UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarter ended March 31, 1995
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
Commission File Number: 1-7234
NATIONAL PATENT DEVELOPMENT CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-1926739
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
9 West 57th Street, New York, NY 10019
(Address of principal executive offices) (Zip code)
(212) 826-8500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange act of 1934 during the preceding 12 months
(or for such shorter period) that the registrant was required to
file such reports and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Number of shares outstanding of each of issuer's classes of
common stock as of May 10, 1995:
Common Stock 26,812,321 shares
Class B Capital 250,000 shares
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
Page No.
Part I. Financial Information
Consolidated Condensed Balance Sheets -
March 31, 1995 and December 31, 1994 1
Consolidated Condensed Statements of Operations-
Three Months Ended March 31, 1995 and 1994 3
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 31, 1995 and 1994 4
Notes to Consolidated Condensed Financial
Statements 6
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Qualification Relating to Financial Information 11
Part II. Other Information 12
Signatures 13
PART I. FINANCIAL INFORMATION
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
March 31, December 31,
1995 1994
ASSETS (unaudited) *
Current assets
Cash and cash equivalents $ 9,009 $ 10,075
Accounts and other receivables 41,163 52,487
Inventories 24,619 20,642
Costs and estimated earnings
in excess of billings on
uncompleted contracts 12,931 15,237
Prepaid expenses and other
current assets 6,154 6,770
Total current assets 93,876 105,211
Investments and advances 15,470 11,600
Property, plant and equipment, at cost 31,544 37,423
Less accumulated depreciation (20,173) (22,843)
11,371 14,580
Intangible assets, net of amortization 33,293 37,025
Investment in financed assets 85 684
Other assets 3,338 6,446
$157,433 $175,546
* The Consolidated Condensed Balance Sheet as of December 31,
1994 has been summarized from the Company's audited Consolidated
Balance Sheet as of that date.
See accompanying notes to the consolidated condensed financial
statements.
1
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (Continued)
(in thousands)
March 31, December 31,
1995 1994
LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited) *
Current liabilities
Current maturities of long-term debt
and notes payable $ 11,011 $ 14,279
Short-term borrowings 25,376 31,060
Accounts payable and accrued expenses 26,193 27,958
Billings in excess of costs and
estimated earnings on
uncompleted contracts 4,175 6,091
Total current liabilities 66,755 79,388
Long-term debt less current maturities 11,706 17,513
Minority interests and other 9,426 11,970
Common stock issued subject to
repurchase obligation 1,522 1,510
Stockholders' equity
Common stock 266 241
Class B capital stock 2 2
Capital in excess of par value 122,387 119,856
Deficit (52,704) (53,151)
Net unrealized loss on available-
for-sale securities (1,927) (1,783)
Total stockholders' equity 68,024 65,165
$157,433 $175,546
* The Consolidated Condensed Balance Sheet as of December 31,
1994 has been summarized from the Company's audited Consolidated
Balance sheet as of that date.
See accompanying notes to the consolidated condensed financial
statements.
2
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
Three months
ended March 31,
1995 1994
Revenues
Sales $ 46,552 $ 44,530
Investment and other income
(expense), net (134) (752)
46,418 43,778
Costs and expenses
Costs of goods sold 39,282 36,518
Selling, general & administrative 7,162 7,865
Interest 998 1,482
47,442 45,865
Gain on sale of stock of a subsidiary 2,567
Minority interests (300) (68)
Income (loss) before income taxes,
discontinued operation and
extraordinary item 1,243 (2,155)
Income tax expense (297) (66)
Income (loss) before discontinued
operation and extraordinary item 946 (2,221)
Discontinued operation
Loss from discontinued operation (727) (239)
Income (loss) before extraordinary item 219 (2,460)
Extraordinary item
Early extinguishment of debt,
net of income tax 228
Net income (loss) $ 447 $ (2,460)
Income (loss) per share
Income (loss) before discontinued
operation and extraordinary item $ .04 $ (.11)
Discontinued operation (.03) (.02)
Extraordinary item .01
Net income (loss) per share $ .02 $ (.13)
Dividends per share none none
See accompanying notes to the consolidated condensed financial
statements.
3
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Three months
ended March 31,
1995 1994
Cash flows from operations:
Net income (loss) $ 447 $ (2,460)
Adjustments to reconcile net
income (loss) to net cash
provided by (used for)
operating activities:
Provision for discontinued operation 700
Depreciation and amortization 2,319 1,248
Gains from early extinguishment
of debt (228)
Gain on sale of stock of a
subsidiary (2,567)
Changes in other operating items (2,236) (5,680)
Net cash used for operations (1,565) (6,892)
Cash flows from investing activities:
Proceeds from sale of stock
of a subsidiary 5,000
Additions to property, plant
& equipment (1,809) (1,382)
Additions to intangible assets (427)
Reduction in (additions to)
investments and other assets, net 291 1,685
Net cash provided by (used for)
investing activities 3,055 303
Cash flows from financing activities:
Net proceeds from short-term borrowings 1,947 5,147
Proceeds from issuance of
long-term debt 924
Reduction of long-term debt (4,503) (778)
Proceeds from issuance of common stock 88
Exercise of common stock options
and warrants 80
Net cash provided by (used for)
financing activities (2,556) 5,461
4
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
(in thousands)
Three months
ended March 31,
1995 1994
Net decrease in cash and cash
equivalents $ (1,066) $ (1,128)
Cash and cash equivalents at the
beginning of the periods 10,075 10,976
Cash and cash equivalents at the end
of the periods 9,009 9,848
Supplemental disclosures of cash
flow information:
Cash paid during the periods for:
Interest $ 1,137 $ 919
Income taxes $ 328 $ 143
See accompanying notes to the consolidated condensed financial
statements.
5
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. Inventories
Inventories are valued at the lower of cost or market,
principally using the first-in, first-out (FIFO) method.
Inventories consisting of material, labor, and overhead are
classified as follows (in thousands):
March 31, December 31,
1995 1994
Raw materials $ 1,763 $ 1,973
Work in process 534 462
Finished goods 19,709 15,557
Land held for resale 2,613 2,650
$ 24,619 $ 20,642
2. Long-term debt
Long-term debt consists of the following (in thousands):
March 31, December 31,
1995 1994
8% Swiss bonds $ 1,385 $ 2,999
Swiss convertible bonds 5,763 10,157
New 5% convertible bonds 2,129 2,129
12% Subordinated debentures 6,783 6,783
Other 6,657 9,145
22,717 31,213
Less current maturities 11,011 13,700
11,706 $ 17,513
6
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (Continued)
(Unaudited)
3. Subsequent event
On April 7, 1995, the Company entered into a $5,000,000 Term
Loan Agreement, of which the Company received $4,900,000 after
closing fees. The Term Loan is payable in sixteen consecutive
quarterly installments, commencing on June 30, 1996. The first
fifteen installments will be $250,000 and the last installment
shall be $1,250,000. The Company will use the proceeds to repay
and refinance its Swiss denominated long-term debt due in 1995
and 1996. The Term Loan is secured by certain assets of the
Company and requires the Company to meet certain financial
covenants.
In addition, General Physics Corporation (GP), the Company's
51% owned subsidiary entered into a new $20,000,000 secured
revolving credit agreement with a commercial bank, and terminated
its previous credit agreement. Borrowings under the new credit
agreement bear interest at the prime rate or at a rate which is
1.75% over LIBOR, whichever rate is elected by GP. The new
credit agreement is secured by the accounts receivable of GP and
certain of its subsidiaries, and contains certain covenants
which, among other things, limit the amount and nature of certain
expenditures by GP, and requires GP to maintain certain financial
ratios.
7
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company had income (loss) before income taxes,
discontinued operation and extraordinary item of $1,243,000 for
the quarter ended March 31, 1995 compared to a loss of
$(2,155,000) for the quarter ended March 31, 1994. The improved
operating results were primarily the result of the $2,567,000
gain recognized by the Company on the sale of 1,666,667 shares of
the Company's GTS Duratek, Inc. (Duratek) common stock in January
1995. As a result of the transaction, the Company's ownership
fell below 50% and commencing in January 1995, the Company will
account for its investment in Duratek on the equity basis. In
addition, the Company had reduced interest expense due to a
reduction in long-term debt, as well as improved operating
results at the Company's Hydro Med Sciences division.
During the first quarter of 1995, the Company realized net
foreign currency transaction losses of $(1,069,000), as compared
to a loss of $(897,000) for the first quarter of 1994. This was
a result of the weakness of the U.S. dollar relative to the Swiss
Franc and the Company's decision not to hedge its Swiss currency
obligations. At March 31, 1995, there was an aggregate of SFr.
6,849,000 of Swiss denominated indebtedness outstanding, of which
SFr. 5,749,000 represents principal amount outstanding and
approximately SFr. 1,100,000 represents interest accrued thereon.
Foreign currency valuation fluctuations may adversely affect the
results of operations and financial condition of the Company. In
order to protect itself against currency valuation fluctuations,
the Company has at times swapped or hedged a portion of its
obligations denominated in Swiss Francs. At March 31, 1995, the
Company had not hedged its Swiss Franc obligations. If the value
of the Swiss Franc to the U.S. dollar increases, the Company will
recognize transaction losses on its Swiss Franc obligations. On
March 31, 1995, the value of the Swiss Franc to the U.S. dollar
was 1.133 to 1. There can be no assurance that the Company will
be able to swap or hedge obligations denominated in foreign
currencies at prices acceptable to the Company or at all. The
Company will continue to review this policy on a continuing
basis.
Sales
For the quarter ended March 31, 1995, consolidated sales
increased by $2,022,000 to $46,552,000 from the $44,530,000 in
the corresponding quarter of 1994. The increased sales were the
result of increased sales within the Distribution and Physical
Science Groups. The increased sales within the Physical Science
8
Group were the result of consolidating the sales of General
Physics Corporation (GP) since September 1994, partially offset
by Duratek being accounted for on the equity basis since January
1995.
Gross margin
Consolidated gross margin of $7,270,000, or 16%, for the
quarter ended March 31, 1995, decreased by $742,000 compared to
the consolidated gross margin of $8,012,000, or 18%, for the
quarter ended March 31, 1994. The decreased gross margin in 1995
was principally the result of decreased gross margin achieved by
the Physical Science Group primarily due to the Company's
ownership in Duratek falling below 50% in January 1995, and the
Company accounting for the results of Duratek on the equity basis
from that time, partially offset by increased gross margin
achieved by GP as a result of GP being included in the
consolidated results since September 1994.
Selling, general and administrative expenses
For the three months ended March 31, 1995, selling, general
and administrative (SG&A) expenses were $7,162,000 compared to
the $7,865,000 incurred in the first quarter of 1994. The
decrease in SG&A for the first quarter of 1995 was the result of
Duratek being accounted for on the equity method since January
1995.
Interest expense
For the three months ended March 31, 1995, interest expense
was $998,000 compared to $1,482,000 for the three months ended
March 31, 1994. The decreased interest expense for the quarter
was the result of reduced long-term debt.
Investment and other income (expense), net
Investment and other income (expense), net of $(134,000) for
the quarter ended March 31, 1995, improved by $618,000 as
compared to $(752,000) for the first quarter of 1994. The
reduced expense was principally due to the effect of the
following factors; a loss of $(275,000) realized in the quarter
ended March 31, 1995, on the share of losses of 20% to 50% owned
subsidiaries, compared to a loss of $(770,000) recognized in the
quarter ended March 31, 1994, partially offset by $(1,069,000)
and $(897,000) of foreign currency transaction losses, for the
quarters ended March 31, 1995 and 1994, respectively. For the
quarter ended March 31, 1995 and 1994, the Company's share of
ISI's loss was $(335,000) and $(845,000). In addition, the
Company achieved increased investment income in 1995 due to
increased cash balances and higher short-term interest rates.
9
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1995, the Company had cash and cash equivalents
totaling $9,009,000. GP, SGLG and American Drug Company had cash
and, cash equivalents of $271,000 at March 31, 1995. The
minority interests of these two companies are owned by the
general public, and therefore the assets of these subsidiaries
have been dedicated to the operations of these companies and may
not be readily available for the general corporate purpose of the
parent. In addition, MXL Industries, Inc. had cash and cash
equivalents totaling $641,000, which was not available to the
Company due to restrictions within MXL's line of credit
agreement.
The Company has sufficient cash, cash equivalents and
marketable securities, and borrowing availability under existing
and potential lines of credit to satisfy its cash requirements
for its Swiss Franc denominated indebtedness due in 1995, which
totaled approximately $3,816,000 at March 31, 1995. The Company
had not yet paid approximately $2,874,000 of such indebtedness
which was due in March 1995. In order for the Company to meet
its long-term cash needs, which include the repayment of
approximately $3,332,000 of Dual Currency and Swiss Franc
denominated indebtedness scheduled to mature in 1996, the Company
must obtain additional funds from among various sources. The
Company has historically reduced its long-term debt through the
issuance of equity securities in exchange for long-term debt. In
addition to its ability to issue equity securities, the Company
believes that it has sufficient marketable long-term investments,
as well as the ability to obtain additional funds from its
operating subsidiaries and the potential to enter into new credit
arrangements. The Company reasonably believes that it will be
able to accomplish some or all of the above transactions in
order to fund the scheduled repayment of the Company's long-term
Swiss debt in 1996.
10
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
QUALIFICATION RELATING TO FINANCIAL INFORMATION
March 31, 1995
The financial information included herein is unaudited. In
addition, the financial information does not include all
disclosures required under generally accepted accounting
principles because certain note information included in the
Company's Annual Report has been omitted; however, such
information reflects all adjustments (consisting solely of normal
recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of the results for the interim
periods. The results for the 1995 interim period are not
necessarily indicative of results to be expected for the entire
year.
11
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
3.ii Amended By-Laws of the Registrant.
10. Credit Agreement dated April 7, 1995 among
the Registrant, General Physics Corporation,
Inventory Management Corporation, GP
Environmental Services, Inc. and GPS
Technologies, Inc. Federal Systems Group and
NatWest Bank, N.A.
b. Reports
none
12
NATIONAL PATENT DEVELOPMENT CORPORATION AND SUBSIDIARIES
March 31, 1995
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed in
its behalf by the undersigned thereunto duly authorized.
NATIONAL PATENT DEVELOPMENT
CORPORATION
DATE: May 12, 1995 BY: Jerome I. Feldman
President and Chief
Executive Officer
DATE: May 12, 1995 BY: Scott N. Greenberg
Vice President,
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000070415
<NAME> NATIONAL PATENT DEVELOPMENT CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 9009
<SECURITIES> 0
<RECEIVABLES> 43463
<ALLOWANCES> 2300
<INVENTORY> 24619
<CURRENT-ASSETS> 93876
<PP&E> 31544
<DEPRECIATION> 20173
<TOTAL-ASSETS> 157433
<CURRENT-LIABILITIES> 66755
<BONDS> 11706
<COMMON> 266
0
0
<OTHER-SE> 2
<TOTAL-LIABILITY-AND-EQUITY> 157433
<SALES> 46552
<TOTAL-REVENUES> 46418
<CGS> 39282
<TOTAL-COSTS> 7162
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 998
<INCOME-PRETAX> 1243
<INCOME-TAX> 297
<INCOME-CONTINUING> 946
<DISCONTINUED> (727)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 447
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
BY-LAWS
OF
NATIONAL PATENT DEVELOPMENT CORPORATION
ARTICLE I
OFFICES
Section 1. The location of the principal office of the
Corporation in the State of Delaware shall be the City of
*Wilmington, County of New Castle.
Section 2. The Corporation may also have offices at such
other places both within and without the State of Delaware as the
Board of Directors may from time to time determine or the
business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the
election of directors shall be held at the principal office of
the Corporation in the State of Delaware or at such other places
within or without the State of Delaware as may from time to time
be fixed by the Board of Directors and may be specified in the
respective notices of meeting or duly executed waivers of notice;
provided that the place of meeting for the election of directors
*(Section 1, Article I, amended by
the Executive Committee of the
Board of Directors on February
1, 1977.)
shall be changed within sixty days next before the day on which
the election is to be held and, at least twenty days before the
election is held, a notice of any such change shall be given to
each stockholder entitled to vote at the election.
*Section 2. The Annual Meeting of the Stockholders of the
Corporation shall be held on such date and at such time as may be
designated by the Board of Directors, for the purpose of electing
directors and for the transaction of such other business as may
be properly brought before the meeting.
Section 3. Written notice of the annual meeting shall be
given to each stockholder entitled to vote thereat, at least ten
days before the date fixed for the meeting.
Section 4. At least ten days before every election of
directors, a complete list of the stockholders entitled to vote
at said election, arranged in alphabetical order, with the
residence of each and the number of voting shares held by each,
shall be prepared by the Secretary. Such list shall be open to
the examination of any stockholder for said ten days either at a
place within the city, town or village where the election is to
be held and which place shall be specified in the notice of
meetings, or, if not so specified, at the place where said
meeting is to be held, and shall be produced and kept at the time
and place of election during the whole time thereof, and subject
to the inspection of any stockholder who may be present.
Section 5. At all elections of Directors, the Chairman
of the meeting shall appoint two (2) Inspectors of Election. The
*(Section 2, Article II, amended by the
Board of Directors on April 24, 1995.)
Inspectors shall first take and subscribe an oath of affirmation
faithfully to execute the duties of Inspectors at such meeting
with strict impartiality and according to the best of their
ability, and shall take charge of the polls, and after the
balloting shall make a certificate of the result of the vote
taken; but no Director or candidate for the office of Director
shall be appointed as such Inspector.
*Section 6. The Board of Directors may close the stock
transfer books of the Corporation for a period not exceeding
sixty days preceding the date of any meeting of the stockholders
or the date for payment of any dividend or the date for the
allotment of rights of the date when any change or conversion or
exchange of capital stock shall go into effect or the date in
connection with obtaining the consent of stockholders for any
purpose. In lieu of closing the stock transfer books as
aforesaid, the Board of Directors may fix in advance a date, not
exceeding sixty day preceding the date of any meeting of
stockholders, or the date for the payment of any dividend, or the
date for the allotment of rights, or the date when any change or
conversion of exchange of capital stock shall go into effect, or
a date in connection with obtaining such consent, as a record
date for the determination of the stockholders entitled to notice
of, and to vote at, any such meeting, and any adjournment
thereof, or entitled to receive payment of any such dividend, or
to any such allotment of rights, or to exercise the rights in
*(Section 6, Article II, amended by
the Executive Committee of the
Board of Directors on November 17,
1978.)
respect of any such change, conversion or exchange of capital
stock, or to give such consent, and in such case such
stockholders and only such stockholders as shall be stockholders
of record on the date so fixed shall be entitled to such notice
of, and to vote at, such meeting and any adjournment thereof, or
to receive payment of such dividend, or to receive such allotment
of rights, or to exercise such rights or to give such consent, as
the case may be, notwithstanding any transfer of any stock on the
books of the Corporation after any such record date fixed as
aforesaid.
Section 7. Special meetings of the stockholders for any
purpose or purposes, unless otherwise prescribed by stature or by
the Certificate of Incorporation, shall be held at the principal
office of the Corporation in the State of Delaware or at such
other place within or without the State of Delaware as may be
designated in the notice of said meeting, upon call of the
President or the Secretary at the request in writing of
stockholders owning capital stock of the Corporation issued and
outstanding and representing 50% of the combined voting power of
all issued and outstanding classes of capital stock. Such
request shall state the purpose of the proposed meeting.
Section 8. Written notice of a special meeting of
stockholders, stating the time and place thereof, shall be given
to each stockholder entitled to vote thereat at least five days
before the date fixed for such meeting.
Section 9. The holders of record of stock, issued and
outstanding and entitled to vote thereat, present in person or
represented by proxy, representing a majority of the number of
votes entitled to be cast shall constitute a quorum at all
meetings of stockholders except as otherwise provided by statute,
by the Certificate of Incorporation or by these By-Laws. If,
however, such quorum shall not be present or represented at any
meeting of the stockholders, the stockholders entitled to vote
thereat, present in person or represented by proxy, shall have
power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be
present or represented. At such adjourned meeting at which a
quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as
originally called.
Section 10. When a quorum is present at any meeting, the
vote of the holders of stock having a majority of the voting
power, present in person or represented by proxy, shall decide
any question brought before such meeting, unless the question is
one upon which by express provision of the statutes or of the
Certification of Incorporation or of these By-Laws, a different
vote is required, in which case such express provisions shall
govern and control the decision of such question.
Section 11. Any vote on stock of the Corporation may be
given by the stockholder entitled thereto in person or by his
proxy appointed by an instrument in writing, subscribed by such
stockholder or by his attorney thereunder authorized and
delivered to the secretary of the meeting; provided, however,
that no proxy shall be voted on after three years from its date
unless said proxy provides for a longer period. Except where the
transfer books of the Corporation shall have been closed or a
date shall have been fixed as a record date for the determination
of stockholders entitled to vote, no share of stock shall be
voted at any election of Directors which shall have been
transferred on the books of the Corporation within twenty days
next preceding such election of Directors.
Section 12. Whenever a vote of stockholders at a meeting
thereof is required or permitted to be taken in connection with
any corporate action by any provisions of the statutes or of the
Certification of Incorporation or of these By-Laws, the meeting
and of stockholders may be dispensed with, if all the
stockholders who would have been entitled to vote upon the action
if such meeting were held, shall consent in wrrriting to such
corporate action being taken. Nothing in the Section contained
shall be construed to alter or modify the provisions of Section
271 of the Delaware Corporation Law.
ARTICLE III
DIRECTORS
Section 1. The property and business of the Corporation
shall be managed by its Board of Directors which may exercise all
such powers of the Corporation and do all such lawful acts and
things as are not by statue or by Certificate of Incorporation of
by these By-Laws directed or required to be exercised or done by
the stockholders.
Section 2. The number of Directors which shall
constitute the whole Board shall be nine or such other number,
not less than three and not more than fifteen, as the Directors
may from time to time determine by resolution. The Directors
shall be elected at the annual meeting of stockholders, except as
provided in Section 3 of this Article, and each Director elected
shall hold office until his successor shall be elected and shall
qualify. Directors need not be stockholders.
*Unless recommended by the Board of Directors for election,
no person shall be elected a director, unless notice in writing
of a nomination by a stockholder of the Corporation shall be
received by the Secretary of the Corporation not less than (i)
with respect to an election to be held at an annual meeting of
stockholders, 90 days in advance of such meeting and (ii) with
respect to an election to be held at a special meeting of
stockholders, the close of business on the seventh day following
the date on which notice of such meeting is first given to
stockholders. Such notice must set forth (a) the name, age,
business address, and (if known) residence address of each
nominee proposed in such notice; (b) the principal occupation or
employment of each such nominee; (c) a description of the
business experience during the last five (5) years of each such
nominee, and (d) the number of shares of capital stock of the
Corporation beneficially owned by each such nominee. In
addition, such notice must be signed by a stockholder duly
*(Section 2, Article III, amended
by the Board of Directors on
April 24, 1995.)
qualified to attend and vote at the meeting (other than the
person or persons nominated) and must contain a notice in writing
signed by each nominee of his willingness to be elected and to
serve as a director.
Section 3. Vacancies and newly created directorships
resulting from any increase in the authorized number of Directors
may be filled by a majority of the Directors then in office,
though less than a quorum, and the Directors so chosen shall hold
office until the next annual election and until their successors
are duly elected and shall qualify, unless sooner displaced
pursuant to law; provided, however, that, if one or more
directors shall resign from the Board, effective at a future
date, the remaining directors who have not resigned may fill such
vacancy or vacancies or they may request the resigning directors
to participate in filling such vacancy or vacancies and in either
case, the vote therein shall become effective at the future date
aforesaid. The votes taken pursuant to this Section 3 need not
be by ballot.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The Directors of the Corporation may hold
their meetings both regular and special, either within or without
the State of Delaware.
Section 5. The first meeting of each newly elected Board
may be held immediately after each annual meeting of the
stockholders at the same place at which such annual meeting is
held, and no notice of such meeting shall be necessary.
Section 6. Regular meetings of the Board may be held
without notice at such time and place as shall from time to time
be determined by the Board.
Section 7. Special meetings of the Board may be called
by the President or Executive Vice President on at least two
days' notice to each Director, either personally or by mail or by
telegram. Meetings may be held at any time without notice if all
the directors are present, or if at any time before or after the
meeting those not present waive notice of the meeting in writing.
Section 8. At all meetings of the Board, a majority of
the number of Directors then in office shall constitute a quorum
for the transaction of business and the act of a majority of the
Directors present at a meeting at which there is a quorum shall
be the act of the Board of Directors, except as may be otherwise
specifically provided by statute or by the Certificate of
Incorporation or by these By-Laws. If a quorum shall not be
present at any meeting of Directors, the Directors present
thereat may adjourn the meeting from time to time without notice
other than announcement at the meeting, until a quorum shall be
present.
COMMITTEES OF DIRECTORS
Section 9. The Board of Directors may, by resolution
passed by a majority of the whole Board, designate an Executive
Committee to consist of two (2) or more Directors as the Board
may from time to time determine. *The Executive Committee shall
*(Section 9, Article III, amended by
the Board of Directors on February
26, 1980.)
have, and may exercise all the powers of the Board of Directors
in the management of the business and the affairs of the
Corporation, including, without limitation, the issuance of
shares of the Common Stock of the Corporation, and shall have
power to authorize the seal of the Corporation to be affixed to
all papers which may require it, but neither the Executive
Committee nor any other Committee appointed by the Board shall
have the power to fill vacancies in the said Committee; provided,
however, that, in the absence or disqualification of any member
of the Executive Committee or of any other Committee appointed by
the Board, the member or members thereof present at any meeting
and not disqualified from voting, whether or not he or they
constitute a quorum may unanimously appoint another member of the
Board to act at a meeting in the place of any such absent or
disqualified member, subject, however, to the right of the Board
of Directors to designate one or more alternate members of such
Committee which alternate members shall have power to serve,
subject to such conditions as the Board may prescribe, as a
member or members of said Committee during the absence of
inability to act of any one ore more members of said Committee.
The Board of Directors shall have the power at any time to change
the membership of the Executive Committee, to fill vacancies in
it, or to dissolve it. The Executive Committee may make rules
for the conduct of its business and may appoint such Committees
and assistants as it may from time to time deem necessary. A
majority of the members of the Executive Committee shall
constitute a quorum. Unless otherwise ordered by the Board, each
member of the Executive Committee shall continue to be a member
thereof until the expiration of his term of office as a Director
(or, in the case of his reelection as a Director, until the
expiration of his new tern of office) or until sooner removed by
the Board. Meetings of the Executive Committee shall be held at
the principal office of the Corporation in the State of Delaware,
or at such other place or places within or without the State of
Delaware as shall abe specified in the notice or waiver of notice
of meeting, or specified by resolution of the Board or of the
Executive Committee.
Section 10. The Board of Directors may also, by
resolution or resolutions, passed by a majority of the Board,
designate one or more other Committees, each Committee to consist
of two or more of the Directors of the Corporation, which to the
extent provided in said resolution or resolutions, shall have and
may exercise the powers of the Board of Directors in the
manageement of the business and affairs of the Corporation and
shall have power to authorize the seal of the Corporation to be
affixed to all papers which may require it. Such Committee or
Committees shall have such name or names as may be determined
from time to time by resolution adopted by the Board of
Directors.
Section 11. Whenever requested by the Board of Directors
a committee shall keep regular minutes of their proceedings and
report the same to the Board when required.
COMPENSATION OF DIRECTORS
Section 12. Directors may, by resolution of the Board,
receive a fixed annual sum or other compensation for acting as
Directors, payable quarterly or at such other intervals as the
Board shall fix, and/or a fixed sum or other compensation and
expenses of attendance, if any, for attendance at each regular or
special meeting of the Board; provided that nothing herein
contained shall be construed to preclude any Director from
serving the Corporation, or any subsidiary or affiliated
corporation, in any other capacity and receiving compensation
therfor. Members of special or standing Committees may be
allowed like compensation for attending Committee meetings.
INFORMAL ACTION BY DIRECTORS
Section 13. Unless otherwise restricted by the
Certificate of Incorporation of these By-Laws, any action
required or permitted to be taken at any meeting of the Board of
Directors or of any committee thereof may be taken without a
meeting, if prior to such action a written consent thereto is
signed by all members of the Board or of such committee, as the
case may be, and such written consent is filed with the minutes
or proceedings of the Board or Committee.
REMOVAL OF DIRECTORS
Section 14. At any special meeting of the stockholders,
duly called as provided in these By-Laws, any Director or
Directors may be the affirmative vote of the holders of amajority
of all the shares of stock outstanding and entitled to vote for
the election of Directors be removed from office, either with or
without cause, and his successor or their successors may be
elected at such meeting; or the remaining directors may, to the
extent vacancies are not filled by such election, fill any
vacancy or vacancies created by such removal.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 15. The Corporation shall indemnify any and all
of its Directors and officers and former Directors and officers
and any person who may be serving or have served at its request
as a Director or officer of another corporation in which it owns
shares of capital stock or of whichit is a creditory (and their
heirs, distributees, executors, and administrators), against
expenses actually and necessarily incurred by them in connection
with the defense of any action, suit or proceeding inwhich they,
or any of them, are made parties, or a party, by reason of being
or having been Directors or officers or a Director or officer of
the Corporation, or of such other corporation; provided however,
that the Corporation shall not indemnify any such Director or
officer or former Director or officer or person in relation to
matters as to which he shall be adjudged in such action, suit or
proceeding to be liable for negligence or misconduct in the
performance of duty, nor in respect of any matter on which any
settlement or compromise is effected, if the total expense,
including the cost of such settlement, shall substantially exceed
the expense which might reasonably be incurred by such Director
or officer or former Director or officer or person in conducting
such litigation to a final conclusion. The foregoing rights and
indemnification shall not be deemed exclusive of any other rights
to which those indemnified may be entitled, under common law, any
statute, by-law, agreement, vote of stockholders, or otherwise.
ARTICLE IV
NOTICES
Section 1. Whenever under the provisions of the statutes
or of the Certificate of Incorporation or of these By-Laws,
notice is required to be given to any Director or stockholder, it
shall not be construed to mean personal notice, but such notice
may be given in writing, by mail addressed to such Director or
stockholder at such address as appears on the books of the
Corporation, and such notice shall be deemed to be given at the
time when the same shall be thus mailed.
Section 2. Whenever any notice is required to be given
under the provisions of the statutes or of the Certificate of
Incorporation or of these By-Laws, a waiver thereof in writing
signed by the person or persons entitled to said notice, whether
before or after the time stated therein, shall be deemed
equivalent thereto.
ARTICLE V
OFFICERS
*Section 1. The officers of the Corporation shall be
chosen by the Board of Directors and shall be a President, one or
more Executive Vice Presidents, a Senior Vice President, a
Secretary and a Treasurer. The Board of Directors may also
choose additional Vice Presidents and one or more Assistant
Secretaries and Assistant Treasurers. Any two offices may be
*(Section 1, Article V, amended by the
Executive Committee of the Board of
Directors on October 1, 1976.)
(Section 1, Article V, further amended
by the Executive Committee of the Board
of Directrs on September 1, 1986.)
held by the same person. More than two offices other than the
offices of President and Secretary may be held by the same
person. The Board may appoint such other officers and agents as
it shall deem necessary, who shall hold their offices for such
terms and shall exercise such powers and perform such duties as
shall be determined from time to time by the Board.
*Section 2. The board of Directors at its first meeting
after each annual meeting of stockholders shall choose a
President, one or more Executive Vice Presidents, and Treasurer
and a Secretary, none of whom need be a member of the Board.
Section 3. The officers of the Corporation shall hold
office until their successors are chosen and qualify. Any
officer elected or appointed by the Board of Directors may be
removed either with or without cause at any time by the
affirmative vote of a majority of the whole Board of Directors.
If the office of any officer becomes vacant for any reason, the
vacancy shall be filled by the Board of Directors.
PRESIDENT
Section 4. The President shall have general supervision
of the business of the Corporation and over its several officers,
subject to the control of the Board of Directors. He shall,
unless another person is designated by the Board of Directors,
preside at all meetings of the stockholders. He shall sign and
execute in the name of the Corporation, all deeds, mortgages,
bonds, contracts or other instruments authorized by the Board of
*(Section 2, Article V amended by the
Executive Committee of the Board of
Directors on September 1, 1986.)
Directors, except where required or permitted by law to be
otherwise signed or executed and except in cases where the
signing and execution thereof shall be delegated by the Board of
Directors or by these By-Laws to some other officer or agent of
the Corporation; and in general, shall perform all the duties
incident to the office of the President.
EXECUTIVE VICE PRESIDENT
Section 5. The Executive Vice President and any
additional Vice Presidents, shall perform such duties as the
President or the Board of Directors may, from time to time,
designate.
SECRETARY AND ASSISTANT SECRETARIES
Section 6. The Secretary shall record all the
proceedings of the meetings of the stockholders and Directors in
a book to be kept for that purpose, and shall perform like duties
for the standing Committees when requested. He shall give, or
cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors, and shall perform
such other duties as may be prescribed by the Board of Directors
or President, under whose supervision he shall be. He shall keep
in safe custody the seal of the Corporation and when authorized
by the Board, affix the same to any instrument requiring it and,
when so affixed, it shall be attested by his signature or by the
signature of the Treasurer or an Assistant Secretary.
Section 7. The Assistant Secretaries in order of their
seniority shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and
shall perform such other duties as the President or the Board of
Directors shall prescribe.
TREASURER AND ASSISTANT TREASURER
Section 8. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the Corporation in such
depositories as may be designated by the Board of Directors.
Section 9. He shall disburse the funds of the
Corporation and may be ordered by the Board of Directors, taking
proper vouchers for such disbursements, and shall render to the
President and the Board of Directors, at its regular meetings, or
when the Board of Directors so requires, an account of all his
transactions as Treasurer and of the financial condition of the
Corporation.
Section 10. He shall perform all duties incident to the
office, and any duties that may be assigned to him by the Board
of Directors or the President.
Section 11. If required by the Board of Directors, he
shall give the Corporation a bond in such sum and with such
surety or sureties as shall be satisfactory to the Board for the
faithful performance of the duties of his office and for the
restoration to the Corporation, in case of his death,
resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in
his possession or under his control belonging to the Corporation.
Section 12. The Assistant Treasurers in the order of
their seniority, unless otherwise determined by the Board of
Directors shall, in the absence or disability of the Treasurer,
perform the duties and exercise the powers of the Treasurer.
They shall perform such other duties and have such other powers
as the President or the Board of Directors may from time to time
prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. The interest of each stockholder of the
Corporation shall be evidenced by certificates for shares of
stock in such form as the Board of Directors may from fime to
time prescribe in accordance with the law. The certificates of
stock shall be numbered and shall be entered in the books of the
Corporation as they are issued. They shall exhibit the holder's
name and numjber of shares and shall be signed by the President
or the Executive Vice President and the Treasurer or an Assistant
Treasurer or the Secretary or an assistnat Secretary.
Section 2. The Board of Directors may appoint one or
more transfer clerks or one or more transfer agents and one or
more registrars, and may require all certificates of stock to
bear the signature or signatures of any of them.
Section 3. Where a certificate is signed (1) by a
transfer agent or an assistant transfer agent, or (2) by a
transfer clerk acting on behalf of the Corporation and a
registrar, the signature of any such President, Executive Vice
President, Treasurer, Assistant Treasurer, Secretary or Assistant
Secretary may be facsimile. In case any officer or officers who
have signed, or whose facsimile signature or signatures have been
used on, any sucy certificate or certificcates shall cease to be
such officer or officers of the Corporation, whether because of
death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Corporation, such
certificate or certificates may nevertheless be adopted by the
Corporation and be issued and delivered as though the person or
persons who signed such certificate or certificates or whose
facsimile signature or signatures have been used thereon have not
ceased to be such officer or officers of the Corporation.
Section 4. The shares of stock of the Corporation shall
be transferable on the books of the Corporation by the registered
holder thereof in person or by his attorney, upon surrender for
cancellation of certificates for the same number of similar
shares, with an assignment and power of transfer endorsed thereon
or attached thereto, duly executed, and with such proof of the
authenticity of the signature as the Corporation or its agents
may reasonably require.
Section 5. The Corporation shall be entitled to treat
the holder of record of any share or shares of stock as the
holder in fact thereof and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as
oherwise provided by the laws of Delaware.
LOST CERTIFICATES
Section 6. The Board of Directors may direct a new
certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation
alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate of
stock to be lost or destroyed. When authorizing the issuance of
a new certificate or certificates, the Board of Directors may, in
its discreation, and as a condition precedent to the issuance
thereof, require the owner of such lost or destroyed certificate
or certificates, or his legal representative, to advertise the
same in such matter as it shall reequire and/or give the
Corporation a bond in such sum as it may direct as indemnity
agaainst any claim that may be made against the Corporation with
respect to the certificate alleged to have been lost or
destroyed.
ARTICLE VII
CORPORATE BOOKS
Section 1. All the books of the Corporation, except
either the original or duplicate stock ledger, may be kept
outside of Delaware at such place or places as the Board of
Directors may from time to time determine.
ARTICLE VIII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of
Incorporation, if any, may be declared by the Board of Directors
at any regular or special meeting pursuant to law. Dividends may
be paid in cash, in property or in shares of the capital stock,
subject to the provisions of the Certificate of Incorporation.
Section 2. Before payment of any dividend, there may be
set aside out of any funds in the Corporation available for
dividends such sum or sums as the Directors, from time to time in
their absolute discretion, think proper as a reserve or reserves
to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the Corporation, or for
such other purposes as the Directors shall think conducive to the
interest of the Corporation, and the Directors may modddify or
abolish any such reserve in the manner in which it was created.
EXECUTION OF INSTRUMENTS
Section 3. All checks, notes, drafts, bills of exchange,
orders for the payment of money, bonds, debentures, obligations,
bill of lading, commerical documents and other negotiable and/or
non-negotiable instruments, contracts and formal documents (other
than certificates of stock) shall be signed by such officer or
officers or agent or agents as shall be thereunto authorized from
time to time by the Board of Directors. The seal of the
Corporation may be affixed to such instruments and papers
requiring the same as shall have been duly signed and may be
attested by the Secretary or one of the Assistant Secretaries or
by the Treasurer or one of the Assistant Treasurers or by any
other officer.
FISCAL YEAR
Section 4. The fiscal year of the Corporation shall be
fixed by resolution of the Board of Directors; otherwise it shall
be a calendar year.
CORPORATE SEAL
Section 5. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its
organization, and the words "Corporate Seal, Delaware". The seal
may be used by causing it or a facsimile thereof to be impressed
or affixed or reproduced or otherwise.
VOTING UPON STOCKS
Section 6. Unless otherwise ordered by the Board of
Directors or Executive Committee, the President, the Executive
Vice President or any of the Vice Presidents authorized thereto
in writing by the President shall have full power and authority
in behalf of the Corporation to attend and to act and to vote, or
to give, on behalf of the Corporation a proxy to attend and to
act and to vote at any meeting of the stockholders of any
corporation in which the Corporation may hold stock, and at such
meeting he or such proxy shall possess any may exercise, for the
purpose of such meeting, any and all the rights and powers
incident to the ownership of said stock, and which as the owner
thereof, the Corporation might have possessed and exercised if
present. The Board of Directors or Executive Committee by
resolution from time to time may confer like powers upon any
other person or persons.
ARTICLE IX
AMENDMENTS
Section 1. These By-Laws may be altered or repealed at
any regular meeting of the stockholders or of the Board of
Directors or at any special meeting of the stockholders or of the
Board of Directors if notice of such alteration or repeal be
contained in the notice of such special meeting; provided,
however, that no change of the time or place of the meeting for
the election of Directors shall be made within sixty days next
before the day on which such meeting is to be held, and that in
case of any change of such time or place, notice thereof shall be
given to each stockholder entitled to vote thereat at least
twenty days before the election is held.
EXECUTION COPY
CREDIT AGREEMENT
Dated as of April 7, 1995
Among
NATIONAL PATENT DEVELOPMENT CORPORATION,
GENERAL PHYSICS CORPORATION,
INVENTORY MANAGEMENT CORPORATION,
GP ENVIRONMENTAL SERVICES, INC. and
GPS TECHNOLOGIES, INC. FEDERAL SYSTEMS GROUP,
as Borrowers
and
NatWest Bank N.A.
as Bank
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND RULES OF INTERPRETATION . . . . . 1
Section 1.1. Definitions. . . . . . . . . . . . . . . 1
Section 1.2. Rules of Interpretation. . . . . . . . . 15
ARTICLE II
THE CREDIT FACILITIES. . . . . . . . . . 16
Section 2.1. The Facilities . . . . . . . . . . . . . 16
ARTICLE III
AMOUNT AND TERMS OF TERM LOAN. . . . . . . . 17
Section 3.1. Commitment to Lend . . . . . . . . . . . 17
Section 3.2. Term Note. . . . . . . . . . . . . . . . 17
Section 3.3. Procedure for Term Loan Borrowing. . . . 17
Section 3.4. Use of Proceeds of the Term Loan . . . . 18
ARTICLE IV
THE REVOLVING CREDIT FACILITY. . . . . . . . 18
Section 4.1. Commitment to Lend . . . . . . . . . . . 18
Section 4.2. Revolving Credit Note. . . . . . . . . . 18
Section 4.3. Procedure for Revolving Credit
Borrowing. . . . . . . . . . . . . . . 19
Section 4.4. Use of Proceeds of the Revolving
Credit Loans . . . . . . . . . . . . . 19
ARTICLE V
INTEREST, CONVERSIONS, PAYMENTS, COSTS, ETC. . . . . 20
Section 5.1. Interest . . . . . . . . . . . . . . . . 20
5.1.1. Interest on Loans. . . . . . . . . . . . 20
5.1.2. Interest After Default . . . . . . . . . 20
Section 5.2. Reduction of Revolving Credit
Commitments. . . . . . . . . . . . . . 21
Section 5.3. Revolving Credit Loan Conversion
Options. . . . . . . . . . . . . . . . 21
5.3.1. Conversion to Different Type of Loan . . 21
5.3.2. Continuation of Type of Loan . . . . . . 21
5.3.3. Deemed Conversion. . . . . . . . . . . . 22
Section 5.4. Repayment of the Loans . . . . . . . . . 22
5.4.1. Maturity . . . . . . . . . . . . . . . . 22
5.4.2. Mandatory Repayment of Revolving
Credit Loans . . . . . . . . . . . . . 22
5.4.3. Optional Repayments of Loans . . . . . . 22
Section 5.5. Certain Fees and Costs . . . . . . . . . 23
5.5.1. NPDC Closing Fee . . . . . . . . . . . . 23
5.5.2. Commitment Fee . . . . . . . . . . . . . 23
5.5.3. Letter of Credit Fee . . . . . . . . . . 23
5.5.4. Additional Costs, Etc. . . . . . . . . . 23
5.5.5. Capital Adequacy . . . . . . . . . . . . 25
5.5.6. Certificate. . . . . . . . . . . . . . . 25
Section 5.6. Payments and Computations. . . . . . . . 26
5.6.1. Funds for Payments . . . . . . . . . . . 26
5.6.1.1. Payment to Bank. . . . . . . . 26
5.6.1.2. No Offset, Etc. . . . . . . . 26
5.6.2. Computations; Records. . . . . . . . . . 26
Section 5.7. Inability to Determine LIBOR Rate. . . . 27
Section 5.8. Illegality . . . . . . . . . . . . . . . 27
Section 5.9. Indemnity. . . . . . . . . . . . . . . . 27
Section 5.10. Concerning Joint and Several
Liability of the GPC Borrowers . . . . 28
ARTICLE VI
LETTERS OF CREDIT. . . . . . . . . . . 30
Section 6.1. Letter of Credit Commitment. . . . . . . 30
6.1.1. Commitment to Issue Letters of
Credit . . . . . . . . . . . . . . . . 30
6.1.2. Procedure for Letters of Credit. . . . . 30
6.1.3. Terms of Letters of Credit . . . . . . . 31
Section 6.2. Reimbursement Obligation of the
Borrowers. . . . . . . . . . . . . . . 31
Section 6.3. Letter of Credit Payments. . . . . . . . 32
Section 6.4. Obligations Absolute . . . . . . . . . . 32
Section 6.5. Reliance by Issuer . . . . . . . . . . . 33
Section 6.6. Letter of Credit Fee . . . . . . . . . . 33
ARTICLE VII
COLLATERAL SECURITY . . . . . . . . . . 33
Section 7.1. Security of NPDC . . . . . . . . . . . . 33
Section 7.2. Security of GPC Borrowers. . . . . . . . 33
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES . . . . . . . 33
Section 8.1. Corporate Authority. . . . . . . . . . . 33
8.1.1. Incorporation; Good Standing . . . . . . 33
8.1.2. Authorization. . . . . . . . . . . . . . 34
8.1.3. Enforceability . . . . . . . . . . . . . 34
Section 8.2. Governmental and Third Party
Approvals. . . . . . . . . . . . . . . 34
Section 8.3. Title to Properties; Leases. . . . . . . 35
Section 8.4. Financial Information. . . . . . . . . . 35
8.4.1. Financial Statements . . . . . . . . . . 35
8.4.2. Projections. . . . . . . . . . . . . . . 36
Section 8.5. Franchises, Patents, Copyrights,
Etc. . . . . . . . . . . . . . . . . . 36
Section 8.6. Litigation . . . . . . . . . . . . . . . 36
Section 8.7. No Materially Adverse Contracts,
Etc. . . . . . . . . . . . . . . . . . 36
Section 8.8. Compliance With Other Instruments,
Laws, Etc. . . . . . . . . . . . . . . 37
Section 8.9. Tax Status . . . . . . . . . . . . . . . 37
Section 8.10. No Event of Default. . . . . . . . . . . 37
Section 8.11. Holding Company and Investment
Company Acts . . . . . . . . . . . . . 37
Section 8.12. Collateral . . . . . . . . . . . . . . . 37
Section 8.13. Perfection of Security Interest. . . . . 38
Section 8.14. Employee Benefit Plans . . . . . . . . . 38
8.14.1. In General . . . . . . . . . . . . . . . 38
8.14.2. Terminability of Welfare Plans . . . . . 38
8.14.3. Guaranteed Pension Plans . . . . . . . . 39
8.14.4. Multiemployer Plan . . . . . . . . . . . 39
Section 8.15. Regulations G, U and X . . . . . . . . . 39
Section 8.16. Environmental Compliance . . . . . . . . 40
Section 8.17. Subsidiaries, Etc. . . . . . . . . . . . 41
Section 8.18. Capitalization; Ownership of GPC's
Subsidiaries . . . . . . . . . . . . . 42
Section 8.19. Disclosure . . . . . . . . . . . . . . . 42
Section 8.20. Labor Relations. . . . . . . . . . . . . 42
ARTICLE IX
AFFIRMATIVE COVENANTS OF THE BORROWERS . . . . . 42
Section 9.1. Punctual Payment . . . . . . . . . . . . 42
9.1.1. NPDC Punctual Payment. . . . . . . . . . 43
9.1.2. Punctual Payments. . . . . . . . . . . . 43
Section 9.2. Maintenance of Offices; Names. . . . . . 43
Section 9.3. Records and Accounts . . . . . . . . . . 43
Section 9.4. Financial Statements, Certificates
and Information. . . . . . . . . . . . 43
Section 9.5. Notices. . . . . . . . . . . . . . . . . 46
9.5.1. Defaults . . . . . . . . . . . . . . . . 46
9.5.2. Environmental Events . . . . . . . . . . 46
9.5.3. Notification of Claims Against
Collateral . . . . . . . . . . . . . . 46
9.5.4. Notice of Litigation and Judgments . . . 46
9.5.5. Notice of Amendments to Certain
Documents. . . . . . . . . . . . . . . 47
9.5.6. Notice of Certain Other Events . . . . . 47
Section 9.6. Corporate Existence; Maintenance of
Properties . . . . . . . . . . . . . . 47
Section 9.7. Insurance. . . . . . . . . . . . . . . . 48
9.7.1. General. . . . . . . . . . . . . . . . . 48
9.7.2. Notice of Cancellation, Etc. . . . . . . 48
Section 9.8. Taxes. . . . . . . . . . . . . . . . . . 48
Section 9.9. Inspection of Properties and Books,
Etc. . . . . . . . . . . . . . . . . . 49
9.9.1. General. . . . . . . . . . . . . . . . . 49
9.9.2. Bank Audits. . . . . . . . . . . . . . . 49
9.9.3. Communications with Accountants. . . . . 49
Section 9.10. Compliance with Laws, Contracts,
Licenses, and Permits. . . . . . . . . 50
Section 9.11. Employee Benefit Plans . . . . . . . . . 50
Section 9.12. Use of Proceeds. . . . . . . . . . . . . 50
Section 9.14. Further Assurances . . . . . . . . . . . 51
Section 9.15. Dividend Payments. . . . . . . . . . . . 51
Section 9.16. Loans to NPDC and the Foreign
Subsidiaries . . . . . . . . . . . . . 51
ARTICLE X
CERTAIN NEGATIVE COVENANTS OF THE GPC BORROWERS . . . 51
Section 10.1. Restrictions on Indebtedness . . . . . . 52
Section 10.2. Restrictions on Liens. . . . . . . . . . 53
Section 10.3. Restrictions on Investments. . . . . . . 54
Section 10.4. Distributions. . . . . . . . . . . . . . 55
Section 10.5. Merger Consolidation and Disposition
of Assets. . . . . . . . . . . . . . . 55
10.5.1. Mergers and Acquisitions . . . . . . . . 55
10.5.2. Disposition of Assets. . . . . . . . . . 56
Section 10.6. Sale and Leaseback . . . . . . . . . . . 56
Section 10.7. Compliance with Environmental Laws . . . 56
Section 10.8. Prohibited Changes and Payments. . . . . 56
Section 10.9. Employee Benefit Plans . . . . . . . . . 56
Section 10.10. Certain Transactions . . . . . . . . . . 57
Section 10.11. Limitation on Certain Changes. . . . . . 57
Section 10.12. Fiscal Year. . . . . . . . . . . . . . . 58
Section 10.13. Ownership of Subsidiaries. . . . . . . . 58
Section 10.14. GPC Fixed Charge Coverage. . . . . . . . 58
Section 10.15. Capital Expenditures . . . . . . . . . . 58
Section 10.16. GPC Consolidated Tangible Net Worth. . . 58
Section 10.17. GPC Consolidated Senior Debt to
Consolidated Tangible Net Worth. . . . 58
Section 10.18. No GPC Loss. . . . . . . . . . . . . . . 58
ARTICLE XI
CERTAIN NEGATIVE COVENANTS OF NPDC . . . . . . 59
Section 11.1. Restrictions on Liens. . . . . . . . . . 59
Section 11.2. Restrictions on Guaranties . . . . . . . 59
Section 11.3. Mergers and Acquisitions . . . . . . . . 60
Section 11.4. Certain Transactions . . . . . . . . . . 60
Section 11.5. Fiscal Year. . . . . . . . . . . . . . . 61
Section 11.6. Ownership of Subsidiaries. . . . . . . . 61
Section 11.8. NPDC Collateral to Loan Ratio. . . . . . 61
Section 11.9. NPDC Collateral Cash Flow Coverage . . . 61
Section 11.10. NPDC Leverage Ratio. . . . . . . . . . . 62
ARTICLE XII
CLOSING CONDITIONS . . . . . . . . . . 62
Section 12.1. Loan Documents . . . . . . . . . . . . . 62
12.1.1. Loan Documents . . . . . . . . . . . . . 62
12.1.2. Subordination Documents. . . . . . . . . 62
Section 12.2. Certified Copies of Charter
Documents; Good Standing
Certificates . . . . . . . . . . . . . 62
Section 12.3. Corporate Action . . . . . . . . . . . . 63
Section 12.4. Incumbency Certificate . . . . . . . . . 63
Section 12.5. Validity of Liens. . . . . . . . . . . . 63
Section 12.6. Lien Search Results. . . . . . . . . . . 63
Section 12.7. Evidence of Security Interests . . . . . 64
Section 12.8. Borrowing Base Report. . . . . . . . . . 64
Section 12.9. Opinions of Counsel. . . . . . . . . . . 64
Section 12.10. Payment of Fees and Expenses . . . . . . 64
Section 12.11. Payoff Letter. . . . . . . . . . . . . . 64
Section 12.12. Disbursement Instructions. . . . . . . . 64
Section 12.13. No Material Changes, Etc. . . . . . . . 65
Section 12.14. Representations True; No Default . . . . 65
Section 12.15. Capital Structure. . . . . . . . . . . . 65
Section 12.16. Legal Restrictions . . . . . . . . . . . 65
Section 12.18. Due Diligence. . . . . . . . . . . . . . 65
Section 12.19. Satisfactory Documentation . . . . . . . 66
ARTICLE XIII
CONDITIONS TO ALL BORROWINGS. . . . . . . . 66
Section 13.1. Representations True; No Event of
Default. . . . . . . . . . . . . . . . 66
Section 13.2. No Legal Impediment. . . . . . . . . . . 66
Section 13.3. Governmental Regulation. . . . . . . . . 66
Section 13.4. Proceedings and Documents. . . . . . . . 66
Section 13.5. Borrowing Base Report. . . . . . . . . . 67
Section 13.6. Sufficient Credit Availability . . . . . 67
ARTICLE XIV
EVENTS OF DEFAULT; ACCELERATION; ETC. . . . . . 67
Section 14.1. Events of Default and Acceleration . . . 67
Section 14.2. Termination of Commitment. . . . . . . . 71
Section 14.3. Remedies . . . . . . . . . . . . . . . . 71
Section 14.4. Setoff . . . . . . . . . . . . . . . . . 72
Section 14.5. Waiver . . . . . . . . . . . . . . . . . 72
ARTICLE XV
PROVISIONS OF GENERAL APPLICATION. . . . . . . 72
Section 15.1. Expenses . . . . . . . . . . . . . . . . 72
Section 15.2. Indemnification. . . . . . . . . . . . . 73
Section 15.3. Survival of Covenants, Etc. . . . . . . 75
Section 15.4. Assignment and Participation . . . . . . 75
15.4.1. No Assignments by Borrowers. . . . . . . 75
15.4.2. Assignments and Participations . . . . . 75
15.4.3. Disclosure . . . . . . . . . . . . . . . 76
Section 15.5. Notices, Etc. . . . . . . . . . . . . . 76
Section 15.6. Governing Law; Jurisdiction and
Venue. . . . . . . . . . . . . . . . . 77
Section 15.7. Acknowledgements . . . . . . . . . . . . 77
Section 15.8. WAIVER OF JURY TRIAL . . . . . . . . . . 78
Section 15.9. Headings . . . . . . . . . . . . . . . . 78
Section 15.10. Counterparts . . . . . . . . . . . . . . 78
Section 15.11. Entire Agreement, Etc. . . . . . . . . . 78
Section 15.12. Consents, Amendments, Waivers, Etc. . . 78
Section 15.13. Severability . . . . . . . . . . . . . . 79
Section 15.14. Integration of Exhibits and
Schedules. . . . . . . . . . . . . . . 79
Section 15.15. Confidentiality. . . . . . . . . . . . . 79
EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Term Note
Exhibit A-2 Form of Revolving Credit Note
Exhibit A-3 Form of Subordinated Pledged Note
Exhibit B Form of Security Agreement
Exhibit C Form of GPC Note Pledge Agreement
Exhibit D Form of Pledge Agreement
Exhibit E-1 Form of Loan Request
Exhibit E-2 Form of Term Loan Request
Exhibit F Form of Borrowing Base Report
Exhibit G Intentionally Omitted
Exhibit H-1 Form of Compliance Certificate
Exhibit H-2 Form of NPDC Compliance Certificate
Exhibit I Intentionally Omitted
Exhibit J Form of Subordination and Intercreditor
Agreement
Schedule 8.2 UCC-1 Financing Statements and UCC-3
Termination Statements
Schedule 8.3 Title Exceptions
Schedule 8.6 Litigation
Schedule 8.12(a) Offices, Etc.
Schedule 8.12(c) Trade Names, Etc.
Schedule 8.14 Guaranteed Pension Plans
Schedule 8.16 Environmental Compliance
Schedule 8.17 Subsidiaries and GPC Borrower Joint Ventures
Schedule 8.18 Capitalization
Schedule 10.1(i) Existing Indebtedness
Schedule 10.1(n) Joint Venture Indebtedness
Schedule 10.2 Existing Liens
Schedule 10.3(d) Existing Investments
Schedule 10.3(h) Stock Exchange and Joint Venture Investments
Schedule 10.10 Certain Transactions with Affiliates
Schedule 11.2 Guaranties
CREDIT AGREEMENT
This CREDIT AGREEMENT is made as of the 7th day of
April, 1995, by and among NATIONAL PATENT DEVELOPMENT CORPORATION
("NPDC"), a Delaware corporation having its principal place of
business at 9 West 57th Street, New York, New York 10019,
GENERAL PHYSICS CORPORATION ("GPC"), a Delaware corporation
having its principal place of business at 6700 Alexander Bell
Drive, Columbia, Maryland 21046, INVENTORY MANAGEMENT CORPORATION
("IMC"), a Maryland corporation having its principal place of
business at 6700 Alexander Bell Drive, Columbia, Maryland 21046,
GP ENVIRONMENTAL SERVICES, INC. ("GPESI"), a Delaware corporation
having its principal place of business at 6700 Alexander Bell
Drive, Columbia, Maryland 21046, GPS TECHNOLOGIES, INC. FEDERAL
SYSTEMS GROUP ("GPSTI", and collectively with GPC, IMC and GPESI
the "GPC Borrowers"), a Delaware corporation having its principal
place of business at 6700 Alexander Bell Drive, Columbia,
Maryland 21046 and NATWEST BANK N.A. (the "Bank"), a national
banking association.
The parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF INTERPRETATION
Section 1.1. Definitions. The following terms shall
have the meanings set forth in this Article I or elsewhere in the
provisions of this Credit Agreement referred to below:
Accounts Receivable. All rights of the GPC Borrowers
to payment for goods sold, leased or otherwise marketed in the
ordinary course of business and all rights of the GPC Borrowers
to payment for services rendered in the ordinary course of
business and all sums of money or other proceeds due thereon
pursuant to transactions with account debtors, except for that
portion of the sum of money or other proceeds due thereon that
relate to sales, use or property taxes in conjunction with such
transactions, recorded on books of account in accordance with
generally accepted accounting principles and including, without
limitation, "accounts" as defined in the Uniform Commercial Code
of any applicable or relevant jurisdiction and Government
Receivables.
Affiliate. As to any Person, any other Person (other
than a wholly-owned Subsidiary) which, directly or indirectly, is
in control of, is controlled by, or is under common control with,
such Person.
Applicable Law. Statutes and rules and regulations
thereunder and interpretations thereof by any competent court or
by any governmental or other regulatory body or official charged
with the administration or the interpretation thereof and all
policies, guidelines, requests, directives, instructions and
notices at any time or from time to time hereafter made upon or
otherwise issued (whether or not having the force of law).
Available Credit. The lesser of (a) the Revolving
Credit Commitment or (b) the Borrowing Base Amount, as each may
be in existence from time to time, as such lesser amount is
reduced by the sum of (x) the aggregate amount of all outstanding
Revolving Credit Loans, (y) the aggregate amount of (i) the
Maximum Drawing Amount of all outstanding Letters of Credit and
(ii) all Reimbursement Obligations and (z) the amount of all
other GPC Obligations arising from or in respect of the Loan
Documents that are then due and payable.
Balance Sheet Date. September 30, 1994.
Bank: As defined in the preamble hereto.
Bank's Office. The Bank's office located at Exchange
Place Centre, 10 Exchange Place, Jersey City, New Jersey 07302,
or at such other location as the Bank may designate from time to
time.
Bank's Special Counsel. Simpson Thacher & Bartlett or
such other counsel as may be approved by the Bank.
Borrowers. The collective reference to NPDC and the
GPC Borrowers.
Borrowing Base Amount. At the relevant time of
reference thereto, an amount determined by the Bank by reference
to the most recent Borrowing Base Report equal to eighty percent
(80%) of Eligible Accounts Receivable. The Borrowing Base Amount
shall be determined monthly (or at such other interval as may be
specified pursuant to Section 9.4(f)) by the Bank by reference to
the Borrowing Base Report delivered to the Bank pursuant to
Section 9.4(f).
Borrowing Base Report. A Borrowing Base Report signed
by the chief financial officer of GPC and in substantially the
form of Exhibit F hereto.
Business Day. Any day other than a Saturday, Sunday or
day on which commercial banking institutions in New York, New
York are authorized or required by law to be closed.
Capital Assets. As to any Person as of the date of
determination thereof, fixed assets, both tangible (such as land,
buildings, fixtures, machinery and equipment) and intangible
(such as patents, copyrights, trademarks, franchises and good
will); provided that Capital Assets shall not include any item
customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with
generally accepted accounting principles.
Capital Expenditures. As to any Person for any fiscal
period, amounts paid or indebtedness incurred by such Person or
any of its Subsidiaries in connection with the purchase or lease
by such Person or any of its Subsidiaries of Capital Assets that
would be required to be capitalized and shown on the balance
sheet of such Person in accordance with generally accepted
accounting principles.
Capitalized Leases. As to any Person as of the date of
determination thereof, leases under which such Person or any of
its Subsidiaries is the lessee or obligor, the discounted future
rental payment obligations under which are required to be
capitalized on the balance sheet of the lessee or obligor in
accordance with generally accepted accounting principles.
CERCLA. As defined in Section 8.16(a).
Closing Date. The first date on which the conditions
set forth in Article XII have been satisfied and any Loans are to
be made or any Letter of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. The collective reference to the GPC
Collateral and the NPDC Collateral.
Consolidated or consolidated. With reference to any
term defined herein, shall mean that term as applied to the
accounts of GPC and its Subsidiaries or NPDC and its
Subsidiaries, as the case may be, to the extent they are or
should be consolidated in accordance with generally accepted
accounting principles.
Consolidated EBITDA. As to any Person for any period,
the Consolidated Net Income of such Person plus, but only to the
extent such items shall have been deducted in determining such
Consolidated Net Income, the sum of: (i) Consolidated Total
Interest Expense, (ii) depreciation and amortization of assets,
(iii) federal, state and local taxes; and minus, but only to the
extent such item shall have been included in determining
Consolidated Net Income, interest income accrued but unpaid
during such period in favor of such Person consisting of interest
on Indebtedness of NPDC owing to such Person, whether such
Indebtedness is evidenced by notes or other evidences of
Indebtedness pledged to the Bank pursuant hereto, or otherwise;
determined in each case on a consolidated basis in accordance
with generally accepted accounting principles.
Consolidated Fixed Charges. As to any Person for any
period, an amount equal to the sum of (i) all payments on
Indebtedness that became due and payable during such fiscal year
pursuant to any agreement or instrument to which such Person or
any of its Subsidiaries is a party relating to the borrowing of
money or the obtaining of credit or in respect of Capitalized
Leases, including, without limitation, all principal payments and
Consolidated Total Interest Expense for such period and (ii) all
payments by such Person during such period on all leases (other
than operating leases that are not Capitalized Leases) of real
and personal property (without duplication of items in (i)
above). Demand obligations shall be deemed to be due and payable
during any fiscal year during which such obligations are
outstanding.
Consolidated Net Income (or Deficits). As to any
Person for any fiscal period, the consolidated net income (or
deficit) of such Person and its Subsidiaries, after deduction of
all expenses, taxes, and other proper charges, determined in
accordance with generally accepted accounting principles.
Consolidated Senior Debt. As to any Person as of the
date of determination thereof, Consolidated Total Liabilities of
such Person excluding Subordinated Debt.
Consolidated Tangible Net Worth. As to any Person as
of the date of determination thereof, the excess of Consolidated
Total Assets over Consolidated Total Liabilities (exclusive of
Subordinated Debt), and less the sum of (without duplication):
(a) the total book value of all assets of such
Person and its Subsidiaries properly classified as
intangible assets under generally accepted accounting
principles, including such items as good will, the purchase
price of acquired assets in excess of the fair market value
thereof, trademarks, trade names, service marks, brand
names, copyrights, patents and licenses, and rights with
respect to the foregoing; plus
(b) all amounts representing any write-up in the
book value of any assets of such Person or its Subsidiaries
resulting from a revaluation thereof subsequent to the
Balance Sheet Date; plus
(c) to the extent otherwise includable in the
computation of Consolidated Tangible Net Worth, any
subscriptions receivable.
Consolidated Total Assets. As to any Person as of the
date of determination thereof, all assets of such Person and its
Subsidiaries determined on a consolidated basis in accordance
with generally accepted accounting principles.
Consolidated Total Interest Expense. As to any Person
for any period, the aggregate amount of interest required to be
paid or accrued by such Person and its Subsidiaries during such
period on all Indebtedness of such Person and its Subsidiaries
outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest in
respect of Capitalized Leases and including commitment fees,
facility fees and similar fees or expenses in connection with the
borrowing of money.
Consolidated Total Liabilities. As to any Person as of
the date of determination thereof, all liabilities that would
appear on the balance sheet of such Person and its Subsidiaries
determined on a consolidated basis in accordance with generally
accepted accounting principles.
Conversion Request. A notice given by the GPC
Borrowers to the Bank of the GPC Borrowers' election to convert
or continue a Revolving Credit Loan in accordance with Section
5.3.
Credit Agreement. This Credit Agreement, including the
Schedules and Exhibits hereto.
Default. As defined in Section 14.1.
Distribution. As to any Person the declaration or
payment of any dividend on or in respect of any shares of any
class of capital stock of such Person, other than dividends
payable solely in shares of common stock of such Person; the
purchase, redemption, or other retirement of any shares of any
class of capital stock of such Person, directly or indirectly
through a Subsidiary of such Person, or otherwise; the return of
capital by such Person to its shareholders as such; or any other
distribution on or in respect of any shares of any class of
capital stock of such Person.
Dollars or $. Dollars in lawful currency of the United
States of America.
Drawdown Date. The date on which any Loan is made or
is to be made, and the date on which any Revolving Credit Loan is
converted or continued in accordance with Section 5.3.
Eligible Accounts Receivable. The aggregate of the
unpaid portions of Accounts Receivable (net of any credits,
rebates, offsets, holdbacks or other adjustments or commissions
payable to third parties that are adjustments to such Accounts
Receivable) (a) that GPC reasonably and in good faith determines
to be collectible; (b) that are with account debtors that (i) are
not Affiliates of GPC, (ii) purchased the goods or services
giving rise to the relevant Account Receivable in an arm's length
transaction conducted in the ordinary course of business, (iii)
are not insolvent or involved, whether voluntary or involuntary,
in any case or proceeding under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution,
liquidation or similar law of any jurisdiction and (iv) are, in
the Bank's reasonable judgment, creditworthy; (c) that are in
payment for goods actually delivered or services or obligations
that have been fully performed; provided, that with respect to
Accounts Receivable subject to dispute or any other similar
claims that would reduce the cash amount payable therefor, the
amount hereunder shall be reduced by the cash amount in dispute,
except that no value shall be given hereunder to any Account
Receivable under which the cash amount payable therefor equals or
exceeds $200,000, if twenty-five percent (25%) or more of the
cash amount payable therefor is in dispute; (d) that are not
subject to any pledge, restriction, security interest or other
lien or encumbrance other than those created by the Loan
Documents and except for Liens permitted under Sections 10.2(ii)
and 10.2(iv) which attach to the general assets (including
Accounts Receivable) of any of the GPC Borrowers; provided, that
the amount hereunder shall be reduced by the amount of any such
Lien (without duplication of reductions pursuant to paragraph (e)
below); (e) in which the Bank has a valid and perfected first
priority security interest and except for Liens permitted under
Sections 10.2(ii) and 10.2(iv) which attach to the general assets
(including Accounts Receivable) of any of the GPC Borrowers;
provided, that the amount hereunder shall be reduced by the
amount of any such Lien (without duplication of reductions
pursuant to paragraph (d) above); (f) that are not outstanding
for more than ninety (90) days past the date of the respective
invoices therefor; (g) that are not due from any single account
debtor if more than fifty percent (50%) of the aggregate amount
of all Accounts Receivable owing from such account debtor would
otherwise not be Eligible Accounts Receivable; (h) that are
payable in Dollars; (i) that are not payable from an office
outside of the United States unless they are subject to letter of
credit support reasonably acceptable to the Bank; (j) with
respect to Government Receivables, to the extent the GPC
Borrowers have complied with the provisions of the Security
Agreement relating thereto; and (k) to the extent that the
aggregate amount owing by a single account debtor (other than the
United States government) on all such Accounts Receivable exceeds
twenty-five percent (25%) of the Eligible Accounts Receivable of
all account debtors, exclusive of such excess unless such excess
has been accepted by the Bank as being eligible, acting in its
exclusive and uncontrolled discretion.
Employee Benefit Plan. Any employee benefit plan
within the meaning of Section 3(3) of ERISA maintained or
contributed to by any Borrower or any ERISA Affiliate, other than
a Multiemployer Plan.
Employment Litigation. That certain litigation known
as Edwin P. Harrison v. General Physics Corporation (Court of
Common Pleas, Aiken County, South Carolina, Civil Action No.
93-CP-02-949); Donita L. Harrison v. General Physics Corporation
(Court of Common Pleas, Aiken County, South Carolina, Civil
Action No. 93-CP-02-766); and Edwin P. Harrison v. General
Physics Corporation (Charge No. 146930477, Equal Employment
Opportunity Commission).
Environmental Laws. As defined in Section 8.16(a).
ERISA. The Employee Retirement Income Security Act of
1974.
ERISA Affiliate. Any Person that is treated as a
single employer with any of the Borrowers under Section 414 of
the Code.
ERISA Reportable Event. A reportable event with
respect to a Guaranteed Pension Plan within the meaning of
Section 4043 of ERISA and the regulations promulgated thereunder
as to which the requirement of notice has not been waived.
Event of Default. As defined in Section 14.1.
Five Star. Five Star Group, Inc., a Delaware
corporation.
Five Star Agreement. The Loan Agreement, dated
April 29, 1993, among Five Star, the lenders signatory thereto
and the Bank, as Agent for the lenders and any other agreement
evidencing any obligation (direct or indirect) for borrowed money
or guarantees of the foregoing between Five Star and the Bank.
Foreign Subsidiaries. Collectively, General Physics
Asia Pte. Ltd., a Singapore private company having its principal
place of business at 80 Marine Parade Road, 11-01 Parkway Parade,
Singapore, 1544 and General Physics (Malaysia) Sdn. Bhn., a
Malaysian private company having its principal place of business
at B2-2 and B2-3, Block B, Bangunan SPKR, 46 Jalan Bungun,
Damansara Heights, Malaysia 50490.
Foreign Subsidiaries Pledged Note. A promissory note,
in form and substance satisfactory to the Bank, made by the
Foreign Subsidiaries to the order of GPC and pledged to the Bank
pursuant to the GPC Note Pledge Agreement.
generally accepted accounting principles. Generally
accepted accounting principles in the United States of America in
effect from time to time.
Government Receivables. All rights of the GPC
Borrowers to moneys due or to become due under any contracts or
agreements with or orders from the United States government or
any agency or department thereof.
GPC. As defined in the preamble hereto.
GPC Collateral. All the property, rights and interests
of the GPC Borrowers that are or are intended to be subject to
the security interests created by the Security Agreements, the
GPC Note Pledge Agreement and any cash collateral paid to the
Bank pursuant to Sections 6.2(b) or (c).
GPC Compliance Certificate. As defined in Section
9.4(e).
GPC Note Pledge Agreement. The GPC Note Pledge
Agreement dated as of the date hereof between GPC and the Bank
and substantially in the form of Exhibit C.
GPC Obligations. All indebtedness, obligations and
liabilities of the GPC Borrowers to the Bank, existing on the
date of this Credit Agreement or arising thereafter, direct or
indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured,
arising by contract, operation of law or otherwise, but only
those arising or incurred under or arising in respect of this
Credit Agreement or any of the other Loan Documents or in respect
of any of the Revolving Credit Loans made or Reimbursement
Obligations incurred or the Revolving Credit Note or any of the
Letter of Credit Applications, Letters of Credit or other
instruments at any time evidencing any thereof.
GPESI. As defined in the preamble hereto.
GPSTI. As defined in the preamble hereto.
Guaranteed Pension Plan. Any employee pension benefit
plan within the meaning of Section 3(2) of ERISA maintained or
contributed to by any Borrower or any ERISA Affiliate the
benefits of which are guaranteed on termination in full or in
part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
Hazardous Substances. As defined in Section 8.16(b).
IMC. As defined in the preamble hereto.
Indebtedness. Without duplication, all obligations,
contingent and otherwise, that in accordance with generally
accepted accounting principles should be classified upon the
obligor's balance sheet as liabilities, including in any event
and whether or not so classified: (a) all debt and similar
monetary obligations, whether direct or indirect; (b) all
liabilities secured by any mortgage, pledge, security interest,
lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured
thereby shall have been assumed; (c) obligations under all
Capitalized Leases and (d) all guarantees, endorsements and other
contingent obligations whether direct or indirect in respect of
indebtedness of others, including any obligation to supply funds
to or in any manner to invest in, directly or indirectly, the
debtor, to purchase indebtedness, or to assure the owner of
indebtedness against loss, through an agreement to purchase
goods, supplies, or services in each case for the purpose of
enabling the debtor to make payment of the indebtedness held by
such owner or otherwise, and the obligations to reimburse the
issuer in respect of any letters of credit.
Indenture. The Indenture, dated as of August 31, 1994,
between GPC and Bank of Montreal Trust Company, as amended,
supplemented or otherwise modified from time to time.
Interest Payment Date. (a) As to any Prime Rate Loan,
the last day of each calendar month to occur while such Loan is
outstanding, (b) as to any LIBOR Rate Loan, each day which is one
month or a whole multiple thereof after the first day of such
Interest Period and the last day of such Interest Period and (c)
as to any Loan, whenever any payment is made in respect of such
Loan.
Interest Period. With respect to any LIBOR Rate Loan:
(a) initially, the period commencing on the
Drawdown Date with respect to such LIBOR Rate Loan and
ending one, two, three or six months thereafter, as
selected by the Borrower thereof in its notice of
borrowing or notice of conversion, as the case may be,
given with respect thereto; and
(b) thereafter, each period commencing on the
last day of the next preceding Interest Period
applicable to such LIBOR Rate Loan and ending one, two,
three or six months thereafter, as selected by the
Borrower thereof by irrevocable notice to the Bank not
less than three Business Days prior to the last day of
the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:
(1) if any Interest Period would otherwise end on
a day that is not a LIBOR Business Day, such Interest
Period shall be extended to the next succeeding LIBOR
Business Day unless the result of such extension would
be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on
the immediately preceding LIBOR Business Day;
(2) any Interest Period that would otherwise
extend beyond the Revolving Credit Maturity Date shall
end on the Revolving Credit Maturity Date;
(3) any Interest Period that begins on the last
LIBOR Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period)
shall end on the last LIBOR Business Day of a calendar
month; and
(4) the Borrower shall select Interest Periods so
as not to require a payment or prepayment of any LIBOR
Rate Loan during an Interest Period for such Loan.
Investments. Without duplication, all expenditures
made and all liabilities incurred (contingently or otherwise) for
the acquisition of stock or Indebtedness of, or for loans,
advances, capital contributions (including, without limitation,
in the form of transfers of property), or in respect of any
guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person, provided, that the
foregoing shall exclude trade credit extended in the ordinary
course of business. In determining the aggregate amount of
Investments outstanding at any particular time: (a) the amount of
any Investment represented by a guaranty shall be taken at not
less than the principal amount of the obligations guaranteed and
still outstanding; (b) there shall be included as an Investment
all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (c) there
shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase,
redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in
respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise,
except that accrued interest included as provided in the
foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments
any decrease in the value thereof.
Joint Venture. The Combat System Development
Associates Joint Venture, formed March 11, 1994, among EG&G
Washington Analytical Center, Inc. and GPSTI.
Letter of Credit. As defined in Section 6.1.1.
Letter of Credit Application. As defined in Section
6.1.1.
LIBOR Base Rate. With respect to each day during each
Interest Period pertaining to a LIBOR Rate Loan, the rate per
annum equal to the rate at which the Bank is offered Dollar
deposits at or about 10:00 A.M., New York City time, two LIBOR
Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where the eurodollar operations
in respect of its LIBOR Rate Loans are then being conducted for
delivery on the first day of such Interest Period for the number
of days comprised therein and in an amount comparable to the
amount of its LIBOR Rate Loan to be outstanding during such
Interest Period.
LIBOR Business Day. Any Business Day on which
commercial banks are open for international business (including
dealings in Dollar deposits) in London or such other Dollar
interbank market as may be selected by the Bank in its sole
discretion acting in good faith.
LIBOR Rate. With respect to each day during each
Interest Period pertaining to a LIBOR Rate Loan, a rate per annum
determined for such day in accordance with the following formula
(rounded upward to the nearest 1/100th of 1%):
LIBOR Base Rate
1.00 - LIBOR Reserve Requirements
LIBOR Rate Loans. Revolving Credit Loans bearing
interest calculated by reference to the LIBOR Rate.
LIBOR Reserve Requirements. For any day as applied to
a LIBOR Rate Loan, the aggregate (without duplication) of the
rates (expressed as a decimal fraction) of reserve requirements
in effect on such day (including, without limitation, basic,
supplemental, marginal 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) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of such Board) maintained by a
member bank of such System.
Lien. Any mortgage, deed of trust, pledge, security
interest, encumbrance, lien or charge of any kind (including any
agreement to give any of the foregoing), any conditional sale or
other title retention agreement, any lease in the nature of any
of the foregoing and the filing of or agreement to give any
financing statement (other than any financing statement in
connection with a "true" lease that is not a Capitalized Lease)
under the Uniform Commercial Code of any jurisdiction.
Loan Documents. This Credit Agreement, the Term Note,
the Revolving Credit Note, the Letter of Credit Applications, the
Letters of Credit, the NPDC Subordinated Pledged Note, the
Subordination and Intercreditor Agreement and the Security
Documents.
Loan Request. As defined in Section 4.3.
Loan. Any loan made or to be made by the Bank to the
Borrowers pursuant to this Credit Agreement.
Materially Adverse Effect. A materially adverse effect
on the business, condition (financial or otherwise), operations,
performance or properties of the GPC Borrowers taken as a whole
or NPDC and its Subsidiaries taken as a whole.
Maximum Drawing Amount. The maximum aggregate amount
from time to time that the beneficiaries may draw under
outstanding Letters of Credit, as such aggregate amount may be
reduced from time to time pursuant to the terms of the Letters of
Credit.
Multiemployer Plan. Any multiemployer plan within the
meaning of Section 3(37) of ERISA maintained or contributed to by
the Borrowers or any ERISA Affiliate.
Note Record. The grid attached to and constituting a
part of the Term Note or the Revolving Credit Note, as the case
may be, or the continuation of such grid, or any other similar
record, including computer records, maintained by the Bank with
respect to any Loan referred to in such Note.
MXL. MXL Industries, Inc., a Delaware corporation.
MXL Agreement. The Loan Agreement, dated April 29,
1993, among MXL, the lenders signatory thereto and the Bank, as
Agent for the lenders and any other agreement evidencing any
obligation (direct or indirect) for borrowed money or guarantees
of the foregoing between MXL and the Bank.
NPDC. As defined in the preamble hereto.
NPDC Collateral. All the property, rights and
interests of NPDC that are or are intended to be subject to the
security interest created by the Pledge Agreement and the Cash
Collateral Agreement.
NPDC Collateral Cash Flow. For any period, an amount
equal to the sum of the cash interest and principal payments on
the Pledged Debentures received by NPDC and the cash dividend
payments received by NPDC on the common stock of GPC pledged
under the Pledge Agreement.
NPDC Compliance Certificate. As defined in Section
9.4(e).
NPDC Obligations. All indebtedness, obligations and
liabilities of NPDC to the Bank, existing on the date of this
Credit Agreement or arising thereafter, direct or indirect,
absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract,
operation of law or otherwise, but only those arising or incurred
under or arising in respect of this Credit Agreement or any of
the other Loan Documents or in respect of the Term Loan or the
Term Note or other instruments at any time evidencing any
thereof.
NPDC Subordinated Pledged Note. The promissory note,
substantially in the Form of Exhibit A-3 hereto, made by NPDC to
the order of GPC and pledged to the Bank pursuant to the GPC Note
Pledge Agreement.
Obligations. The collective reference to the GPC
Obligations and the NPDC Obligations.
outstanding. With respect to the Loans, the aggregate
unpaid principal thereof as of any date of determination.
Overdue Rate. As defined in Section 5.1.2
Payment Date. As defined in Section 3.2.
PBGC. The Pension Benefit Guaranty Corporation created
by Section 4002 of ERISA and any successor entity or entities
having similar responsibilities.
Permitted Liens. Liens, security interests and other
encumbrances permitted by Section 10.2, in the case of the GPC
Borrowers, and Section 11.1, in the case of NPDC.
Person. Any individual, corporation, partnership,
trust, unincorporated association, business, or other legal
entity, and any government or any governmental agency or
political subdivision thereof.
Pledge Agreement. The Pledge Agreement dated as of the
date hereof between NPDC and the Bank and substantially in the
form of Exhibit D hereto.
Pledged Debentures. The Debentures (as defined in the
Indenture) of which NPDC is a Holder (as defined in the
Indenture) and which NPDC has pledged to the Bank pursuant to the
Pledge Agreement.
Prime Rate. The interest rate established from time to
time by the Bank as its prime rate at its principal office in New
York City. Notwithstanding the foregoing, the Borrowers
acknowledge that the Bank may regularly make domestic commercial
loans at rates of interest less than the rate of interest
referred to in the preceding sentence. Each change in any
interest rate provided for herein based upon the Prime Rate
resulting from a change in the Prime Rate shall take effect as of
the opening of business on the effective day of such change in
the Prime Rate.
Prime Rate Loans. Loans bearing interest calculated by
reference to the Prime Rate.
Prime Rate Revolving Credit Loans. Revolving Credit
Loans bearing interest calculated by reference to the Prime Rate.
Real Estate. All real property at any time owned or
leased (as lessee or sublessee) by the Borrowers.
Reimbursement Obligation. The GPC Borrowers' joint and
several obligation to reimburse the Bank on account of any
drawing under, or any other amount payable under or in respect
of, any Letter of Credit as provided in Section 6.2. This term
includes, but is not limited to, Unpaid Reimbursement
Obligations.
Revolving Credit Commitment. As defined in Section
2.1.
Revolving Credit Loans. As defined in Section 4.1.
Revolving Credit Maturity Date. April 10, 1998, on
which date the Revolving Credit Commitment is scheduled to
terminate in its entirety, unless prior to that date the
Revolving Credit Commitment is reduced to $0 pursuant to Section
5.2, in which case "Revolving Credit Maturity Date" means such
earlier date on which the Revolving Credit Commitment is so
reduced to $0.
Revolving Credit Note. As defined in Section 4.2.
Rolling Four Quarters. The four consecutive fiscal
quarters ending with the most recently ended fiscal quarter.
Security Agreements. The several Security Agreements
dated as of the date hereof between the GPC Borrowers and the
Bank and each substantially in the form of Exhibit B hereto.
Security Documents. The Security Agreements, the GPC
Note Pledge Agreement and the Pledge Agreement.
Subordinated Debt. Unsecured Indebtedness of any
Borrower that is expressly subordinated and made junior to the
payment and performance in full of the NPDC Obligations or the
GPC Obligations, as the case may be, and evidenced as such by (a)
the Subordination and Intercreditor Agreement, (b) the NPDC
Subordinated Pledged Note or (c) one or more other written
instruments containing subordination provisions in form and
substance approved by the Bank in writing.
Subordination and Intercreditor Agreement. The
Subordination and Intercreditor Agreement dated as of the date
hereof among the Bank, NPDC and GPC and substantially in the form
of Exhibit J hereto.
Subordination Documents. The Subordination and
Intercreditor Agreement, the NPDC Subordinated Pledged Note, the
Indenture and the Pledged Debentures.
Subsidiary. Any corporation, association, trust (other
than a trust related to an employee benefit plan), or other
business entity of which the designated parent shall at any time
own directly or indirectly through a Subsidiary or Subsidiaries
at least a majority (by number of votes) of the outstanding
Voting Stock, provided, that for purposes of this Agreement
(including, without limitation, the calculation of the financial
covenants set forth in Sections 10.14 through 10.18 and the
definitions related thereto), each Foreign Subsidiary and the
Joint Venture shall not be Subsidiaries of GPC.
Term Loan. As defined in Section 3.1
Term Loan Commitment. As defined in Section 3.1.
Term Loan Maturity Date. April 31, 2000.
Term Loan Request. As defined in Section 3.3.
Term Note. As defined in Section 3.2.
Type. As to any Loan, its nature as a Prime Rate Loan
or a LIBOR Rate Loan.
Uniform Customs. With respect to any Letter of Credit,
the Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500
or any successor version thereto adopted by the Bank in the
ordinary course of its business as a letter of credit issuer and
in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement
Obligation for which the GPC Borrowers did not reimburse the Bank
on the date specified in, and in accordance with, Section 6.2.
Voting Stock. Stock, equity or similar interests
however characterized, of any class or classes (however
designated), the holders of which are at the time entitled, as
such holders, to vote for the election of a majority of the
directors (or officers performing similar functions) of the
corporation, association, trust or other business entity
involved, whether or not the right so to vote exists by reason of
the happening of a contingency.
Section 1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall
include such document or agreement as amended, modified, waived
or supplemented from time to time in accordance with its terms
and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural
includes the singular.
(c) A reference to any law or regulation includes any
amendment or modification to such law or regulation.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have
the meanings assigned to them by generally accepted accounting
principles applied on a consistent basis by the accounting entity
to which they refer.
(f) The words "include", "includes" and "including"
are not limiting.
(g) All terms not specifically defined herein or by
generally accepted accounting principles, which terms are defined
in the Uniform Commercial Code as in effect in the State of New
York, have the meanings assigned to them therein.
(h) Reference to a particular "Section" refers to that
section of this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and
words of like import shall refer to this Credit Agreement as a
whole and not to any particular section or subdivision of this
Credit Agreement.
ARTICLE II
THE CREDIT FACILITIES
Section 2.1. The Facilities. This Credit Agreement
includes two credit facilities: a term loan credit facility for
NPDC and a revolving credit facility for the GPC Borrowers. The
term loan facility provides for a loan to NPDC in an amount up to
the Term Loan Commitment of $5,000,000. The revolving credit
facility provides for Revolving Credit Loans and Letters of
Credit to the GPC Borrowers in an aggregate amount up to the
initial Revolving Credit Commitment of $20,000,000 (the
"Revolving Credit Commitment"). Within the revolving credit
facility, there is a letter of credit sub-facility under which
the GPC Borrowers may open Letters of Credit that are part of,
and charged against credit availability under, the revolving
credit facility, provided, however, that the sum of the Maximum
Drawing Amount on all Letters of Credit and the amount of all
Reimbursement Obligations shall not at any time exceed $750,000.
Upon compliance with the provisions of Section 9.16, GPC may
advance $2,000,000, at any time outstanding, of the proceeds of
the Revolving Credit Loans to NPDC and such amounts may be repaid
to GPC and reborrowed by NPDC. Until the Revolving Credit
Maturity Date and upon compliance with the provisions of Section
9.16, GPC may advance to the Foreign Subsidiaries (i) up to
$360,000 at any one time outstanding of the proceeds of the
Revolving Credit Loans during the twelve-month period commencing
on the date hereof and (ii) for each twelve-month period
thereafter, an amount equal to $360,000 at any one time
outstanding plus the aggregate amount of the loans by GPC to the
Foreign Subsidiaries from the proceeds of the Revolving Credit
Loans outstanding on the last day immediately prior to the
commencement of such twelve-month period.
ARTICLE III
AMOUNT AND TERMS OF TERM LOAN
Section 3.1. Commitment to Lend. (a) Subject to the
terms and conditions hereof, the Bank agrees to make a term loan
(the "Term Loan") to NPDC on the Closing Date, in a principal
amount equal to $5,000,000 (the "Term Loan Commitment").
(b) Subject to the terms and conditions hereof, the
Term Loan shall be a Prime Rate Loan.
Section 3.2. Term Note. The Term Loan shall be
evidenced by a promissory note of NPDC, substantially in the form
of Exhibit A-1 (the "Term Note"), with appropriate insertions
therein as to principal amount, payable to the order of the Bank
and representing the obligation of NPDC to pay a principal amount
equal to the amount of the Term Loan, with interest thereon. The
Bank is hereby authorized to record the Drawdown Date and
principal amount of the Term Loan and the date and amount of each
payment or prepayment of principal thereof on the Note Record for
the Term Note, and any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded in
the absence of manifest error; provided that failure by the Bank
to make any recordation on the Term Note shall not affect any of
the obligations of NPDC under the Term Note or this Credit
Agreement. The Term Note shall (i) be dated the Closing Date,
(ii) bear interest, payable as specified in subsection 5.1, and
(iii) be stated to be payable in sixteen consecutive quarterly
installments (each a "Payment Date") commencing on June 30, 1996,
the amount of the first fifteen such installments to be equal to
$250,000 and the amount of the last such installment to be equal
to $1,250,000.
Section 3.3. Procedure for Term Loan Borrowing. NPDC
shall give the Bank irrevocable written notice (or telephonic
notice promptly confirmed in writing) in the form of Exhibit E-2
hereto of the Term Loan requested hereunder (a "Term Loan
Request") not later than 10:00 A.M. (New York City time) one
Business Day prior to the anticipated Closing Date requesting
that the Bank make the Term Loan on the Closing Date and
specifying the principal amount of the Term Loan and the Closing
Date. The Term Loan Request shall be irrevocable and binding on
NPDC and shall obligate NPDC to accept the Term Loan from the
Bank on the Closing Date. The Term Loan Request shall constitute
a representation and warranty by NPDC that the conditions set
forth in Article XII and Article XIII (other than those stated to
be to the satisfaction of the Bank or words of similar import)
have been satisfied or waived on the date of such request. Not
later than 1:00 P.M. (New York City time) on the Closing Date,
upon receipt of such notice and the documents required by
Articles XII and XIII and the satisfaction of the other
conditions set forth therein, in each case to the extent
applicable, the Bank will make available to NPDC, at the Bank's
Office, in immediately available funds, the amount of the
requested Term Loan.
Section 3.4. Use of Proceeds of the Term Loan. The
proceeds of the Term Loan will be used solely for the partial
repayment of certain Swiss Franc denominated long-term debt of
NPDC due in 1995 and 1996 and for reimbursement to NPDC of
amounts previously paid by NPDC in 1995 for such purpose.
Pending such use, the proceeds shall be invested by NPDC in
investments substantially similar to those described in Sections
10.3(a), (b) and (c).
ARTICLE IV
THE REVOLVING CREDIT FACILITY
Section 4.1. Commitment to Lend. (a) Subject to the
terms and conditions hereof (including, without limitation, the
last two sentences of Section 2.1), the Bank agrees to make
revolving credit loans ("Revolving Credit Loans") to the GPC
Borrowers and the GPC Borrowers, on a joint and several basis,
may borrow, repay, and reborrow from time to time between the
Closing Date and the Revolving Credit Maturity Date upon notice
by any Borrower to the Bank given in accordance with Section 4.3,
such Revolving Credit Loans as are requested by GPC on behalf of
the GPC Borrowers up to a maximum amount (after giving effect to
all amounts requested) at any one time equal to the Available
Credit.
(b) Subject to the terms and conditions hereof, the
Revolving Credit Loans may be (i) Prime Rate Loans, (ii) LIBOR
Rate Loans or (iii) a combination thereof, as determined by GPC,
on behalf of the GPC Borrowers, and notified to the Bank in
accordance with subsections 4.3 and 5.3.
Section 4.2. Revolving Credit Note. The Revolving
Credit Loans shall be evidenced by a promissory note of the GPC
Borrowers, substantially in the form of Exhibit A-2 (the
"Revolving Credit Note"), with appropriate insertions as to
principal amount, payable to the order of the Bank and
representing the joint and several obligation of the GPC
Borrowers to pay a principal amount equal to the lesser of (a)
the amount of the Revolving Credit Commitment or, (b) the
outstanding amount of all Revolving Credit Loans, with interest
thereon, and all costs and expenses in connection therewith or
with any other Loan Document. The Bank is hereby authorized to
record the Drawdown Date, Type and principal amount of each
Revolving Credit Loan, each continuation thereof, each conversion
of all or a portion thereof to another Type, the date and amount
of each payment or prepayment of principal thereof and, in the
case of LIBOR Rate Loans, the length of each Interest Period with
respect thereto on the Note Record, and any such recordation
shall constitute prima facie evidence of the accuracy of the
information so recorded in the absence of manifest error;
provided, that the failure by the Bank to make any recordation on
the Revolving Credit Note shall not affect any of the obligations
of the GPC Borrowers under the Revolving Credit Note or this
Agreement. The Revolving Credit Note shall (i) be dated the
Closing Date, (ii) bear interest, payable as specified in
subsection 5.1 and (iii) be stated to mature on the Revolving
Credit Maturity Date.
Section 4.3. Procedure for Revolving Credit Borrowing.
GPC, on behalf of the GPC Borrowers, shall give to the Bank
irrevocable written notice (or telephonic notice promptly
confirmed in a writing) in the form of Exhibit E-1 hereto of each
Revolving Credit Loan requested hereunder (a "Loan Request") not
later than 10:00 A.M. (New York City time) (a) on the same
Business Day as the proposed Drawdown Date of any Prime Rate Loan
and (b) on the third LIBOR Business Day prior to the proposed
Drawdown Date of any LIBOR Rate Loan. Each such notice shall
specify (i) the principal amount of the Revolving Credit Loan
requested, (ii) the proposed Drawdown Date of such Loan, (iii) if
a LIBOR Rate Loan, the Interest Period for such Loan, and (iv)
the Type of such Revolving Credit Loan. Each Loan Request shall
be irrevocable and binding on the Borrowers and shall obligate
GPC, on behalf of the Borrowers, to accept the Loan requested
from the Bank on the proposed Drawdown Date. Each Loan Request
hereunder shall constitute a representation and warranty by each
of the GPC Borrowers that the conditions set forth in Article XII
and Article XIII, in the case of the initial Revolving Credit
Loans to be made on the Closing Date, and Article XIII, in the
case of all other Revolving Credit Loans (in each case other than
those conditions stated to be to the satisfaction of the Bank or
words of similar import), have been satisfied or waived on the
date of such request. Each Loan Request shall be in a minimum
aggregate amount of $100,000. Not later than 1:00 P.M. (New York
City time) on the proposed Drawdown Date of any Revolving Credit
Loan, upon receipt of the documents required by Articles XII and
XIII and the satisfaction of the other conditions set forth
therein, in each case to the extent applicable, the Bank will
make available to GPC, on behalf of the GPC Borrowers, at the
Bank's Office, in immediately available funds, the amount of the
requested Revolving Credit Loan.
Section 4.4. Use of Proceeds of the Revolving Credit
Loans. The GPC Borrowers will use the proceeds of the Revolving
Credit Loans solely for working capital purposes and other
purposes not prohibited by this Agreement. Upon compliance with
the provisions of Section 9.16, GPC may advance $2,000,000, at
any time outstanding, of the proceeds of the Revolving Credit
Loans to NPDC and such amounts may be repaid to GPC and
reborrowed by NPDC. Until the Revolving Credit Maturity Date and
upon compliance with the provisions of Section 9.16, GPC may
advance to the Foreign Subsidiaries (i) up to $360,000 at any one
time outstanding of the proceeds of the Revolving Credit Loans
during the twelve-month period commencing on the date hereof and
(ii) for each twelve-month period thereafter, an amount equal to
$360,000 at any one time outstanding plus the aggregate amount of
the loans by GPC to the Foreign Subsidiaries from the proceeds of
the Revolving Credit Loans outstanding on the last day
immediately prior to the commencement of such twelve-month
period.
ARTICLE V
INTEREST, CONVERSIONS, PAYMENTS, COSTS, ETC.
Section 5.1. Interest.
5.1.1. Interest on Loans. Except as otherwise
provided in Section 5.1.2:
(a) The Term Loan shall bear interest for each day at
a rate per annum equal to the Prime Rate plus two percent (2%).
NPDC promises to pay interest on the outstanding principal amount
of the Term Loan, in arrears, on each Interest Payment Date with
respect thereto.
(b) Each Prime Rate Revolving Credit Loan shall bear
interest for each day at a rate per annum equal to the Prime Rate
for such day.
(c) Each LIBOR Rate Loan shall bear interest for each
day during each Interest Period with respect thereto at a rate
per annum equal to the LIBOR Rate determined for such day plus
one and three quarters of one percent (1.75%).
(d) The GPC Borrowers, jointly and severally, promise
to pay interest on each Revolving Credit Loan, in arrears, on
each Interest Payment Date with respect thereto.
5.1.2. Interest After Default. If all or a
portion of (i) the principal amount of any Loan (ii) any interest
payable thereon or (iii) any other amount payable hereunder or
under any of the other Loan Documents shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal
to (a) in the case of overdue principal and overdue interest on
any Loan, two percent (2%) above the rate of interest otherwise
applicable to such Loan pursuant to Section 5.1.1 during such
period and (b) in the case of other overdue amounts, two percent
(2%) above the rate of interest applicable to Prime Rate Loans
during such period (the "Overdue Rate") in each case from the
date of such non-payment until such amount is paid in full (as
well after as before judgment). Accrued interest at the Overdue
Rate shall be payable from time to time on demand of the Bank.
Section 5.2. Reduction of Revolving Credit
Commitments. GPC, on behalf of the GPC Borrowers, shall have the
right, at any time and from time to time upon five (5) Business
Days' irrevocable written notice to the Bank, to reduce by
$500,000 or an integral multiple thereof or terminate entirely
the Revolving Credit Commitment, whereupon the Revolving Credit
Commitment shall be reduced by the amount specified in such
notice, or as the case may be, terminated. No reduction or
termination of the Revolving Credit Commitment pursuant to this
Section 5.2 may be reinstated.
Section 5.3. Revolving Credit Loan Conversion Options.
5.3.1. Conversion to Different Type of Loan.
Subject to the terms and conditions of this Credit Agreement,
GPC, on behalf of the Borrowers, may elect from time to time to
convert any outstanding Revolving Credit Loan to a Revolving
Credit Loan of another Type, provided, that (a) with respect to
any such conversion of a LIBOR Rate Loan to a Prime Rate
Revolving Credit Loan, the GPC Borrowers shall give the Bank
written notice of such election by not later than 10:00 A.M. (New
York City time) on the same Business Day as the proposed
conversion; (b) with respect to any such conversion of a LIBOR
Rate Loan into a Prime Rate Revolving Credit Loan, such
conversion shall only be made on the last day of the Interest
Period with respect to the LIBOR Rate Loan; (c) with respect to
any such conversion of a Prime Rate Revolving Credit Loan to a
LIBOR Rate Loan, the Borrowers shall give the Bank written notice
of such election by not later than 10:00 A.M. (New York City
time) on the third LIBOR Business Day before the proposed
conversion; and (d) no Revolving Credit Loan may be converted
into a LIBOR Rate Loan when either a Default or Event of Default
has occurred and is continuing. All or any part of outstanding
Revolving Credit Loans of either Type may be converted into a
Revolving Credit Loan of the other Type as provided herein,
provided, that any partial conversion shall be in an aggregate
principal amount of $250,000 or a whole multiple thereof. Each
Conversion Request relating to the conversion of a Revolving
Credit Loan to a LIBOR Rate Loan shall be irrevocable by the
Borrowers.
5.3.2. Continuation of Type of Loan. Subject
to the terms and conditions of this Credit Agreement, any LIBOR
Rate Loan may be continued as a Loan of the same Type upon the
expiration of an Interest Period with respect thereto by
compliance by GPC, on behalf of the Borrowers, with the notice
provisions contained in Section 5.3.1; provided, that no LIBOR
Rate Loan may be continued as such when any Default or Event of
Default has occurred and is continuing, but shall be
automatically converted to a Prime Rate Revolving Credit Loan on
the last day of the first Interest Period relating to the LIBOR
Rate Loan ending during the continuance of any Default or Event
of Default of which officers of the Bank actively engaged in
administering the Borrowers' account have actual knowledge.
5.3.3. Deemed Conversion. If the applicable GPC
Borrower shall fail to provide the conversion or continuation
notice required by this Section 5.3 prior to the expiration of an
Interest Period for a LIBOR Rate Loan, such GPC Borrower shall be
deemed to have requested a conversion of such LIBOR Rate Loan to
a Prime Rate Loan on the last day of the Interest Period with
respect thereto.
Section 5.4. Repayment of the Loans.
5.4.1. Maturity. (a) NPDC irrevocably and
unconditionally promises to pay on each Payment Date, and there
shall become absolutely due and payable on each Payment Date, the
principal amount of the Term Loan set forth in Section 3.2 as
payable on such Payment Date, together with any and all accrued
and unpaid interest thereon and any and all fees and expenses
payable by NPDC under any of the Loan Documents.
(b) The GPC Borrowers, jointly and severally,
irrevocably and unconditionally promise to pay on the Revolving
Credit Maturity Date, and there shall become absolutely due and
payable on the Revolving Credit Maturity Date, all of the
Revolving Credit Loans outstanding on such date, together with
any and all accrued and unpaid interest thereon and any and all
fees and expenses payable by such parties under any of the Loan
Documents.
5.4.2. Mandatory Repayment of Revolving Credit
Loans. If at any time the Available Credit at such time should
be less than $0, the amount equal to an amount sufficient to make
the Available Credit equal to $0 shall be immediately due and
payable to the Bank to be applied to the GPC Obligations arising
in respect of this Credit Agreement, and the GPC Borrowers,
jointly and severally, hereby irrevocably and unconditionally
promise to pay such amount, immediately and without notice,
demand, or any other act or action by the Bank or any other
Person, which amount shall be paid to the Bank for application:
first, to any Unpaid Reimbursement Obligations; second, to the
Revolving Credit Loans; and third, to provide to the Bank cash
collateral for Reimbursement Obligations as contemplated by
Section 6.2(b) and (c).
5.4.3. Optional Repayments of Loans. NPDC shall
have the right, at its election, to repay the outstanding amount
of the Term Loan, as a whole or in part, at any time without
penalty or premium, and the GPC Borrowers shall have the right,
at their election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time
without penalty or premium; provided, that any full or partial
prepayment of the outstanding amount of any LIBOR Rate Loans
pursuant to this Section 5.4.3 may be made only on the last day
of the Interest Period relating thereto. NPDC or GPC, as
appropriate, shall give the Bank, no later than 10:00 A.M., New
York City time, at least one (1) Business Days' prior written
notice of any proposed prepayment pursuant to this Section 5.4.3
of Prime Rate Loans, and three (3) LIBOR Business Days' notice of
any proposed prepayment pursuant to this Section 5.4.3 of LIBOR
Rate Loans, in each case specifying the proposed date of
prepayment of Loans and the principal amount to be prepaid. Each
such partial prepayment of the Loans shall be in an integral
multiple of $100,000, shall be accompanied by the payment of
accrued interest on the principal prepaid to the date of
prepayment and shall be applied, (a) in the case of Revolving
Credit Loans and in the absence of instruction by the GPC
Borrowers, first to the principal of Prime Rate Revolving Credit
Loans and then to the principal of LIBOR Rate Loans and (b) in
the case of the Term Loan to installments of principal in the
inverse order of the maturity thereof. Any prepayment of the
Term Loan may not be reborrowed.
Section 5.5. Certain Fees and Costs.
5.5.1. NPDC Closing Fee. NPDC agrees to pay to
the Bank on the Closing Date a $100,000 closing fee. The closing
fee is fully earned and is nonrefundable.
5.5.2. Commitment Fee. The GPC Borrowers,
jointly and severally, agree to pay to the Bank a commitment fee
calculated at the rate of one-half of one percent (1/2 of 1%) per
annum on the average daily amount during each calendar quarter or
portion thereof from the Closing Date to the Revolving Credit
Maturity Date by which the Revolving Credit Commitment exceeds
the average daily outstanding amount of Revolving Credit Loans
during such calendar quarter. The commitment fee shall be
payable quarterly in arrears on the last day of each calendar
quarter for such calendar quarter commencing on the first such
date following the date hereof, with a final payment on the
Revolving Credit Maturity Date or any earlier date on which the
Revolving Credit Commitment shall terminate.
5.5.3. Letter of Credit Fee. The GPC Borrowers,
jointly and severally, shall, in connection with the issuance or
any extension or renewal of any Letter of Credit, pay a fee (in
each case, a "Letter of Credit Fee") to the Bank in respect of
each Letter of Credit equal to one percent (1%) per annum of the
face amount of such Letter of Credit payable quarterly in advance
and which is fully earned when paid and nonrefundable plus the
Bank's customary issuance fees.
5.5.4. Additional Costs, Etc. If after the date
hereof the adoption of or change in any Applicable Law issued or
made applicable to the Bank by any central bank or other fiscal,
monetary or other authority (whether or not having the force of
law) or any change in the interpretation or application of any
Applicable Law by a court or government authority with
appropriate jurisdiction, shall:
(a) subject the Bank to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters
of Credit, any Letter of Credit Application, the Revolving Credit
Commitment or the LIBOR Rate Loans (other than net income taxes
and franchise taxes imposed in lieu of net income taxes), or
(b) materially change the basis of taxation (except
for changes in taxes on income or profits) of payments to the
Bank of the principal of or the interest on any LIBOR Rate Loans
or any other amounts payable to the Bank under this Credit
Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other
than to the extent specifically provided for elsewhere in this
Credit Agreement) any special deposit, reserve, assessment,
liquidity, capital adequacy or other similar requirements
(whether or not having the force of law) against assets held by,
or deposits in or for the account of, or loans by, or letters of
credit issued by, or commitments of an office of the Bank, or
(d) impose on the Bank any other conditions or
requirements with respect to this Credit Agreement, the other
Loan Documents, any Letters of Credit, the LIBOR Rate Loans, the
Revolving Credit Commitment, or any class of loans, letters of
credit or commitments of which any of the LIBOR Rate Loans or the
Revolving Credit Commitment forms a part, and the result of any
of the foregoing is
(i) to increase the cost to the Bank of
making,
funding, issuing, renewing, extending or maintaining
any of the LIBOR Rate Loans or the Revolving Credit
Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal,
interest,
Reimbursement Obligation or other amount payable to the
Bank hereunder, in each case on account of the
Revolving Credit Commitment, any Letter of Credit or
any of the LIBOR Rate Loans, or
(iii) to require the Bank to make any
payment or to
forego any interest or Reimbursement Obligation or
other sum payable hereunder, in each case on account of
the Revolving Credit Commitment, any Letter of Credit
or any of the LIBOR Rate Loans, the amount of which
payment or foregone interest or Reimbursement
Obligation or other sum is calculated by reference to
the gross amount of any sum receivable or deemed
received by the Bank from any GPC Borrower hereunder,
then, and in each such case, the GPC Borrowers, jointly and
severally will, not later than five (5) days after demand made by
the Bank and receipt by GPC of the certificate described in
Section 5.5.6, at any time and from time to time and as often as
the occasion therefor may arise, pay to the Bank such additional
amounts (excluding amounts duplicative of amounts payable under
Section 5.5.5) as will be sufficient to compensate the Bank for
such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum. In the event that the
Bank demands compensation under this Section 5.5.4, then (without
limiting or reducing the obligations of the GPC Borrowers,
jointly and severally, under this Section 5.5.4) the Bank shall
take reasonable steps to mitigate the circumstances resulting in
such demand, provided, that the Bank shall not be required to
take any such steps if, in its opinion, such steps (i) would be
inconsistent with the Banks internal policies, (ii) would or
might have an adverse effect upon the Bank's business, operations
or financial condition or (iii) would result in any cost,
liability or expense to the Bank.
5.5.5. Capital Adequacy. If after the date
hereof the Bank determines that (a) the adoption of or change
after the date hereof in any Applicable Law regarding capital
requirements for banks or bank holding companies or any change in
the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction occurring
after the date hereof, or (b) compliance by the Bank or any
corporation controlling the Bank with any Applicable Law
regarding capital adequacy as a result of any adoption or change
referred to in clause (a) above, has the effect of reducing the
return on the Bank's commitment with respect to any Revolving
Credit Loans or Letters of Credit to a level below that which the
Bank could have achieved but for such adoption, change or
compliance (taking into consideration the Bank's then existing
policies with respect to capital adequacy and assuming full
utilization of such entity's capital) by any amount deemed by the
Bank to be material, then the Bank may notify the GPC Borrowers
of such fact. To the extent that the amount of such reduction in
the return on capital is not reflected in the Prime Rate, the GPC
Borrowers, jointly and severally agree to pay the Bank for the
amount of such reduction in the return on capital as and when
such reduction is determined not later than five (5) days after
demand by the Bank and receipt by GPC of the certificate
described in Section 5.5.6. The Bank shall allocate such cost
increases among its customers in good faith and on an equitable
basis.
5.5.6. Certificate. A certificate setting forth
any additional amounts payable pursuant to Section 5.5.4 or
Section 5.5.5 and a brief explanation of such amounts that are
due, submitted by the Bank to the GPC Borrowers, shall be prima
facie evidence, absent manifest error, that such amounts are due
and owing.
Section 5.6. Payments and Computations.
5.6.1. Funds for Payments.
5.6.1.1. Payment to Bank. All payments of
principal, interest, Reimbursement Obligations, the closing fee,
commitment fees, Letter of Credit Fees and any other amounts due
hereunder or under any of the other Loan Documents shall be made
to the Bank, at the Bank's Office or at such other location that
the Bank may from time to time designate, in each case in Dollars
and in immediately available funds, not later than 11:00 a.m.,
New York city time, on the date on which such payment shall
become due. Any such payment made on such date but after such
time shall, if the amount paid bears interest, be deemed to have
been made on, and interest shall continue to accrue and be
payable thereon until, the next succeeding Business Day.
5.6.1.2. No Offset, Etc. All payments by
any Borrower hereunder and under any of the other Loan Documents
shall be made without setoff or counterclaim and free and clear
of and without deduction for any taxes (other than net income
taxes or franchise taxes imposed in lieu of net income taxes),
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless
required by law. If any such obligation is imposed upon such
Borrower with respect to any amount payable by it hereunder or
under any of the other Loan Documents, (i) NPDC or (ii) the GPC
Borrowers, jointly and severally, as the case may be, will pay to
the Bank, on the date on which such amount is due and payable
hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Bank to
receive the same net amount that the Bank would have received on
such due date had no such obligation been imposed upon such
Borrower. The agreements in this Section 5.6.1.2 shall survive
the termination of this Credit Agreement and the payment of the
Loans, Letters of Credit and all other amounts payable hereunder.
5.6.2. Computations; Records. All computations
of interest on the Loans and of commitment fees, Letter of Credit
Fees or other fees shall be based on a 360-day year and paid for
the actual number of days elapsed. All fees payable hereunder
shall be fully earned when paid and nonrefundable. Except as
otherwise provided in the definition of the term "Interest
Period" with respect to LIBOR Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on
a day that is not a Business Day, the due date for such payment
shall be extended to the next succeeding Business Day, and
interest shall accrue during such extension. The outstanding
amount of the Loans as reflected on the applicable Note Record
from time to time shall constitute prima facie evidence of the
accuracy of such information so recorded in the absence of
manifest error; provided, that failure by the Bank to make any
recordation on the applicable Note Record shall not affect any of
the obligations of (a) NPDC or (b) the GPC Borrowers, jointly and
severally, as the case may be, under this Credit Agreement or any
other Loan Document.
Section 5.7. Inability to Determine LIBOR Rate. In
the event, prior to the commencement of any Interest Period
relating to any LIBOR Rate Loan, the Bank shall reasonably
determine that adequate and reasonable methods do not exist for
ascertaining the LIBOR Rate that would otherwise determine the
rate of interest to be applicable to any LIBOR Rate Loan during
any Interest Period, the Bank shall forthwith give notice of such
determination to the GPC Borrowers (which shall be conclusive and
binding on the GPC Borrowers). In such event (a) any Loan
Request or Conversion Request with respect to LIBOR Rate Loans
shall be automatically withdrawn and shall be deemed a request
for Prime Rate Loans, (b) each LIBOR Rate Loan will
automatically, on the last day of the then current Interest
Period relating thereto, become a Prime Rate Revolving Credit
Loan, and (c) the obligations of the Bank to make LIBOR Rate
Loans shall be suspended until the Bank reasonably determines
that the circumstances giving rise to such suspension no longer
exist, whereupon the Bank shall so notify the GPC Borrowers.
Section 5.8. Illegality. Notwithstanding any other
provisions herein, if any present or future law, regulation,
treaty or directive or in the interpretation or application
thereof shall make it unlawful for the Bank to make or maintain
LIBOR Rate Loans, the Bank shall forthwith give notice of such
circumstances to the GPC Borrowers and thereupon (a) the
commitment of the Bank to make LIBOR Rate Loans or convert Prime
Rate Revolving Credit Loans to LIBOR Rate Loans shall forthwith
be suspended and (b) the Revolving Credit Loans then outstanding
as LIBOR Rate Loans, if any, shall be converted automatically to
Prime Rate Revolving Credit Loans on the last day of each
Interest Period applicable to such LIBOR Rate Loans or within
such earlier period as may be required by law. The GPC
Borrowers, jointly and severally, hereby agree promptly to pay
the Bank, upon demand by the Bank, any additional amounts
necessary to compensate the Bank for any costs incurred by the
Bank in making any conversion in accordance with this Section
5.8, including any interest or fees payable by the Bank to
lenders of funds obtained by it in order to make or maintain its
LIBOR Rate Loans hereunder.
Section 5.9. Indemnity. The GPC Borrowers, jointly
and severally, agree to indemnify the Bank and to hold the Bank
harmless from and against any loss, cost or expense (excluding
loss of anticipated profits) that the Bank may sustain or incur
as a consequence of default by any GPC Borrower in making a
borrowing, conversion into or continuation of a LIBOR Rate Loan
after such Borrower has given (or is deemed to have given) a Loan
Request or a Conversion Request relating thereto in accordance
with Section 4.3 or Section 5.3, default by any GPC Borrower in
making any prepayment after such GPC Borrower has given a notice
thereof in accordance with the provisions of this Credit
Agreement or the making of any payment of a LIBOR Rate Loan
(including, without limitation, as a result of any acceleration
of the Revolving Credit Loans in accordance with Section 14.1) or
the making of any conversion of any such Revolving Credit Loan to
a Prime Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including
interest or fees payable by the Bank to lenders of funds obtained
by it in order to maintain any such Revolving Credit Loans.
Section 5.10. Concerning Joint and Several Liability
of the GPC Borrowers.
(a) Each of the GPC Borrowers is accepting joint and
several liability hereunder in consideration of the financial
accommodation to be provided by the Bank under this Credit
Agreement, for the mutual benefit, directly and indirectly, of
each of the GPC Borrowers and in consideration of the
undertakings of each of the GPC Borrowers to accept joint and
several liability for the obligations of each of them.
(b) Each of the GPC Borrowers jointly and severally
hereby irrevocably and unconditionally accepts, not merely as a
surety but also as a co-debtor, joint and several liability with
the other GPC Borrowers with respect to the payment and
performance of all of the GPC Obligations, it being the intention
of the parties hereto that all the GPC Obligations shall be the
joint and several obligations of each of the GPC Borrowers
without preferences or distinction among them.
(c) If and to the extent that any of the GPC Borrowers
shall fail to make any payment with respect to any of the GPC
Obligations as and when due or to perform any of the GPC
Obligations in accordance with the terms thereof, then in each
such event, the other GPC Borrowers will make such payment with
respect to, or perform, such GPC Obligation.
(d) The obligations of each GPC Borrower under the
provisions of this Section 5.10 constitute full recourse
obligations of such Borrower, enforceable against it to the full
extent of its properties and assets, irrespective of the
validity, regularity or enforceability of this Agreement or any
other circumstances whatsoever.
(e) Except as otherwise expressly provided herein,
each GPC Borrower hereby waives notice of acceptance of its joint
and several liability, notice of any and all Revolving Credit
Loans made under this Credit Agreement, notice of occurrence of
any Event of Default, or of any demand for any payment under this
Credit Agreement, notice of any action at any time taken or
omitted by the Bank under or in respect of any of the GPC
Obligations, any requirement of diligence and, generally, all
demands, notices and other formalities of every kind in
connection with this Credit Agreement. Each GPC Borrower hereby
assents to, and waives notice of, any extension or postponement
of the time for the payment of any of the GPC Obligations, the
acceptance of any partial payment thereon, any waiver, consent or
other action or acquiescence by the Bank at any time or times in
respect of any default by any Borrower in the performance or
satisfaction of any term, covenant, condition or provision of
this Credit Agreement, any and all other indulgences whatsoever
by the Bank in respect of any of the GPC Obligations, and the
taking, addition, substitution or release, in whole or in part,
at any time or times, of any security for any of the GPC
Obligations or the addition, substitution or release, in whole or
in part, of any GPC Borrower. Without limiting the generality of
the foregoing, each GPC Borrower assents to any other action or
delay in acting or failure to act on the part of the Bank,
including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully
with applicable laws or regulations thereunder which might, but
for the provisions of this Section 5.10, afford grounds for
terminating, discharging or relieving such GPC Borrower, in whole
or in part, from any of its obligations under this Section 5.10,
it being the intention of each GPC Borrower that, so long as any
of the GPC Obligations remain unsatisfied, the obligations of
such GPC Borrower under this Section 5.10 shall not be discharged
except by performance and then only to the extent of such
performance. The GPC Obligations of each GPC Borrower under this
Section 5.10 shall not be diminished or rendered unenforceable by
any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any GPC
Borrower or the Bank. The joint and several liability of the GPC
Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other
change whatsoever in the name, membership, constitution or place
of formation of any GPC Borrower or the Bank.
(f) The provisions of this Section 5.10 are made for
the benefit of the Bank and its successors and assigns, and may
be enforced by it from time to time against any of the GPC
Borrowers as often as occasion therefor may arise and without
requirement on the part of the Bank first to marshal any of its
claims or to exercise any of its rights against the other GPC
Borrowers or to exhaust any remedies available to it against the
other GPC Borrowers or to resort to any other source or means of
obtaining payment of any of the GPC Obligations or to elect any
other remedy. The provisions of this Section 5.10 shall remain
in effect until all the GPC Obligations shall have been paid in
full or otherwise fully satisfied. If at any time, any payment,
or any part thereof, made in respect of any of the GPC
Obligations, is rescinded or must otherwise be restored or
returned by the Bank upon the insolvency, bankruptcy or
reorganization of any of the GPC Borrowers, or otherwise, the
provisions of this Section 5.10 will forthwith be reinstated in
effect, as though such payment had not been made.
(g) NPDC shall have no obligations under this Section
5.10.
ARTICLE VI
LETTERS OF CREDIT
Section 6.1. Letter of Credit Commitment.
6.1.1. Commitment to Issue Letters of Credit.
Subject to the terms and conditions hereof and the execution and
delivery by the GPC Borrowers of a letter of credit application
on the Bank's customary form as it may change from time to time
(a "Letter of Credit Application"), the Bank agrees, in
accordance with the Bank's usual and customary business
practices, to issue, extend and renew for the account of the
specified GPC Borrower one or more standby letters of credit
(individually, a "Letter of Credit"), in such form as may be
requested from time to time, during the period commencing on the
Closing Date and ending on the Revolving Credit Maturity Date, by
GPC, on behalf of the GPC Borrowers, and agreed to by the Bank;
provided, however, that after giving effect to such request, (a)
the sum of the aggregate Maximum Drawing Amount and all Unpaid
Reimbursement Obligations shall not exceed $750,000 at any one
time and (b) the Available Credit is not less than $0; and
provided, further, that the Bank shall not issue, extend or renew
any Letter of Credit if: (i) any order, judgment or decree of any
governmental authority or arbitrator shall purport by its terms
to enjoin or restrain the Bank from issuing such Letter of Credit
or any rule, regulation or law applicable to the Bank or any
request or directive from any governmental authority with
jurisdiction over the issuance of letters of credit generally or
such Letters of Credit in particular shall impose upon the Bank
with respect to such Letters of Credit any restriction or reserve
or capital requirement (for which the Bank is not otherwise
compensated) not in effect on the date hereof, or any
unreimbursed loss, cost or expense occurs which was not
applicable, in effect or known to the Bank as of the date hereof
and which the Bank in good faith deems material to it, (ii) any
of the terms and provisions of Articles XII or XIII, as
applicable, are not satisfied or (z) such issuance, extension or
renewal would conflict with, or cause the Bank to exceed any
limits imposed by Applicable Law.
6.1.2. Procedure for Letters of Credit. GPC, on
behalf of any GPC Borrower, may from time to time request that
the Bank issue, extend or renew a Letter of Credit by delivering
to the Bank at the Bank's Office a Letter of Credit Application,
and such other certificates, documents and other papers and
information as the Bank may reasonably request. Upon receipt of
any Letter of Credit Application, the Bank will process such
Letter of Credit Application and the certificates, documents and
other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall
promptly issue, extend or renew the Letter of Credit requested
thereby (but in no event shall the Bank be required to issue,
extend or renew any Letter of Credit earlier than three Business
Days after its receipt of the Letter of Credit Application
therefor and all such other certificates, documents and other
papers and information relating thereto) in a manner as may be
agreed by the Bank and such GPC Borrower. In the event that any
provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then
the provisions of this Credit Agreement shall, to the extent of
any such inconsistency, govern.
6.1.3. Terms of Letters of Credit. Each Letter
of Credit issued, extended or renewed hereunder shall be
denominated in Dollars and, among other things, (a) provide for
the payment of sight drafts for honor thereunder when presented
in accordance with the terms thereof and when accompanied by the
documents described therein, and (b) have an expiration date no
more than one year after the date of issuance and no later than
the date that is fourteen (14) days (or, if the beneficiary is
located outside of the United States of America, forty-five (45)
days) prior to the Revolving Credit Maturity Date. Each Letter
of Credit so issued, extended or renewed shall be subject to the
Uniform Customs and, to the extent not inconsistent therewith,
the laws of the State of New York.
Section 6.2. Reimbursement Obligation of the
Borrowers. In order to induce the Bank to issue, extend and
renew each Letter of Credit, the GPC Borrowers, jointly and
severally, hereby irrevocably and unconditionally promise to
reimburse or pay to the Bank with respect to each Letter of
Credit issued, extended or renewed by the Bank hereunder,
(a) except as otherwise expressly provided in Section
6.2(b) and (c), on each date that any draft presented under such
Letter of Credit is honored by the Bank, or the Bank otherwise
makes a payment with respect thereto, (i) the amount paid by the
Bank under or with respect to such Letter of Credit
("Reimbursement Obligations"), and (ii) the amount of any taxes,
fees, charges or other costs and expenses whatsoever incurred by
the Bank in connection with any payment made by the Bank under,
or with respect to, such Letter of Credit; provided, however,
that in the event that such amounts referred to in this
subparagraph (a) are less than the amount of the Available Credit
and there is no Default or Event of Default, GPC, on behalf of
the Borrowers, shall be deemed to have requested, and the Bank
shall be deemed to have made, a Prime Rate Revolving Credit Loan
as of such date in satisfaction of such Reimbursement
Obligations,
(b) upon the reduction (but not termination) of the
Revolving Credit Commitment to an amount less than the Maximum
Drawing Amount, an amount equal to 110% of such difference, which
amount shall be held by the Bank as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Revolving Credit
Commitment, or the acceleration of the Reimbursement Obligations
with respect to all Letters of Credit in accordance with Article
XIV, an amount equal to 110% of the then Maximum Drawing Amount
on all Letters of Credit, which amount shall be held by the Bank
as cash collateral for all Reimbursement Obligations.
Each such payment shall be made to the Bank at the Bank's Office
in immediately available funds. Interest on any and all amounts
remaining unpaid by the Borrowers under this Section 6.2 at any
time from the date such amounts become due and payable (whether
as stated in this Section 6.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be
payable to the Bank on demand at the rate specified in Section
5.2 for overdue principal on the Prime Rate Revolving Credit
Loans.
Section 6.3. Letter of Credit Payments. If any draft
shall be presented or other demand for payment shall be made
under any Letter of Credit, the Bank shall notify the GPC
Borrowers of the date and amount of the draft presented or demand
for payment and of the date and time when it expects to pay such
draft or honor such demand for payment. The responsibility of
the Bank to the GPC Borrowers shall be only to determine that the
documents (including each draft) delivered under each Letter of
Credit in connection with such presentment shall be generally in
conformity in all material respects with such Letter of Credit.
Section 6.4. Obligations Absolute. The GPC Borrowers'
obligations under this Article VI shall be absolute and
unconditional under any and all circumstances and irrespective of
the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or
defense to payment that any Borrower may have or have had against
the Bank or any beneficiary of a Letter of Credit. The GPC
Borrowers further agree with the Bank that the Bank shall not be
responsible for, and the GPC Borrowers' Reimbursement Obligations
under Section 6.2 shall not be affected by, among other things,
the validity or genuineness of documents or of any endorsements
thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute
between or among any GPC Borrower, the beneficiary of any Letter
of Credit or any financing institution or other party to which
any Letter of Credit may be transferred or any claims or defenses
whatsoever of any GPC Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Bank shall not be
liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice,
however transmitted, in connection with any Letter of Credit.
The GPC Borrowers agree that any action taken or omitted by the
Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be
binding upon the GPC Borrowers and shall not result in any
liability on the part of the Bank to the GPC Borrowers.
Section 6.5. Reliance by Issuer. To the extent not
inconsistent with Section 6.4, the Bank shall be entitled to
rely, and shall be fully protected in relying upon, any Letter of
Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document believed by
it to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons and upon advice and
statements of legal counsel, independent accountants and other
experts selected by the Bank.
Section 6.6. Letter of Credit Fee. The GPC Borrowers,
jointly and severally, shall, in connection with the issuance or
any extension or renewal of any Letter of Credit, pay a fee in
accordance with Section 5.5.3.
ARTICLE VII
COLLATERAL SECURITY
Section 7.1. Security of NPDC. The NPDC Obligations
shall be secured by a perfected first priority security interest
in the NPDC Collateral pursuant to the terms of the Pledge
Agreement.
Section 7.2. Security of GPC Borrowers. The GPC
Obligations shall be secured by a perfected first priority
security interest in the GPC Collateral pursuant to the terms of
the Security Agreements and the GPC Note Pledge Agreement to
which certain GPC Borrowers are party.
ARTICLE VIII
REPRESENTATIONS AND WARRANTIES
Each of the Borrowers represents and warrants to the Bank as
follows (it being agreed that NPDC represents and warrants only
to matters with respect to itself, but not with respect to any
GPC Borrower, and each GPC Borrower represents and warrants only
to matters with respect to itself and the other GPC Borrowers,
but not with respect to NPDC):
Section 8.1. Corporate Authority.
8.1.1. Incorporation; Good Standing. Each of the
Borrowers (a) is a corporation duly organized, validly existing
and in good standing under the laws of its state of
incorporation, (b) has all requisite corporate power to own its
property and conduct its business as now conducted and as
presently contemplated, and (c) is in good standing as a foreign
corporation and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a
failure to be so qualified would not have a Materially Adverse
Effect.
8.1.2. Authorization. The execution, delivery
and performance of this Credit Agreement and the other Loan
Documents to which any Borrower is or is to become a party and
the transactions contemplated hereby and thereby (a) are within
the corporate authority of such Borrower, (b) have been duly
authorized by all necessary corporate proceedings, (c) do not
conflict with or result in any breach or contravention of any
provision of law, statute, rule or regulation to which such
Borrower is subject or any judgment, order, writ, injunction,
license or permit or similar document applicable to such
Borrower, (d) do not conflict with any provision of the corporate
charter or bylaws of such Borrower or create (with or without the
giving of notice or lapse of time, or both), a default under or
breach of any agreement, bond, note or indenture to which such
Borrower is a party, or by which such Borrower is bound or any of
its respective properties or assets is affected that would
individually or in the aggregate have a Materially Adverse
Effect, or result in the imposition of any Lien of any nature
whatsoever upon any of the properties or assets owned by or used
in connection with the business of such Borrower, except for the
lien of this Credit Agreement and the other Loan Documents.
8.1.3. Enforceability. This Credit Agreement and
the other Loan Documents to which any Borrower is a party have
been duly executed and delivered by each such Borrower and will
result in valid and legally binding obligations of such Borrower
enforceable (subject, in the case of dispositions of the Pledged
Stock and the Pledged Debentures (each as defined under the
Pledge Agreement) to the Securities Act and other applicable
securities laws and regulations) against it in accordance with
the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors rights and except to the
extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court
before which any proceeding therefor may be brought.
Section 8.2. Governmental and Third Party Approvals.
The execution, delivery and performance by any Borrower of this
Credit Agreement and the other Loan Documents to which such
Borrower is or is to become a party, the grant by NPDC to the
Bank of security interests in the NPDC Collateral, the grant by
the GPC Borrowers to the Bank of security interests in the GPC
Collateral and the transactions contemplated hereby and thereby
do not require the approval or consent of, or filing with, any
governmental agency or authority or required third party other
than (a) those that have been already obtained without the
imposition of any conditions that are not acceptable to the Bank
and that remain in effect, (b) the filing of the UCC-1 financing
statements listed on Schedule 8.2, (c) the filing of the UCC-3
termination statements listed on Schedule 8.2 with respect to the
security interests of Nationsbank, National Association and (d)
those that are disclosed by the Borrowers to the Bank prior to
the date hereof in writing and that the Bank reasonably
determines are not material and (e) consents under any agreement,
bond, note or indenture referred to in Section 8.1.2(d) hereof,
the failure of which to obtain would not create (with or without
the giving of notice or lapse of time, or both), a default under
or breach of such agreement, bond, note or indenture that would
individually or in the aggregate have a Materially Adverse
Effect.
Section 8.3. Title to Properties; Leases. Except as
indicated on Schedule 8.3 hereto, (a) GPC and its Subsidiaries
own or lease all of the assets reflected in the consolidated
balance sheet of GPC and its Subsidiaries as at the Balance Sheet
Date or acquired since that date (except property and assets sold
or otherwise disposed of in the course of business since that
date), subject to no rights of others, including any mortgages,
leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens and (b) NPDC
and its Subsidiaries own or lease all of the assets reflected in
the consolidated balance sheet of NPDC and its Subsidiaries as at
the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the course
of business since that date).
Section 8.4. Financial Information.
8.4.1. Financial Statements. There has been
furnished to the Bank consolidated balance sheets of NPDC and its
Subsidiaries and GPC and its Subsidiaries as at December 31,
1993, and consolidated statements of operations, changes in
stockholders' equity and cash flows of NPDC and its Subsidiaries
and GPC and its Subsidiaries for the fiscal year then ended,
certified by KPMG Peat Marwick, NPDC's and GPC's independent
certified public accountants, as well as the accountants'
management letters relating thereto. In addition, the Borrowers
have furnished to the Bank consolidated balance sheets of NPDC
and its Subsidiaries and GPC and its Subsidiaries as at the
Balance Sheet Date and consolidated statements of operations,
changes in stockholders' equity and cash flows of NPDC and its
Subsidiaries and GPC and its Subsidiaries for the fiscal quarter
then ended, certified by the principal financial or accounting
officer of NPDC and its Subsidiaries or of GPC, as the case may
be. All such balance sheets and statements of operations,
changes in stockholders' equity and cash flows have been prepared
in accordance with generally accepted accounting principles and
fairly present, on a consolidated basis, the financial condition
of NPDC and its Subsidiaries or GPC and its Subsidiaries, as the
case may be, as at the close of business on the respective dates
thereof and the results of operations for the fiscal year or
quarter, as applicable, then ended, subject to year-end audit
adjustments. Except as set forth in Schedule 8.6, there were no
direct or contingent liabilities, obligations or commitments of
NPDC or any of its Subsidiaries or GPC or any of its Subsidiaries
as of December 31, 1993 or as of the Balance Sheet Date involving
material amounts, known to the officers of the Borrowers, that
were not disclosed in the balance sheets for such dates and the
notes related thereto that could have a Materially Adverse
Effect.
8.4.2. Projections. The projections of the
annual income statements and cash flow statements of NPDC and its
Subsidiaries on a consolidated basis and on a consolidating basis
and of GPC and its Subsidiaries on a consolidated basis and on a
consolidating basis for the 1995 fiscal year, copies of which
have been delivered to the Bank, disclose all assumptions used in
formulating such projections. As of the date hereof, to the
knowledge of the Borrowers, no facts exist that (individually or
in the aggregate) would result in any material change in any of
such projections. The projections are based upon reasonable
estimates and assumptions, have been prepared on the basis of the
assumptions stated therein and reflect the reasonable estimates
of the Borrowers of the results of operations and other
information projected therein.
Section 8.5. Franchises, Patents, Copyrights, Etc.
Each of the Borrowers possesses all franchises, patents,
copyrights, trademarks, trade names, licenses and permits, and
rights in respect of the foregoing, which are required for the
conduct of its business substantially as now conducted without
known conflict with any rights of others.
Section 8.6. Litigation. Except as set forth on
Schedule 8.6 hereto, there are no actions, suits, proceedings or
investigations of any kind pending or, to the knowledge of the
Borrowers, threatened against any of the Borrowers before any
court, tribunal or administrative agency or board that (a) could
reasonably be expected to have a Materially Adverse Effect, (b)
question the validity of this Credit Agreement or any of the
other Loan Documents, or (c) purport to materially adversely
affect any transaction contemplated by the Loan Documents.
Section 8.7. No Materially Adverse Contracts, Etc.
None of the Borrowers is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or
regulation that has or is expected in the future to have a
Materially Adverse Effect. None of the Borrowers is a party to
any contract or agreement that has, or in the reasonable judgment
of such Borrower's officers, is expected to have a Materially
Adverse Effect.
Section 8.8. Compliance With Other Instruments, Laws,
Etc. None of the Borrowers is in violation of any provision of
its charter documents, bylaws, or any agreement or instrument to
which it may be subject or by which it or any of its properties
may be bound or any decree, order, judgment (except as set forth
on Schedule 8.6 hereto), statute, license, rule or regulation, in
any of the foregoing cases in a manner that could reasonably be
expected to result in a Materially Adverse Effect.
Section 8.9. Tax Status. The Borrowers (a) have made
or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which
any of them is subject, (b) have paid all taxes and other
governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being
contested in good faith and by appropriate proceedings and (c)
have set aside on their books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the periods to
which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the
Borrowers know of no basis for any such claim.
Section 8.10. No Event of Default. No Default or
Event of Default has occurred and is continuing.
Section 8.11. Holding Company and Investment Company
Acts. None of NPDC, GPC and their respective Subsidiaries is a
"holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company", as such terms
are defined in the Public Utility Holding Company Act of 1935;
nor is any such Person an "investment company", or an "affiliated
company" or a "principal underwriter" of an "investment company",
as such terms are defined in the Investment Company Act of 1940.
Section 8.12. Collateral.
(a) The chief executive office of each of the
Borrowers and the office at which all of such Borrower's records
and books of account are kept are as set forth on Schedule
8.12(a) hereto or such other location of which 30 days prior
written notice is given to the Bank.
(b) Except with respect to Permitted Liens, there is
no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to
cover, affect or give notice of any present or possible future
lien on, or security interest in (i) in the case of any GPC
Borrower, any assets or property of any GPC Borrower or any
rights relating thereto and (ii) in the case of NPDC, any NPDC
Collateral or any rights relating thereto.
(c) The names under which the Borrowers transact
business, as of the date hereof, are listed on Schedule 8.12(c)
hereto, by corporate entity and with an indication as to the
locations at which, as of the date hereof, each Borrower uses
each such name. Except as set forth on Schedule 8.12(c), none of
the Borrowers has within the six-year period immediately
preceding the date of this Agreement changed its name, been the
surviving entity of a merger or consolidation, or acquired all or
substantially all of the assets of any person. Each Borrower
will not change its name without providing at least 30 days'
prior written notice to the Bank.
Section 8.13. Perfection of Security Interest. All
filings, assignments, pledges and deposits of documents or
instruments have been made and all other actions have been taken
that are necessary or advisable, under Applicable Law, to
establish and perfect the Bank's security interest in the
Collateral (other than the filing by Nationsbank, National
Association of the UCC-3 Termination statements listed on
Schedule 8.2 and other than the filing of the UCC-1 financing
statements listed on Schedule 8.2). The Collateral and the
Bank's rights with respect to the Collateral are not subject to
any setoff, claims, withholdings or other defenses (other than
those that could not, singly or in the aggregate, be expected to
have a Materially Adverse Effect or those with respect to the
security interest of Nationsbank, National Association prior to
the filing of UCC-3 termination statements listed on Schedule 8.2
with respect thereto). NPDC is the registered owner or
authorized holder of the NPDC Collateral, free from any lien,
security interest, encumbrance and any other claim or demand,
except for Liens of the nature permitted under Sections 10.2(ii)
and 10.2(iv) hereunder which attach to the general assets of
NPDC. The GPC Borrowers are the owners of the GPC Collateral
free from any lien, security interest, encumbrance and any other
claim or demand, except for Liens permitted under Sections
10.2(ii) and 10.2(iv) which attach to the general assets of any
GPC Borrower.
Section 8.14. Employee Benefit Plans.
8.14.1. In General. Each Employee Benefit Plan
has been maintained and operated in compliance in all material
respects with the provisions of ERISA and, to the extent
applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions. The Borrowers
have heretofore delivered to the Bank the most recently completed
annual report, Form 5500, with all required attachments, and
actuarial statement required to be submitted under Section 103(d)
of ERISA, with respect to each Guaranteed Pension Plan.
8.14.2. Terminability of Welfare Plans. Under
each Employee Benefit Plan that is an employee welfare benefit
plan within the meaning of Section 3(1) or Section 3(2)(B) of
ERISA, no benefits are due unless the event giving rise to the
benefit entitlement occurs prior to plan termination (except as
required by Title I, Part 6 of ERISA). The Borrowers or an ERISA
Affiliate, as appropriate, may terminate each such Plan at any
time (or at any time subsequent to the expiration of any
applicable bargaining agreement) in the discretion of the
Borrowers or such ERISA Affiliate without liability to any
Person.
8.14.3. Guaranteed Pension Plans. Each
contribution required to be made to a Guaranteed Pension Plan,
whether required to be made to avoid the incurrence of an
accumulated funding deficiency, the notice or lien provisions of
Section 302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any
Guaranteed Pension Plan. No liability to the PBGC (other than
required insurance premiums, all of which have been paid) has
been incurred by the Borrowers or any ERISA Affiliate with
respect to any Guaranteed Pension Plan and there has not been any
ERISA Reportable Event, or any other event or condition that
presents a material risk of termination of any Guaranteed Pension
Plan by the PBGC. Except as set forth on Schedule 8.14, based on
the latest valuation of each Guaranteed Pension Plan (which in
each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of
all such Guaranteed Pension Plans within the meaning of Section
4001 of ERISA did not exceed the aggregate value of the assets of
all such Guaranteed Pension Plans, disregarding for this purpose
the benefit liabilities and assets of any Guaranteed Pension Plan
with assets in excess of benefit liabilities.
8.14.4. Multiemployer Plans. Neither the
Borrowers nor any ERISA Affiliate has incurred any material
liability (including secondary liability) to any Multiemployer
Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under Section 4201 of ERISA or as a result of
a sale of assets described in Section 4204 of ERISA. Neither the
Borrowers nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and
within the meaning of Section 4241 or Section 4245 of ERISA or
that any Multiemployer Plan intends to terminate or has been
terminated under Section 4041A of ERISA.
Section 8.15. Regulations G, U and X. The Borrowers
have complied with all of the requirements and provisions of
Regulations G, U and X as to which the Borrowers are required to
comply in connection herewith. No portion of any Revolving
Credit Loan is to be used, and no portion of any Letter of Credit
is to be obtained, for the purpose of "purchasing" or "carrying"
any "margin security" or "margin stock" as such terms are used in
Regulations G, U and X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect.
Section 8.16. Environmental Compliance. The Borrowers
have taken all necessary steps to investigate their past and
present usage of the Real Estate owned or leased by the Borrowers
and the operations conducted thereon commencing with their
purchase or lease thereof, as well as, in the case of any fee
interest in Real Estate that may be acquired by any of the
Borrowers after the Closing Date, the past and present condition
and usage thereof and the operations conducted thereon and, based
upon such diligent investigation, has determined that:
(a) none of the Borrowers or any operator of the Real
Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters,
including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("SARA"), the
Federal Clean Water Act, the Federal Clean Air Act, the
Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health,
safety or the environment (hereinafter "Environmental
Laws"), which violation would have a Materially Adverse
Effect;
(b) none of the Borrowers has received notice from any
third party including, without limitation: any federal,
state or local governmental authority, (i) that any one of
them has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party
under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii)
that any hazardous waste, as defined by 42 U.S.C. Section
9601(5), any hazardous substances as defined by 42 U.S.C.
Section 9601(14), any pollutant or contaminant as defined by
42 U.S.C. Section 9601(33) and any toxic substances, oil or
hazardous materials or other chemicals or substances
regulated by amy Environmental Laws ("Hazardous Substances")
that any one of them has generated, transported or disposed
of has been found at any site at which a federal, state or
local agency or other third party has conducted or has
ordered that any of the Borrowers conduct a remedial
investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each
case, contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or damages of
any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as set forth on Schedule 8.16 attached
hereto: (i) no portion of the purchased or leased Real
Estate has been used from and after the Borrowers' purchase
or lease thereof and no portion of any fee interest in Real
Estate that may be acquired by any of the Borrowers after
the Closing Date has at any time been used for the handling,
processing, storage or disposal of Hazardous Substances
except in accordance with applicable Environmental Laws; and
no underground tank or other underground storage receptacle
for Hazardous Substances is located on any portion of the
Real Estate; (ii) in the course of any activities conducted
by the Borrowers or operators of its properties, no
Hazardous Substances have been generated or are being used
on the Real Estate except in accordance with applicable
Environmental Laws; (iii) there have been no releases (i.e.
any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping) or threatened releases of
Hazardous Substances on, upon, into or from the properties
of the Borrowers, which releases would have a material
adverse effect on the value of any of the Real Estate or
adjacent properties or the environment; (iv) to the best of
the Borrowers' knowledge, there have been no releases on,
upon, from or into any real property in the vicinity of any
fee interest in Real Estate that may be acquired by any of
the Borrowers after the Closing Date that, through soil or
groundwater contamination, may have come to be located on,
and which would have a material adverse effect on the value
of, such Real Estate; and (v) in addition, any Hazardous
Substances that have been generated on any of the leased
Real Estate from and after the Borrowers' lease thereof or
on any fee interest in Real Estate that may be acquired by
any of the Borrowers after the Closing Date have been
transported offsite only by carriers having an
identification number issued by the EPA, treated or disposed
of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental
Laws, which transporters and facilities have been and are,
to the best of the Borrowers' knowledge, operating in
compliance with such permits and applicable Environmental
Laws; and
(d) None of the Borrowers or any Real Estate is
subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the
giving of notice to any governmental agency or the recording
or delivery to other Persons of an environmental disclosure
document or statement by virtue of the transactions set
forth herein and contemplated hereby, or as a condition to
the effectiveness of any other transactions contemplated
hereby.
Section 8.17. Subsidiaries, Etc. Each of the
Subsidiaries of NPDC and GPC existing on the date hereof are set
forth on Schedule 8.17 hereto. Except as set forth on Schedule
8.17, each of NPDC, GPC, and each Subsidiary of GPC is not on the
date hereof engaged in any joint venture or partnership with any
other Person.
Section 8.18. Capitalization; Ownership of GPC's
Subsidiaries. The authorized capital stock and the number of
shares outstanding on the date hereof of each of NPDC's and GPC's
Subsidiaries and the names of each such Subsidiary's non-public
shareholders (together with an indication of the number of shares
each holds) are set forth on Schedule 8.18 hereto. All of such
outstanding shares on the date hereof are duly issued, fully paid
and non-assessable. NPDC has pledged 3,349,088 shares of GPC
common stock of which NPDC is the registered owner, and all
dividends thereto, and 2,300,937 shares of the common stock of
which NPDC is the registered owner in GTS Duratek, Inc., to the
Bank pursuant to the Pledge Agreement.
Section 8.19. Disclosure. No representation or
warranty made by any of the Borrowers in this Credit Agreement or
in any agreement, instrument, document, certificate, written
statement or letter furnished to the Bank by or on behalf of any
of the Borrowers in connection with any of the transactions
contemplated by the Loan Documents, at the time such
representation was made, contained any untrue statement of a
material fact or omitted to state a material fact in order to
make the statements contained therein not misleading in light of
the circumstances in which they were made.
Section 8.20. Labor Relations. On the date hereof,
none of the Borrowers has any labor contracts or agreements. To
the best of the Borrowers' knowledge after diligent inquiry and
except for the Employment Litigation, the labor relations between
the Borrowers and their respective employees are satisfactory,
and there is no indication of any strike, work stoppage or other
labor problem involving the business of the Borrowers which would
have a Materially Adverse Effect.
ARTICLE IX
AFFIRMATIVE COVENANTS OF THE BORROWERS
NPDC covenants and agrees (on behalf of and with
respect to itself and for so long as the Term Loan or the Term
Note is outstanding) and each of the GPC Borrowers covenants and
agrees (on behalf of and with respect to itself and the other GPC
Borrowers and for so long as the Revolving Credit Note, any
Revolving Credit Loan, Reimbursement Obligation or Letter of
Credit is outstanding or the Revolving Credit Commitment has not
been terminated) as follows:
Section 9.1. Punctual Payment.
9.1.1. NPDC Punctual Payment. NPDC will duly and
punctually pay or cause to be paid the principal and interest on
the Term Loan, the closing fee, all costs, expenses and all other
amounts due and payable by NPDC under this Credit Agreement and
the other Loan Documents to which NPDC is a party, all in
accordance with the terms of this Credit Agreement and such other
Loan Documents.
9.1.2. Punctual Payments. The GPC Borrowers,
jointly and severally, will duly and punctually pay or cause to
be paid the principal and interest on the Revolving Credit Loans,
all Reimbursement Obligations, the Letter of Credit Fees, the
commitment fees, all costs, expenses and all other amounts due
and payable by the GPC Borrowers under this Credit Agreement and
the other Loan Documents to which any GPC Borrower is a party,
all in accordance with the terms of this Credit Agreement and
such other Loan Documents.
Section 9.2. Maintenance of Offices; Names. NPDC will
maintain its chief executive offices at 9 West 57th Street, New
York, New York 10019 and each of the GPC Borrowers will maintain
their chief executive offices at 6700 Alexander Bell Drive,
Columbia, Maryland 21046 or at such other place in the United
States of America as the applicable Borrower shall designate upon
not less than thirty (30) days' prior written notice to the Bank.
Each of the Borrowers will maintain its name and provide the Bank
with not less than thirty days' prior written notice of any
change of its name.
Section 9.3. Records and Accounts. Each of the
Borrowers and its Subsidiaries will (a) keep true and accurate
records and books of account, and maintain duplicate books and
records, which may be retained in electronic form or on other
data processing media and which shall be updated not less
frequently than monthly, at an alternate off-site location (in a
fire-proof facility) in which accurate and complete entries will
be made in accordance with generally accepted accounting
principles and (b) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties, contingencies,
and other reserves.
Section 9.4. Financial Statements, Certificates and
Information. NPDC or GPC, as the case may be, will deliver to
the Bank:
(a) as soon as practicable, but in any event not later
than one hundred and five (105) days after the end of each
fiscal year of NPDC and GPC, (i) NPDC's and GPC's Annual
Report on Form 10-K for such fiscal year as filed with the
Securities and Exchange Commission and (ii) the consolidated
balance sheet of NPDC and its Subsidiaries and of GPC and
its Subsidiaries and the consolidating balance sheet of NPDC
and its Subsidiaries and of GPC and its Subsidiaries, each
as at the end of such year, and the related consolidated
statements of operations, changes in stockholders' equity
and cash flow and consolidating statements of operations,
changes in stockholders' equity and cash flow for such year,
each setting forth in comparative form the figures for the
previous fiscal year and all such consolidated and
consolidating statements to be in reasonable detail,
prepared in accordance with generally accepted accounting
principles, and (in the case of the consolidated statements)
certified without qualification by KPMG Peat Marwick or by
other independent certified public accountants satisfactory
to the Bank, together with (A) a written statement from such
accountants to the effect that in making the examination
necessary to said certification, they have obtained no
knowledge that the Borrowers failed to comply with the
terms, covenants, provisions or conditions of Article X or
Article XI hereof insofar as such Articles relate to
accounting matters or, if such accountants shall have
obtained knowledge of such failure, they shall disclose the
failure in such statement; provided, that such accountants
shall not be liable to the Bank for failure to obtain such
knowledge, and (B) the accountants' management letters
relating thereto;
(b) as soon as practicable, but in any event not later
than thirty (30) days after the end of each fiscal year of
NPDC and GPC, the annual business plan of NPDC and of the
GPC Borrowers and forecasts and projections prepared by the
management of the Borrowers, in each case in form and detail
reasonably satisfactory to the Bank, of consolidated and
consolidating balance sheets and related statements of
operations, changes in stockholders' equity and cash flow on
an annual basis for each of the following two fiscal years;
(c) as soon as practicable, but in any event not later
than forty-five (45) days after the end of each of the first
three (3) fiscal quarters of NPDC and GPC (i) NPDC's and
GPC's Quarterly Report on Form 10-Q for such fiscal quarter
as filed with the Securities and Exchange Commission and
(ii) copies of the unaudited consolidated balance sheet of
NPDC and its Subsidiaries and of GPC and its Subsidiaries
and the unaudited consolidating balance sheet of NPDC and
its Subsidiaries and of GPC and its Subsidiaries, each as at
the end of such quarter, and the related consolidated
statements of operations, changes in stockholders' equity
and cash flow and consolidating statements of operations,
changes in stockholders' equity and cash flow for the
portion of NPDC's or GPC's, as the case may be, fiscal year
then elapsed, as well as a backlog report for each of the
GPC Borrowers' business segments, all in reasonable detail
and prepared in accordance with generally accepted
accounting principles, together with a certification by the
principal financial or accounting officer of NPDC or GPC, as
the case may be, that the information contained in such
financial statements and reports fairly presents the
financial position of NPDC and its Subsidiaries or GPC and
its Subsidiaries, as the case may be, on the date thereof
(subject to year-end adjustments);
(d) as soon as it is available, but in any event not
later than thirty (30) days after the end of each of the
fiscal quarters of GPC, a copy of the quarterly business
report for such fiscal quarter in the form as is currently
prepared by GPC or such other form as is reasonably
acceptable to the Bank;
(e) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (c) above, a
statement certified by the principal financial or accounting
officer of GPC in substantially the form of Exhibit H-1
hereto, (i) setting forth in reasonable detail computations
evidencing compliance with the covenants contained in
Sections 10.14 through 10.18 and (if applicable)
reconciliations to reflect changes in generally accepted
accounting principles since the Balance Sheet Date and (ii)
stating that to the best of such officer's knowledge, after
due inquiry, no Default or Event of Default has occurred
with respect to any GPC Borrower and, if so, whether such
Default or Event of Default is continuing (the "GPC
Compliance Certificate") and a statement certified by the
principal financial or accounting officer of NPDC in
substantially the form of Exhibit H-2 hereto, (i) setting
forth in reasonable detail computations evidencing
compliance with the covenants contained in Sections 11.7
through 11.10 and (if applicable) reconciliations to reflect
changes in generally accepted accounting principles since
the Balance Sheet Date and (ii) stating that to the best of
such officer's knowledge, after due inquiry, no Default or
Event of Default has occurred with respect to NPDC and, if
so, whether such Default or Event of Default is continuing
(the "NPDC Compliance Certificate");
(f) within twenty-five (25) days after the end of each
calendar month or, after the occurrence and during the
continuance of a Default or Event of Default, at such other
times as the Bank may request, a Borrowing Base Report
setting forth the Borrowing Base as at the end of such
calendar month or other date so requested by the Bank, in
each case accompanied by a statement certified by the
principal financial or accounting officer of GPC stating
that the Borrowing Base Report complies with the terms of
this Credit Agreement;
(g) within twenty-five (25) days after the end of each
calendar month, an Accounts Receivable aging report,
certified by the principal financial or accounting officer
of GPC;
(h) to the extent not otherwise required to be
delivered to the Bank pursuant to Section 9.4(a)(i) or
Section 9.4(c)(i), contemporaneously with the filing or
mailing thereof, copies of all material of a financial
nature filed with the Securities and Exchange Commission by
NPDC or GPC or sent to the stockholders of NPDC or GPC; and
(i) from time to time such other business and
financial data and information (including, without
limitation, accountants' management letters) as the Bank may
reasonably request.
Section 9.5. Notices.
9.5.1. Defaults. The Borrowers will promptly
notify the Bank in writing of the occurrence of any Default or
Event of Default.
9.5.2. Environmental Events. Each Borrower will
promptly give notice to the Bank (a) of any violation of any
Environmental Law that such Borrower or any of its Subsidiaries
reports in writing or is reportable by such Borrower in writing
(or for which any written report supplemental to any oral report
is made) to any federal, state or local environmental agency and
(b) upon becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any
agency of potential environmental liability, or any federal,
state or local environmental agency or board, that, in the case
of either clause (a) or (b) above, has the potential to have a
Materially Adverse Effect or materially adversely affect the
Bank's security interests pursuant to the Security Documents.
9.5.3. Notification of Claims Against Collateral.
Each Borrower will, promptly upon becoming aware thereof, notify
the Bank in writing of any setoff, claims, withholdings or other
defenses to which any of the Collateral, or the Bank's rights
with respect to the Collateral, are subject; provided, that with
respect to the GPC Borrowers, such notice shall only be required
if the aggregate amount of such setoffs, claims, withholdings or
other defenses (i) causes the Available Credit to be less than $0
or (ii) equals or exceeds $250,000.
9.5.4. Notice of Litigation and Judgments. NPDC
or GPC, as the case may be, will give notice to the Bank in
writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending
litigation and proceedings affecting NPDC or any of its
Subsidiaries or GPC or any of its Subsidiaries or to which any
such entity is or becomes a party involving an uninsured claim
against NPDC or any of its Subsidiaries or GPC or any of its
Subsidiaries that could reasonably be expected to have a
Materially Adverse Effect and stating the nature and status of
such litigation or proceedings. Such notice will be given to the
Bank, in writing, in form and detail satisfactory to the Bank,
within ten (10) days of any judgment not covered by insurance,
final or otherwise, against NPDC or any of its Subsidiaries or
GPC or any of its Subsidiaries in an amount in excess of
$250,000.
9.5.5. Notice of Amendments to Certain Documents.
If (and on each occasion that) any of the charter or other
incorporation documents or by-laws of any of NPDC or its
Subsidiaries or GPC or its Subsidiaries shall at any time be
modified or amended in any respect whatever or if any new filings
of any such documents shall at any time take place, then NPDC or
GPC, as the case may be, shall, not later than ten (10) days
prior to the date on which any such modification, amendment,
supplement or new filing shall first become effective, furnish to
the Bank a true and complete copy of such modification,
amendment, supplement or new filing.
9.5.6. Notice of Certain Other Events. Each
Borrower will, immediately upon becoming aware thereof, notify
the Bank of any material change in the operations of such
Borrower which could reasonably be expected to have a Material
Adverse Effect, including, without limitation, (a) the cessation
of operations at any facility of any of the foregoing that shall
continue for a period of five (5) days of more which could
reasonably be expected to have a Material Adverse Effect, (b) the
consolidation of any of such facilities which could reasonably be
expected to have a Material Adverse Effect, (c) any strike, work
stoppage or other material labor relations problem involving any
of the foregoing which could reasonably be expected to have a
Material Adverse Effect and (d) the start-up of any new
operations of any of the foregoing commencing after the Closing
Date which could reasonably be expected to have a Material
Adverse Effect.
9.5.7 Notice under Pledge Agreement. GPC will notify
the Bank promptly in writing of the occurrence of any events
described in paragraph 7(a) of the Pledge Agreement.
Section 9.6. Corporate Existence; Maintenance of
Properties. Except as permitted by Section 10.5.1 in the case of
the GPC Borrowers and Section 11.3, in the case of NPDC, each of
the Borrowers will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate
existence, rights and franchises, except if no Materially Adverse
Effect results from the loss of such rights or franchises. Each
of the Borrowers (a) will cause all of its properties which are
necessary in the conduct of its business to be maintained and
kept in reasonably good condition, repair and working order and
supplied with all necessary equipment, (b) will cause to be made
all necessary repairs, renewals, replacements, betterments and
improvements thereof, but only as in the judgment of the
Borrowers may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted
at all times, and (c) will continue to engage primarily in the
businesses now conducted by them and in related businesses;
provided, that nothing in this Section 9.6 shall prevent any of
the Borrowers from discontinuing the operation and maintenance of
any of its properties and disposing of same if such
discontinuance, or discontinuance and disposition, is, in the
judgment of such Borrowers, desirable in the conduct of its or
their business and all such discontinuances, or discontinuances
and dispositions, do not in the aggregate have a Materially
Adverse Effect.
Section 9.7. Insurance.
9.7.1. General. Each of the Borrowers will
maintain with financially sound and reputable insurers insurance
with respect to its properties and business against such
casualties and contingencies as shall be in accordance with the
general practices of businesses engaged in similar activities in
similar geographic areas and in amounts, containing such terms,
in such forms and for such periods as may be reasonable and
prudent and will not result in any Borrower being deemed a
co-insurer under applicable insurance laws, regulations and
policies. Without limiting the foregoing, each of the Borrowers
shall:
(a) keep all of its physical property insured against
fire and extended coverage risks in amounts and with
deductibles equal to those generally maintained by
businesses of similar size engaged in similar activities in
similar geographic areas;
(b) maintain all such workers' compensation or similar
insurance as may be required by law; and
(c) maintain, in amounts and with deductibles equal to
those generally maintained by businesses of similar size
engaged in similar activities in similar geographic areas,
general public liability insurance against claims for bodily
injury, death or property damage occurring on, in or about
the properties of such Borrower, business interruption
insurance and product liability insurance.
9.7.2. Notice of Cancellation, Etc. In the event
of failure by NPDC or the GPC Borrowers, as the case may be, to
provide and maintain insurance as herein provided, the Bank may,
at its option, after five days notice, provide such insurance and
charge the amount thereof (which shall constitute a NPDC
Obligation or a GPC Obligation, as applicable) to NPDC or the GPC
Borrowers, as the case may be. Upon five days notice, the
Borrowers shall furnish the Bank with certificates of insurance
and, as promptly as possible, policies evidencing compliance with
the foregoing insurance provisions.
Section 9.8. Taxes. Each of the Borrowers will duly
pay and discharge, or cause to be paid and discharged, before the
same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties,
sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials, or
supplies that if unpaid might by law become a lien or charge upon
any of its property; provided, that any such tax, assessment,
charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate
proceedings and if such Borrower shall have set aside on its
books adequate reserves with respect thereto; and provided,
further, that such Borrower will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as
security therefor.
Section 9.9. Inspection of Properties and Books, Etc.
9.9.1. General. Each of the Borrowers shall
permit the Bank, through its designated representatives, to visit
and inspect any of the properties of such Borrower, to examine
the books of account of such Borrower (and to make copies thereof
and extracts therefrom), and to discuss the affairs, finances and
accounts of such Borrower with, and to be advised as to the same
by, its and their officers, all at such reasonable times (during
normal business hours and on prior notice) and intervals as the
Bank may reasonably request.
9.9.2. Bank Audits. At any time and from time to
time, upon the reasonable request of the Bank, with prior notice
and during normal business hours, the Bank may conduct audits
with respect to the Accounts Receivable to verify whether or not
the information set forth in the Borrowing Base Report most
recently delivered is accurate and complete in all material
respects based upon a review by such auditors of the Accounts
Receivable (including verification with respect to the amount,
aging, identity and credit of the respective account debtors and
the billing practices of GPC). All such Bank audits shall be
conducted by the Bank and made at the expense of the GPC
Borrowers, jointly and severally; provided, that the GPC
Borrowers shall bear the expense (without duplication of any
expense incurred pursuant to Section 9.9.1) of no more than two
Bank audits per GPC Borrower during any twelve month period
(excluding Bank audits after the occurrence of and during the
continuance of a Default or Event of Default which shall in each
case be at the expense of the GPC Borrowers, jointly and
severally).
9.9.3. Communications with Accountants. Each of
the Borrowers authorizes the Bank to communicate directly with
such Borrower's independent certified public accountants and
authorizes such accountants to disclose to the Bank any and all
financial statements and other supporting financial documents and
schedules including copies of any management letter with respect
to the business, financial condition and other affairs of such
Borrower. At the request of the Bank, the Borrowers shall
deliver a letter addressed to such accountants instructing them
to comply with the provisions of this Section 9.9.3.
Section 9.10. Compliance with Laws, Contracts,
Licenses, and Permits. Each of the Borrowers will comply in all
material respects with (a) Applicable Laws wherever its business
is conducted, including all Environmental Laws and applicable
provisions of ERISA, except for noncompliance that would not,
singly or in the aggregate, have a Materially Adverse Effect, (b)
the provisions of its charter documents and by-laws, (c) all
agreements and instruments by which it or any of its properties
may be bound, except for noncompliance that would not, singly or
in the aggregate, have a Materially Adverse Effect, and (d) all
applicable decrees, orders, and judgments except for
non-compliance that would not singly or in the aggregate have a
Materially Adverse Effect. If any authorization, consent,
approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or
required in order that any of the Borrowers may conduct its
business as it is now being conducted or any of the Borrowers may
fulfill any of its obligations hereunder or under any of the
other Loan Documents to which such Borrower is a party, each of
the Borrowers will immediately take or cause to be taken all
reasonable steps within the power of such Borrower to obtain such
authorization, consent, approval, permit or license and furnish
the Bank with evidence thereof except if no Materially Adverse
Effect would result from failure to obtain the foregoing.
Section 9.11. Employee Benefit Plans. Each of the
Borrowers will (a) upon request of the Bank, furnish to the Bank
a copy of the most recent actuarial statement required to be
submitted under Section 103(d) of ERISA and Annual Report, Form
5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (b) promptly upon receipt or
dispatch, furnish to the Bank any notice, report or demand sent
or received in respect of a Guaranteed Pension Plan under
Sections 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of
ERISA, or in respect of a Multiemployer Plan, under Section
4041A, 4202, 4219, 4242 or 4245 of ERISA.
Section 9.12. Use of Proceeds. NPDC will use the
proceeds of the Term Loans solely for the partial repayment of
certain Swiss Franc denominated long-term debt of NPDC due in
1995 and 1996 and for reimbursement to NPDC of amounts previously
paid by NPDC in 1995 for such purpose. The GPC Borrowers will
use the proceeds of the Revolving Credit Loans solely for working
capital purposes and other purposes not prohibited by this
Agreement. The GPC Borrowers will obtain Letters of Credit
solely for use in the ordinary course of business.
Section 9.13. Bank Accounts. NPDC will, together with
the employees, agents and other Persons acting on behalf of NPDC,
receive and hold in trust for the Bank all payments constituting
proceeds of NPDC Collateral that come into their possession or
under their control and, immediately upon receipt thereof,
deposit such payments in the form received, with any appropriate
endorsements, in the collateral account of the Bank created
pursuant to the Pledge Agreement.
Section 9.14. Further Assurances. Each of the
Borrowers will cooperate with the Bank and execute such further
instruments and documents as the Bank shall reasonably request to
carry out to their satisfaction the transactions contemplated by
this Credit Agreement and the other Loan Documents. Without in
any way limiting the foregoing, each of the Borrowers will
execute, acknowledge and deliver any and all such further
assurances and other assignments, consents, waivers, stock
powers, incumbency certificates, affidavits, agreements or
instruments, and take or cause to be taken all such other action
as shall be reasonably requested by the Bank (including, without
limitation, compliance with the Assignment of Claims Act as
provided in the Security Agreements) from time to time in order
to give full effect to any of the Security Documents or in order
to maintain, preserve, perfect, safeguard and continue in full
force and effect at all times all or any of the rights, remedies,
powers and privileges of the Bank under or in respect of any of
the Security Documents or any of the Collateral, including,
without limitation, all steps necessary to perfect and maintain a
security interest in any Collateral that requires special
filings, all without any cost or expense to the Bank.
Section 9.15. Dividend Payments. GPC may, at such
times and in such amounts as is consistent with the fiduciary
duties of the GPC Board of Directors and GPC's historical
practice and with Applicable Law, declare and pay cash dividends
in respect of its common stock.
Section 9.16. Loans to NPDC and the Foreign
Subsidiaries. All loans or other extensions of credit to NPDC or
the Foreign Subsidiaries made by GPC shall be evidenced (a) in
the case of NPDC, by a promissory note of NPDC in substantially
the form of Exhibit A-3 and (b) in the case of the Foreign
Subsidiaries, by a promissory note in form and substance
reasonably satisfactory to the Bank; the promissory note of NPDC
shall be pledged to the Bank pursuant to the GPC Note Pledge
Agreement and the promissory note of the Foreign Subsidiaries
shall be pledged to the Bank pursuant to a pledge agreement in
form and substance reasonably satisfactory to the Bank.
ARTICLE X
CERTAIN NEGATIVE COVENANTS OF THE GPC BORROWERS
Each of the GPC Borrowers covenants and agrees (on
behalf of and with respect to itself and the other GPC Borrowers
and for so long as the Revolving Credit Note, any Revolving
Credit Loan, Reimbursement Obligation or Letter of Credit is
outstanding or the Revolving Credit Commitment has not been
terminated) as follows:
Section 10.1. Restrictions on Indebtedness. Each of
the GPC Borrowers will not create, incur, assume, guarantee or be
or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Bank arising under any of the
Loan Documents;
(b) current liabilities of such Borrower incurred in
the ordinary course of business not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for
credit on an open account basis customarily extended and in fact
extended in connection with purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials
and supplies to the extent that payment therefor shall not at the
time be required to be made in accordance with the provisions of
Section 9.8;
(d) Indebtedness in respect of judgments or awards
that do not constitute an Event of Default under Section 14.1(j);
(e) endorsements for collection, deposit or
negotiation and warranties of products or services, in each case
incurred in the ordinary course of business;
(f) the Subordinated Debt;
(g) obligations under Capitalized Leases and
Indebtedness incurred in connection with the acquisition of any
real or personal property by such Borrower, provided, that (i)
the aggregate principal amount of such Indebtedness of the GPC
Borrowers incurred in any fiscal year shall not exceed $300,000
and (ii) the aggregate principal amount of such Indebtedness of
the GPC Borrowers shall not exceed the aggregate amount of
$900,000 at any one time outstanding;
(h) performance or other guaranties given by any GPC
Borrower in respect of Indebtedness of the other GPC Borrowers
that is otherwise permitted pursuant to this Section 10.1 and in
respect of other obligations of the other GPC Borrowers permitted
under this Agreement;
(i) Indebtedness existing on the date hereof and
listed and described on Schedule 10.1(i) or Schedule 10.3(d)
hereto;
(j) Indebtedness of any of the GPC Borrowers to any
other GPC Borrower and Indebtedness of either Foreign Subsidiary
existing on the date hereof to any GPC Borrower or as
contemplated by subsection 2.1;
(k) Indebtedness not otherwise permitted under this
Section 10.1 (other than to the Foreign Subsidiaries, to the
Joint Venture or to the joint venture referred to in Schedule
10.1(n)) in aggregate principal amount not to exceed $100,000 at
any one time outstanding;
(l) Indebtedness in respect of deferred liabilities
other than for deferred taxes and other than for borrowed money,
including without limitation, deferred compensation, provided,
that the aggregate amount of such Indebtedness of the GPC
Borrowers incurred on or after the date hereof shall not exceed
$500,000 at any one time outstanding;
(m) Indebtedness in respect of deferred taxes other
than for borrowed money; and
(n) Indebtedness described on Schedule 10.1(n).
Section 10.2. Restrictions on Liens. Each of the GPC
Borrowers will not (a) create or incur or suffer to be created or
incurred or to exist any Lien of any kind upon any of its
property or assets of any character whether now owned or
hereafter acquired, or upon the income or profits therefrom; (b)
sell, assign, pledge or otherwise transfer any accounts, contract
rights, general intangibles, chattel paper or instruments, with
or without recourse; or (c) grant a negative pledge on any of its
assets in favor of any Person other than the Bank; provided, that
any GPC Borrower may create or incur or suffer to be created or
incurred or to exist:
(i) Liens in favor of any GPC Borrower on
all or part of the assets of the Foreign Subsidiaries securing
Indebtedness owing by such Subsidiaries to such Borrower;
(ii) Liens to secure taxes, assessments and
other government charges or liens on properties to secure claims
for labor, material or supplies in respect of obligations permitted
under Section 9.8;
(iii) deposits or pledges made in connection
with, or to secure payment of, workmen's compensation, unemployment
insurance, old age pensions or other social security obligations
or similar obligations;
(iv) Liens on properties in respect of
judgments or awards which do not constitute an Event of Default
under Section 14.1(j);
(v) Liens of carriers, warehousemen,
mechanics and materialmen, and other like liens on properties,
in respect of obligations not overdue by more than 90 days
or permitted under Section 9.8;
(vi) encumbrances on Real Estate consisting
of easements, rights of way, zoning restrictions, restrictions on
the use of real property and defects and irregularities in the
title thereto, landlord's or lessor's liens under leases to which
such GPC Borrower is a party, and other minor Liens or
encumbrances none of which in the opinion of the GPC Borrowers
interferes materially with the use of the property affected in
the ordinary conduct of the business of the GPC Borrowers, which
defects do not individually or in the aggregate have a Materially
Adverse Effect;
(vii) Liens not otherwise permitted under this
Section 10.2 existing on the date hereof and listed on Schedule
10.2 hereto;
(viii) purchase money security interests in or
purchase money mortgages on or the interest of a lessor in real or
personal property to secure purchase money Indebtedness or
Capitalized Leases of the type and amount permitted by Section
10.1(g), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the
real or personal property so acquired;
(ix) Liens in favor of the Bank under the
Loan Documents;
(x) good faith pledges or deposits made in
the ordinary course of business to secure performance of bids,
tenders, contracts (other than for the repayment of borrowed
money) or leases or to secure statutory obligations, or surety,
appeal, indemnity, performance or similar bonds required in the
ordinary course of business;
(xi) any interest or title of a lessor in
assets being leased by any of the GPC Borrowers under an
operating lease; and
(xii) Liens to secure a letter of credit in the amount
of $23,762.83 issued by Nationsbank, National Association for the
benefit of B.F. Saul Real Estate Investment Trust.
Section 10.3. Restrictions on Investments. Each of
the GPC Borrowers will not make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the
date of purchase by such Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper"
issued by a corporation organized and existing under the laws of
the United States of America or any state thereof that at the
time of purchase have been rated and the ratings for which are
not less than "P 1" if rated by Moody's Investors Services, Inc.,
and not less than "A 1" if rated by Standard and Poor's;
(d) Investments existing on the date hereof and listed
on Schedule 8.17, Schedule 8.18, Schedule 10.3(d) or Schedule
10.1(i) hereto;
(e) Investments with respect to Indebtedness permitted
by Section 10.1(f) or 10.1(j);
(f) Investments consisting of loans and advances to
employees for moving, entertainment, travel and other similar
expenses in the ordinary course of business not to exceed
$100,000 in the aggregate at any time outstanding;
(g) other Investments (other than with the Foreign
Subsidiaries, the Joint Venture or the joint venture referred to
in paragraph 2 of Section 10.3(h)) in an aggregate amount not to
exceed $500,000 at any time outstanding;
(h) Investments described on Schedule 10.3(h); and
(i) Investments consisting of the loans evidenced or
to be evidenced by the NPDC Subordinated Pledged Note.
Section 10.4. Distributions. GPC will not make any
Distributions, except GPC may (a) consistent with the fiduciary
duties of the GPC Board of Directors, GPC's normal course of
business and Applicable Law, declare and pay dividends in respect
of its common stock and (b) repurchase GPC common stock with an
aggregate value not to exceed $3,000,000, provided, that for
purposes of this Section 10.4, the repurchased GPC common stock
shall be valued at the closing price of such common stock on the
national securities exchange upon which such common stock is
listed on the Business Day immediately preceding the date of
repurchase, and if such common stock is not so listed or there is
no closing price, at such other price as the Bank shall
reasonably determine.
Section 10.5. Merger Consolidation and Disposition of
Assets.
10.5.1. Mergers and Acquisitions. Each of the
GPC Borrowers will not become a party to any merger or
consolidation, or liquidate or dissolve itself (or suffer any
liquidation or dissolution) or agree to or effect any asset
acquisition or stock acquisition or acquire any interest in any
partnership, joint venture or similar enterprise (other than the
acquisition of assets in the ordinary course of business
consistent with past practices) except (i) in connection with
Investments permitted pursuant to Section 10.3 and (ii) a merger
or consolidation among any of the GPC Borrowers, provided, that
if GPC is a party thereto, GPC is the surviving entity.
10.5.2. Disposition of Assets. Each of the GPC
Borrowers will not become a party to or agree to or effect any
disposition of assets, other than (a) the disposition of assets
in the ordinary course of business, consistent with past
practices, (b) the transfer of assets in connection with a merger
or consolidation permitted by Section 10.5.1 and (c) dispositions
of assets permitted under the proviso in Section 9.6.
Section 10.6. Sale and Leaseback. Except in
connection with the making by the GPC Borrowers of Capital
Expenditures permitted by and charged against the amounts
permitted under Section 10.15 hereof, each of the GPC Borrowers
will not enter into any arrangement, directly or indirectly,
whereby such Borrower shall sell or transfer any property owned
by it in order then or thereafter to lease such property or lease
other property that such Borrower intends to use for
substantially the same purpose as the property being sold or
transferred.
Section 10.7. Compliance with Environmental Laws.
Each of the GPC Borrowers will not (a) use any of the Real Estate
or any portion thereof for the handling, processing, storage or
disposal of Hazardous Substances except for the handling of
samples of Hazardous Materials, in accordance with Environmental
Laws, for purposes of analysis, (b) cause or permit to be located
on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (c)
generate any Hazardous Substances on any of the Real Estate, (d)
conduct any activity at any Real Estate or use any Real Estate in
any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or
threatened release of Hazardous Substances on, upon or into the
Real Estate or (e) otherwise conduct any activity at any Real
Estate or use any Real Estate in any manner that would violate
any Environmental Law or bring such Real Estate in violation of
any Environmental Law.
Section 10.8. Prohibited Changes and Payments. Each
of the GPC Borrowers will not (a) amend, supplement or otherwise
modify the terms of any of the Subordinated Debt or (b) prepay,
redeem, purchase, defease, exchange or repurchase any of such
Subordinated Debt.
Section 10.9. Employee Benefit Plans. Neither the
GPC Borrowers nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code that
could result in a material liability for any Borrower; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in
Section 302 of ERISA, whether or not such deficiency is or may be
waived; or
(c) fail to contribute to any Guaranteed Pension Plan
to an extent that, or terminate any Guaranteed Pension Plan in a
manner that, could result in the imposition of a lien or
encumbrance on the assets of any Borrower pursuant to Section
302(f) or Section 4068 of ERISA; or
(d) permit or take any action that would result in the
aggregate benefit liabilities (with the meaning of Section 4001
of ERISA) of all Guaranteed Pension Plans exceeding the value of
the aggregate assets of such Plans, disregarding for this purpose
the benefit liabilities and assets of any such Plan with assets
in excess of benefit liabilities.
Section 10.10. Certain Transactions. (a) Except for
transactions otherwise permitted by this Agreement (and subject
to the terms and conditions of this Agreement), none of the GPC
Borrowers will enter into or be a party to any transaction with
any Affiliate (other than any other GPC Borrower), any NPDC
non-public stockholder or with any officer, director, or employee
of
any of the Borrowers, including any contract, agreement or other
arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any NPDC non-public
stockholder, any officer, director or employee or, to the
knowledge of the GPC Borrowers, any corporation, partnership,
trust or other entity in which any NPDC non-public stockholder,
officer, director, or employee has a substantial interest or is
an officer, director, trustee or partner, except (i) arms length
transactions pursuant to which any GPC Borrower makes or receives
payments or other consideration in the ordinary course of
business upon terms no less favorable than such GPC Borrower
could obtain from third parties, (ii) license and royalty
agreements and equipment leases with certain Affiliates of GPC
listed on Schedule 10.10 hereto, (iii) reasonable compensation
for services of officers, directors or employees (including the
issuance of stock options to officers, employees and directors)
and (iv) management fees paid to NPDC in the amount of no more
than $250,000 per year.
Section 10.11. Limitation on Certain Changes. Each of
the GPC Borrowers shall not at any time (a) in the case of such
Borrower, engage primarily (directly or indirectly) in any
business except the business conducted by such Borrower on the
Closing Date and any business related thereto, (b) change its
organizational structure from that of a corporation to another
organizational structure, (c) amend its charter or by-laws,
except for amendments (of which prior written notice has been
given to the Bank) that would not adversely affect any
Obligations, any Collateral, any rights of the Bank under the
Loan Documents or the ability of such Borrower to perform its
NPDC Obligations or GPC Obligations, as the case may be, or
conduct its business as previously conducted or (d) except as may
be required by generally accepted accounting principles, change
the accounting treatment or reporting practices of NPDC and its
Subsidiaries or GPC and its Subsidiaries from those in effect as
of the Balance Sheet Date; provided, that nothing in this Section
10.11 shall prevent any of the GPC Borrowers from discontinuing
the operation and maintenance of any of its properties and
disposing of same if such discontinuance, or discontinuance and
disposition, is, in the judgment of such GPC Borrower, desirable
in the conduct of its business and all such discontinuances, or
discontinuances and dispositions, do not in the aggregate have a
Materially Adverse Effect.
Section 10.12. Fiscal Year. Each of the GPC Borrowers
shall not cause or permit its fiscal year to end on any date
other than December 31 of each year unless it gives not less than
thirty (30) days' prior written notice thereof to the Bank and
the GPC Borrowers agree to changes in this Credit Agreement that
the Bank deems to be necessary or appropriate in connection with
such change.
Section 10.13. Ownership of Subsidiaries. GPC shall
not own, directly or indirectly, less than one hundred percent
(100%) of the voting capital stock of each of its Subsidiaries.
Section 10.14. GPC Fixed Charge Coverage. Commencing
with the fiscal quarter ended September 30, 1995, the GPC
Borrowers will not permit the ratio of (a) Consolidated EBITDA of
GPC and its Subsidiaries to (b) Consolidated Fixed Charges of GPC
and its Subsidiaries to be less than 2.0:1.0 on a Rolling Four
Quarter basis, as of the end of each fiscal quarter.
Section 10.15. Capital Expenditures. The GPC
Borrowers will not make Capital Expenditures in any fiscal year
that exceed, in the aggregate, $500,000 for such fiscal year.
Section 10.16. GPC Consolidated Tangible Net Worth.
The GPC Borrowers will not at any time permit Consolidated
Tangible Net Worth of GPC and its Subsidiaries to be less than
$19,000,000.
Section 10.17. GPC Consolidated Senior Debt to
Consolidated Tangible Net Worth. The GPC Borrowers will not at
any time permit the ratio of (a) Consolidated Senior Debt of GPC
and its Subsidiaries to (b) Consolidated Tangible Net Worth of
GPC and its Subsidiaries to exceed 1.5:1.0.
Section 10.18. No GPC Loss. The GPC Borrowers will
not permit the Consolidated Net Income of GPC and its
Subsidiaries for any fiscal quarter to be less than $0.
ARTICLE XI
CERTAIN NEGATIVE COVENANTS OF NPDC
NPDC covenants and agrees (on behalf of and with
respect to itself and for so long as the Term Loan or the Term
Note is outstanding) as follows:
Section 11.1. Restrictions on Liens. NPDC will not
create or incur or suffer to be created or incurred or to exist
any Lien of any kind upon any of the properties or assets of
NPDC, whether now owned or hereafter acquired, which are covered
by any of the Security Documents, except for the Liens created by
such Security Documents and Liens of the nature permitted by
Sections 10.2(ii) and 10.2(iv) which attach to the general assets
of NPDC.
Section 11.2. Restrictions on Guaranties. (a) Except
as set forth on Schedule 11.2 hereto and as permitted by Section
11.2(b) below, NPDC will not assume, endorse, or be or become
liable for, or guarantee the obligations of any Person, except by
the endorsement of negotiable instruments for deposit or
collection in the ordinary course of business. For the purposes
of this Section 11.2, the term "guarantee" shall include any
agreement, whether such agreement is on a contingency or
otherwise, to purchase, repurchase or otherwise acquire
Indebtedness of any other Person, or to purchase, sell or lease
as lessee or lessor, property or services, in any such case
primarily for the purpose of enabling another Person to make
payment of Indebtedness, or to make any payment (whether as an
advance, capital contribution, purchase of an equity interest or
otherwise) to assure a minimum equity, asset base, working
capital or other balance sheet or financial condition, in
connection with the Indebtedness of another Person, or to supply
funds to or in any manner invest in another Person in connection
with such Person's Indebtedness.
(b) In addition to the foregoing, NPDC shall be
permitted to guarantee the obligations of other Persons on the
following terms and conditions:
(i) at the time of, and immediately after,
entering into any such guarantee, no Default or Event of Default
shall have occurred and be continuing;
(ii) the aggregate amount of all guarantees
entered into pursuant to this Section 11.2(b) (whether guarantees
of payment or performance) shall at no time exceed the excess of
(A) NPDC's aggregate available, unencumbered and unrestricted
cash, cash equivalents and marketable securities (as defined in
accordance with generally accepted accounting principles) over
(B) $5,000,000;
(iii) the aggregate amount of all guarantees
entered into pursuant to this Section 11.2(b) (whether guarantees
of payment or performance) shall at no time exceed $5,000,000;
(iv) the aggregate amount of all guarantees
of payment obligations entered into pursuant to this Section 11.2(b)
shall at no time exceed $3,000,000; and
(v) for the purposes hereof, the "amount" of
a guarantee shall mean, as to guarantees of payment, the aggregate
maximum amount as to which the guarantor may be liable at any
time in respect of such guarantee, and as to guarantees of
performance, the aggregate maximum amount of the consideration
payable at any time for such performance to the Person whose
performance is being guaranteed.
Section 11.3. Mergers and Acquisitions. NPDC will not
become a party to any merger or consolidation, or acquire all or
substantially all of the assets or any of the capital stock of
any Person, or liquidate or dissolve itself (or suffer any
liquidation or dissolution); provided, that NPDC may merge with
another Person or acquire all or substantially all of the assets
or capital stock of another Person, if, and only if, all of the
following conditions are satisfied:
(a) NPDC shall have given the Bank not less than
thirty days' prior written notice of such merger or acquisition
together with a reasonably detailed description of the terms
thereof;
(b) if such proposed transaction is a merger, NPDC
shall be the survivor thereof;
(c) the aggregate amount of consideration paid by NPDC
in respect of any such merger or acquisition shall not exceed ten
percent (10%) of NPDC's Consolidated Tangible Net Worth
immediately prior to the consummation of such merger or
acquisition; and
(d) no Default or Event of Default shall exist
hereunder immediately prior to or immediately after the
consummation of any such merger or acquisition.
Section 11.4. Certain Transactions. Except for
transactions otherwise permitted by this Agreement (and subject
to the terms and conditions of this Agreement), NPDC will not
enter into or be a party to any transaction with any Affiliate or
with any NPDC non-public stockholder, or with any officer,
director, or employee of any of the Borrowers, including any
contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to
or from any NPDC non-public stockholder, officer, director or
employee or, to the knowledge of NPDC, any corporation,
partnership, trust or other entity in which any NPDC non-public
stockholder, officer, director, or employee has a substantial
interest or is an officer, director, trustee or partner, except
(i) arms length transactions pursuant to which NPDC makes or
receives payments in the ordinary course of business upon terms
no less favorable than NPDC could obtain from third parties, (ii)
license and royalty agreements and equipment leases with certain
Affiliates of GPC listed on Schedule 10.10 hereto, (iii)
reasonable compensation for services of officers, directors or
employees (including the issuance of stock options to officers,
employees and directors) and (iv) management fees paid to NPDC in
the amount of no more than $250,000 per year.
Section 11.5. Fiscal Year. NPDC shall not cause or
permit its fiscal year to end on any date other than December 31
of each year unless it gives not less than thirty (30) days'
prior written notice thereof to the Bank and NPDC agrees to
changes in this Credit Agreement that the Bank deems to be
necessary or appropriate in connection with such change.
Section 11.6. Ownership of Subsidiaries. NPDC shall
not own, directly or indirectly, less than forty-five percent
(45%) of the voting capital stock of GPC.
Section 11.7. Available Cash. NPDC shall not permit,
as to NPDC only, on an unconsolidated basis, as of the end of
each fiscal quarter, available, unencumbered and unrestricted
cash, cash equivalents and marketable securities (as such terms
are defined in accordance with generally accepted accounting
principles) to be less than $5,000,000 in the aggregate, of which
amount, not more than $2,500,000 shall consist of marketable
securities.
Section 11.8. NPDC Collateral to Loan Ratio. NPDC
will not permit the ratio of (a) the value of the NPDC Collateral
to (b) the principal amount of the Term Loan to be less than
2.5:1.0 for five consecutive days. NPDC may at any time pledge
additional assets as NPDC Collateral or prepay the Term Loan to
maintain compliance with this Section 11.8. For purposes of
determining the value of NPDC Collateral at any date of
determination, (i) the common stock of GPC and GTS Duratek, Inc.,
pledged by NPDC under the Pledge Agreement, shall be valued at
the closing price of such common stock on the national securities
exchange upon which such common stock is listed on the Business
Day immediately preceding such date of determination and if such
stock is not so listed or there is no closing price, at such
other price as the Bank shall reasonably determine and (ii) the
Pledged Debentures, so long as there is no default thereunder
shall be valued at the then outstanding principal amount thereof
and if such a default exists they shall have such value as the
Bank shall deem appropriate in its reasonable discretion.
Section 11.9. NPDC Collateral Cash Flow Coverage.
NPDC will not permit the ratio of (a) NPDC Collateral Cash Flow
to (b) interest and principal payments on the Term Loan to be
less than 1.0:1.0 on a Rolling Four Quarters Basis, as of the end
of any fiscal quarter.
Section 11.10. NPDC Leverage Ratio. NPDC will not at
any time permit the ratio of (a) Consolidated Tangible Net Worth
of NPDC and its Subsidiaries to (b) Consolidated Total
Liabilities of NPDC and its Subsidiaries to be less than 4.0:1.0.
ARTICLE XII
CLOSING CONDITIONS
The obligations of the Bank to make the Term Loan and
the initial Revolving Credit Loans and to issue any initial
Letters of Credit shall be subject to the satisfaction of the
following conditions precedent on or prior to April 10, 1995:
Section 12.1. Loan Documents.
12.1.1. Loan Documents. Each of the Loan
Documents shall have been duly executed and delivered by the
respective parties thereto, shall be in full force and effect and
shall be in form and substance reasonably satisfactory to the
Bank. The Bank shall have received a fully executed original of
each such document.
12.1.2. Subordination Documents. Each of the
Subordination Documents shall have been duly executed and
delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance reasonably
satisfactory to the Bank. The Bank shall have received a true
and correct copy of each such document as well as a certificate
of an officer of GPC stating that there exists no default by GPC
thereunder.
Section 12.2. Certified Copies of Charter Documents;
Good Standing Certificates. The Bank shall have received from
each of the Borrowers a copy, certified by a duly authorized
officer of such Person to be true and complete on the Closing
Date, of each of (a) its charter or other incorporation or
organizational documents as in effect on the Closing Date, and
(b) its by-laws or other applicable governing documents, if any,
as in effect on the Closing Date. Each of such documents shall
be in full force and effect and in form and substance reasonably
satisfactory to the Bank. In addition, the Bank shall have
received with respect to each of the Borrowers certificates of
good standing and of foreign qualification dated as of recent
date issued by the secretary of state (or comparable authority)
in each state where the nature of such Borrower's business makes
such authority necessary except where the failure to be in good
standing or so qualified, singly or in the aggregate, would not
have a Materially Adverse Effect.
Section 12.3. Corporate Action. All corporate action
necessary for the valid execution, delivery and performance by
each of the Borrowers of this Credit Agreement and the other Loan
Documents to which it is or is to become a party shall have been
duly and effectively taken, and evidence thereof satisfactory to
the Bank shall have been provided to the Bank.
Section 12.4. Incumbency Certificate. The Bank shall
have received from each of the Borrowers an incumbency
certificate, dated as of the Closing Date, signed by a duly
authorized officer of such Borrower, and giving the name and
bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of such
Borrower, each of the Loan Documents and Subordination Documents
(other than the Indenture and the Pledged Debentures) to which
such Borrower is or is to become a party; (b) in the case of GPC,
to make Loan Requests and Conversion Requests on behalf of the
GPC Borrowers and to apply for Letters of Credit on behalf of the
GPC Borrowers; (c) in the case of NPDC, to make the Term Loan
Request and (d) to give notices and to take other action on its
behalf under the Loan Documents.
Section 12.5. Validity of Liens. The Security
Documents shall each have been duly executed and delivered by the
respective parties thereto and shall be in full force and effect
and shall be effective to create in favor of the Bank a legal,
valid and enforceable first (except for Permitted Liens entitled
to priority under Applicable Law) security interest in and lien
upon the Collateral. All UCC and other filings, assignments,
recordings, deliveries of instruments and other actions
(including delivery to the Bank of executed forms required under
the Federal Assignment of Claims Act of 1940 with respect to
Government Receivables, to the extent provided in the Security
Agreements) necessary or desirable in the opinion of the Bank to
protect and preserve such security interests shall have been duly
effected (other than the filing of the UCC-1 financing statements
listed on Schedule 8.2 and other than the filing by Nationsbank,
National Association of the UCC-3 termination statements listed
on Schedule 8.2) and all filing and recording fees and taxes
shall have been duly paid by the GPC Borrowers. The Bank shall
have received evidence thereof in form and substance satisfactory
to the Bank. The Bank agrees to cause to be filed at the GPC
Borrower's expense all UCC-1 financing statements signed by the
GPC Borrowers and delivered to the Bank on or prior to the
Closing Date.
Section 12.6. Lien Search Results. The Bank shall
have received from each of the GPC Borrowers the results of UCC,
tax lien, judgment and suit searches, indicating no liens other
than Permitted Liens and otherwise in form and substance
satisfactory to the Bank, in the following locations: (a) for
each of the GPC Borrowers, Maryland State Department of
Assessments and Taxation and Howard County, Maryland and (b) in
the case of GPESI, Montgomery County, Maryland. If the results
of the UCC searches indicate UCC filings in such jurisdictions,
the Bank shall have received evidence of the filing with the
appropriate filing offices of UCC-3 termination statements with
respect to such UCC filings (other than those in respect of
Permitted Liens and those with respect to Nationsbank, National
Association listed on Schedule 8.2).
Section 12.7. Evidence of Security Interests. The
Bank shall have received (a) the certificates representing the
Collateral consisting of shares of common stock of GPC and GTS
Duratek and the Pledged Debentures together with appropriate
stock powers and bond powers and (b) the NPDC Subordinated
Pledged Note pledged pursuant to the GPC Note Pledge Agreement.
The Bank shall also have received evidence reasonably
satisfactory to it that the dividends on the GPC common stock
pledged under the Pledge Agreement and the interest and principal
payments on the Pledged Debentures will be paid directly to the
cash collateral account of the Bank described in the Pledge
Agreement.
Section 12.8. Borrowing Base Report. The Bank shall
have received from GPC the initial Borrowing Base Report dated as
of a date not earlier than 45 days prior to the Closing Date.
Section 12.9. Opinions of Counsel. The Bank shall
have received (a) favorable legal opinions addressed to the Bank,
dated as of the Closing Date, in form and substance satisfactory
to the Bank, from (i) Piper & Marbury, counsel to the GPC
Borrowers, (ii) Kenneth L. Crawford, General Counsel of the GPC
Borrowers, (iii) Lawrence M. Gordon, Vice President and General
Counsel of NPDC and (iv) Sullivan & Worcester, counsel to NPDC.
Section 12.10. Payment of Fees and Expenses. NPDC
shall have paid to the Bank the closing fee pursuant to Section
5.5.1 and the Borrowers shall have paid all other reasonable
accrued fees and expenses, including, without limitation, the
reasonable fees and expenses of the Bank's auditors and the Bank
in connection with its due diligence and all filing fees and
expenses not previously paid by the Borrowers shall have been
paid to the Bank pursuant to Section 15.1.
Section 12.11. Payoff Letter. The Bank shall have
received a payoff letter or other agreement in form and substance
satisfactory to the Bank.
Section 12.12. Disbursement Instructions. The Bank
shall have received disbursement instructions from the GPC
Borrowers, indicating that a portion of the proceeds of the
initial Revolving Credit Loans, in an amount equal to the
aggregate loan obligations of the Borrowers to Nationsbank,
National Association, are to be paid to such lender and such loan
facility shall be terminated.
Section 12.13. No Material Changes, Etc. From the
Balance Sheet Date to the Closing Date there has occurred no
materially adverse change in the condition (financial or
otherwise), business, operations, performance, or properties of
the Borrowers taken as a whole as shown on or reflected in the
consolidated balance sheet of NPDC and its Subsidiaries and GPC
and its Subsidiaries, respectively, as at the Balance Sheet Date,
or the consolidated statements of income for the fiscal year then
ended, other than changes in the ordinary course of business that
have not had a Materially Adverse Effect. Since the Balance
Sheet Date, GPC has not made any Distributions other than the
payment of quarterly dividends in respect of its capital stock in
an aggregate amount equal to approximately $1,206,500.
Section 12.14. Representations True; No Default. Both
immediately prior to, and after giving effect to, the making of
the Term Loan and the initial Revolving Credit Loans hereunder,
each of the representations and warranties of each of the
Borrowers contained in this Credit Agreement, the other Loan
Documents or in any document or instrument delivered pursuant to
or in connection with this Credit Agreement shall be true as of
the date as of which they were made and shall also be true at and
as of the Closing Date, with the same effect as if made at and as
of that time and no Default or Event of Default shall have
occurred and be continuing. The Bank shall have received
certificates of (a) NPDC and (b) the GPC Borrowers as to the
representations made by them, respectively, signed by an
authorized officer of each such Borrower to such effect.
Section 12.15. Capital Structure. The Bank shall be
satisfied with the capital structure contemplated for each of the
Borrowers.
Section 12.16. Legal Restrictions. No decree, order,
judgment, statute, license, rule or regulation shall be
applicable in the judgment of the Bank that restrains, prevents
or imposes any materially adverse conditions upon any of the
transactions contemplated by the Loan Documents.
Section 12.17. Regulation U. The Bank shall have
received from NPDC a statement on FR Form U-1 duly completed in a
manner acceptable to the Bank.
Section 12.18. Due Diligence. The Bank shall have
completed an initial funding audit and a due diligence
investigation of the Borrowers in scope, and with results,
satisfactory to the Bank and shall have been given such access to
the management, records, books of account, contracts and
properties of the Borrowers and shall have received such
financial, business and other information, certificates and other
documents regarding the Borrowers as the Bank shall have
requested, which shall all be in form and substance satisfactory
to the Bank.
Section 12.19. Satisfactory Documentation. The Loan
Documents shall be satisfactory to the Bank in its sole
discretion.
ARTICLE XIII
CONDITIONS TO ALL BORROWINGS
The obligations of the Bank to make the Term Loan, any
Revolving Credit Loan and to issue, extend or renew any Letter of
Credit, in each case whether on or after the Closing Date, shall
also be subject to the satisfaction of the following conditions
precedent:
Section 13.1. Representations True; No Event of
Default. With respect to the making of any Revolving Credit Loan
or the issuance, extension or renewal of any Letter of Credit,
each of the representations and warranties of the GPC Borrowers
contained in this Credit Agreement, the other Loan Documents or
in any document or instrument delivered pursuant to or in
connection with this Credit Agreement shall be true as of the
date as of which they were made and shall also be true at and as
of the time of the making of such Revolving Credit Loan or the
issuance, extension or renewal of such Letter of Credit, with the
same effect as if made at and as of that time (except to the
extent of changes resulting from transactions contemplated or
permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that
singly or in the aggregate do not have a Materially Adverse
Effect on the GPC Borrowers, and except to the extent that such
representations and warranties relate expressly to an earlier
date) and no Default or Event of Default shall have occurred and
be continuing. The Bank shall have received the Loan Request of
the GPC Borrowers signed by an authorized officer of each such
Borrower to such effect.
Section 13.2. No Legal Impediment. No change shall
have occurred in any law or regulations thereunder or
interpretations thereof that in the reasonable opinion of the
Bank would make it illegal for the Bank to make such Loan or to
issue, extend or renew such Letter of Credit.
Section 13.3. Governmental Regulation. The Bank shall
have received such statements in substance and form reasonably
satisfactory to the Bank as the Bank shall require for the
purpose of compliance with any Applicable Law or, without
limiting the generality of the foregoing, any applicable
regulations of the Comptroller of the Currency or the Board of
Governors of the Federal Reserve System.
Section 13.4. Proceedings and Documents. All
proceedings in connection with the transactions contemplated by
this Credit Agreement, the other Loan Documents and all other
documents incident thereto shall be satisfactory in substance and
in form to the Bank and the Bank's Special Counsel, and the Bank
and such counsel shall have received all information and such
counterpart originals or certified or other copies of such
documents as the Bank may reasonably request.
Section 13.5. Borrowing Base Report. The Bank shall
have received the most recent Borrowing Base Report required to
be delivered to the Bank in accordance with Section 9.4(f).
Section 13.6. Sufficient Credit Availability. After
giving effect to the making of the requested Revolving Credit
Loan or the issuance, extension or renewal of the Letter of
Credit, the Available Credit is not less than $0. The Bank shall
have received a certificate of the GPC Borrowers signed by an
authorized officer of each of the GPC Borrowers to such effect.
ARTICLE XIV
EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 14.1. Events of Default and Acceleration. If
any of the following events ("Events of Default" or, if the
giving of notice or the lapse of time or both is required
pursuant to this Section 14.1, then, prior to such notice or
lapse of time, "Defaults") shall occur with respect to a Borrower
(it being understood that a Default or Event of Default with
respect to a GPC Borrower shall constitute a Default or Event of
Default with respect to NPDC and all GPC Borrowers but that a
Default or Event of Default with respect to NPDC, MXL or Five
Star shall not constitute a Default or Event of Default with
respect to any GPC Borrower):
(a) (i) NPDC shall fail to pay any principal of the
Term Loan, any interest on the Term Loan, the closing fee or
other sums due and payable by NPDC hereunder or under any of the
other Loan Documents or (ii) the GPC Borrowers shall fail to pay
any principal of the Revolving Credit Loans, any Reimbursement
Obligation, any interest on the Revolving Credit Loans, the
commitment fee, any Letter of Credit Fee or other sums due and
payable by the GPC Borrowers hereunder or under any of the other
Loan Documents, in each case, when the same shall become due and
payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for
payment;
(b) any of the Borrowers shall fail to comply with any
of its covenants contained in Article X;
(c) any of the Borrowers shall fail to comply with any
of its covenants contained in Article IX (other than Section 9.5)
and such failure shall continue unremedied for fifteen (15) days
after written notice of such failure has been given to such
Borrower by the Bank;
(d) any of the Borrowers shall fail to perform any
term, covenant or agreement contained herein or in any of the
other Loan Documents (other than those specified elsewhere in
this Section 14.1) for fifteen (15) days after written notice of
such failure has been given to such Borrower by the Bank;
(e) any representation or warranty of any of the
Borrowers in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered
pursuant to this Credit Agreement shall prove to have been false
in any material respect upon the date when made or deemed to have
been made or repeated;
(f) any of the GPC Borrowers or any of their
Subsidiaries shall, after required notice, if any, fail to pay
any obligation (direct or indirect) for borrowed money
(including, without limitation, the Subordinated Debt) or in
respect of any Capitalized Leases or guarantees of any of the
foregoing, in each case beyond any period of grace with respect
thereto, that, in any such case, is outstanding in a principal or
notional amount of at least $250,000 in the aggregate, or shall,
after required notice, if any, fail to observe or perform any
material term, covenant or agreement contained in any agreement
by which it is bound, beyond any period of grace with respect
thereto, evidencing or securing such borrowed money or in respect
of any such Capitalized Leases or guarantees of the foregoing for
such period of time as would permit the holder or holders thereof
or of any obligations issued thereunder to accelerate the
maturity thereof;
(g) any of NPDC (or MXL or Five Star, so long as any
obligation is outstanding under any MXL Agreement or any Five
Star Agreement, as the case may be) shall, after required notice,
if any, fail to pay any obligation (direct or indirect) for
borrowed money (including, without limitation, the Subordinated
Debt) or in respect of any Capitalized Leases or guarantees of
any of the foregoing, in each case beyond any period of grace
with respect thereto, that, in any such case, is outstanding in a
principal or notional amount of at least $500,000 in the
aggregate, or shall, after required notice, if any, fail to
observe or perform any material term, covenant or agreement
contained in any agreement by which it is bound, beyond any
period of grace with respect thereto, evidencing or securing such
borrowed money or in respect of any such Capitalized Leases or
guarantees of the foregoing for such period of time as would
permit the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof;
(h) any of NPDC, MXL or Five Star, any of the GPC
Borrowers or any of the GPC Borrowers' Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its
inability generally to pay or generally fail to pay its debts as
they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or
receiver of any of NPDC, MXL or Five Star, the GPC Borrowers or
any of the GPC Borrowers' Subsidiaries or of any substantial part
of the assets of any of NPDC, MXL or Five Star, the GPC Borrowers
or any of the GPC Borrowers' Subsidiaries or shall commence any
case or other proceeding relating to any of NPDC, MXL or Five
Star, the GPC Borrowers or any of the GPC Borrowers' Subsidiaries
under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law
of any jurisdiction, now or hereafter in effect, or shall take
any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed
or any such case or other proceeding shall be commenced against
any of NPDC, MXL or Five Star, the GPC Borrowers or any of the
GPC Borrowers' Subsidiaries and any of NPDC, MXL or Five Star,
the GPC Borrowers or any of the GPC Borrowers' Subsidiaries shall
indicate its approval thereof, consent thereto or acquiescence
therein or such case or other proceeding shall remain undismissed
or unstayed for a period of sixty (60) days or more; provided,
that with respect to MXL and Five Star, this paragraph shall only
apply so long as any obligation is outstanding under any MXL
Agreement or any Five Star Agreement, as the case may be;
(i) a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating any of
NPDC, MXL or Five Star, the GPC Borrowers or any of the GPC
Borrowers' Subsidiaries bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or
order for relief is entered in respect of any of NPDC, MXL or
Five Star, the GPC Borrowers or any of the GPC Borrowers'
Subsidiaries in an involuntary case under federal bankruptcy laws
as now or hereafter constituted; provided, that with respect to
MXL and Five Star, this paragraph shall only apply so long as any
obligation is outstanding under any MXL Agreement or any Five
Star Agreement, as the case may be;
(j) there shall remain in force, undischarged,
unsatisfied and unstayed, for more than thirty days, whether or
not consecutive, any final judgment against any of NPDC, the GPC
Borrowers or any of the GPC Borrowers' Subsidiaries that, with
other outstanding final judgments, undischarged, unsatisfied and
unstayed against any of NPDC, the GPC Borrowers or any of the GPC
Borrowers' Subsidiaries to the extent not covered by insurance
exceeds in the aggregate $300,000;
(k) any of the Loan Documents shall be canceled,
terminated, revoked or rescinded otherwise than in accordance
with the terms thereof or with the express prior written
agreement, consent or approval of the Bank, or any action at law,
suit or in equity or other legal proceeding to cancel, revoke or
rescind any of the Loan Documents shall be commenced by or on
behalf of any of the Borrowers party thereto or any of their
respective stockholders, or any court or any other governmental
or regulatory authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment, order, decree or
ruling to the effect that, any one or more of the Loan Documents
is illegal, invalid or unenforceable in accordance with the terms
thereof;
(l) with respect to any Guaranteed Pension Plan, an
ERISA Reportable Event shall have occurred and the Bank shall
have determined in its reasonable discretion that such event
reasonably could be expected to result in liability of any of the
Borrowers to the PBGC or such Guaranteed Pension Plan in an
aggregate amount exceeding $100,000 and such event in the
circumstances occurring reasonably could constitute grounds for
the termination of such Guaranteed Pension Plan by the PBGC or
for the appointment by the appropriate United States District
Court of a trustee to administer such Guaranteed Pension Plan; or
a trustee shall have been appointed by the United States District
Court to administer such Guaranteed Pension Plan; or the PBGC
shall have instituted proceedings to terminate such Guaranteed
Pension Plan;
(m) any of the Borrowers shall be enjoined, restrained
or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material
part of its business and such order shall continue in effect for
more than thirty (30) days;
(n) (i) Any of the Security Documents shall cease, for
any reason, to be in full force and effect, or any Borrower or
any other Person which is a party to any of the Security
Documents shall so assert or (ii) the Lien created by any of the
Security Documents shall cease to be enforceable and of the same
effect and priority purported to be created thereby, except with
respect to Liens permitted by or of the nature permitted by
Section 10.2(ii) or 10.2(iv) hereof with respect to any Borrower;
or
(o) (i) Any Person or "group" (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended) (i) shall obtain the power (whether or not exercised) to
elect a majority of GPC's directors except NPDC or (ii) the Board
of Directors of GPC shall not consist of a majority of Continuing
Directors; "Continuing Directors" shall mean the directors of GPC
on the Closing Date and each other director, if such other
director's nomination for election to the Board of Directors of
GPC is recommended by a majority of the then Continuing
Directors;
then, in the case of any such Event of Default (i) with respect
to a GPC Borrower, so long as the same may be continuing, the
Bank may, by notice in writing to the Borrowers declare all
amounts owing with respect to this Credit Agreement, the Term
Note, the Revolving Credit Note and the other Loan Documents and
all Reimbursement Obligations to be, and they shall thereupon
forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby expressly waived by each of the Borrowers; and
(ii) with respect to NPDC, so long as the same may be continuing,
the Bank may, by notice in writing to NPDC declare all amounts
owing by NPDC under this Credit Agreement, the Term Note and the
other Loan Documents to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived by NPDC; provided, that in the event of any
Event of Default specified in Section 14.1(h) or Section 14.1(i),
all such amounts referred to in clause (i) or (ii), as
applicable, shall become immediately due and payable
automatically and without any requirement of notice from the
Bank.
Section 14.2. Termination of Commitment. If any one
or more of the Events of Default specified in Section 14.1(h) or
Section 14.1(i) shall occur with respect to a GPC Borrower, any
unused portion of the Revolving Credit Commitment hereunder shall
forthwith terminate and the Bank shall be relieved of all further
obligations to make Revolving Credit Loans to the GPC Borrowers
and to issue, extend or renew Letters of Credit. If any other
Event of Default with respect to a GPC Borrower, shall have
occurred and be continuing, the Bank may terminate the unused
portion of the Revolving Credit Commitment hereunder, and upon
such notice being given such unused portion of the credit
hereunder shall terminate immediately and the Bank shall be
relieved of all further obligations to make Revolving Credit
Loans and all further obligations to issue, extend or renew
Letters of Credit. No termination of the Revolving Credit
Commitment hereunder shall relieve any of the GPC Borrowers of
any of the GPC Obligations or any of its existing obligations to
the Bank arising under other agreements or instruments.
Section 14.3. Remedies. In case any one or more of
the Events of Default shall have occurred and be continuing, and
whether or not the Bank shall have accelerated the maturity of
the Loans pursuant to Section 14.1, the Bank, if owed any amount
with respect to the Loans or the Reimbursement Obligations, may
proceed to protect and enforce its rights against NPDC and/or the
GPC Borrowers, as applicable, by suit in equity, action at law or
other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Credit
Agreement and the other Loan Documents or any instrument pursuant
to which the NPDC Obligations or the GPC Obligations to the Bank
are evidenced, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right of the Bank. No remedy
herein conferred upon the Bank is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any
other provision of law.
Section 14.4. Setoff. Regardless of the adequacy of
any Collateral, during the continuance of any Event of Default,
any deposits or other sums credited by or due from the Bank to
any of the Borrowers and any securities or other property of any
of the Borrowers in the possession of the Bank may be applied to
or set off by the Bank against (i) if such Event of Default is
with respect to any Borrower and such Borrower is NPDC, the
payment of the NPDC Obligations (and any and all other
liabilities, direct, or indirect, absolute or contingent, due or
to be become due, now existing or hereafter arising, of NPDC to
the Bank) or (ii) if such Event of Default is with respect to the
GPC Borrowers and such Borrower is a GPC Borrower, to the payment
of GPC Obligations (and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, of any of the GPC Borrowers to the
Bank).
Section 14.5. Waiver. No waiver of notice in the Term
Note or the Revolving Credit Note shall affect the requirement of
notice under this Article XIV.
ARTICLE XV
PROVISIONS OF GENERAL APPLICATION
Section 15.1. Expenses. The Borrowers, jointly and
severally, agree to pay (except to the extent such amounts can be
allocated to NPDC or the GPC Borrowers, respectively, in which
case NPDC severally agrees to pay and the GPC Borrowers jointly
and severally agree to pay, as the case may be) (a) the
reasonable costs of producing and reproducing this Credit
Agreement, the other Loan Documents and the other agreements and
instruments mentioned herein, or any amendments, modifications or
supplements thereto, (b) any taxes (including any interest and
penalties in respect thereto) payable by the Bank (other than net
income taxes and franchise taxes imposed in lieu of net income
taxes) on or with respect to the transactions contemplated by
this Credit Agreement (the Borrowers, jointly and severally,
hereby agreeing to indemnify the Bank with respect thereto), (c)
the reasonable fees, expenses and disbursements of the Bank's
Special Counsel or any local counsel to the Bank incurred in
connection with the preparation, administration or interpretation
of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals,
consents or waivers hereto or hereunder, (d) any out-of-pocket
fees, costs, expenses and bank charges, including bank charges
for returned checks and wire transfer charges, incurred by the
Bank in establishing, maintaining or handling of any lock box
accounts, cash collateral accounts and other accounts for the
collection of any of the Collateral which are required under the
Loan Documents or established with the consent of any Borrower;
(e) subject to the provisions of Section 9.9.1 and 9.9.2, all
reasonable fees, expenses and disbursements (including without
limitation reasonable attorneys' fees and costs, which attorneys
may be employees of the Bank, and reasonable consulting,
accounting, auditing (including the cost of the Bank's initial
audit and any future audits that the Bank deems necessary))
examination, commercial finance examination, preparation of
collateral reports, appraisal, investment banking and similar
professional fees and charges) incurred by the Bank in connection
with (i) the preparation, negotiation, execution, amendment,
modification, administration or interpretation of the Loan
Documents and other instruments mentioned herein (ii) the
enforcement of or preservation of rights under any of the Loan
Documents against any of the Borrowers or the administration
thereof after the occurrence of a Default or Event of Default and
(iii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to the Bank's
relationship with any of the Borrowers and (f) all reasonable
fees, expenses and disbursements of the Bank incurred in
connection with UCC searches, UCC filings, or other filings or
recordations relating to the Collateral. The covenants of this
Section 15.1 shall survive payment or satisfaction of all other
NPDC Obligations and GPC Obligations.
Section 15.2. Indemnification. (a) NPDC agrees to
indemnify and hold harmless the Bank and each of its affiliates,
officers, directors, employees, agents and advisors (each an
"Indemnified Party") from and against any and all claims,
actions, investigations and suits whether groundless or
otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of
this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby in each case with respect to the
Term Loan or NPDC including, without limitation, (i) any actual
or proposed use by NPDC respectively, of the proceeds of any of
the Loans (ii) the reversal or withdrawal of any provisional
credits granted by the Bank upon the transfer of funds from
accounts or in connection with the provisional honoring of checks
or other items, (iii) NPDC entering into or performing this
Credit Agreement or any of the other Loan Documents or (iv) with
respect to NPDC and its properties and assets, the violation of
any Environmental Law, the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release or threatened
release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claim
with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and the direct and
reasonable costs of internal counsel incurred in connection with
any such investigation, litigation or other proceeding; provided,
that NPDC shall have no obligation hereunder to the Bank with
respect to indemnified liabilities arising from the gross
negligence or willful misconduct of the Bank. In litigation, or
the preparation therefor, each Indemnified Party shall be
entitled to select its own counsel and, in addition to the
foregoing indemnity, NPDC agrees to pay promptly the reasonable
fees and expenses of such counsel. If, and to the extent that
the obligations of NPDC under this Section 15.2 are unenforceable
for any reason, NPDC hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations
that is permissible under Applicable Law. The covenants
contained in this Section 15.2 shall survive payment or
satisfaction in full of all other NPDC Obligations.
(b) The GPC Borrowers jointly and severally agree to
indemnify and hold harmless the Bank and each of its affiliates,
officers, directors, employees, agents and advisors (each an
"Indemnified Party") from and against any and all claims,
actions, investigations and suits whether groundless or
otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of
this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby in each case with respect to
the Revolving Credit Loans, the Letters of Credit or any GPC
Borrower, including, without limitation, (i) any actual or
proposed use by the GPC Borrowers of the proceeds of any of the
Loans or Letters of Credit, (ii) the reversal or withdrawal of
any provisional credits granted by the Bank upon the transfer of
funds from accounts or in connection with the provisional
honoring of checks or other items, (iii) any of the GPC Borrowers
entering into or performing this Credit Agreement or any of the
other Loan Documents or (iv) with respect to the GPC Borrowers
and their properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage,
leakage, spillage, discharge, emission, release or threatened
release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claim
with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and the direct and
reasonable costs of internal counsel incurred in connection with
any such investigation, litigation or other proceeding; provided,
that the GPC Borrowers shall have no obligation hereunder to the
Bank with respect to indemnified liabilities arising from the
gross negligence or willful misconduct of the Bank. In
litigation, or the preparation therefor, each Indemnified Party
shall be entitled to select its own counsel and, in addition to
the foregoing indemnity, the GPC Borrowers, jointly and
severally, agree to pay promptly the reasonable fees and expenses
of such counsel. If, and to the extent that the obligations of
any of the GPC Borrowers under this Section 15.2 are
unenforceable for any reason, such GPC Borrower hereby agrees to
make the maximum contribution to the payment in satisfaction of
such obligations that is permissible under Applicable Law. The
covenants contained in this Section 15.2 shall survive payment or
satisfaction in full of all other GPC Obligations.
Section 15.3. Survival of Covenants, Etc. All
covenants, agreements, representations and warranties made by (a)
NPDC or (b) the GPC Borrowers, respectively, herein, in the Term
Note, in any of the other Loan Documents or in any documents or
other papers delivered by or on behalf of any of such respective
Borrowers pursuant hereto shall be deemed to have been relied
upon by the Bank, notwithstanding any investigation heretofore or
hereafter made by any of them, and (i) in the case of NPDC, shall
survive the making by the Bank of the Term Loan as herein
contemplated, and shall continue in full force and effect so long
as any amount due from NPDC under this Credit Agreement or the
Term Note or any of the other Loan Documents remains outstanding
and for such further time as may be otherwise expressly specified
in this Credit Agreement and (ii) in the case of the GPC
Borrowers, shall survive the making by the Bank of any of the
Revolving Credit Loans and the issuance, extension or renewal of
any Letters of Credit, as herein contemplated, and shall continue
in full force and effect so long as any Letter of Credit or
amount due by any GPC Borrower under this Credit Agreement or any
Revolving Credit Note or any of the other Loan Documents remains
outstanding or the Bank has any obligation to make any Revolving
Credit Loans or to issue, extend or renew any Letter of Credit,
and for such further time as may be otherwise expressly specified
in this Credit Agreement. All statements contained in any
certificate or other paper delivered to the Bank at any time by
or on behalf of any of the Borrowers pursuant hereto shall
constitute representations and warranties by such Borrower
hereunder.
Section 15.4. Assignment and Participation.
15.4.1. No Assignments by Borrowers. None of the
Borrowers shall assign or transfer any of its rights or
obligations under any of the Loan Documents without the prior
written consent of the Bank.
15.4.2. Assignments and Participations. The Bank
may sell assignments with the consent of the Borrowers, which
will not be unreasonably withheld, or participations to one or
more banks or other entities in all or a portion of the Bank's
rights and obligations under this Credit Agreement and the other
Loan Documents; provided, that (a) each such assignment or
participation shall be in an amount of not less than $5,000,000,
(b) any such sale of a participation shall not affect the rights
and duties of the Bank hereunder to the Borrowers and the
Borrowers shall continue to deal solely and directly with the
Bank in connection therewith, (c) the only rights granted to a
participant pursuant to any such participation arrangements with
respect to waivers, amendments or modifications of the Loan
Documents shall be the rights to approve waivers, amendments or
modifications that would reduce the principal of or the interest
rate on any Loans, extend the term or increase the amount of the
Revolving Credit Commitment of the Bank as it relates to such
participant, reduce the amount of any commitment fees or Letter
of Credit Fees to which such participant is entitled or extend
any regularly scheduled payment date for principal or interest
and (d) no participant shall be entitled to receive any greater
amount pursuant to Section 5.5.4, 5.5.5 or 5.6.1.2 than the Bank
would have been entitled to receive in respect of the amount of
the participation transferred by the Bank had no such transfer
occurred.
15.4.3. Disclosure. The Borrowers agree that in
addition to disclosures made in accordance with standard and
customary banking practices the Bank may disclose information
obtained by the Bank pursuant to this Credit Agreement to
assignees, participants, potential assignees and potential
participants hereunder; provided, that such assignees,
participants, potential assignees or potential participants shall
agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to
disclose such information to a third party, except as required by
law or legal process and (c) not to make use of such information
for purposes of transactions unrelated to such contemplated
assignment or participation.
Section 15.5. Notices, Etc. Except as otherwise
expressly provided in this Credit Agreement, all notices and
other communications made or required to be given pursuant to
this Credit Agreement or the Term Note or the Revolving Credit
Note or any Letter of Credit Applications shall be in writing and
shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by nationally
recognized overnight delivery service, or sent by facsimile and
confirmed by delivery via nationally recognized overnight
delivery service or postal service, addressed as follows:
(a) if to the GPC Borrowers, at 6700 Alexander Bell
Drive, Columbia, Maryland 21046, Attention: John C. McAuliffe,
Executive Vice President and Chief Financial Officer (facsimile
410-290-2646), or at such other address for notice as the
Borrowers shall last have furnished in writing to the Person
giving the notice; and
(b) if to NPDC, at 9 West 57th St., Suite 4170, New
York, New York 10019, Attn: General Counsel (facsimile
212-230-9545), or such other address for notice as the Bank shall
last
have furnished in writing to the Person giving notice.
(c) if to the Bank, at Exchange Place Centre, 10
Exchange Place, Jersey City, New Jersey 07302, Attention: Phillip
H. Sorace, Vice President (facsimile 212-703-1724), or such other
address for notice as the Bank shall last have furnished in
writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been
duly given or made and to have became effective (i) if delivered
by hand or nationally recognized overnight delivery service to a
responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer, (ii) if delivered by
facsimile, at the time of the sending of such facsimile (receipt
of which shall be confirmed by telephonic or electronic means)
and (iii) if sent by registered or certified first-class mail,
postage prepaid, on the third Business Day following the mailing
thereof.
Section 15.6. Governing Law; Jurisdiction and Venue.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF ALL PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Each Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any
legal action or proceeding relating to this Credit Agreement
and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the
United States of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding
may be brought in such courts and waives any objection that
it may now or hereafter have to the venue of any such action
or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(c) agrees that service of process in any such
action or proceeding may be effected by mailing a copy
thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to
such Borrower at its address set forth in Section 15.5 or at
such other address of which the Bank shall have been
notified pursuant thereto; and
(d) agrees that nothing herein shall affect the
right to effect service of process in any other manner
permitted by law or shall limit the right to sue in any
other jurisdiction.
Section 15.7. Acknowledgements. Each Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Credit Agreement and the
other Loan Documents;
(b) the Bank does not have any fiduciary relationship
with or fiduciary duty to any Borrower arising out of or in
connection with this Credit Agreement or any of the other
Loan Documents, and the relationship between the Bank and
each Borrower in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the
transactions contemplated hereby among any Borrower and the
Bank.
Section 15.8. WAIVER OF JURY TRIAL. AS A SPECIFICALLY
BARGAINED INDUCEMENT FOR THE BANK TO EXTEND CREDIT TO EACH
BORROWER, AND AFTER HAVING THE OPPORTUNITY TO CONSULT COUNSEL,
THE BORROWERS HEREBY EXPRESSLY WAIVE THE RIGHT TO TRIAL BY JURY
IN ANY LAWSUIT OR PROCEEDING RELATING TO THIS CREDIT AGREEMENT OR
ARISING IN ANY WAY FROM THE NPDC OBLIGATIONS OR THE GPC
OBLIGATIONS.
Section 15.9. Headings. The captions in this Credit
Agreement are for convenience of reference only and shall not
define or limit the provisions hereof.
Section 15.10. Counterparts. This Credit Agreement
and any amendment hereof may be executed in several counterparts
and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Credit
Agreement it shall not be necessary to produce or account for
more than one such counterpart signed by the party against whom
enforcement is sought.
Section 15.11. Entire Agreement, Etc. The Loan
Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this
Credit Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided in Section 15.11.
Section 15.12. Consents, Amendments, Waivers, Etc.
Any consent or approval required or permitted by this Credit
Agreement to be given by the Bank may be given, and any term of
this Credit Agreement, the other Loan Documents or any other
instrument related hereto or mentioned herein may be amended, and
the performance or observance by any of the Borrowers of any
terms of this Credit Agreement, the other Loan Documents or such
other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular
instance and either retroactively or prospectively) with, but
only with, the written consent of each of the Borrowers and the
written consent of the Bank. No waiver shall extend to or affect
any right or obligation not expressly waived. No course of
dealing or delay or omission on the part of the Bank in
exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No notice to or demand upon
any of the Borrowers shall entitle any of the Borrowers to other
or further notice or demand in similar or other circumstances.
Section 15.13. Severability. The provisions of this
Credit Agreement are severable and if any one clause or provision
hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause
or provision in any other jurisdiction, or any other clause or
provision of this Credit Agreement in any jurisdiction.
Section 15.14. Integration of Exhibits and Schedules.
Annexed to this Credit Agreement are Exhibits A-1 through J and
Schedules 8.2 through 11.2. Such Exhibits and Schedules are an
integral part of this Credit Agreement and are hereby
incorporated by reference.
Section 15.15. Confidentiality. The Bank agrees to
use reasonable precautions to keep confidential, in accordance
with its customary procedures for handling confidential
information of this nature and in accordance with safe and sound
banking practices, any non-public information supplied to it by
any Borrower pursuant to this Credit Agreement which is
identified by such Borrower as being confidential at the time the
same is delivered to the Bank, provided, that nothing herein
shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process,
(ii) to counsel to the Bank, (iii) to bank examiners, auditors or
accountants, (iv) in connection with any litigation to which the
Bank is a party or (v) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) is notified
of the confidentiality provisions in this Section 15.15. In no
event shall the Bank be obligated or required to return any
materials furnished by any Borrower.
IN WITNESS WHEREOF, the undersigned have duly executed this
Credit Agreement as of the date first set forth above.
NATIONAL PATENT DEVELOPMENT
CORPORATION
By: Lawrence M. Gordon
Vice President
GENERAL PHYSICS CORPORATION
By: John V. Moran
Senior Vice President
INVENTORY MANAGEMENT CORPORATION
By: John C. McAuliffe
Vice President
GP ENVIRONMENTAL SERVICES, INC.
By: Robert Danna
President
GPS TECHNOLOGIES, INC. FEDERAL
SYSTEMS GROUP
By: John C. McAuliffe
Treasurer
NATWEST BANK N.A.
By: Phillip H. Sorace
Vice President
Title:
