.4 showing no liens or judgments
against any Borrower or any of their assets which would violate Section
6.4;
A certificate of insurance evidencing property insurance, business
interruption coverage insurance, and workmen's compensation and commercial
general liability insurance, providing such level of coverage and otherwise
in form and substance reasonably satisfactory to Agent.
Each policy of insurance must be issued by an insurance company
reasonably satisfactory to the Agent, must not be in arrears as to the payment
of premiums, and must provide that it will not be terminated without at least
thirty (30) days prior written notice to the Agent and must name Agent as
mortgagee/loss payee or additional insured, as appropriate, for the account of
the Banks;
Financial Statements for the year ended December 31, 2001, internally-prepared
draft Interim Financial Statements as of March 31, 2002, and copies of all
reports delivered to the Securities and Exchange Commission since the
Existing Agreement;
Detailed projected financial statements prepared by MTI for the fiscal years
ending December 31, 2002-2003, reasonably acceptable to the Banks;
UCC-1 "in lieu" initial financing statements and/or UCC-3 financing statement
amendments for all jurisdictions requested by the Agent;
UCC-3 termination statements from parties holding liens which are not permitted
in accordance herewith;
The Subrogation and Contribution Agreement executed by each Borrower;
An executed Borrowing Base Certificate as of the most recent month-end
preceding the Closing Date, demonstrating the amount of availability under
the Credit Limit, with a summary of the accounts receivable and accounts
payable agings and inventory listing;
Originals of all of the Borrowers' instruments, chattel paper and letters of
credit (drawn on a financial institution other than the Banks), if any,
supporting any account, each properly endorsed and/or assigned to the
Agent, and, in the case of each such letter of credit, together with any
necessary consent by the issuer thereof;
Evidence that Wachovia Bank is each Borrower's principal bank of deposit and
account;
An acknowledgement of confession of judgment executed by each Borrower; and
such other documents as may be reasonably requested by the Agent, the Banks or
its or their counsel.
Conditions Precedent to All Revolving Credit Advances. The obligation of each
Bank to disburse each Loan or issue any Letter of Credit is subject to the
further conditions precedent that:
The representations and warranties contained herein shall be accurate on and as
of the date of such disbursement or issuance as though made on and as of
such date (or, to the extent any such representation or warranty expressly
relates to a specific date, as of such specific date) except for changes
permitted hereby or in writing by the Agent for the account of the Banks;
No Event of Default or Unmatured Event of Default shall have occurred and be
continuing or will result from the making of such disbursement or issuance;
and
Each Borrowing Base Certificate furnished to the Agent hereunder shall be
correct and accurate.
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Agent and each Bank as
follows:
Existence. Each Borrower is a corporation or limited liability company duly
organized, validly existing and in good standing under the laws of its
state or other jurisdiction of organization. Each Borrower has all
requisite power and authority, corporate and otherwise, to conduct its
business and to own its properties and is duly qualified as a foreign
corporation or limited liability company in good standing in all
jurisdictions in which its failure so to qualify could reasonably be
expected to have a Material Adverse Effect.
Authorization. The execution, delivery and performance by each Borrower of each
Loan Document has been duly authorized by all necessary corporate or
limited liability company action, and does not and will not violate any
current provision of any government regulation or statute, or of the
charter or by-laws or other organizational documents of such Borrower or
result in a breach of or constitute a default under any instrument or other
material agreement to which such Borrower is a party or by which it or its
properties are bound or affected, except for any such breach or default
that would not, either individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Validity. Each Loan Document to which such Borrower is a party constitutes valid
and legally binding obligations of such Borrower, enforceable in accordance
with their respective terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and subject to the availability of equitable
remedies.
Financial Information. The Consolidated balance sheet and statements of cash
flows, income and changes in shareholder's equity of MTI and its
Subsidiaries as of and for the year ended December 31, 2001 audited by
PriceWaterhouseCoopers, and internally-prepared draft Interim Financial
Statements for the period ended March 31, 2002, copies of all of which have
been furnished to the Banks, are accurate, and present fairly the financial
positions, the results of operations and cash flows at such dates and for
the periods ended on such dates, all in accordance with GAAP. Since
December 31, 2001 there has been no material adverse change to the
financial condition, business operations or prospects of MTI and its
Subsidiaries taken as a whole either in such financial positions or in such
results of operations except to the extent, if any, reflected in the
internally-prepared draft Interim Financial Statements referred to above.
Litigation. There are no actions, suits or proceedings pending or, to the
knowledge of the Borrowers, threatened against any Borrower, or any of
their respective properties before any court or governmental department,
commission, board, bureau, agency or instrumentality (domestic or foreign)
which if adversely determined could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
Contingent Liabilities. There are on the date hereof no suretyship agreements,
guarantees or other contingent liabilities of any Borrower in respect of
any Indebtedness or any other material contingent liabilities known to any
Borrower other than (A) guarantees and other contingent liabilities that
are disclosed in the financial statements mentioned in Section 5.4 or in
Schedule 5.15, and (B) the joint and several obligations of the Borrowers
hereunder.
Taxes. Each Borrower has filed all tax returns and reports required to be filed
before the date of this Agreement and has paid all taxes, assessments and
charges imposed upon it or its property, or that it is required to withhold
and pay over, to the extent that they were required to be paid before the
date of this Agreement except where an extension for filing is available
and such Borrower has taken the necessary steps to qualify for such
extension, where such taxes, assessments or charges are being contested in
good faith and by proper proceedings and against which adequate reserves
are being maintained in accordance with GAAP or where a failure to pay such
taxes, assessments or charges or file such returns or reports would not
reasonably be expected to have a Material Adverse Effect.
Encumbrances. Except as disclosed in the lien searches conducted pursuant
hereto, or permitted pursuant to Section 6.4, none of the properties or
assets of any Borrower are subject to any lien, encumbrance or security
interest.
Consents. No authorization, consent, approval, license, exemption by or filing
or registration with any court or governmental department, commission,
board (including the Board of Governors of the Federal Reserve System),
bureau, agency or instrumentality, domestic or foreign, is or will be
necessary for the valid execution, delivery or performance by any Borrower
of this Agreement or the Notes. Each Borrower has obtained all Governmental
Approvals necessary for the conduct of such Borrower's business, and the
conduct of such Borrower's business is not and has not been in violation of
any such Governmental Approval or any applicable federal or state law, rule
or regulation, except for any Governmental Approval which if not obtained,
or any violation which if having occurred, could not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse
Effect.
ERISA. All Defined Benefit Pension Plans and Defined Contribution Plans
maintained by any of the Borrowers and the members of their Controlled
Group meet the minimum funding standards of ss.412 of the Code, the
regulations thereunder and ss.302 of ERISA without regard to any funding
waiver. No Prohibited Transaction that would have a Material Adverse Effect
has occurred with respect to any Plan. No Reportable Event that would have
a Material Adverse Effect has occurred with respect to any Defined Benefit
Pension Plan. No trust was established in connection with any such Defined
Benefit Pension Plan pursuant to ss.4049 of ERISA (as in effect on December
17, 1987) and no liabilities have been asserted against any Borrower or any
member of its Controlled Group in connection with any such Defined Benefit
Pension Plan by the PBGC or by a trustee appointed pursuant to ss.4042(b)
or (c) of ERISA, and no lien has been attached and neither the PBGC nor the
Internal Revenue Service has threatened to attach a lien on any property of
any Borrower or any member of its Controlled Group as a result of any
failure to comply with the Code or the Treasury regulations thereunder or
ERISA. All Plans maintained by any Borrower or any Subsidiary of any
Borrower comply (A) in operation with the applicable requirements of the
Code and the regulations thereunder and ERISA, and (B) in form with those
requirements of the Code and the regulations thereunder and ERISA which
must be met and reflected in Plan documents on the date hereof, except
where the failure so to comply would not have a Material Adverse Effect. No
Borrower or any member of its Controlled Group has incurred any Withdrawal
Liabilities that would have a Material Adverse Effect.
Ownership. The Borrowers have title to, or valid leasehold interests in, all of
their properties and assets, real and personal, including the properties
and assets and leasehold interests reflected on the financial statements
referred to in Section 5.4 hereof except for (A) properties and assets
reflected therein and disposed of as inventory in the ordinary course of
business and (B) other property reflected therein, the disposal of which
(individually or in the aggregate) would not reasonably be expected to have
a Material Adverse Effect.
Subsidiaries and Ownership of Stock. Schedule 5.12 is a complete and accurate
list of the entities comprising the Borrowers, and shows (A) the
jurisdiction of incorporation or organization of each such entity, (B) any
Person owning more than 5% of the outstanding stock of MTI, (C) the chief
executive office of each Borrower, and (D) the organizational
identification number, if any, of each such entity. All of the outstanding
capital stock or other ownership interests of each Borrower has been
validly issued and is fully paid and nonassessable. MTI owns directly or
indirectly all of the outstanding capital stock or other ownership
interests of the other Borrowers, free and clear of all liens, claims or
encumbrances. No Borrower has any Subsidiaries except for those Persons
shown on Schedule 5.12.
Margin Stock; Regulation U, Etc. No Borrower engages in the business of making
loans for the purchase of Margin Stock. The Loans will not constitute a
violation of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System. No part of the proceeds of the Loans will be used
for any purposes which violate or are inconsistent with the provisions of
any of such regulations.
Environmental Matters. Each Borrower is in possession of and in compliance with
all required permits and Environmental Laws relating to the discharge or
release of liquids, gases or solids into the air, water, and soil, except
for any such permit that, if not obtained, would not reasonably be expected
to have, either individually or in the aggregate, a Material Adverse
Effect. No Borrower refines, processes, generates, stores, recycles,
transports, disposes of, or releases into the environment any "hazardous
substance" as that term is defined under Section 101(14) of CERCLA or any
hazardous or toxic substances as those terms are defined by the provisions
of any state or local environmental statute or regulation, except to the
extent such Borrower does so in material compliance with all applicable
Environmental Laws. No Borrower has received: (A) written or, to its
knowledge, oral notice from any governmental agency that it is a
potentially responsible party in any proceeding under CERCLA or any similar
state or local environmental statute or regulation, or (B) any written or,
to its knowledge oral, notice of violation, citation, complaint, request
for information, order, directive, compliance schedule, notice of claim,
proceeding or litigation from any party concerning such entity's compliance
with any Environmental Law which is presently outstanding or unresolved,
except for any notice or other communication relating to any such
non-compliance or proceeding that could not reasonably be expected to have,
either individually or in the aggregate, a Material Adverse Effect.
Debt and Guarantees. Except as set forth in Schedule 5.15 hereto, no Borrower
has guaranteed the payment or performance of the debts or obligations of
any other Person except for the guaranty of checks or other documents for
collection in the ordinary course of business.
Credit Arrangements. Except as set forth on Schedule 5.16 hereto, there are no
credit agreements, indentures, securities, purchase agreements, guaranties,
capital leases, and other investments, agreements and arrangements
presently in effect providing for or relating to extensions of credit for
Funded Debt (including agreements and arrangements for the issuance of any
letters of credit or for acceptance financing) in respect of which any
Borrower is in any manner directly or contingently obligated, excluding
therefrom any single agreement relating to the purchase of the machinery,
equipment, goods and supplies made in the ordinary course of business of
less than Two Hundred Fifty Thousand ($250,000); and, with respect to each
credit disclosed on Schedule 5.16 hereto, the maximum principal or face
amount of the credit in question as of the date hereof is therein correctly
stated.
Licenses, Permits, Etc. Each Borrower is in possession of and operating in
compliance with all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders required for the conduct of
its business now conducted, and all of them are valid and in full force and
effect, except to the extent the failure to possess or be in compliance
with any of the foregoing, or for any of the foregoing not to be valid and
in full force and effect, could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
Compliance with Laws. Each Borrower is in compliance with all laws, rules,
regulations, and orders of all Federal, state and governmental agencies and
courts (domestic and foreign) which are applicable to it, to the conduct of
its business, or to the ownership and use of its properties, except for any
such non-compliances that could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
Labor Matters. There are no existing, or to the best of the Borrowers'
knowledge, threatened or contemplated, strikes, slowdowns, picketing or
work stoppages by any employees against any Borrower, any lockouts by any
Borrower of any of its employees or any other occurrence, event or
condition of a similar character affecting or which may affect any Borrower
that could reasonably be expected to have a Material Adverse Effect.
Outstanding Judgments or Orders. Each Borrower has satisfied all judgments
against it that could reasonably be expected to have a Material Adverse
Effect and no Borrower is in default with respect to any judgment, writ,
injunction, decree, material rule or regulation of any court, arbitrator or
commission, board bureau, agency or instrumentality, domestic or foreign
that could reasonably be expected to have a Material Adverse Effect.
No Defaults on Other Agreements. No Borrower is in default in the performance,
observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement or instrument to which it is a party,
except for any such default that could not reasonably be expected to have a
Material Adverse Effect.
Public Utility Holding Company Act. No Borrower is a public utility holding
company within the meaning of the Public Utility Holding Company Act of
1935, as amended.
Patents. Each Borrower's trademarks, servicemarks and patents needed for its
operations are valid and enforceable on the date hereof.
Names Used by Borrowers. (i) The actual name of each Borrower is the name set
forth in the preamble above; (ii) no Borrower has used any name other than
that stated in the preamble hereto or as set forth on Schedule 5.24 hereto
for the preceding five years; and (iii) no entity has merged into any
Borrower or been acquired by any Borrower within the past five years except
as set forth on Schedule 5.24 hereto.
Full Disclosure. No representation or warranty by any Borrower in this Agreement
and no information in any statement, certificate, schedule or other
document furnished or to be furnished to the Agent or any Bank pursuant
hereto, contains or will contain any untrue statement of a material fact,
or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading. Except as disclosed
in this Agreement and the Schedules attached hereto, there is no fact known
to any Borrower which on the date hereof it has not disclosed to the Agent
or any Bank in writing which has had, or could reasonably be expected to
have, a Material Adverse Effect.
COVENANTS OF THE BORROWERS
So long as any amount due Agent or any Bank hereunder remains
outstanding, or any Bank shall have any Commitment hereunder, unless the Agent
and each Bank shall otherwise consent in writing, each Borrower agrees that:
Financial Statements.
The Borrowers will furnish to the Agent not later than ninety (90) days after
the end of each year, Financial Statements as of and for the twelve (12)
months ending the last day of such year, the Consolidated statements
therein contained to be audited and unqualifiedly certified by
PriceWaterhouseCoopers or other independent certified public accountants of
nationally recognized standing or otherwise reasonably satisfactory to the
Banks.
In addition, the Borrowers will furnish to the Agent, within 45 days of the
close of each fiscal quarter other than the last fiscal quarter of each
fiscal year, Interim Financial Statements for such fiscal quarter and for
the portion of the fiscal year then ended.
In addition, the Borrowers will furnish to the Agent, within 30 days of the
end of each month, (1) Interim Financial Statements for such month and for
the portion of the fiscal year then ended; (2) a completed Borrowing Base
Certificate as of the end of such month with a summary of the accounts
receivable and accounts payable agings and inventory listing; and (3) a
report for the aging and values of the Borrowers' accounts receivable
showing the aging of aggregate gross amounts owed by each Purchaser and
credit owed to each Purchaser, a report for the aging and value of the
Borrowers' accounts payable showing the aging of aggregate amounts owed to
each supplier and a report of the inventory of the Borrowers showing the
aggregate amount of "slow moving", "special" and "discontinued" items to
the extent such categories apply, all of which shall support the
above-mentioned summary and shall be stated in such form and with such
detail as the Agent may reasonably require.
With all Financial Statements and Interim Financial Statements, the Borrowers
will provide to the Agent a certificate of the chief financial officer of
MTI, which certificate shall state that such Financial Statements or
Interim Financial Statements are complete and correct in all material
respects and prepared in accordance with GAAP, subject only to usual
year-end adjustments and the absence of footnotes in the case of Interim
Financial Statements. The Borrowers shall furnish to the Agent together
with all Financial Statements and Interim Financial Statements, a
certificate executed by the chief financial officer of MTI, which
certificate shall include all calculations (in reasonable detail) necessary
to determine compliance with Sections 6.24 or 6.25 (as appropriate for each
Financial Statement or Interim Financial Statement), which shall state that
the signer has reviewed the terms of this Agreement and has made, or caused
to be made under his supervision, a review in reasonable detail of the
transactions and condition of the Borrowers during the accounting period
covered by such Financial Statements or Interim Financial Statements and
that such review has not disclosed the existence during or at the end of
such accounting period, and does not have knowledge of the existence as at
the date of the certificate, of any condition or event which constitutes an
Event of Default or Unmatured Event of Default or if any such condition or
event existed or exists, specifying the nature and period of existence
thereof and what action(s) the Borrowers have taken, are taking and propose
to take with respect thereto. A compliance certificate substantially in the
form of Exhibit 6.1 hereto executed by the chief financial officer of MTI
shall be delivered to the Agent at the same time as all Financial
Statements and Interim Financial Statements are delivered hereunder.
Promptly upon receipt thereof, the Borrowers shall deliver to the Agent copies
of any management letters or other reports submitted to the Borrowers by
independent certified public accountants in connection with the examination
of the Financial Statements.
Insurance. Each Borrower will maintain insurance with financially sound and
reputable insurance companies or associations in such amounts and covering
such risks as are usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which
such Borrower operates or owns such properties. Each Borrower shall cause
each insurance policy issued in connection herewith to provide, and the
insurer issuing such policy to certify to the Agent that (a) the Agent will
be named as mortgagee/loss payee and additional insured, as appropriate,
under each such insurance policy; (b) if such insurance be proposed to be
cancelled or materially changed for any reason whatsoever, such insurer
will promptly notify the Agent and such cancellation or change shall not be
effective as to the Agent for at least thirty (30) days after receipt by
the Agent of such notice, unless the effect of such change is to extend or
increase coverage under the policy; and (c) the Agent will have the right
(but no obligation) at its election to remedy any default in the payment of
premiums within thirty (30) days of notice from the insurer of such
default.
Taxes. Each Borrower will pay all taxes, assessments and charges imposed upon it
or its property or that it is required to withhold and pay over when due,
except where such taxes, assessments and charges are contested in good
faith and where adequate reserves have been set aside in accordance with
GAAP, or where the failure to pay such taxes, assessments or charges when
due could not reasonably be expected to cause, individually or in the
aggregate, a Material Adverse Effect.
Encumbrances.
No Borrower will create, incur, assume or suffer to exist any mortgage,
pledge, lien, security interest or other encumbrance of any kind ("Lien")
upon or in, any of its property or assets, including, without limitation,
patents, trademarks, copyrights or any other general intangible except for
(1) liens for taxes not yet delinquent or being contested in good faith and
by appropriate proceedings, (2) liens solely securing the performance of
bids, tender contracts, surety and appeal bonds, or similar obligations,
arising in the ordinary course of business, provided that the Borrowers
remain in compliance with the terms of such obligations, (3) liens in
connection with workmen's or worker's compensation, unemployment insurance
or other social security obligations, (4) mechanic's, materialman's,
landlord's, carrier's, or other similar liens arising in the ordinary
course of business with respect to obligations that are not due, or which
are being contested diligently, in good faith and by appropriate
proceedings, provided that (a) such proceedings have the effect of staying
execution on such liens, and (b) adequate reserves have been set aside or
the obligation being contested has been bonded against, (5) the
encumbrances disclosed pursuant to Section 5.8 hereof; and (6) purchase
money liens on any asset hereinafter acquired including the assumption of
any such lien on assets existing at the time of such acquisition or at the
time of acquisition of the owner of such assets, any lien incurred in
connection with any conditional sale or other title retention agreement, a
capital lease, or construction loans or permanent financing for new
construction; provided that (a) any property subject to any of the
foregoing is acquired by a Borrower in the ordinary course of its business
and the lien on any such property is created contemporaneously with such
acquisition or in accordance with the construction financing or permanent
financing of a newly constructed facility or is assumed in connection with
such acquisition; (b) the obligation secured by any lien so created,
assumed or existing shall not exceed one hundred percent (100%) of the
lesser of cost or fair market value as of the time of acquisition of the
property covered thereby to the Borrower acquiring the same; (c) each such
lien shall attach only to the asset so acquired and fixed improvements
thereon; and (d) the obligation so secured shall not exceed in any case
Five Hundred Thousand Dollars ($500,000) or in the aggregate Two Million
Dollars ($2,000,000) at any one time outstanding.
No Borrower will agree with any Person to restrict its ability to grant
mortgages, pledges, liens, or other encumbrances upon, or security
interests in, any of its property or assets to the Agent and/or the Banks.
No Lien on any asset or property of any Borrower shall be of equal or higher
priority than the Liens of the Agent hereunder, except Liens expressly
permitted under Section 6.4(A) (6) above and except to the extent that
Liens expressly permitted under Section 6.4(A)(1) - (5) may be granted
statutory priority irrespective of the chronological order of perfection.
Compliance with Laws. Each Borrower will comply with all laws and regulations
applicable to it in the operation of its business, except to the extent any
such non-compliance could not reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect.
Inspection by the Agent. Each Borrower will permit representatives of the Agent,
at the request of any Bank to inspect the property and books and records of
such Borrower and to make extracts therefrom and to discuss the affairs of
each Borrower with its officers, directors, employees and accountants at
all reasonable times during normal business hours and, except after the
occurrence of an Event of Default, upon reasonable prior notice from the
Agent. After the occurrence and during the continuance of an Event of
Default, the Borrowers agree to reimburse the Agent for all reasonable
out-of-pocket costs and expenses incurred in connection with any such
inspection. In addition to the foregoing, the Borrowers agree that the
Agent or its agents may enter upon the premises of the Borrowers at any
time and from time to time for the purpose of enabling the Agent's auditors
to conduct periodic field examinations at the Borrowers' expense. Except
after the occurrence of an Unmatured Event of Default or an Event of
Default, the Agent shall give the Borrowers at least same day telephone
notice before exercising the rights granted in the preceding sentence and
such rights shall be exercised during normal business hours. The frequency
of such periodic field examinations shall be at the sole discretion of the
Agent.
Reports. The Borrowers will furnish to the Agent:
As soon as possible after any Borrower has knowledge of the occurrence of any
Event of Default or Unmatured Event of Default, a written statement by the
chief executive or chief financial officer of such Borrower on behalf of
such Borrower setting forth details of such Event of Default or Unmatured
Event of Default, stating whether or not the same is continuing and, if so,
the action(s) that such Borrower proposes to take with respect thereto;
Immediately after receiving notice thereof, notice in writing of all actions,
suits and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign
if an adverse result thereof could reasonably be expected to have a
Material Adverse Effect;
As soon as practicable after any Borrower has knowledge of the occurrence of a
change in the business, properties or the operations and condition
(financial or otherwise) of such Borrower that such Borrower considers
could reasonably be expected to have a Material Adverse Effect, a statement
by such officer setting forth details of such change and the action(s) that
the Borrowers propose to take with respect thereto;
Simultaneously with the filing thereof, the Borrowers shall deliver to the Agent
copies of all notices required by law or regulation to be filed, and all
reports, registrations and requests for interpretive letters or rulings
filed, with the Securities and Exchange Commission;
Annually, within 90 days after the end of each Fiscal Year of MTI, the Borrowers
will furnish to the Agent an annual operating budget for MTI and its
Subsidiaries on a Consolidated Basis; and
Such other information respecting the business, properties, condition and
operations (financial or otherwise) of each Borrower as the Agent may at
any time and from time to time reasonably request be furnished to it.
ERISA.
Each Borrower and all of its Subsidiaries will comply in all material respects
with the applicable provisions of ERISA and the Code and the regulations
thereunder with respect to any Plan except where the failure to so comply
could not reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect.
Each Borrower will cause to be made all contributions required to avoid any
accumulated funding deficiency (as defined in ss.412(a) of the Code and the
regulations thereunder and ss.302(a) of ERISA) with respect to any pension
plan (as defined in ss.3(2) of ERISA) which is subject to Part 3 of
Subtitle B of Title I of ERISA or Section 412 of the Code and the
regulations thereunder and which is maintained by a Borrower or any member
of its Controlled Group.
As soon as practicable (and in any event within five days) after any Borrower
has reason to know (1) that any Reportable Event has occurred with respect
to any Defined Benefit Pension Plan maintained by a Borrower or any member
of its Controlled Group, (2) that any Defined Benefit Pension Plan
maintained by a Borrower or any member of its Controlled Group is to be
terminated in a "distress termination" (within the meaning of ss.4041(c) of
ERISA), (3) that the PBGC has instituted or will institute proceedings
under Title IV of ERISA to terminate any Defined Benefit Pension Plan
maintained by a Borrower or any member of its Controlled Group, (4) that a
Borrower has incurred Withdrawal Liability from a Multiemployer Plan
maintained by it or any member of its Controlled Group which is likely to
have a Material Adverse Effect, or (5) that any Multiemployer Plan to which
a Borrower or any member of its Controlled Group has made contributions is
in "reorganization" (within the meaning of ss.4241 of ERISA), such Borrower
will furnish a statement to the Agent setting forth the details of such
Reportable Event, distress termination, termination proceedings, Withdrawal
Liability, or "reorganization" (within the meaning of ss.4241 of ERISA),
and the action that the Borrowers propose to take with respect thereto,
together with a copy of any notice of such Reportable Event or distress
termination given to the PBGC, or a copy of any notice of termination
proceedings, Withdrawal Liability, or "reorganization" (within the meaning
of ss.4241 of ERISA) received by a Borrower or any member of its Controlled
Group.
Each Borrower will furnish to the Agent as soon as possible after receipt
thereof a copy of any notice that a Borrower or any member of its
Controlled Group receives from the PBGC, the Internal Revenue Service, the
Department of Labor, any other governmental entity or from the sponsor of
any Multiemployer Plan that sets forth or proposes any action to be taken
or determination made by the PBGC, the Internal Revenue Service, the
Department of Labor, any other governmental entity or the sponsor of any
Multiemployer Plan with respect to any Plan or Multiemployer Plan, which is
likely to have a Material Adverse Effect.
Each Borrower will promptly notify the Agent of any material taxes, penalties,
interest charges and other financial obligations that have been assessed or
otherwise imposed, or that such Borrower has reason to believe may be
assessed or otherwise imposed, against any Borrower or any member of its
Controlled Group by the Internal Revenue Service, the PBGC, the Department
of Labor or any other governmental entity with respect to any Plan or
Multiemployer Plan, that is likely to have a Material Adverse Effect.
Each Borrower will promptly notify the Agent of the adoption of any Plan or any
obligation to contribute to any Multiemployer Plan by any Borrower or any
member of its Controlled Group if the potential liability thereunder is
likely to have a Material Adverse Effect.
No Borrower will withdraw, or permit any member of its Controlled Group to
withdraw, from any Multiemployer Plan to which any of them now or hereafter
contribute if the Withdrawal Liability which would thereupon be incurred
and the payments thereupon required over the time period required could
have a Material Adverse Effect.
No Borrower will fail to make required minimum contributions, or permit any
member of its Controlled Group to fail to make required minimum
contributions, with respect to a Defined Benefit Pension Plan, resulting in
a lien (as provided in the Code or ss.302(f) of ERISA) against any Borrower
or any member of its Controlled Group.
No Borrower will permit the adoption of a plan amendment which results in
significant underfunding (as defined in ss.307 of ERISA) of a Defined
Benefit Pension Plan which requires such Borrower or any member of its
Controlled Group to provide security.
Without the written consent of the Agent, Borrower will not acquire or permit
the acquisition by any other member of its Controlled Group of any trade or
business which maintains a Defined Benefit Plan (1) with any "amount of
unfunded benefit liabilities" (as defined in ss.4001(a)(18) of ERISA) if
the potential liability from the termination of such Plan is likely to have
a Material Adverse Effect, or (2) with any "accumulated funding deficiency"
(as defined in ss.412(a) of the Code), whether or not waived.
Environmental Matters.
Each Borrower will obtain and comply with all required permits, licenses,
registrations, and approvals relating to the discharge or release of
liquids, gases or solids into the environment; and to the extent that such
are applicable to the operation of its business, each Borrower will comply
with all laws, rules, regulations and governmental orders and directives
relating to the generation, treatment, storage, transportation, disposal
and release into the environment and cleanup of any "hazardous substance"
as that term is defined under Section 101(14) of CERCLA, or any hazardous
or toxic substances as defined by the provisions of any state or local
environmental statute or regulation at all premises owned or operated by
such Borrower; in each case, to the extent non-compliance therewith could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.
Each Borrower will notify the Agent in writing of the receipt by it of (1) any
written notice from any governmental agency that it is a potentially
responsible party in any proceeding under CERCLA or any similar state or
local environmental statute or regulation, (2) any written notice of any
claim, proceeding, litigation, order, directive, citation, or request for
information concerning its compliance with the Environmental Laws, (3)
written notice of any alleged violation of the Environmental Laws, or (4)
any information known to it concerning any potentially materially adverse
environmental condition on, above, or beneath its premises, including but
not limited to any spilling, leaking, discharge, release, or threat of
release of any hazardous or toxic waste or substance; in each case, to the
extent such notice or information relates to an event or circumstance that
has had, or could reasonably be expected to have, a Material Adverse
Effect.
Change of Business. No Borrower will make any material change in the lines of
business as conducted by it at the date hereof, meaning no Borrower will
enter into any new business unrelated to that conducted by it at the date
hereof.
Regulation U. No Borrower will: (A) use the proceeds of the Loans to purchase or
carry any Margin Stock; (B) engage in the business of making loans for the
purchase of Margin Stock; or (C) purchase or carry Margin Stock in a manner
that would result in a violation of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
Disposal of Assets. No Borrower will dispose of any asset except for the sale of
inventory in the ordinary course of business and the sale or other
disposition of obsolete or worn-out equipment.
Loans, Investments, and Contingent Liabilities. No Borrower will (A) become
liable for the obligation of anyone except by endorsement of negotiable
instruments for deposit or collection in the usual course of business and
except for the joint and several obligations of the Borrowers hereunder, or
(B) make any loan or Investment except for (1) Investments in cash or Cash
Equivalents, (2) loans or Investments in Borrowers existing on the date
hereof or (3) the loans to Showcase Manufacturing Corporation as described
on Schedule 5.25 and other similar loans to manufacturers for DMS in an
aggregate amount not exceed $800,000 at any one time outstanding.
Maintenance of Property. Each Borrower will maintain all of its property in good
condition and repair, ordinary wear and tear excepted, and keep all of its
patents, trademarks, copyrights, licenses, and permits which are of more
than nominal value in full force and effect.
Transactions with Affiliates and Subsidiaries. No Borrower will enter into any
transaction with any officer, director or shareholder of any Borrower or
any Affiliate or Subsidiary of any Borrower for less than full value or on
terms or conditions less favorable to such Borrower in any material respect
than could be obtained in an arm's length transaction with a third party.
Restriction on Acquisitions; Merger; Corporate Structure. No Borrower shall
create or acquire, or permit a Subsidiary to create or acquire, any new
Subsidiary, or acquire, or permit a Subsidiary to acquire, all or a
substantial portion of the assets or securities of any other Person, or
assume or agree, or permit a Subsidiary to assume or agree, to merge or
consolidate with any Person or discharge the liabilities or obligations of
any other Person, or agree or permit a Subsidiary to agree to do any of the
foregoing; except that, so long as no Unmatured Event of Default or Event
of Default exists or would result therefrom:
any Borrower may merge with one or more other Borrowers, any Borrower may
consolidate with one or more other Borrowers or may merge or consolidate
with one or more Subsidiaries of any Borrower, if, in any such case, the
resulting or surviving corporation (if not already a Borrower) becomes a
Borrower, provided that if such merger or consolidation involves MTI, MTI
shall be the resulting or surviving corporation; and the security interests
in all collateral shall remain perfected and first priority; and
any Subsidiary of a Borrower may merge or consolidate with one or more other
Subsidiaries of a Borrower.
Dividends and Distributions. No Borrower shall be entitled to make or declare
dividends upon any of its capital stock or return any capital to any of its
shareholders (except to a Borrower), or make or declare any other payment
or distribution to its shareholders (including those relating to share
repurchases or redemptions) (except to a Borrower) in their capacity as
such, except that MTI may repurchase its shares of capital stock if the
aggregate consideration therefor, after the date of this Agreement, does
not exceed $250,000.
Other Indebtedness. No Borrower will incur or otherwise permit to exist any
Indebtedness, whether as borrower or guarantor, except (A) Indebtedness
incurred hereunder, (B) Indebtedness listed on Schedule 5.16 existing as of
the date hereof, (C) purchase money Indebtedness permitted under Section
6.4(A)(6), (D) Subordinated Debt that is incurred by MTI in favor of its
owners/principals provided that the incurrence of such Subordinated Debt
does not cause or create an Event of Default, and (E) any obligations under
or arising out of Swap Agreements that have been or will be entered into
with any Bank from time to time consistent with the terms of this
Agreement.
Licenses, Permits. Each Borrower will maintain the validity, force and effect
of, and operate in compliance with, all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates and orders required
for the conduct of its businesses, except to the extent non-compliance with
the foregoing could not reasonably be expected to have, either individually
or in the aggregate, a Material Adverse Effect.
Fiscal Year. Each Borrower shall maintain a fiscal year ending on December 31.
Banking Relationships. The Borrowers shall maintain the Agent as their principal
bank of deposit and account.
Ownership of Borrowers Other than MTI. MTI will at all times directly or
indirectly own 100% of the capital stock of the other Borrowers in
existence on the Closing Date.
RICO. No Borrower shall engage in any conduct or take or fail to take any action
which will, or would, under the facts and circumstances relative thereto,
violate RICO.
Minimum Tangible Net Worth. MTI will maintain at the end of each fiscal quarter,
commencing the fiscal quarter ending March 31, 2002, consolidated Tangible
Net Worth in an amount not less than $7,800,000. Such minimum Tangible Net
Worth shall increase from time to time from and after the Closing Date as
follows: (A) annually on each March 31, commencing March 31, 2003, by 50%
of MTI's cumulative consolidated net income for the fiscal year ending
December 31, 2002 and each fiscal year thereafter; (B) by an amount equal
to 100% of the net proceeds of each equity offering of MTI upon receipt
thereof; and (C) by an amount equal to 100% of the net proceeds of the
issuance of Subordinated Debt by MTI upon receipt thereof. For purposes of
determining the required minimum as aforesaid (a) cumulative consolidated
net income shall include consolidated net income for entire fiscal years
only and shall be determined by reference to the financial statements
delivered under Section 6.1, (b) a consolidated net loss during any period
shall be deemed to be consolidated net income in the amount of zero, and
(c) MTI will be permitted to exclude up to a maximum of $1,000,000 in the
aggregate of new cash equity contributions under clause (B) above.
Fixed Charge Coverage Ratio. MTI and its Subsidiaries, on a consolidated basis,
shall not allow the ratio of EBITDA plus expenses for the rental of real or
personal property to Fixed Charges, to be less than 1.1:1.0 for:
the fiscal quarter ended March 31, 2002;
the two fiscal quarter period ending June 30, 2002;
the three fiscal quarter period ending September 30, 2002; and
any period of four fiscal quarters, commencing the four fiscal quarter period
ending December 31, 2002 and continuing each four fiscal quarter period
thereafter.
For purposes of calculating the foregoing ratio, MTI shall be permitted to add
to EBITDA an amount equal to the new cash equity contributions received during
the measurement period, up to a maximum of $1,000,000 in the aggregate for all
measurement periods.
Subordinated Debt. No Borrower will effect or permit any change in or amendment
to any document or instrument pertaining to the subordination, terms of
payment or required prepayments of any Subordinated Debt, or effect or
permit any change in or amendment to any document or instrument pertaining
to the covenants or events of default of any Subordinated Debt, in each
case without the prior written consent of the Agent in its sole discretion.
DEFAULT
Events of Default. Each of the following shall be an event of default ("Event
of Default"):
(i) if the Borrowers shall fail to pay when due any principal of the Loans or
any interest on the Loans, or (ii) if the Borrower shall fail to pay any
Fee or any other amount owing hereunder within 3 Business Days of written
notice by facsimile or overnight mail by the Agent to the Borrower Agent;
if any representation or warranty made or deemed made by any of the Borrowers
in this Agreement, or in any certificate, agreement, instrument, statement
or report required hereby or made, or delivered or deemed delivered
pursuant hereto or in connection herewith, shall prove to have been
incorrect in any material respect as of the date on which it is made,
deemed made or reaffirmed;
(i) if any Borrower (1) shall fail to pay any Indebtedness in a principal
amount of $250,000 or greater owing by it, or any interest or premium
thereon, when due, whether such Indebtedness shall become due by scheduled
maturity, by required prepayment, by acceleration, by demand or otherwise,
or (2) shall fail to perform any term, covenant or agreement on its part to
be performed under any agreement or instrument evidencing or securing or
relating to any such Indebtedness when required to be performed and such
defaults shall permit the holder of such Indebtedness to accelerate the
repayment of such Indebtedness and shall not be cured within any applicable
grace period; or (ii) there shall occur any material breach or violation of
any agreement or instrument to which any Borrower is bound relating to the
acquisition by such Borrower of all or a substantial portion of the assets
or securities of any other Person, or any Borrower shall incur any material
cost, penalty or obligation under any such agreement or instrument;
if any Borrower is adjudicated a bankrupt or insolvent or the equivalent under
any law or admits in writing its inability generally to pay its debts as
they mature, or makes an assignment for the benefit of its creditors; or if
any Borrower shall apply for or consent to the appointment of any receiver,
trustee, or similar officer or the equivalent under any law for such
applicant or for all or any substantial part of its property; or such
receiver, trustee or similar officer or the equivalent under any law shall
be appointed without the application or consent of such party and shall
continue undischarged or unstayed for a period of 90 days; or if any
Borrower shall institute (by petition, application, answer, consent or
otherwise) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding
relating to it under the laws of any jurisdiction; or if any such
proceeding shall be instituted (by petition, application or otherwise)
against any Borrower and an order for relief or similar remedy shall be
entered in such proceeding or such proceeding shall remain undismissed for
a period of 90 days; or if any Borrower suspends its operations or becomes
unable to pay its debts as they mature or calls a meeting of creditors for
the purpose of debt restructuring or dissolves or otherwise terminates its
existence; provided that, the occurrence of any of the foregoing events
with respect to any Borrower other than MTI, SEH, or Sparks shall not
constitute an Event of Default if (1) such occurrence does not have a
Material Adverse Effect on the financial condition or business operations
of any of the other Borrowers or all of the other Borrowers on a
Consolidated basis, (2) such occurrence does not materially and adversely
effect the collateral position of the Banks or the Collateral, (3) no other
Borrower is consolidated in or otherwise made a party to such proceeding,
and (4) the aggregate of the revenues and assets of all Borrowers with
respect to which one or more of such events has occurred after the date of
this Agreement shall not exceed, cumulatively, ten percent (10%) of the
total Consolidated revenues and assets, respectively, of all Borrowers (the
measurement dates for such calculation being the date of each such event);
if (1) any Reportable Event, or any failure of compliance required by Section
6.8 hereof, that creates a reasonable likelihood of the termination of any
Defined Benefit Pension Plan maintained by any Borrower or any member of
its Controlled Group, or of the appointment by the appropriate United
States District Court of a trustee to administer any such Plan has occurred
and is continuing 30 days after written notice to such effect is given to
the Borrowers by the Agent or any Bank, or (2) any Borrower or any member
of its Controlled Group withdraws from any Defined Benefit Pension Plan for
which it was a substantial employer as defined by ss.4001(a)(2) and within
the meaning of ss.4063(b) of ERISA or from any Multiemployer Plan and the
liability for such withdrawal exceeds $500,000, or (3) the plan
administrator of any Defined Benefit Pension Plan maintained by any
Borrower or any member of its Controlled Group files with the PBGC a notice
of intention to terminate such Plan in a "distress termination" (as defined
in ss.4041(c) of ERISA), or (4) the PBGC institutes proceedings to
terminate any such Plan or to appoint a trustee to administer any such
Plan, and if, in any of the cases described in the foregoing clauses (1) to
(4);
if the Borrowers shall fail to perform or observe when due any term, covenant
or agreement contained herein and such failure (other than a failure which
otherwise constitutes an Event of Default under this Section 7.1 or is a
violation of Sections 6.24 or 6.25) is not cured within a period of thirty
(30) days from the date the Borrower Agent first became aware of such
failure, whether by written notice from the Agent or any Bank or otherwise,
or has not been cured within a period of five (5) days from the date that
the Agent or any Bank gives the Borrower Agent notice of such default;
if there is a Change in Control not approved in advance and in writing by the
Majority Banks in their sole discretion;
if any two of the three officers of MTI presently serving in the capacities of
Chief Executive Officer, Chairman or Vice Chairman (a) shall voluntarily
resign or (b) shall be discharged or otherwise involuntarily cease to serve
in such position and shall not be replaced within thirty (30) days with a
replacement reasonably acceptable to the Agent;
if a judgment of Five Hundred Thousand Dollars ($500,000) or more is entered
against any Borrower and is not satisfied or bonded within thirty (30)
days;
this Agreement, any of the Notes, the Subrogation and Contribution Agreement or
any other material Loan Document executed pursuant hereto is found to be
unenforceable or its enforceability is contested in any way by a Borrower;
provided that, the occurrence of any of the foregoing events with respect
to any Borrower other than MTI, SEH, or Sparks shall not constitute an
Event of Default if (1) such occurrence does not have a Material Adverse
Effect on the financial condition or business operations of any of the
other Borrowers or all of the other Borrowers on a Consolidated basis, (2)
such occurrence does not materially and adversely affect the collateral
position of the Banks or the Collateral, (3) no other Borrower is
consolidated in or otherwise made a party to any related proceeding, and
(4) the aggregate of the revenues and assets of all Borrowers with respect
to which one or more of such events has occurred after the date of this
Agreement shall not exceed, cumulatively, ten percent (10%) of the total
Consolidated revenues and assets, respectively, of all Borrowers (the
measurement dates for such calculation being the date of each such event);
if there shall be a violation or breach under any of Sections 6.24 or 6.25;
any governmental authority with applicable jurisdiction determines that the
Subordinated Debt is not subordinated to any of the Obligations or the
subordination provisions in any agreement relating to Subordinated Debt
shall, in whole or in part, terminate, cease to be effective or cease to be
legally valid, binding and enforceable as to any holder of the Subordinated
Debt; or
any Borrower shall default in any payment or performance of any obligations
under any Swap Agreement entered into pursuant to the provisions of Section
2.20 above, regardless of the amount involved in the default.
Termination of Revolving Commitment; Acceleration. If any Event of Default shall
occur and be continuing, the Agent may at its option and shall, upon being
so directed by the Majority Banks, declare the Commitments to be terminated
and the outstanding Notes and all interest thereon and all other amounts
payable under this Agreement to be immediately due and payable and require
the Borrowers to (and the Borrowers shall) immediately and fully
collateralize each outstanding Letter of Credit with cash deposited with
the Agent in the full amount of the aggregate outstanding amounts thereof;
provided that immediately and automatically upon the happening of an Event
of Default specified in Section 7.1(D), the Commitments shall terminate,
the outstanding Notes and all interest thereon and all other amounts
payable under this Agreement shall be immediately due and payable and the
aforesaid cash collateralization shall be immediately required without
declaration or other notice to the Borrowers, and the Borrowers shall
immediately make all such payments to the Agent for the ratable benefit of
the Banks. Thereupon, the Agent shall notify the Borrowers of the accrual
of interest at the Default Rate, and the Agent and the Banks shall have all
of the rights and remedies available under the Loan Documents or otherwise
at law or in equity. The Borrowers expressly waive any presentment, demand,
protest or further notice of any kind.
Remedies.
Upon the occurrence and during the continuance of any one or more Events of
Default, the Agent for the account of the Banks may proceed to protect and
enforce its rights under this Agreement, the Notes and/or any other
document executed pursuant hereto by exercising such remedies as are
available to the Agent or any Bank in respect thereof under applicable law,
either by suit in equity or by action at law, or both, whether for specific
performance of any provision contained in this Agreement, the Notes or the
other Loan Documents or in aid of the exercise of any power granted in this
Agreement, the Notes or the other Loan Documents.
Upon the occurrence and during the continuance of any one or more Events of
Default, the Agent for the account of the Banks, in addition to all the
other rights and remedies herein contained, shall be entitled to exercise
any and all rights available to it in law or equity.
AGENCY PROVISIONS
Authorization and Action. Each Bank hereby irrevocably appoints and authorizes
the Agent to take such action as agent on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. The duties of the Agent shall be mechanical
and administrative in nature and the Agent shall not by reason of this
Agreement be a trustee or fiduciary for any Bank. The Agent shall have no
duties or responsibilities except those expressly set forth in the Loan
Documents. As to any matters not expressly provided for by this Agreement
or the other Loan Documents (including, without limitation, enforcement or
collection of the Notes), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Majority Banks, and such instructions
shall be binding upon all Banks and all holders of Notes; provided,
however, 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 the other Loan Documents or applicable law. Whenever the Agent
shall receive any notice, financial information or other written material
from any Borrower relating to or in connection with any of the Loan
Documents, any such oral notification of a material nature shall be
promptly relayed to the Banks, and copies of any such written notice,
information or other material shall be promptly provided to the Banks.
Liability of Agent. Neither the Agent nor any of its directors, officers, agents
or employees shall be liable to any Bank for any action taken or omitted to
be taken by it or them under or in connection with any Loan Documents in
the absence of its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent (a) may
treat the payee of any Note as the holder thereof until the Agent receives
written notice of the assignment or transfer thereof signed by such payee
and in form satisfactory to the Agent; (b) may consult with legal counsel
(including counsel for the Borrowers), independent public accountants and
other experts selected by it and shall not be liable for any action taken
or omitted to be taken in good faith by it in accordance with the advice of
such counsel, accountants or experts; (c) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connection with any
Loan Document; (d) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions
of any Loan Document on the part of the Borrowers or any other Person or to
inspect the property (including the books and records) of the Borrowers;
(e) shall not be responsible to any Bank for the due execution, legality,
validity, enforceability, genuineness, perfection, sufficiency or value of
any of the Loan Documents or any other instrument or document furnished
pursuant thereto; and (f) shall incur no liability under or in respect of
any Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, cable or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
Rights of Agent as a Bank. With respect to its Commitment, the Loans made by it
and the Note issued to it, the Agent shall have the same rights and powers
under the Loan Documents as any other Bank and may exercise the same as
though it were not the Agent; and the term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include the Agent in its individual
capacity. The Agent, each Bank and their respective Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, any Borrower, any of the
Subsidiaries and any Person who may do business with or own securities of
any Borrower or any Subsidiary, all as if the Agent were not the Agent and
without any duty on the part of the Agent or any Bank to account therefor
to the Banks or the Agent as the case may be.
Independent Credit Decisions. Each Bank acknowledges that it has, independently
and without reliance upon the Agent or any other Bank and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the
Agent or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents. Except
for notices, reports and other documents and information expressly required
to be furnished to the Banks by the Agent under the terms of any of the
Loan Documents, the Agent shall have no duty or responsibility to provide
any Bank with any credit or other information concerning the affairs,
financial condition or business of any Borrower or any Subsidiary (or any
of their Affiliates) which may come into the possession of the Agent or any
of its Affiliates.
Indemnification. The Banks agree to indemnify the Agent (to the extent not
reimbursed by the Borrowers), ratably according to the respective amounts
of their Commitments, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against the Agent in any way relating
to or arising out of any of the Loan Documents or any action taken or
omitted by the Agent under any of the Loan Documents, provided that no Bank
shall be liable for any portion of any of the foregoing resulting from the
Agent's gross negligence or willful misconduct. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent (to the extent not
reimbursed by the Borrowers) promptly upon demand for its ratable share of
any out-of-pocket expenses (including counsel fees) incurred by the Agent
in connection with the preparation, administration, or enforcement of, or
legal advice in respect of rights or responsibilities under, any of the
Loan Documents. The Agent shall confer with the Banks prior to retaining
outside counsel in connection with this Agreement and shall not retain
counsel with whom any Bank demonstrates an actual or potential conflict of
interest of a material nature without such Bank's written consent.
Successor Agent. The Agent may resign at any time by giving at least 30 days
prior written notice thereof to the Banks and the Borrowers and may be
removed at any time with or without cause by the Majority Banks. Upon any
such resignation or removal, the Borrowers shall have the right, with the
approval of the Banks, to appoint a successor Agent. If no successor Agent
shall have been so appointed and accepted such appointment, within 21 days
after the retiring Agent's giving of notice of resignation or the Majority
Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which shall be a commercial
bank organized under the laws of the United States of America or of any
State thereof and having a combined capital and surplus of at least $500
million. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article shall inure to
its benefit as to any actions taken or omitted to be taken by it while it
was Agent under any of the Loan Documents.
Sharing of Payments, Etc. If any Bank shall obtain any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) on account of the Notes or other obligations of Borrowers held
by all the Banks, such Bank shall purchase from the other Banks such
participations in the Notes or other obligations held by them as shall be
necessary to cause such purchasing Bank to share the excess payment ratably
with each of them, provided, however, that if all or any portion of such
excess payment is thereafter recovered from such purchasing Bank, such
purchase from each Bank shall be rescinded and each Bank shall repay to the
purchasing Bank the purchase price to the extent of such recovery together
with an amount equal to such Bank's ratable share (according to the
proportion of (a) the amount of such Bank's required repayment to (b) the
total amount so recovered from the purchasing Bank) of any interest or
other amount paid or payable by the purchasing Bank in respect of the total
amount so recovered. The Borrowers agree that any Bank so purchasing a
participation from another Bank pursuant to this Section may, to the
fullest extent permitted by law, exercise all its rights of payment
(including the right of set-off) with respect to such participation as
fully as if such Bank were the direct creditor of the Borrowers in the
amount of such participation.
MISCELLANEOUS
No Waiver; Cumulative Remedies. No failure or delay on the part of the Agent
for the account of the Banks in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or
remedy hereunder. No waiver of any right, power, remedy, privilege or
prerogative of the Agent or any Bank hereunder shall be effective unless
the same shall be in writing and signed by the Agent or applicable (as the
case may be) Bank. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Arbitration.
Upon demand of any party hereto, whether made before or after institution of any
judicial proceeding, any claim or controversy arising out of, or relating
to the Loan Documents between the parties (a "Dispute") hereto shall be
resolved by binding arbitration conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration Rules")
and, where applicable, the Supplementary Rules for Large Complex Disputes,
of the American Arbitration Association (the "AAA") and the Federal
Arbitration Act. Disputes may include, without limitation, tort claims,
counterclaims, a dispute as to whether a matter is subject to arbitration,
claims brought as class actions, or claims arising from documents executed
in the future. A judgment upon the award may be entered in any court having
jurisdiction. Notwithstanding the foregoing, this arbitration provision
does not apply to disputes under or related to Swap Agreements.
All arbitration hearings shall be conducted in the city of Philadelphia,
Commonwealth of Pennsylvania unless otherwise agreed by all parties to such
arbitration. A hearing shall begin within 90 days of demand for arbitration
and all hearings shall conclude within 120 days of demand for arbitration.
These time limitations may not be extended unless a party shows cause for
extension and then for no more than a total of 60 days. At the
administrative conference conducted by the AAA, the parties and the AAA
shall determine how to ensure that the hearing is started and completed on
sequential hearing days. Potential arbitrators shall be informed of the
anticipated length of the hearing and they shall not be subject to
appointment unless they agree to abide by the parties' intent that, absent
exigent circumstances, the hearing be conducted on sequential days. The
expedited procedures set forth in Rule 51 et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000.00. Arbitrators shall
be licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties do not waive applicable Federal
or state substantive law except as provided herein. The award of the
arbitrator(s) shall be accompanied by a statement of the reasons upon which
such award is based.
In any arbitration hereunder, the arbitrator shall decide (by documents only
or with a hearing, at the arbitrators' discretion) any pre-hearing motions
which are substantially similar to pre-hearing motions to dismiss for
failure to state a claim or motions for summary adjudication.
Discovery shall be limited to the prehearing exchange of all documents which
each party intends to introduce at the hearing and any expert reports
prepared by an expert who will testify at the hearing.
Notwithstanding the preceding binding arbitration provisions, the parties agree
to preserve, without diminution, certain remedies that any party may
exercise before or after an arbitration proceeding is brought. The parties
shall have the right to proceed in any court of proper jurisdiction or by
self-help to exercise or prosecute the following remedies, as applicable:
(i) all rights to foreclose against any real or personal property or other
security by exercising a power of sale or under applicable law by judicial
foreclosure including a proceeding to confirm the sales; (ii) all rights of
self-help including peaceful occupation of real property and collection of
rents, set-off, and peaceful possession of personal property; (iii)
obtaining provisional or ancillary remedies including injunctive relief,
sequestration, garnishment, attachment, appointment of receiver and filing
of involuntary bankruptcy proceedings; and (iv) when applicable, a judgment
by confession of judgment. Any claim or controversy with regard to any
party's entitlement to such remedies is a Dispute.
The parties agree that they shall not have a remedy of punitive, exemplary,
special or consequential damages against other parties in any Dispute and
hereby waive any right or claim to punitive, exemplary, special or
consequential damages they have now or which may arise in the future in
connection with any Dispute whether the Dispute is resolved by arbitration
or judicially.
CONFESSION OF JUDGMENT. THE FOLLOWING PARAGRAPH SETS FORTH A POWER OF AUTHORITY
FOR ANY ATTORNEY TO CONFESS JUDGMENT AGAINST BORROWERS. IN GRANTING THIS
WARRANT OF ATTORNEY TO CONFESS JUDGMENT AGAINST BORROWERS, EACH BORROWER,
FOLLOWING CONSULTATION WITH (OR DECISION NOT TO CONSULT) SEPARATE COUNSEL
FOR SUCH BORROWER AND WITH KNOWLEDGE OF THE LEGAL EFFECT HEREOF, HEREBY
KNOWINGLY, INTENTIONALLY, VOLUNTARILY, INTELLIGENTLY AND UNCONDITIONALLY
WAIVES ANY AND ALL RIGHTS SUCH BORROWER HAS OR MAY HAVE TO PRIOR NOTICE AND
AN OPPORTUNITY FOR HEARING UNDER THE RESPECTIVE CONSTITUTIONS AND LAWS OF
THE UNITED STATES OF AMERICA, COMMONWEALTH OF PENNSYLVANIA, OR ELSEWHERE
INCLUDING, WITHOUT LIMITATION, A HEARING PRIOR TO ATTACHMENT OF SUCH
BORROWER'S BANK ACCOUNT AND OTHER ASSETS. EACH BORROWER ACKNOWLEDGES AND
UNDERSTANDS THAT BY ENTERING INTO THIS AGREEMENT CONTAINING A CONFESSION OF
JUDGMENT CLAUSE THAT SUCH BORROWER IS VOLUNTARILY, INTELLIGENTLY AND
KNOWINGLY GIVING UP ANY AND ALL RIGHTS, INCLUDING CONSTITUTIONAL RIGHTS,
THAT SUCH BORROWER HAS OR MAY HAVE TO NOTICE AND A HEARING BEFORE JUDGMENT
CAN BE ENTERED AGAINST SUCH BORROWER AND BEFORE SUCH BORROWER'S ASSETS,
INCLUDING, WITHOUT LIMITATION, ITS BANK ACCOUNTS, MAY BE GARNISHED, LEVIED,
EXECUTED UPON AND/OR ATTACHED. EACH BORROWER UNDERSTANDS THAT ANY SUCH
GARNISHMENT, LEVY, EXECUTION AND/OR ATTACHMENT SHALL RENDER THE PROPERTY
GARNISHED, LEVIED, EXECUTED UPON OR ATTACHED IMMEDIATELY UNAVAILABLE TO
SUCH BORROWER. IT IS SPECIFICALLY ACKNOWLEDGED BY EACH BORROWER THAT THE
AGENT AND THE BANKS HAVE RELIED ON THIS WARRANT OF ATTORNEY AND THE RIGHTS
WAIVED BY BORROWERS HEREIN IN ENTERING INTO THIS AGREEMENT AND AS AN
INDUCEMENT TO GRANT FINANCIAL ACCOMMODATIONS TO THE BORROWERS.
Upon the occurrence of an Event of Default, each Borrower hereby jointly and
severally authorizes and empowers any attorney of any court of record or the
prothonotary or clerk of any county in the Commonwealth of Pennsylvania, or in
any jurisdiction where permitted by law or the clerk of any United States
District Court, to appear for the Borrowers in any and all actions which may be
brought hereunder and enter and confess judgment against the Borrowers or any of
them in favor of the Agent and the Banks for such sums as are due or may become
due hereunder or under any other Loan Documents, together with costs of suit and
actual collection costs including, without limitation, reasonable attorneys'
fees equal to 2% of the Obligations then due and owing but in no event less than
$5,000.00, with or without declaration, without prior notice, without stay of
execution and with release of all procedural errors and the right to issue
executions forthwith. To the extent permitted by law, each Borrower waives the
right of inquisition on any real estate levied on, voluntarily condemns the
same, authorizes the prothonotary or clerk to enter upon the writ of execution
this voluntary condemnation and agrees that such real estate may be sold on a
writ of execution; and also waives any relief from any appraisement, stay or
exemption law of any state now in force or hereafter enacted. Each Borrower
further waives the right to any notice and hearing prior to the execution, levy,
attachment or other type of enforcement of any judgment obtained hereunder,
including, without limitation, the right to be notified and heard prior to the
garnishment, levy, execution upon and attachment of Borrower's bank accounts and
other property. If a copy of this Agreement verified by affidavit of any officer
of the Agent or any Bank shall have been filed in such action, it shall not be
necessary to file the original thereof as a warrant of attorney, any practice or
usage to the contrary notwithstanding. The authority herein granted to confess
judgment shall not be exhausted by any single exercise thereof, but shall
continue and may be exercised from time to time as often as the Agent or any
Bank shall find it necessary and desirable and at all times until full payment
of all amounts due hereunder and under any other Loan Documents. The Agent and
each Bank may confess one or more judgments in the same or different
jurisdictions for all or any part of the Obligations arising hereunder or under
any other Loan Documents to which any Borrower is a party, without regard to
whether judgment has theretofore been confessed on more than one occasion for
the same Obligations. In the event that any judgment confessed against any
Borrower is stricken or opened upon application by or on behalf of such Borrower
or any obligor for any reason, the Agent and each Bank is hereby authorized and
empowered to again appear for and confess judgment against the Borrowers for any
part or all of the Obligations owing under this Agreement and/or for any other
liabilities, as herein provided.
Set-Off. Upon an Event of Default, the Agent and each Bank shall have a right of
set-off against all property of each Borrower now or at any time in the
possession of the Agent or such Bank in any capacity whatever, including,
but not limited to, any such Borrower's interest in any deposit account.
Amendments, Etc. No amendment, modification, termination, or waiver of any
provision of any Loan Document to which any Borrower is a party, nor
consent to any departure by any Borrower from any Loan Document to which it
is a party, shall in any event be effective unless the same shall be in
writing and signed by the Majority Banks, and then such waiver or consent
shall be effective only in the specific instance and for the specific
purpose for which given, provided, however, that no amendment, waiver or
consent, shall, unless in writing and signed by all Banks, do any of the
following: (a) waive any of the conditions precedent specified in Article
IV; (b) increase the Commitments of the Banks or subject the Banks to any
additional obligations; (c) reduce the principal of, or interest on, the
Notes or any fees hereunder; (d) postpone any date fixed for any payment of
principal of, or interest on, the Notes or any fees hereunder; (e) change
the percentage of the Commitments or of the aggregate unpaid principal
amount of the Notes which shall be required for the Banks or any of them to
take any action hereunder; (f) release any Borrower from its obligations
hereunder; or (g) amend, waive or modify this Section or the definition of
"Majority Banks," provided that, no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Banks required
above to take such action, affect the rights or duties of the Agent under
any of the Loan Documents.
Notices. Unless this Agreement specifically provides otherwise, all notices,
requests, demands and other communications that this Agreement requires or
permits the Borrowers to give to the Agent or Banks or the Agent or any
Bank to give to the Borrowers shall be in writing (including telecopy) and
shall be given to the Agent, the Bank(s) or the Borrower Agent, as the case
may be, at their respective address or telecopy number specified on the
signature pages of this Agreement or at such other address or telecopy
number as shall be designated by such party in a notice to each other
complying with the terms of this Section. Unless this Agreement
specifically provides otherwise, all notices, requests, demands and other
communications provided for hereunder shall be effective (A) if given by
mail, three days after placing in the United States mail, postage prepaid,
certified mail, return receipt requested, (B) if given by telecopy, when
such telecopy is transmitted to the aforesaid telecopy number and the
appropriate confirmation of receipt is received by the sender or (C) if
given by any other means, when delivered to the carrier with postage
prepaid to the aforesaid address(es); provided, however, that notices from
the Borrower Agent to the Agent pursuant to any of the provisions of
Article II hereof shall not be effective until received by the Agent. The
Agent and each Bank shall be entitled to rely on any notice, oral or
written, received by it from the Borrower Agent as if such notice were
delivered by all of the Borrowers. Although the Borrower Agent is obligated
to follow any telephonic notice made to select an Interest Rate and/or
Interest Period with written confirmation, the Agent shall be entitled to
rely on such telephonic notice whether or not the Borrower Agent thereafter
confirms in writing, as if the Borrower Agent did, in fact, confirm in
writing.
Nature of Obligations.
Nothing contained in this Agreement, and no action taken by the Agent or any
Bank pursuant hereto, shall be deemed to create a partnership, association,
joint venture or other entity with the Borrowers. The obligations of each
Borrower under this Agreement and the Notes are joint and several.
The joint and several obligations of each Borrower hereunder shall be absolute
and unconditional irrespective of: (i) any lack of validity or
enforceability of the Agreement or the Notes against any other Borrower;
(ii) any change in the time, manner or place of payment of, or in any other
term in respect of, all or any of the obligations of any other Borrower
hereunder, or any other amendment or waiver of or consent to any departure
from any provision of this Agreement or the Notes with respect to any other
Borrower; or (iii) any other circumstance which might otherwise constitute
a defense available to, or a discharge of, any Borrower in respect of the
obligations of the Borrowers hereunder.
Each Borrower hereby irrevocably agrees for the benefit of the Agent and the
Banks and the other Borrowers that it will not exercise any rights which it
may have or acquire against such other Borrower by way of subrogation or
otherwise arising from payments under this Agreement or the Notes; until
all amounts due to the Banks hereunder and under the Notes are paid in full
and the Revolving Credit Commitment terminates or expires and no Letter of
Credit Liabilities shall be outstanding or otherwise exist.
Costs and Expenses. The Borrowers agree to pay on demand (A) all reasonable,
out-of-pocket costs and expenses of the Agent in connection with the
preparation, negotiation, printing, execution and delivery of this
Agreement, the Notes and the other documents executed pursuant hereto
(including and limited to the reasonable fees and out-of-pocket expenses of
counsel for the Agent), (B) all reasonable, out-of-pocket costs and
expenses of the Agent in connection with the amendment, waiver and
administration of this Agreement, the Notes or any other documents executed
pursuant hereto, and (C) all reasonable costs and expenses, if any, of the
Agent and the Banks in connection with the enforcement against the
Borrowers of this Agreement, the Notes or any other documents executed
pursuant hereto (including without limitation the reasonable fees and
out-of-pocket expenses of counsel with respect thereto of the Banks).
Counterparts. This Agreement and any amendments thereto may be executed in any
number of counterparts, all of which taken together shall constitute one
and the same instrument, and any of the parties hereto may execute this
Agreement by signing any such counterpart.
Binding Effect. This Agreement shall become effective when it has been executed
by the Borrowers, the Agent and the Banks. It shall thereafter be binding
upon and inure to the benefit of the Borrowers, the Agent and the Banks and
their respective successors and assigns except that no Borrower shall have
the right to assign any of its rights or obligations hereunder or any
interest herein.
Governing Law. This Agreement, the Notes and the other documents executed
pursuant hereto shall be governed in all respects by the law of the
Commonwealth of Pennsylvania and for all purposes shall be construed in
accordance with the law of the Commonwealth of Pennsylvania (without giving
effect to principles of conflicts of laws). Subject to Section 9.2, the
parties acknowledge the non-exclusive jurisdiction of the federal and state
courts located within Philadelphia County in the Commonwealth of
Pennsylvania over controversies arising from or relating to this Agreement.
Headings. Article and Section headings used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
Usury. Nothing herein contained, contained in the Notes or contained in any
other document executed pursuant hereto, nor any transaction related hereto
or thereto, shall be construed or shall so operate either presently or
prospectively to require the Borrowers (i) to pay interest at a rate
greater than is now lawful in such case to contract for, but shall require
payment of interest only to the extent of such lawful rate, or (ii) to make
any payment or do any act contrary to law, but if any provision herein or
therein contained shall otherwise so operate to invalidate such document,
in whole or in part, then such provision only shall be held for naught as
though not herein or therein contained and the remainder of such document
shall remain operative and in full force and effect. Any interest paid in
excess of the lawful rate shall be refunded to the Borrowers. Such refund
shall be made by application of the excessive amount of interest paid
against any sums outstanding under this Agreement and shall be applied in
such order as the Agent may determine. If the excessive amount of interest
paid exceeds the sums outstanding hereunder, the portion exceeding the said
sums outstanding shall be refunded in cash by the Banks. Any such crediting
or refund shall not cure or waive any Unmatured Event of Default or Event
of Default by the Borrowers hereunder or under the Notes. The Borrowers
agree, however, that in determining whether or not any interest payable
exceeds the highest rate permitted by law, any non-principal payment
(except payments specifically stated in this Agreement to be "interest")
shall be deemed, to the extent permitted by law, to be an expense, fee,
premium, or penalty rather than interest.
Assignments; Participations. The Borrowers acknowledge and agree that any Bank
may at any time:
assign or transfer any of its rights or obligations under this Agreement in a
transaction intended solely as a source of funding, to a Federal Reserve
Bank, without the consent of or notice to MTI or the Agent;
sell participations in the Loans outstanding hereunder to another financial
institution (after providing written notice to MTI regarding such sale at
least five (5) days prior thereto), but in the event of any such
participation, no party to this Agreement shall have any obligations or
responsibilities to such participant other than its obligations or
responsibilities to the seller of such participation, and no participation
shall relieve any party of its obligations and duties hereunder, provided
that, any agreement pursuant to which any Bank may grant a participation
shall not limit such Bank's ability to agree to any modification, amendment
or waiver of the Loan Documents without the consent of the participant
except to the extent such modification, amendment or waiver would change
the amount of the Commitments, reduce the principal of or rate of interest
on the Loans or related fees or postpone the date fixed for any payment of
principal of or interest on the Loans or related fees;
assign all or any portion of its rights under the Loans and its Commitment in
minimum amounts of $1,000,000 either (A) to an Affiliate of such Bank, or
(B) with the prior written consent of the Agent, which shall not be
unreasonably withheld or delayed, together with the payment by such Bank to
the Agent of a $3,500 transfer fee, and, except after the occurrence of an
Event of Default, with the prior written consent of MTI, which shall not be
unreasonably withheld or delayed. Promptly upon any such assignment
described in (A) or (B) above, the assignee shall execute a joinder to this
Agreement in form satisfactory to the Agent, agreeing to be bound by the
terms and conditions of this Agreement, and then shall be deemed a Bank for
all purposes hereunder, and the Borrowers shall execute and deliver new
Notes and such other documents as may be appropriate to reflect such
assignment; and
share credit information on the Borrowers with prospective and actual
participants and assignees.
Appointment of Borrower Agent. Each Borrower hereby irrevocably appoints and
authorizes MTI to act as its agent hereunder and under the Notes with such
powers as are specifically delegated to the Borrower Agent by the terms of
this Agreement and the Notes, including, without limitation, the power to
receive notice on behalf of all of the Borrowers, together with such other
powers as are reasonably incidental thereto.
Survival; Indemnification.
The obligations of the Borrowers under Sections 2.11, 2.12, 2.17, 2.18, 3.10,
9.8 and 9.16 shall survive the repayment of the Loans.
If after receipt of any payment of all or any part of the amounts outstanding
hereunder or under the Notes, the Agent or any Bank is for any reason
compelled to return such payment to any Person because such payment is
determined to be void or voidable as a preference, an impermissible setoff,
or a diversion of trust funds, or for any other reason, this Agreement and
the Notes shall continue in full force and the Borrowers shall be liable,
and shall indemnify and hold the Agent and each Bank harmless for, the
amount of such payment returned and any fees and expenses incurred in
enforcing this indemnity provision. The provisions of this Section shall be
and remain effective notwithstanding any contrary action which may have
been taken by the Agent or any Bank in reliance upon such payment, and any
such contrary action so taken shall be without prejudice to the Agent's or
any Bank's rights under this Agreement and the Notes and shall be deemed to
have been conditioned upon such payment having become final and
irrevocable. The provisions of this Section shall survive the termination
of the Agreement and the Notes.
Each Borrower hereby jointly and severally indemnifies and holds harmless the
Agent, each Bank and all of their affiliates, subsidiaries, successors,
assigns, officers, directors, attorneys, shareholders, employees and agents
("Indemnified Parties") from any and all liability, damages, costs, claims,
losses, suits, actions, legal or administrative proceedings, interest,
expenses, reasonable attorneys' fees (including any such fees and expenses
incurred in investigating, evaluating or defending such claims or in
enforcing this indemnity provision), and reasonable consultants' fees and
expert witness fees incurred by any of them caused by, relating to, arising
out of or resulting from or in any way connected with this Agreement or the
Notes and any transaction contemplated herein or therein, exclusive of any
of the forgoing resulting from any act or omission amounting to willful
misconduct or gross negligence by any beneficiary of this indemnity.
Each Borrower hereby jointly and severally indemnifies, defends and holds
harmless the Indemnified Parties, from and against any and all liability,
damages, costs, claims, losses, suits, actions, legal or administrative
proceedings, interest, expenses, reasonable attorneys' fees (including any
such fees and expenses incurred in investigating, evaluating, or defending
such claims or in enforcing this indemnity provision), and reasonable
consultants' fees and expert witness fees incurred by any of them caused
by, relating to, arising out of or resulting from or in any way connected
with (1) any liability or any claims relating to the Environmental Laws or
the environmental condition of the Properties; (2) the presence of any
hazardous substance on, about, beneath or arising from any Properties, (3)
the failure of any Borrower, any Subsidiary thereof, any past or present
occupant, or any future occupant that controls, is controlled by, or is
under common control with any Borrower, of any Property (whether owner,
tenant, subtenant or any other occupant) to comply with the Environmental
Laws; or (4) the untruth or breach of any of the representations or
warranties contained herein relating to the Environmental Laws, provided,
however, that the Borrowers shall not be required to indemnify any
Indemnified Party to the extent the liability resulted from or arose out of
the gross negligence or willful or reckless act or omission of that
Indemnified Party.
Entire Agreement. This Agreement, the Schedules and Exhibits attached hereto,
the Notes, the Subrogation and Contribution Agreement and the other
documents executed pursuant hereto constitute the entire understanding
among the parties with respect to the subject matter hereof and supersede
any and all contemporaneous and prior agreements between the parties hereto
with respect to the subject matter hereof and thereof.
WAIVER OF JURY TRIAL. BORROWERS, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY
JURY IN ANY LEGAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF
OR RELATED TO THIS AGREEMENT OR THE RELATIONSHIP EVIDENCED HEREBY. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE BANKS TO ENTER
INTO THIS AGREEMENT. EACH BORROWER ACKNOWLEDGES THAT THE RIGHTS WAIVED
ABOVE ARE CONSTITUTIONAL RIGHTS, THAT SUCH BORROWER HAS WAIVED SUCH RIGHTS
INTENTIONALLY, KNOWINGLY, AND AFTER CONSULTATION WITH ITS ATTORNEY, AND
THAT SUCH BORROWER WAIVES SUCH RIGHTS VOLUNTARILY.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have caused this Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
MARLTON TECHNOLOGIES, INC., a
Pennsylvania corporation, successor to Marlton
Technologies, Inc., a New Jersey corporation Address:
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▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CEO
SPARKS EXHIBITS & ENVIRONMENTS CORP.
(formerly Sparks Exhibits Corp.), a
Pennsylvania corporation
SPARKS EXHIBITS & ENVIRONMENTS, INC.
(formerly Sparks Exhibits, Inc.), a
Georgia corporation
SPARKS EXHIBITS HOLDING CORPORATION, a
Delaware corporation
SPARKS EXHIBITS & ENVIRONMENTS, LTD.
(formerly Sparks Exhibits, Ltd.), a
California corporation
SPARKS EXHIBITS & ENVIRONMENTS INCORPORATED
(formerly Piper Productions, Inc.), a Florida
corporation
SIGNATURE CONTINUED ON THE FOLLOWING PAGE
SIGNATURE CONTINUED FROM THE PREVIOUS PAGE
SPARKS EXHIBITS & ENVIRONMENTS COMPANY,
an Illinois corporation Address:
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By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CFO
DMS STORE FIXTURES LLC (formerly
DMS Store Fixtures Corp.), a Pennsylvania
limited liability company Address:
-------
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▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
By: Sparks Exhibits & Environments Corp.,
its sole Member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: CFO
WACHOVIA BANK, NATIONAL ASSOCIATION, Address:
formerly known as First Union -------
National Bank, (for itself and as Agent) ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ AND
Title: Vice President ---
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▇.▇. ▇▇▇ ▇▇▇▇
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Schedule 2.1
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Revolving Credit Commitments
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Wachovia Bank $12,000,000
Total $12,000,000
Schedule 5.16
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Credit Arrangements
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GE Capital Corporation capital lease for up to $725,000.