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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
(PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934)
(Amendment No. 1)
AND
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No. 1)
Bryan Steam Corporation
(Name Of Subject Company)
Burnham Acquisition Corporation
Burnham Corporation
(Bidders)
---------------
COMMON STOCK, PAR VALUE $10.00 PER SHARE
(Title of Class of Securities)
117547 109
(CUSIP Number of Class of Securities)
---------------
Albert Morrison III
Burnham Corporation
1241 Harrisburg Avenue
Lancaster, PA 17603
(717) 293-5800
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications
on Behalf of Bidder)
COPY TO:
Donald A. Stern, Esq.
Cleary, Gottlieb, Steen & Hamilton
One Liberty Plaza
New York, New York 10006
(212) 225-2000
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<PAGE>
Burnham Acquisition Corporation ("Parent") and Burnham
Corporation ("Purchaser") hereby amend and supplement their
Tender Offer Statement on Schedule 14D-1 (the "Statement")
originally filed on September 29, 1998, with respect to the offer
by Burnham Acquisition Corporation to purchase all outstanding
shares of Common Stock, par value $10.00 per share (the
"Shares"), of Bryan Steam Corporation, a New Mexico corporation,
for a purchase price of $152.00 per share, net to the seller in
cash, without interest thereon, as set forth in this Amendment
No. 1. This amendment also amends and supplements the Schedule
13D originally filed on September 29, 1998 by with respect to the
Shares. Capitalized terms not defined herein have the meanings
assigned thereto in the Statement.
ITEM 3. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS WITH SUBJECT
COMPANY
Item 3(a)-(b) of the Statement is hereby amended and
supplemented by adding thereto the following:
(a)-(b) The disclosure of projections and estimates in the
Offer to Purchase includes all material financial projections and
estimates included in information provided by Goelzer & Co. and
McDonald & Co. to Purchaser and Parent.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4 (a)-(b) of the Statement is hereby amended and
supplemented by adding thereto the following:
(a)-(b) Parent will provide Purchaser with the funds
required to consummate the Offer and the Merger. It is
anticipated that approximately $6.5 million will be provided from
Parent's existing cash reserves and $24 million will be borrowed
under Parent's existing credit facility with Mellon Bank, N.A.
(the "Mellon Facility"). The Mellon Facility permits Parent to
borrow up to $24 million on a revolving credit basis at a
floating rate of interest based on the London Interbank Offered
Rate for various periods as selected by Parent plus a spread of
1%, or based on the Mellon Bank Prime Rate if Parent so elects.
Parent expects that the initial interest rate under the Mellon
Facility will be approximately 6.4%. The Mellon Facility is
unsecured and matures and must be repaid by August 31, 1999.
Events of Default under the Mellon Facility, which could result
in acceleration and early maturity of the indebtedness
thereunder, include such matters as payment defaults, a breach of
certain financial covenants, a material adverse change in the
business of Parent and a default by Parent under the provisions
of any of its other credit agreements. While Parent has not yet
made plans or arrangements to repay and refinance the
indebtedness under the Mellon Facility, Parent believes it will
be able to make such plans and arrangements in a timely manner.
<PAGE>
ITEM 9. FINANCIAL STATEMENTS OF CERTAIN BIDDERS.
Item 9 of the Statement is hereby further amended and
supplemented by adding thereto the following:
[see next page]
<PAGE>
BURNHAM CORPORATION AND ITS SUBSIDIARIES
SELECTED CONSOLIDATED CONDENSED FINANCIAL DATA
(In Thousands, Except Per Share Data)
Audited Unaudited
--------------- ---------------
1998 1997 1997 1996
---- ---- ---- ----
Six months ended Year ended
June 30, December 31,
------------------- -------------------
Income Statement Data:
Net Sales $ 72,564 $ 66,769 $174,593 $159,936
Net income (loss) 602 1,794 9,419 8,844
Net income per
common share* .26 .80 4.20 3.95
Net income per share
(fully diluted) ** .26 .79 4.15 3.91
Balance Sheet Data:
Working Capital $ 43,751 $ 40,626 $ 44,071 $ 41,557
Total Assets 124,317 112,266 127,642 114,285
Total Assets less
research and
development
charges and excess
of cost of assets
acquired over book
value 121,525 108,366 124,221 111,035
Total Liabilities 55,045 48,307 57,752 50,916
Stockholders' Equity 69,272 63,959 69,890 63,369
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* Based on 2,264, 2,238, 2,238 and 2,235 shares issued and
outstanding for the respective periods.
** Based on 2,280, 2,253, 2,262 and 2,256 shares on a
fully-diluted basis for the respective periods.
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
Item 11 of the Statement is hereby amended to add the
following exhibits:
(b)(1) Promissory Note
(b)(2) Rider to Promissory Note
(b)(3) Revolving Line of Credit Agreement
(b)(4) Supplement to Revolving Line of Credit Agreement
<PAGE>
SIGNATURE
After due inquiry and to the best of its knowledge and
belief, each of the undersigned certifies that the information
set forth in this Statement is true, complete and correct.
Dated: October 16, 1998
BURNHAM ACQUISITION
CORPORATION
By /s/ Ronald L. Griffith
--------------------------
Name: Ronald L. Griffith
Title: Secretary
BURNHAM CORPORATION
By /s/ Ronald L. Griffith
--------------------------
Name: Ronald L. Griffith
Title: Senior Vice President
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT NAME
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(b)(1) Promissory Note
(b)(2) Rider to Promissory Note
(b)(3) Revolving Line of Credit Agreement
(b)(4) Supplement to Revolving Line of
Credit Agreement
Exhibit (b)(1)
Mellon Bank
Promissory Note
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$24,000,000.00 October 15, 1998
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For value received, and intending to be legally bound,
Undersigned, as defined below, promises to pay Mellon Bank,
N.A.
- -----------------------------------------------------------------
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("Bank") or its order at Philadelphia, Pennsylvania
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the sum of Twenty-Four Million-----------------------------------
------------------------------------------------------
- ---------------------------------------------------xx/l00 Dollars
- ---------------------------------------------------------
($24,000,000.00), or such lesser or greater principal amount as
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may be outstanding from time to time under the Revolving Line of
Credit Agreement dated of even date herewith as amended and
supplemented from time to time, ("Credit Agreement"), between
Bank and Undersigned, with interest on the outstanding balance
from the date of this Note ("Note") at the rate(s) ("Contractual
Rate(s)" specified herein.
See attached Rider to Promissory Note.
After maturity, whether by acceleration or otherwise, interest
shall accrue at a rate 2 percent per annum above the Contractual
Rate(s) until all sums due hereunder are paid. Interest shall
continue to accrue after the entry of judgment at a rate 2
percent per annum above the Contractual Rate(s) until all sums
due hereunder and/or under the judgment are paid. Undersigned
agrees to pay to Bank, as consideration for Bank's commitment
under the Credit Agreement, (i) a commitment fee equal
to N/A % per annum on the unborrowed Commitment Amount (as
------
defined in the Credit Agreement), from time to time, for each day
of the Commitment Period (as defined in the Credit Agreement),
and (ii) a facility fee equal
to N/A % per annum on the Commitment Amount (whether borrowed or
------
unborrowed) for each day of the Commitment Period, in each case
payable for the preceding period for which such fee has not been
paid,
(a) on the last day of each N/A
--------------------------
and
- --------------------------, ---------------------------
after the date hereof, (b) on the date
- --------------------------
of each reduction of the Commitment Amount on the amount so
reduced, and (c) on the last day of the Commitment Period.
If any payment (including without limitation any regularly
scheduled payment, balloon payment and final payment) is not paid
within 10 days after it is due, Undersigned will pay a late
----
charge as specified below, regardless of whether the payment due
consists of principal and interest, principal only or interest
only:
[X] 4 % of the unpaid portion of the payment due
-----
[ ] $ .
------------
[ ] the greater of $ , or % of the unpaid
--------------- ----
portion of the payment due
[ ] late payment charge does not apply
Such late charge shall be in addition to any increase made to the
Contractual Rate(s) applicable to the outstanding balance hereof
as a result of maturity of this Note or otherwise, as well as in
addition to any other applicable fees, charges and costs.
Undersigned shall have the right, at its option, to prepay this
Note in whole at any time or in part from time to time. Any such
prepayment shall be applied first to any accrued but unpaid
interest, secondly to the prepayment charge, if any, discussed
below, and lastly to the unpaid installments of principal in the
reverse order of their scheduled maturities. In the event that
any portion of principal of this Note accruing interest at a
fixed rate is prepaid for any reason whatsoever, whether by
declaration, acceleration, demand or otherwise and whether or not
an Event of Default has occurred, a prepayment charge shall be
due and payable by Undersigned to Bank, calculated as described
in the Prepayment Addendum, if any, which references this Note,
from Undersigned to Bank, incorporated herein by reference and
made a part hereof. All such prepayments shall be subject to all
terms and conditions of any such Prepayment Addendum.
If any change after the date hereof in any law, regulation,
order, decree or guideline or interpretation or application
thereof by any governmental authority charged with the
interpretation or administration thereof or compliance by Bank
with any request or directive of any governmental authority
(whether or not having the force of law) shall either impose,
modify or deem applicable any capital adequacy or similar
requirement against assets (funded or contingent) of, or credits
or commitments to extend credit extended by Bank and the result
of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of
margin) upon Bank with respect to the Credit Agreement, this
Note, or the making, maintenance or funding of any part of the
Loans (or, in the case of capital adequacy or similar
requirement, to have the effect of reducing the rate of return on
Bank's capital, taking into account Bank's policies with regard
to capital adequacy) by an amount which Bank deems to be
material, Bank shall from time to time promptly notify
Undersigned of the amount determined in good faith by Bank (which
determination shall be conclusive absent manifest error) to be
necessary to compensate Bank for such increase, reduction or
imposition. Such amount shall be due and payable by Undersigned
to Bank ten (10) business days after such notice is given.
So long as Bank is the holder hereof, Bank's books and records
shall be prima facie deemed correct in evidencing at all times
all amounts outstanding under this Note and the date and amount
of each advance and payment made pursuant hereto.
The prompt and faithful performance of all of Undersigned's
obligations hereunder, including without limitation time of
payment, is of the essence of this Note.
1. REPRESENTATIONS. Undersigned hereby makes the following
representations and warranties which shall be true and correct on
the date of this Note and shall continue to be true and correct
for so long as any indebtedness evidenced hereby remains
outstanding: (a) Undersigned's residence and/or Chief Executive
Office, as the case may be, is as stated below or as otherwise
stated in a subsequent written notice delivered to Bank pursuant
to the terms hereof; and (b) if any of the Undersigned is an
individual, each such individual is at least 18 years of age and
under no legal disability or incapacity.
2. COVENANTS. Undersigned covenants and agrees that until all
indebtedness evidenced hereby has been paid in full, Undersigned
<PAGE>
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shall: (a) use the proceeds of the Loans evidenced hereby only
for the purpose(s) specified to Bank at or prior to the execution
hereof; (b) promptly notify Bank in writing of any change in its
or their residence or Chief Executive Office; (c) provide, upon
request, financial or other information, documentation or
certifications to Bank (including balance sheets and income
statements), all in form and content reasonably satisfactory to
Bank; and (d) pay, upon demand by Bank, all amounts reasonably
incurred by Bank in connection with any actin or proceeding taken
or commenced by Bank to enforce or collect this Note, including
reasonable attorney's fees and attorney's costs and all costs of
legal proceedings.
3. ENVIRONMENTAL REPRESENTATIONS, WARRANTIES AND COVENANTS. In
addition to the representations, warranties and covenants set
forth in this Note, the Credit Agreement (if any) and any other
document executed and delivered in connection with this Note
and/or the Credit Agreement, Undersigned hereby represents,
warrants, covenants and agrees, on behalf of itself and each of
its subsidiaries and affiliates, if any, that: (a) each of them
now has and will continue to have all Environmental Permits (as
hereinafter defined) necessary for the conduct of each of their
businesses and operations; (b) each of them conducts and will
continue to conduct each of their businesses and operations in
material compliance with all applicable Environmental Laws (as
hereinafter defined) and Environmental Permits; (c) there does
not exist, nor will any of them permit to exist, any event or
condition that requires or is likely to require any of them under
any Environmental Law to pay or expend funds by way of fines,
judgments, damages, cleanup, remediation or the like in an
aggregate amount, the payment of which could reasonably be
expected to interfere substantially with normal operations of
Undersigned or materially adversely affect the financial
condition of Undersigned; (d) Undersigned shall notify Bank, in
writing within five (5) business days, upon becoming aware of any
pending or threatened proceeding, suit, investigation, allegation
or inquiry regarding any alleged event or condition that, if
resolved unfavorably to Undersigned or any of Undersigned's
subsidiaries or affiliates, is likely to cause Undersigned or any
of its subsidiaries or affiliates under any Environmental Law to
pay or expend funds by way of fines, penalties, administrative
actions, judgments, damages, cleaning, remediation or the like,
or cause Undersigned or any of its subsidiaries or affiliates to
pay or expend funds for any third party claims, proceedings,
actions or judgments for personal injury or property damage
resulting from an event or condition relating to Hazardous
Substances (as hereinafter defined) or from a release or
threatened release of Hazardous Substances; and (e) Undersigned
shall provide at Undersigned's cost, upon request by Bank,
certifications, documentation, copies of pleadings and other
information regarding the above, all in form and content
satisfactory to Bank.
4. EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an "Event of Default" hereunder: (a) default in
payment or performance of any of the indebtedness or obligations
evidenced by this Note or any other evidence of liability of
Undersigned to Bank which remains unpaid or unperformed for five
(5) calendar days after becoming due; (b) the breach by any
Obligor (defined as Undersigned and each surety or guarantor of
any of Undersigned's liabilities to Bank as well as any person or
entity granting Bank a security interest in property to secure
any indebtedness evidenced hereby) of any covenant contained in
the Credit Agreement, this Note, or in any separate security,
guarantee or suretyship agreement between Bank and any Obligor
which covenant, if capable of being cured, is not cured within
thirty (30) days of its occurrence, the occurrence of any default
hereunder or under the terms of any such agreement, or the
discovery by Bank of any false or misleading representation made
by any Obligor herein or in any such agreement or in any other
information submitted to Bank by any Obligor; (c) with respect to
any Obligor: (1) death or incapacity of any individual or general
partner; or (2) dissolution of any partnership or corporation;
(d) any assignment for the benefit of creditors by any Obligor;
(e) insolvency of any Obligor; (f) the filing or commencement of
any petition, action, case or proceeding, voluntary or
involuntary, under any state or federal law regarding bankruptcy,
insolvency, reorganization, receivership or dissolution,
including the Bankruptcy Reform Act of 1978, as amended, by or
against any Obligor, which, in the case of any involuntary
filing, is not dismissed within sixty (60) days; (g) the
garnishment, attachment or taking by governmental authority of
any property of the Undersigned which is in Bank's possession or
which constitutes security for any indebtedness evidenced hereby;
(h) a material adverse change has occurred in the financial or
business condition of Undersigned; (i) the assessment against any
Obligor by the Internal Revenue Service or any other federal,
state or local taxing authority of unpaid taxes, which taxes
remain unpaid for a period of thirty (30) days after their
assessment, or the issuance of a levy or the entering of a lien
in connection therewith; (j) the maturity of any life insurance
policy held as collateral for this Note by reason of the death of
the insured or otherwise; (k) the revocation, termination,
cancellation, denial of liability, or the attempt of any of the
foregoing, by any Obligor of any obligation or liability
whatsoever of the Obligor to Bank, including without limitation
any security, guarantee or suretyship agreement; or (l) default
by Undersigned in the payment of indebtedness of Undersigned or
in the performance of any of Undersigned's obligations (other
than indebtedness or obligations evidenced by this Note or any
other evidence of liability of Undersigned to Bank) and such
default shall continue for more than any applicable grace period.
5. ACCELERATION; REMEDIES. Upon the occurrence of any Event of
Default: (a) all amounts due under this Note, including the
unpaid balance of principal and interest hereof, shall become
immediately due and payable at the option of Bank, without any
demand or notice whatsoever; and (b) Bank may immediately and
without demand exercise any of its rights and remedies granted
herein, under applicable law, or which it may otherwise have,
against Undersigned or otherwise. Notwithstanding any provision
to the contrary contained herein, upon the occurrence of an Event
of Default as described in Section 3(f) hereof, all amounts due
under this Note shall become immediately due and payable, without
any demand, notice, or further action by Bank whatsoever, and an
action therefor shall immediately accrue.
6. BANK'S RIGHTS. Undersigned hereby authorizes Bank, and Bank
shall have the continuing right, at its sole option and
discretion, after reasonable notice, to: (a) do anything which
Undersigned is required but fails to do hereunder, and in
particular Bank may, if Undersigned fails to do so, obtain and
pay any premiums payable on any policy of insurance required to
be obtained or maintained hereunder, and add any amounts paid
under this Section 5(a) to the principal amount of the
indebtedness evidenced by this Note; (b) pay the proceeds of the
Loans evidenced by this Note to any or all of the Undersigned
individually or jointly, or to such other persons as any of the
Undersigned may direct; and (c) add any amounts reasonably paid
or incurred by Bank hereunder to the principal amount of the
indebtedness evidenced by this Note.
7. DEFINITIONS; MISCELLANEOUS PROVISIONS. (a) Undersigned waives
protest of all commercial paper at any time held by Bank on which
Undersigned is in any way liable, notice of nonpayment at
maturity of any and all accounts, and (except where requested
hereby) notice of action taken by Bank. Bank shall be entitled to
exercise any right notwithstanding any prior exercise, failure to
exercise or delay in exercising any such right. (b) Bank shall
retain the lien of any judgment entered on account of the
indebtedness evidenced hereby. Undersigned warrants that
Undersigned has no defense whatsoever to any action or proceeding
that may be brought to enforce or realize on any such judgment.
(c) If any provision hereof shall for any reason be held invalid
or unenforceable, no other provision shall be affected thereby,
and this Note shall be construed as if the invalid or
unenforceable provision had never been a part of it. The
descriptive headings of this Note are for convenience only and
shall not in any way affect the meaning or construction of any
provision hereof. (d) The rights and privileges of Bank contained
<PAGE>
- -----------------------------------------------------------------
in this Note shall inure to the benefit of its successors and
assigns, and the duties of Undersigned shall bind all heirs,
personal representatives, successors and assigns. (e) This Note
shall in all respects be governed by the laws of the state in
which this Note is payable (except to the extent that federal law
governs). (f) "Chief Executive Office" means the place from which
the main part of the business operations of an entity is managed.
(g) "Undersigned" refers individually and collectively to all
makers of this Note, including, in the case of any partnership,
all general partners of such partnership individually and
collectively, whether or not such partners sign below.
Undersigned shall each be jointly and severally bound by the
terms hereof, and, with respect to any partnership executing this
Note, each general partner shall be bound hereby both in such
general partner's individual and partnership capacities. (h)
Capitalized terms not defined in this Note shall have the same
meanings set forth in the Credit Agreement. (i) "Environmental
Law" means any federal, state or local environmental law, statue,
regulation, rule, ordinance, court or administrative order or
decree, or private agreement or interpretation, now or hereafter
in existence, relating to the manufacture, distribution,
labeling, use, handling, collection, storage, treatment, disposal
or otherwise of Hazardous Substances, or in any way relating to
pollution or protection of the environment or public health. (j)
"Environmental Permit" means any federal, state or local permit,
license or authorization issued under or in connection with any
Environmental Law. (k) "Hazardous Substances" means petroleum and
petroleum products, radioactive materials, asbestos, radon, lead
containing materials, sewage or any materials or substances
defined as or included in the definition of "hazardous wastes,"
"hazardous substances," hazardous materials," "toxic substances,"
"hazardous air pollutants," "toxic pollutants," "pollution," or
terms of similar meaning as those terms are used in any
Environmental Law.
8. CONFESSION OF JUDGMENT. UNDERSIGNED HEREBY EMPOWERS THE
PROTHONOTARY OR ANY ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR
UNDERSIGNED AND TO CONFESS JUDGMENT AS OFTEN AS NECESSARY AGAINST
UNDERSIGNED IN FAVOR OF THE HOLDER HEREOF, AS OF ANY TERM, FOR
THE ABOVE SUM PLUS INTEREST DUE UNDER THE TERMS HEREOF, TOGETHER
WITH COSTS OF LEGAL PROCEEDINGS AND REASONABLE ATTORNEY'S FEES,
WITH RELEASE OF ALL ERRORS. UNDERSIGNED WAIVES ALL LAWS EXEMPTING
REAL OR PERSONAL PROPERTY FROM EXECUTION.
- -----------------------------------------------------------------
Signatures
- -----------------------------------------------------------------
Witness the due execution hereof.
- -----------------------------------------------------------------
Witness: Individual:
x x (Seal)
- ------------------------------ ------------------------------
Address
- ------------------------------ ------------------------------
Witness: Individual:
x x (Seal)
- ------------------------------ ------------------------------
Address
- ------------------------------ ------------------------------
Corporation or Other Entity
BURNHAM CORPORATION
- ------------------------------ ------------------------------
Attest/Witness By: (Signature and Title)
x /s/ Robert Berardi x /s/ Ronald L. Griffith (Seal)
- ------------------------------ ------------------------------
By: (Signature and Title)
x Senior Vice President (Seal)
------------------------------
(Corporate Seal) Business Address
1241 Harrisburg Ave.,
P.O. Box 3205,
Lancaster, PA 17604
------------------------------
CL-405 Rev. (10/89) PD 7/95
Exhibit (b)(2)
RIDER TO PROMISSORY NOTE
This Rider to Promissory Note ("Rider") is annexed to
and is part of the Promissory Note dated October 15, 1998 (the
"Note") of Undersigned, payable to Mellon Bank, N.A. ("Bank"), in
the stated principal amount of $24,000,000 (the "Facility"). Such
Promissory Note, as supplemented by this Rider, shall be referred
to as the Note. Capitalized terms used without further definition
herein shall have the meaning set forth in the Note.
1. Nature of Facility; Purpose. Proceeds of this
Facility shall be used solely for Undersigned's acquisition of
substantially all of the assets and/or stock of Bryan Steam Corp.
To the extent that the full amount available under this Facility
is not drawn in connection with such acquisition, the principal
amount under the Facility shall be reduced to the amount so drawn
and no further amounts shall be available hereunder.
2. Payment. (a) Interest shall be payable at each of
the following times: (i) if at the Prime Rate, on a monthly
basis, payable in arrears, and beginning on the first day of the
first calendar month after the date hereof; and (ii) if at the
LIBOR Rate, at the end of each Rate Period specified in each
Notification. All interest if not sooner paid shall be due and
payable on August 31, 1999 (the "Maturity Date"). Undersigned
understands and agrees that any payments of principal, interest
or other sums required under this Note may be deducted on the due
date, without notice by Bank, from any deposit account maintained
by Undersigned with Bank.
(b) Principal shall be due and payable on the Maturity
Date.
3. Interest Rate Options. (a) The outstanding
principal balance of this Note shall earn interest at the Prime
Rate, provided however that, subject to the terms of paragraph
3(b) below, by giving Notification and with Bank's consent,
Undersigned may request to have all of the outstanding principal
of this Note as hereinafter permitted earn interest, instead, at
the LIBOR Rate as follows: (i) with respect to the principal
amount of any advance under the Facility, from the date of a
Notification until the end of the Rate Period specified in the
Notification; and/or (ii) with respect to the principal amount of
any portion of the Facility outstanding and earning interest at
the LIBOR Rate at the time of the Notification related to such
principal amount, from the expiration of the then current Rate
Period related to such principal amount until the end of the Rate
Period specified in the Notification; and/or (iii) with respect
to all or any portion of the principal amount of the Facility
outstanding and earning interest at the Prime Rate at the time of
Notification, from the date set forth in the Notification until
the end of the Rate Period specified in the Notification. There
shall be no more than three (3) advances of principal accruing
interest at the LIBOR Rate outstanding at any one time. All
advances of principal amounts accruing interest at the LIBOR Rate
shall be made in minimum increments of $100,000.00.
(b) Undersigned understands and agrees: (i) that Bank,
from time to time, may refuse any request of Undersigned to
select, convert to or renew the LIBOR Rate, as the case may be,
if Bank determines in good faith (which determination shall be
conclusive) that such interest rate is impractical or unlawful
due to any law, regulation, rule, guideline or interpretation or
administration to which Bank may be subject, and (ii) that the
Bank shall have the right to terminate any Rate Periods and the
interest rate applicable thereto, prior to maturity of such Rate
Period, if Bank determines in good faith (which determination
shall be conclusive) that continuance of such interest rate has
been made impractical or unlawful by any law, regulation, rule,
guideline or interpretation or administration to which Bank may
be subject, in which event the principal to which such terminated
Rate Period relates thereafter shall earn interest at the Prime
Rate.
4. Prime Rate Fallback. After expiration of any Rate
Period, as applicable, any principal portion corresponding to
such Rate Period which has not been converted or renewed in
accordance with paragraph 3 hereof shall earn interest
automatically at the Prime Rate from the date of expiration of
such Rate Period until paid in full, unless and until Undersigned
requests and Bank approves a conversion to the LIBOR Rate, as
applicable, in accordance with paragraph 3. With respect to any
principal amount, if Undersigned fails to request the LIBOR Rate
by giving Bank a Notification, or if Bank fails to approve such
request when made, such principal amount shall be deemed to earn
interest at the Prime Rate.
5. Voluntary Repayment. Prior to the occurrence of an
Event of Default hereunder, (a) Undersigned shall have the right
at its option from time to time to prepay that portion of the
outstanding
<PAGE>
principal balance hereof which is earning interest at such time
at the Prime Rate in whole or in part; and (b) Undersigned shall
have the right to prepay all or any portion of the outstanding
principal balance hereof which is earning interest at the LIBOR
Rate, provided, however that, any prepayments of principal
earning interest at the LIBOR Rate shall be made in integral
multiples of $100,000.00 and shall be accompanied by the
Repayment Premium applicable thereto. Bank shall apply any amount
received from Undersigned as repayment (whether received pursuant
to the previous sentence or as a result of a demand or after
occurrence of an Event of Default) first, against any amount,
other than principal or interest, which may be due and payable
under this Note or under any of the documents executed and
delivered by Undersigned in connection herewith; second, against
unpaid interest; and third, against outstanding principal.
6. Indemnity. Undersigned shall indemnify Bank against
any loss or expense (including loss of margin) which Bank has
sustained or incurred as a consequence of: (a) any payment,
prepayment or conversion of any principal amount earning interest
at the LIBOR Rate, as the case may be, on a day other than the
last day of the corresponding Rate Period (whether or not any
such payment is made pursuant to demand by Bank under this Note
and whether or not any such payment is consented to by Bank,
unless Bank shall have expressly waived such indemnity in
writing); (b) any attempt by Undersigned to revoke in whole or
part any Notification given pursuant to this Note; (c) any
attempt by Undersigned to convert or renew any principal amount
earning interest at the LIBOR Rate on a day other than the last
day of the corresponding applicable Rate Period (whether or not
such conversion or renewal is consented to by Bank, unless Bank
shall have expressly waived such indemnity in writing); or (d)
any Event of Default.
If Bank sustains any such loss or expense it shall
from time to time notify Undersigned of the amount reasonably
determined by Bank to be necessary to indemnify Bank for such
loss or expense. Such amount shall be due and payable by
Undersigned on demand.
7. Records. The unpaid principal amount of this Note,
the unpaid interest accrued thereon, the interest rate or rates
applicable to such unpaid principal amount, the duration of such
applicability and the date and amount of each payment or demand
shall at all times be reasonably ascertained from the books and
records created by Bank.
All notices (including any Notification) under this
Note shall be in writing or by telephone promptly confirmed in
writing, and all such writings shall be sent by first-class,
first-class express or certified mail or by hand delivery, in all
cases with charges prepaid, provided that Bank may act in
reliance on any telephonic notice prior to receipt of written
confirmation. All notices shall be sent to Undersigned at the
address stated on the signature page hereof or in accordance with
the last unrevoked written direction from Undersigned to Bank.
All notices by Undersigned shall be effective when received by
Bank at its address at Mellon Bank, N.A., 10 South Second Street,
Harrisburg, PA 17108-1010, Attention: Middle Market Banking, and
all notices by Bank shall be effective when telephoned, deposited
in the mail or hand delivered. Written notices or confirmations
by Undersigned shall not be deemed records of Bank within the
meaning of this paragraph whether or not received by Bank and, in
the event that any written notice sent by Undersigned in
confirmation of telephonic notice differs from Bank's records of
such telephonic notice, Bank may act in reliance upon such
telephonic notice as if written notice were not received,
provided that Bank has acted in good faith. Bank may conclusively
and reasonably rely without inquiry on any notice or confirmation
purporting to be from or authorized by Undersigned and such
reliance shall be presumed to be correct.
8. Definitions. As used in this Note: "LIBOR Rate"
means for any day during each Rate Period the per annum rate of
interest (computed on a basis of a year of 360 days and actual
days elapsed) determined by Bank by adding (a) the per annum rate
of interest (rounded upward to the nearest 1/100 of 1%) obtained
by dividing (i) the rate of interest estimated in good faith by
Bank in accordance with its usual procedures (which determination
shall be conclusive) to be the average of the rate per annum for
deposits, in an amount of U.S. Dollars comparable to the amount
of principal relating to such Rate Period and having maturities
comparable to such Rate Period, offered to major money center
banks in the London interbank market at or about 11:00 a.m.,
London time, two London Business Days prior to such Rate Period,
(ii) a number equal to 1.00 minus the LIBOR Rate Reserve
Percentage for such day, plus (b) one hundred (100) basis points.
"LIBOR Rate Reserve Percentage" for any day means the percentage
(rounded upward to the nearest 1/100 of 1%), as determined in
good faith by Bank (which determination shall be conclusive) as
representing for such day the maximum effective percentage as
prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve
requirements (including, without limitation, supplemental,
marginal and emergency reserve requirements)
-2-
<PAGE>
for Bank with respect to eurocurrency funding. "Notification"
means telephonic notice (which shall be irrevocable) by
Undersigned to Bank that Undersigned has requested that the LIBOR
Rate, as the case may be, shall apply to some portion of the
principal amount of this Note in accordance with the provisions
of paragraph 3 hereof, which notice shall be given no later than
11:00 a.m., local time at the place where this Note is payable,
on the day (which shall be a day on which Bank is opened for
business) on which such election is to become effective, which
notice shall specify (i) that the LIBOR Rate option is being
selected; (ii) the principal amount to be subject to the LIBOR
Rate; (iii) whether such amount is a renewal of a previous
request of the LIBOR Rate, a conversion from the Prime Rate to
the LIBOR Rate, or a combination thereof; (iv) the Rate Period
selected; and (v) the date on which such request is to become
effective (which date shall be a date selected in accordance with
paragraph 3(a) hereof. "Prime Rate" means a per annum rate of
interest, calculated on an 360 day basis but charged on the
actual number of days elapsed, equal to the rate of interest
announced from time to time by Bank as its Prime Rate which rate
is not necessarily the lowest interest rate charged by the Bank
for loans, such Prime Rate to change from time to time as of the
effective date of each change in the Prime Rate. "Rate Period"
means for any portion of principal for which Undersigned elects
the LIBOR Rate the period of time for which such rate shall apply
to such principal portion. Rate Periods shall be for periods of
one, two, three, four or six months and for no other length of
time. "Repayment Premium" means the amount which Undersigned
shall pay to Bank as a premium in connection with a repayment of
outstanding principal earning interest at the LIBOR Rate at the
time of repayment, which amount shall be the amount determined by
Bank to be the difference between (a) the present value of the
interest payments that would have been paid in the future to Bank
by Undersigned on such repaid portion of principal accruing at
the LIBOR Rate during such Rate Period but for such repayment,
and (b) the present value of the interest payments that would be
paid in the future to Bank at the United States Treasury Rate if
on or about the date of repayment Bank made a hypothetical
investment of the repaid portion of principal accruing at a fixed
rate of interest in United States Treasury securities maturing on
or about the end of such Rate Period and bearing interest
accruing from the date of repayment, payable on each date on
which Undersigned, but for such repayment, would have paid
interest on the repaid portion of principal. "Undersigned" means,
individually and collectively, all makers of this Note. "United
States Treasury Rate" means a rate of interest per annum, equal
to (rounded downward to the nearest 1/100 of one percent) the
annual yield Bank could obtain by purchasing on the date of
repayment United States Treasury Securities with semi-annual
interest payments, maturing on or about the date on which the
repaid portion of principal would have matured.
WITNESS the due execution and delivery hereof,
intending to be legally bound.
BURNHAM CORPORATION
Attest: /s/ Robert Berardi /s/ Ronald Griffith
--------------------- -----------------------------
(Corporate Seal) By: Ronald L. Griffith
Title: Senior Vice President
/s/ Albert Morrison, III
-----------------------------
By: Albert Morrison, III
Title: President
-3-
Exhibit (b)(3)
Mellon Bank
Revolving Line of Credit Agreement
- -----------------------------------------------------------------
BURNHAM CORPORATION
("Borrower") has requested Mellon Bank, N.A. ("Bank")
to make loans (the "Loans") to Borrower from time to time during
the period set forth below (the "Commitment Period") in an
aggregate principal amount outstanding at any one time not to
exceed Bank's commitment set forth below (the "Commitment
Amount") and, subject to the terms and conditions set forth
herein and in the Note and the other Credit Documents
(hereinafter defined) and, relying upon the representations and
warranties herein and therein set forth, Bank is willing to make
such Loans.
Commitment Period: From the date hereof to but not including
August 31, 1999.
-------------------
Commitment Amount: $24,000,000.00
Within the limits of time and amount set forth above and subject
to the terms and conditions set forth herein and in the Note and
the other Credit Documents, Borrower may borrow, repay and
reborrow hereunder. Borrower may at any time or from time to time
reduce the Commitment Amount to an amount not less than the sum
of the unpaid principal amount of the Loans then outstanding plus
the principal amount of all Loans not yet made as to which notice
has been given by Borrower under Section 2 hereof, by providing
not less than five days' prior written notice (which notice shall
be irrevocable) to such effect to Bank. If Bank allows Loans
above the Commitment Amount, all the terms and conditions set
forth herein and in the Note and the other Credit Documents will
apply to such Loans.
The obligation of Borrower to repay the Loans, to pay interest
thereon and to pay fees, if any, with respect to the Commitment
Amount shall be evidenced by one or more promissory notes, note
and security agreements, letter of credit applications, or other
instruments or documents (collectively, the "Note"), which
together with this Agreement, including any Supplement hereto,
and any security agreements, instruments and other documents
executed by Borrower in connection herewith are sometimes
referred to herein as the "Credit Documents".
In consideration of the foregoing and intending to be legally
bound, Borrower agrees with Bank as follows:
1. REPRESENTATIONS AND WARRANTIES. In addition to the
representations and warranties contained in the Note and any
other Credit Documents, Borrower hereby makes the following
representations and warranties which shall be true and correct on
the date hereof and shall continue to be true and correct at the
time of the creation of any of the Loans and until the Loans
shall have been paid in full, or if there are no Loans
outstanding so long as the Commitment Period has not expired:
(a) ORGANIZATION-CORPORATION AND PARTNERSHIP. If Borrower is a
corporation or a partnership, Borrower is duly organized, validly
existing, and in good standing under the laws of the jurisdiction
in which Borrower is incorporated or was formed; Borrower has the
power and authority to own its properties and assets, to carry on
its businesses as now being conducted and is qualified to do
business in every jurisdiction in which it is required to qualify
to do business.
(b) VALIDITY AND BINDING NATURE. Borrower has the power to
execute, deliver, and perform this Agreement, the Note and all
other Credit Documents, and when executed and delivered, this
Agreement, the Note and all other Credit Documents will be valid
and binding obligations of Borrower, enforceable in accordance
with their terms; provided, however, that this representation
with respect to enforceability is limited by bankruptcy,
insolvency, or other laws of general application relating to or
affecting the enforcement of creditors' rights.
(c) DUE AUTHORIZATION-CORPORATION AND PARTNERSHIP. The execution,
delivery and performance of this Agreement, the Note and all
other Credit Documents by Borrower have been duly authorized by
all corporate or partnership action required for the lawful
creation and issuance and performance thereof and will not
violate any provisions of law, any order of any court or
governmental agency, the charter documents and by-laws of, or
partnership agreement of Borrower.
(d) CONFLICTING INSTRUMENTS. The execution, delivery and
performance of this Agreement, the Note and all other Credit
Documents will not violate any provisions of any indenture,
agreement, or other instrument to which Borrower or any of
Borrower's properties or assets are bound, and will not be in
conflict with, result in a breach of, or constitute (with due
notice and/or lapse of time) a default under any such indenture,
agreement, or other instrument, or result in the creation or
imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of Borrower.
(e) AUTHORIZATION AND CONSENTS. No authorization, consent,
approval, license or exemption of, and no registration,
qualification, designation, declaration or filing with any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, is necessary to the valid
execution,
<PAGE>
delivery and performance of this Agreement, the Note or any other
Credit Document by Borrower.
(f) FINANCIAL CONDITION. The most recent financial statements of
Borrower delivered to the Bank are true and correct and represent
fairly its financial position as of the date thereof; and the
results of its operations for the period or periods indicated;
and show all known liabilities, direct or contingent, of Borrower
as of the date thereof required to be shown in accordance with
GAAP. Since the date of such financial statements, there has been
no material adverse change in the condition, financial or
otherwise, of Borrower or in the operations, business or
properties of Borrower and, since such date, Borrower has not
incurred, other than in the ordinary course of business, any
indebtedness, liabilities, obligations or commitments, contingent
or otherwise, other than indebtedness created hereunder and
obligations in connection with the merger agreement and offer to
purchase concerning Bryan Steam Corp.
(g) COMPLIANCE WITH LAWS. Neither the Borrower nor any subsidiary
is in violation of or subject to any contingent liability on
account of any law or any order or regulation issued by any court
or governmental authority, state or federal, including but not
limited to the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), the Internal Revenue Code of 1986, as
amended (the "Code"), any applicable occupational and health or
safety law, environmental protection or pollution control law or
hazardous waste or toxic substances management, handling or
disposal law, except such as will not be materially adverse to
the business of Borrower and its subsidiaries taken as a whole.
(h) LITIGATION. Except as previously disclosed in writing to Bank
prior to the date of this Agreement, there is no action, suit or
proceeding at law or in equity or by or before any governmental
instrumentality or other agency now pending, or to the knowledge
of Borrower, threatened by or against or affecting Borrower or
any of the properties or rights of Borrower which, if adversely
determined, would impair the right of Borrower to carry on its
business substantially as now conducted or would adversely affect
the financial condition, business or operations of Borrower.
(i) MISREPRESENTATION. Neither this Agreement, the Note, the
other Credit Documents, nor any other document, statement,
financial statement, or certificate furnished to Bank by or on
behalf of Borrower in connection herewith, contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements contained therein not
misleading.
2. CONDITIONS. The obligation of Bank to make any Loan hereunder
is subject to the performance by Borrower of its obligations to
be performed hereunder and under the Note and the other Credit
Documents on or before the date of such Loan and to the
satisfaction of the following further conditions:
(a) The representations and warranties contained herein, in the
Note and in the other Credit Documents shall be true on and as of
the date of each Loan hereunder with the same effect as though
made on and as of each such date; on each such date no "Event of
Default" under and as defined in the Note and no event, act or
condition which with notice or the passage of time or both would
constitute such an Event of Default shall have occurred and be
continuing or exist or shall occur or exist after giving effect
to the Loan to made on such date; and any request for borrowing
under Section 2.(b) below shall constitute a certification by
Borrower to both such effects.
(b) Borrower shall have provided Bank with written notice (or
telephonic notice confirmed in writing) of the proposed Loan
specifying the principal amount thereof and the proposed date
thereof, which notice shall be received by Bank at its designated
office no later than 1:00 p.m., local time at the place where the
proposed Loan is to be payable, on the date (which shall be a day
on which Bank is opened for business) of such proposed Loan. In
the event Bank receives telephonic notice, Bank may act in
reliance upon such telephonic notice, provided Bank has acted in
good faith.
(c) The conditions, if any, specified in any Supplement hereto
and in the Note or any Credit Document shall have been met to the
satisfaction of Bank.
(d) All legal details and proceedings in connection with the
transactions contemplated by this Agreement shall be reasonably
satisfactory to Bank and Bank shall have received all such
counterpart originals or certified or other copies of such
documents and records of proceedings in connection with such
transactions, in form and substance reasonably satisfactory to
Bank, as Bank may from time to time reasonably request.
3. GENERAL COVENANTS. In addition to the covenants contained in
the Note and the other Credit Documents, Borrower hereby
covenants and agrees that, so long as any of the Loans are
outstanding, or if there are no Loans outstanding so long as the
Commitment Period has not expired, Borrower shall, except as Bank
may otherwise agree in writing:
(a) FINANCIAL STATEMENTS-ANNUAL. Furnish to Bank,
within ___________ days after the end of each fiscal year of
Borrower, a financial statement of Borrower's profit and loss and
surplus for such fiscal year and a balance sheet as of the end of
such fiscal year, in each case setting forth in comparative form
the corresponding figures for the preceding fiscal year, all in
reasonable detail and
See attached Supplement to Revolving Line of Credit
- -----------------------------------------------------------------
Agreement.
- -----------------------------------------------------------------
- -----------------------------------------------------------------
CL-400 (9/98)
L.C. (9/89) PD 12/89
<PAGE>
(b) FINANCIAL STATEMENTS-OTHER. Furnish to Bank each financial
statement required to be delivered to Bank by any supplement,
addendum or amendment hereto, and such other information
concerning the financial or business affairs of Borrower as may
be reasonably requested by Bank from time to time.
(c) PROPERTY. Maintain and keep all its property in good repair,
working order and condition and make or cause to be made all
necessary or appropriate repairs, renewals, replacements,
substitutions, additions, betterments and improvements thereto so
that the efficiency of all such properties shall at all times be
properly preserved and maintained.
(d) TAXES AND ASSESSMENTS. Duly pay and discharge all taxes,
assessments and governmental charges levied upon or assessed
against it or against its properties or income prior to the date
on which penalties are attached thereto, unless and except to the
extent only that such taxes, assessments and charges shall be
contested in good faith and by appropriate proceedings diligently
conducted by Borrower (unless and until foreclosure, distraint,
sale or other similar proceedings shall have been commenced) and
provided that such reserve or their appropriate provisions, if
any, as shall be required by generally accepted accounting
principles shall have been made therefor.
(e) LITIGATION. Promptly give notice in writing to Bank of the
occurrence of any material litigation, arbitration or
governmental proceeding affecting Borrower, and of any
governmental investigation or labor dispute pending or, to the
knowledge of Borrower, threatened which could reasonably be
expected to interfere substantially with normal operations of the
business of Borrower or materially adversely, affect the
financial condition, business, or operations of Borrower.
(f) BOOKS AND RECORDS. Maintain and keep proper records and books
of account in conformance with generally accepted accounting
principles applied on a consistent basis in which full, true and
correct entries shall be made of all its dealings and business
affairs.
(g) ACCESS TO PROPERTIES, BOOKS AND RECORDS. Permit any of the
officers, employees or representatives of Bank to visit and
inspect any of the properties of Borrower and to examine its
books and records and discuss the affairs, finances and accounts
of Borrower with representatives thereof, during normal business
hours, and as often as Bank may request.
(h) FINANCIAL INFORMATION-GUARANTORS. Cause any third party
guarantor of the Loans to submit annually or at any time there is
a material change in their financial position, personal or
business financial statements containing such financial
information as may be requested by Bank from time to time.
(i) OTHER OBLIGATIONS. Maintain all obligations of Borrower in
whatsoever manner incurred, including but not limited to
obligations for borrowed money or for services or goods purchased
by Borrower, in a current status.
(j) CONTINUANCE OF BUSINESS. Not engage in any line of business
other than those in which it is actively engaged in on the date
hereof and associated lines of business and the businesses of
Bryan Steam Corp. and its subsidiaries.
(k) COMPLIANCE WITH LAWS. Comply, and shall cause any subsidiary
to comply, with all laws, and all regulations or orders issued
pursuant thereto, including but not limited to ERISA, the Code,
any applicable occupational, and health or safety law,
environmental protection or pollution control law or hazardous
waste or toxic substances management, handling or disposal law.
(1) SALE OF ASSETS. Except for sales or other dispositions of
inventory in the ordinary course of business, not sell, lease,
transfer, or otherwise dispose of in a single transaction, or a
series of related transactions, all or a substantial part of the
property and assets of Borrower, whether now owned or hereafter
acquired, to any person, firm or corporation.
(m) ACQUISITION OF ASSETS. Not purchase or otherwise acquire all
or substantially all of the operating assets of any other person,
firm or corporation and, if Borrower is a corporation, not merge
or consolidate with or into any other person, firm or
corporation, or permit any other person, firm or corporation to
merge with or into it, or acquire all or substantially all of the
property or assets of any other person, firm or corporation.
(n) SELLING ACCOUNTS RECEIVABLE. Not sell, assign or discount any
of its accounts receivable or any promissory note held by it,
with or without recourse, other than the discount of such
receivables or notes in the ordinary course of business for
collection.
(o) PAYMENTS ON OUTSTANDING STOCK. Pursuant to or in
contemplation of termination, liquidation, dissolution or winding
up of Borrower, not purchase, redeem or retire or make any
dividend on or distribution on account of, if Borrower is a
corporation, any shares of the capital stock of Borrower or if
Borrower is a partnership, any capital account of any partner of
such partnership.
(p) AFFILIATED ENTITIES. Not establish any partnership
subsidiary, corporation, joint venture or other form of business
combination.
(q) INSURANCE. Keep all insurable property, real and personal,
now owned or hereafter acquired, insured at all times against
loss or damage by fire and extended coverage risks and other
hazards of the kinds customarily insured against and in amounts
customarily carried by businesses engaged in comparable
businesses and comparably situated; effect all such insurance
under valid and enforceable policies issued by insurers of
recognized responsibility not unacceptable to Bank; and, promptly
from time to time upon request of Bank, deliver to Bank a
CL-400 (9/98)
L.C. (9/89) PD 12/89
<PAGE>
summary schedule in indicating all insurance then in effect.
(r) INVESTMENTS. Not purchase, own, invest in or otherwise
acquire, directly or indirectly, any stock or other securities or
make or permit to exist any investment or capital contribution or
acquire any interest whatsoever in any other person, firm or
corporation or permit to exist any loans or advances for such
purposes except for investments in direct obligations of the
United States of America or any agency thereof, obligations
guaranteed by the United States of America, certificates of
deposit issued by a bank or trust company, organized under the
laws of the United States, or any state thereof, or marketable
securities which are publicly traded on a nationally recognized
market.
(s) PATENTS. Preserve and protect its patents, franchises,
licenses, trademarks, trademark rights, tradenames, tradename
rights, and copyrights used or useful in the conduct of its
business.
(t) GUARANTEES AND CONTINGENCIES. Not endorse, assume, guarantee,
become surety for, or otherwise become or remain liable in
connection with the obligations of any person, firm or
corporation, except Borrower may endorse negotiable or other
instruments for deposit or collection or similar transactions in
the ordinary course of its business and may guarantee or become
surety for obligations of wholly-owned subsidiaries of Borrower.
(u) TRANSACTIONS WITH AFFILIATES. Not enter into any transaction,
including, without limitation, the purchase, sale, leasing or
exchange of property, real or personal, or the rendering of any
service, with any person, firm or corporation affiliated with
Borrower, except in the ordinary course of and pursuant to the
reasonable requirements of Borrower's business and upon fair and
reasonable terms no less favorable to Borrower than would be
obtained in a comparable arm's-length transaction with any other
person, firm or corporation not affiliated with Borrower. This
provision shall not apply to transactions between Borrower, on
the one hand, and one or more of its wholly-owned subsidiaries,
on the other hand.
(v) MODIFICATIONS TO OTHER AGREEMENTS. Not amend or modify any
existing agreement with any person, firm or corporation in any
manner materially adverse to Borrower.
(w) NOTICE OF EVENT OF DEFAULT. Promptly give notice in writing
to Bank of the occurrence of any Event of Default under and as
defined in the Note, and of any condition, event, act or omission
which, with the giving of notice or the lapse of time or both,
would constitute such an Event of Default.
4. GENERAL PROVISIONS.
(a) WAIVERS. The provisions of this Agreement may from time to
time be waived in writing by Bank in its sole discretion. Any
such waiver of any kind on the part of Bank of any breach or
default under this Agreement or any waiver of any provision or
condition of this Agreement must be in writing and shall be
effective only to the extent set forth in such writing. No delay
by Bank in exercising any right or remedy hereunder shall operate
as a waiver thereof.
(b) FINANCIAL COVENANTS. Compliance or non-compliance with all
financial covenants of Borrower contained herein, or in any
supplement, addendum or amendment hereto, shall be determined in
accordance with generally accepted accounting principles applied
on a consistent basis. All financial statements of Borrower
required to be delivered to Bank hereby, or by any written
supplement now or hereafter executed by Borrower in which
reference to this Agreement is made, shall be prepared on the
basis of generally accepted accounting principles applied on a
consistent basis.
(c) BINDING NATURE. The rights and privileges of Bank contained
in this Agreement shall inure to the benefit of its successors
and assigns, and the duties of Borrower shall bind all heirs,
personal representatives, successors, and assigns. "Borrower"
refers individually and collectively to all signers of this
Agreement, including, in the case of any partnership, all general
partners of such partnership individually and collectively,
whether or not such partners sign below. Each of the signers
shall be jointly and severally bound by the terms hereof, and,
with respect to any partnership executing this Agreement, each
general partner shall be bound hereby both in such general
partner's individual and partnership capacities.
(d) GOVERNING LAW. Time of performance hereunder is of the
essence of this Agreement. This Agreement and any written
supplement hereto executed by Borrower in which reference to this
Agreement is made shall in all respects be governed by the laws
of the state where the Note is payable (except to the extent that
federal law governs).
(e) SEVERABILITY. If any provision hereof shall for any reason be
held invalid or unenforceable, no other provision shall be
affected thereby, and this Agreement shall be construed as if the
invalid or unenforceable provision had never been a part of it.
The descriptive headings hereof are for convenience only and
shall not in any way affect the meaning or construction of any
provision hereof.
5. SPECIAL COVENANTS. In addition to the covenants contained
herein and in the Note and the other Credit Documents, Borrower
hereby agrees that, so long as any of the Loans are outstanding,
or if there are no Loans outstanding so long as the Commitment
Period has not expired, Borrower shall, except as Bank may grant
its prior written consent, comply with the special provisions or
covenants set forth in any written supplement, now or hereafter
executed by Borrower, in which reference to this Agreement is
made.
CL-400 (9/98)
L.C. (9/89) PD 12/89
<PAGE>
Signatures
Witness the due execution hereof intending to be legally bound
this 15th day of October, 1998.
- -----------------------------------------------------------------
Witness: Individual:
x x (Seal)
- --------------------------- ----------------------------------
Address
- --------------------------- ----------------------------------
Witness: Individual:
x x (Seal)
- --------------------------- ----------------------------------
Address
- --------------------------- ----------------------------------
Corporation or Other Entity
BURNHAM CORPORATION
- --------------------------- ----------------------------------
Attest/Witness: By: (Signature and Title)
x /s/ Robert Berardi x /s/ Ronald L. Griffith (Seal)
- --------------------------- ----------------------------------
By: (Signature and Title)
x x Senior Vice President (Seal)
(Corporate Seal) ----------------------------------
Business Address
1241 Harrisburg Avenue,
P.O. Box 3205,
Lancaster, PA 17604
MELLON BANK, N.A.
/s/ Joseph N. Butto
----------------------------------
By: Joseph N. Butto
Title: Vice President
Business Address
10 South Market Square,
4th Floor
Harrisburg, PA 17101
Exhibit (b)(4)
SUPPLEMENT TO REVOLVING LINE OF CREDIT AGREEMENT
The following constitutes the special provisions and/or
special covenants and/or modifications referred to in the
Revolving Line of Credit Agreement dated October 15, 1998 (the
"Credit Agreement") covering the Loans (as that term is defined
in the Credit Agreement) of the undersigned (the "Borrower") from
Mellon Bank, N.A. ("Bank"). The following shall supersede any
special provision or covenant contained in any prior Supplement
To Revolving Line of Credit Agreement and shall be applicable to
all Loans in existence on the date hereof or incurred hereafter.
1. The provisions of this Supplement shall, as of the date
hereof, be deemed to be fully incorporated by reference in,
constitute a part of, and supplement the provisions of, the
Credit Agreement, which, except as supplemented hereby, shall
continue in full force and effect in accordance with its terms
and conditions. Capitalized terms not defined herein shall have
the meaning given them in the Credit Agreement.
2. Borrower hereby covenants and decrees that, so long as
any Loans are outstanding, Borrower shall, except as Bank may
grant its prior written consent:
(a) Negative Pledge. Not incur, create, assume or
permit to exist, any mortgage, pledge, lien, charge or other
encumbrance of any nature whatsoever on the accounts receivable
and inventory of Borrower other than: (i) security interests
granted in favor of Bank, (ii) pledges or deposits under workers'
compensation, unemployment insurance and social security laws, or
to secure the performance of bids, tenders, contracts (other than
for the repayment of borrowed money) or leases or to secure
statutory obligations or surety or other similar bonds used in
the ordinary course of business, (iii) tax liens which are being
contested in good faith and by appropriate proceedings diligently
conducted (unless and until foreclosure, sale or other similar
proceedings have been commenced) and provided that such reserve
or other appropriate provisions, if any, as shall be required by
generally accepted accounting principles shall have been made
therefor, and (iv) any unfiled materialmen's, mechanic's,
workmen's and repairmen's liens (provided, that if such a lien
shall be perfected, it shall be discharged of record immediately
by payment, bond or otherwise).
(b) Restrictions on Investments. Notwithstanding
Paragraph 3(r) of the Credit Agreement, investments shall be
permitted in an amount not to exceed, in the aggregate, the lower
of (i) $8,000,000; or (ii) ten percent (10%) of Borrower's total
stockholders' equity.
(c) Restrictions on Indebtedness. Borrower's
subsidiaries shall not create, incur, assume or suffer to exist
any indebtedness including, without limitation, obligations for
borrowed money and extended credit (except for indebtedness
extended by an affiliated entity), whether or not such
indebtedness is evidenced by an instrument, bond, note, debenture
or other instrument, in an amount greater than $250,000 in the
aggregate, per subsidiary.
(d) Most Favored Nations Status. Borrower shall give
notice in writing to Bank of the occurrence of any default under
any debt instruments or under any material contractual
obligations or agreements with governmental authorities, and of
the incurrence of new or additional debt obligations and the
terms thereof, and of any change, whether by addition or
modification in the terms or covenants of any debt obligation. In
the event that the terms or covenants of debt obligation of
Borrower existing on the date hereof or incurred hereafter are
more restrictive than the terms and covenants of the Credit
Agreement, such terms and covenants shall be deemed to be
incorporated in the Credit Agreement for the benefit of Bank and
shall be enforceable by Bank hereunder, at its discretion, as if
such more restrictive terms and conditions were herein fully set
forth.
(e) Year 2000 Considerations. (i) Borrower has (A)
undertaken a detailed inventory, review and assessment of all
areas within its business and operations that could be adversely
affected by the failure of Borrower to be Year 2000 Compliant on
a timely basis, (B) developed a detailed plan and timeline for
Borrower to become Year 2000 Compliant on a timely basis and (C)
to date, implemented that plan in accordance with that timetable
in all material respects. Borrower reasonably anticipates that it
will be Year 2000 Compliant on a timely basis.
<PAGE>
(f) Financial Information. Furnish to Bank, the
following financial statements within the requisite time period:
(i) Annual Reporting. Within 120 days of fiscal
year-end, a consolidated statement of profit and loss and cash
flow of Borrower and its subsidiaries for such period and a
consolidated balance sheet for Borrower and its subsidiaries as
of the end of such period, in each case setting forth in
comparative form the corresponding figures from the preceding
fiscal year, all in reasonable detail, in accordance with GAAP,
and audited by a certified public accountant satisfactory to
Bank.
(ii) Quarterly Reporting. Within sixty (60) days
of each fiscal quarter, a consolidated statement of profit and
loss and cash flow of Borrower and its subsidiaries for such
period and a consolidated balance sheet for Borrower and its
subsidiaries as of the end of such period, in each case setting
forth in comparative form the corresponding figures from the
preceding fiscal quarter, all in reasonable detail, prepared on
an unaudited basis in accordance with GAAP, and certified by the
principal financial officer of Borrower.
(iii) Compliance Certificate. Together with the
quarterly financial statements, furnish to Bank an Officer's
Compliance Certificate, signed by the Chief Financial Officer of
Borrower, certifying that no default or Event of Default has
occurred as of the date of such certificate and setting forth in
reasonable detail the calculations required to establish whether
Borrower was in compliance with the applicable requirements of
the financial covenants hereof, on the date of such financial
statement.
(iv) Additional Information. Upon request, such
other financial information, documentation or certifications to
Bank, in form and content satisfactory to Bank;
(g) Financial Covenants. Comply with the following
financial covenants which shall be tested on Borrower on a
quarterly basis in accordance with GAAP:
(i) Minimum Fixed Charges Coverage. The
Borrower's ratio of (a) Cash Flow to (b) interest expense plus
operating lease expense as determined in accordance with GAAP,
shall not be less than 1.25 to 1.00 as measured as of the end of
each fiscal quarter.
(ii) Minimum Consolidated Stockholders' Equity.
The Borrower's consolidated stockholders' equity shall not fall
below the following levels:
Date Amount
Through 6/30/96 $45,000,000
9/30/96 and adjusted $45,000,000 plus 50% of
quarterly thereafter future quarterly net income
beginning with 9/30/96
(iii) Maximum Funded Debt Ratio. The Borrower's
ratio of (a) Funded Debt to (b) Funded Debt plus total
stockholders' equity shall not exceed 0.55 to 1.00.
(iv) Adjusted Maximum Funded Debt Ratio. For a
period of at least 30 consecutive days during each fiscal year,
the Borrower's ratio of (a) Funded Debt plus current maturities
on long-term debt plus outstandings under the Note to (b) Funded
Debt plus total stockholders' equity shall not exceed 0.55 to
1.00.
(v) Maximum Secured Debt Ratio. The Borrower's
ratio of (a) Secured Funded Debt to (b) total stockholders'
equity shall not exceed 0.10 to 1.00.
(h) Fees and Expenses. Borrower shall pay on demand
any and all costs, fees and expenses including, without
limitation, attorneys' fees reasonably incurred by Bank in
connection with the closing and any subsequent documentation or
enforcement of the Loans.
(i) Definitions.
"Cash Flow" means net income plus interest expense
plus taxes plus operating lease expense, each as determined in
accordance with GAAP.
-2-
<PAGE>
"Funded Debt" means any obligations not maturing in
the next 365 day period evidenced by notes, bonds, debentures or
similar instruments and all obligations under capital leases not
maturing in the next 365 day period, as determined in accordance
with GAAP.
"GAAP" means generally accepted accounting principles.
"Secured Funded Debt" means any obligations, secured
by any asset(s) of the borrower and not maturing in the next 365
day period, evidenced by notes, bonds, debentures or similar
instruments and all obligations under capital leases not maturing
in the next 365 day period, as determined in accordance with
GAAP.
"Year 2000 Compliant" means, with regard to any
entity, that all software, embedded microchips, and other
processing capabilities utilized by, and material to the business
operations or financial condition of, such entity are able to
interpret and manipulate data on and involving all calendar dates
correctly and without causing any abnormal ending scenario,
including in relation to dates in and after the year 2000.
Witness the due execution hereof intending to be legally
bound the day first above written.
Attest: BURNHAM CORPORATION
/s/ Robert Berardi /s/ Ronald L. Griffith
- --------------------------- -----------------------------
By: Ronald L. Griffith
(CORPORATE SEAL) Title: Senior Vice President
/s/ Albert Morrison, III
-----------------------------
By: Albert Morrison, III
Title: President
MELLON BANK, N.A.
/s/ Joseph Butto
-----------------------------
By: Joseph N. Butto
Title: Vice President
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