<PAGE> 1
1997 Third Quarter
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended December 31, 1996
Commission File No. 0-18706
BLACK BOX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-3086563
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1000 Park Drive
Lawrence, Pennsylvania 15055
(Address of principal executive offices)
412-746-5500
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
----- -----
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
----- -----
The number of shares outstanding of the Registrant's common stock, $.001 par
value, as of January 31, 1997 was 16,493,016 shares.
<PAGE> 2
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
BLACK BOX CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except share amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
December 31, March 31,
ASSETS 1996 1996
--------------- --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,567 $ 1,924
Accounts receivable, net of allowance for doubtful
accounts of $2,552 and $2,407, respectively 36,279 34,804
Inventories, net 25,135 18,781
Other current assets 8,169 7,333
-------- --------
Total current assets 71,150 62,842
Property, plant and equipment, net of accumulated depreciation
of $11,076 and $9,623, respectively 12,300 12,299
Intangibles, net of accumulated amortization of $20,219 and
$17,396, respectively 76,135 78,958
Other assets 1,548 1,445
-------- --------
Total assets $161,133 $155,544
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current debt $ 8,540 $ 8,184
Accounts payable 12,923 12,580
Accrued expenses 9,765 10,081
Accrued income taxes 4,449 1,948
-------- --------
Total current liabilities 35,677 32,793
Long-term debt 24,734 41,142
Other liabilities 12,580 14,468
Stockholders' equity:
Common stock authorized 20,000,000; par value $.001; issued
and outstanding 16,488,516 and 16,302,254, respectively 16 16
Additional paid-in capital 29,322 25,904
Retained earnings 59,350 42,209
Cumulative foreign currency translation adjustments (546) (988)
-------- --------
Total stockholders' equity 88,142 67,141
-------- --------
Total liabilities and stockholders' equity $161,133 $155,544
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
2
<PAGE> 3
BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(UNAUDITED)
<TABLE>
<CAPTION>
Three month period ended Nine month period ended
December 31, December 31,
1996 1995 1996 1995
----------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Revenues $57,657 $47,243 $166,677 $138,181
Cost of sales 27,037 21,066 77,514 61,639
------- ------- -------- --------
Gross profit 30,620 26,177 89,163 76,542
Selling, general and
administrative expenses 18,321 15,980 53,602 47,079
Intangibles amortization 945 894 2,835 2,728
------- ------- -------- --------
Operating income 11,354 9,303 32,726 26,735
Interest expense, net 845 1,435 3,023 4,440
Other income, net (26) (126) (176) (301)
------- ------- -------- --------
Income before income taxes 10,535 7,994 29,879 22,596
Provision for income taxes 4,425 3,517 12,738 9,940
------- ------- -------- --------
Net income $ 6,110 $ 4,477 $ 17,141 $ 12,656
======= ======= ======== ========
Earnings per share $ 0.35 $ 0.27 $ 0.99 $ 0.76
======= ======= ======== ========
Weighted average common and
common equivalent shares 17,691 16,785 17,365 16,738
======= ======= ======== ========
</TABLE>
See Notes to Consolidated Financial Statements
3
<PAGE> 4
BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY
(Dollars in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
Common Stock Additional
------------------- Paid-in Retained Translation
Shares Amount Capital Earnings Adjustment Total
---------- ------ ------- -------- ---------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance at March 31, 1995 16,061,557 $16 $23,169 $23,931 $ (1) $47,115
Net income for the year
ended March 31, 1996 - - 18,278 - 18,278
Exercise of options 240,697 - 2,057 - - 2,057
Tax benefit from exercised options - - 678 - - 678
Foreign currency translation -
adjustments - - - - (987) (987)
---------- --- ------- ------- ------ -------
Balance at March 31, 1996 16,302,254 16 25,904 42,209 (988) 67,141
Net income for the nine month
period ended December 31, 1996 - - - 17,141 - 17,141
Exercise of options 186,262 - 2,251 - - 2,251
Tax benefit from exercised options - - 1,167 - - 1,167
Foreign currency translation -
adjustments - - - - 442 442
---------- --- ------- ------- ----- -------
Balance at December 31, 1996 16,488,516 $16 $29,322 $59,350 $(546) $88,142
========== === ======= ======= ===== =======
</TABLE>
See Notes to Consolidated Financial Statements
4
<PAGE> 5
BLACK BOX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine month period ended
December 31,
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 17,141 $ 12,656
Adjustments to reconcile net income to cash provided
by operating activities:
Intangibles amortization 2,835 2,728
Depreciation 1,712 1,765
Joint venture income (77) (159)
Changes in working capital items:
Account receivable, net (1,475) (1,657)
Inventories, net (6,320) (1,714)
Other current assets (972) (1,647)
Accounts payable 343 2,512
Accrued expenses 297 (3,049)
-------- --------
Cash provided by operating activities 13,484 11,435
-------- --------
Cash flows from investing activities:
Capital expenditures (1,713) (1,964)
Dividends from joint ventures 64 54
-------- --------
Cash used in investing activities (1,649) (1,910)
-------- --------
Cash flows from financing activities:
Repayment of borrowings (55,725) (36,009)
Proceeds from borrowings 39,673 25,845
Proceeds from exercise of options 3,418 916
-------- --------
Cash used in financing activities (12,634) (9,248)
-------- --------
Foreign currency translation adjustment 442 (656)
-------- --------
Decrease in cash and cash equivalents (357) (379)
Cash and cash equivalents at beginning of period 1,924 2,546
-------- --------
Cash and cash equivalents at end of period $ 1,567 $ 2,167
======== ========
</TABLE>
See Notes to Consolidated Financial Statements
5
<PAGE> 6
BLACK BOX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(Dollars in thousands)
NOTE 1 - BASIS OF PRESENTATION
The Financial Statements presented herein and these notes are
unaudited. Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission. Although the Company
believes that all adjustments necessary for a fair presentation have been made,
interim periods are not necessarily indicative of the results of operations for
a full year. As such, these financial statements should be read in conjunction
with the financial statements and notes thereto included in the Company's most
recent Form 10-K which was filed for the fiscal year ended March 31, 1996.
NOTE 2 - FISCAL YEARS AND INTERIM PERIODS
The Company has a 52 or 53 week fiscal year that ends on the Sunday
nearest March 31. Each fiscal quarter consists of 13 weeks. The last quarter
is adjusted for those years which have 53 weeks. The ending dates for the
periods ended December 31, 1996, March 31, 1996 and December 31, 1995 were
actually December 29, 1996, March 31, 1996 and December 31, 1995, respectively.
NOTE 3 - INVENTORIES
Inventories are stated at the lower of cost (first-in, first-out
method) or market. The net inventory balances are as follows:
<TABLE>
<CAPTION>
December 31, March 31,
1996 1996
------------ ---------
<S> <C> <C>
Raw materials $ 1,744 $ 1,440
Work-in-process 22 8
Finished goods 24,970 18,981
Inventory reserve (1,601) (1,648)
------- -------
Inventory, net $25,135 $18,781
======= =======
</TABLE>
NOTE 4 - ACCOUNTING FOR STOCK-BASED COMPENSATION
In the first quarter of Fiscal 1997, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based
Compensation". As allowable under SFAS No. 123, the Company has elected to
disclose in the notes to the financial statements the impact on net income and
net income per share as if the fair value based compensation cost had been
recognized. The Company will reflect this disclosure in the notes to the March
31, 1997 fiscal year end consolidated financial statements.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS (dollars in thousands)
GENERAL
The table below should be read in conjunction with the following
discussion (percentages are based on total revenues).
<TABLE>
<CAPTION>
Three month period ended December 31, Nine month period ended December 31,
1996 1995 1996 1995
----------------- ------------------ ------------------ -----------------
<S> <C> <C> <C> <C>
Revenues $57,657 $47,243 $166,677 $138,181
======= ======= ======== ========
Revenues:
North America 52.5% 56.2% 55.2% 59.7%
International 47.5 43.8 44.8 40.3
------- ------- -------- --------
Total 100.0 100.0 100.0 100.0
Cost of sales 46.9 44.6 46.5 44.6
------- ------- -------- --------
Gross profit 53.1 55.4 53.5 55.4
Selling, general and
administrative expenses 31.8 33.8 32.2 34.1
------- ------- -------- --------
Operating income
before amortization 21.3 21.6 21.3 21.3
Intangibles amortization 1.6 1.9 1.7 1.9
------- ------- -------- --------
Operating income 19.7% 19.7% 19.6% 19.4%
======= ======= ======== ========
</TABLE>
RESULTS OF OPERATIONS
Revenues for the three and nine month periods ended December 31, 1996
increased 22.0% and 20.6% respectively over the comparable periods for the
prior year, reflecting strong growth worldwide. For the three and nine month
periods ended December 31, 1996, revenues from International operations
increased 32.3% and 34.1%, respectively over the comparable periods last year.
If exchange rates had remained constant from the three month period and the
nine month period ended December 31, 1995, International revenues would have
increased 37.5% and 42.3%, respectively. On a percentage basis and at constant
exchange rates, all international subsidiaries experienced double digit revenue
growth over the nine month period from last year. For the three and nine month
periods ended December 31, 1996, revenues from North America increased 14.0%
and 11.5%, respectively, over the same periods last year. International and
North American revenue growth for the quarter and year-to-date was driven
primarily by the introduction of new products.
Gross profit margin for the three and nine month periods ended
December 31, 1996 was 53.1% and 53.5% respectively, compared to 55.4% for both
of the same periods last year. The dollar increase was primarily due to
increased volumes. The decrease in gross profit margin is due to a change in
product mix and the revaluing of intercompany receivable amounts denominated in
currencies other than the U.S.
7
<PAGE> 8
dollar. The revaluation of the intercompany receivables is primarily a
result of the strengthening U.S. dollar against the Japanese Yen.
Selling, general and administrative ("S,G&A") expense as a percentage
of revenues for the three and nine month periods ended December 31, 1996 was
31.8% and 32.2% respectively, compared to 33.8% and 34.1% for the same periods
last year. The dollar increase relates to additional marketing and personnel
costs. S,G&A decreased as a percentage of revenues as the Company was able to
leverage its existing support structure and improve the efficiency of its
marketing expenditures.
Operating income for the three and nine month periods ended
December 31, 1996 increased over the same periods for last year as a result
of higher revenues and gross profit, partially offset by higher S,G&A expenses.
Net interest expense for the three and nine month periods ended
December 31, 1996 decreased over the same periods for last year as a result of
lower average borrowings and lower average interest rates. Amortization
expense has remained constant from prior year, decreasing as a percentage of
revenues.
The Company's estimated annual effective income tax rate is 42.5%,
which is higher than the U.S. statutory rate of 35.0% primarily due to state
income taxes and the unfavorable impact of non-deductible intangibles
amortization. The effective tax rate for the three and nine month periods
ended December 31, 1996 differs from the annual effective rate as the Company
revised its estimate in Second Quarter Fiscal 1997, and is amortizing the
adjustment of the first quarter tax provision to the remaining three quarters
of the fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
The Company continues to meet all of its cash requirements through
cash flow from operations. During the first nine months of Fiscal 1997, cash
flow from operations after investing activities of $11,835 plus the proceeds
from the exercise of stock options enabled the Company to reduce debt by
$16,052. As of December 31, 1996, the Company had $1,567 in cash and cash
equivalents, working capital of $35,473 and long-term debt of $24,734.
The Company's long-term debt at December 31, 1996 was comprised of
$8,600 under the Mellon Credit Agreement, $16,000 of Senior Notes, and $134 of
various other loans. The weighted average interest rate on all indebtedness of
the Company as of December 31, 1996 was approximately 8.3% compared to 8.4% as
of December 31, 1995. In addition, at December 31, 1996, the Company had
$1,297 of letters of credit outstanding and $30,103 of additional funds
available under the Mellon Credit Agreement.
The Company has entered into, on a selective basis, forward exchange
contracts to reduce foreign currency exposure related to certain intercompany
inventory transactions. At December 31, 1996, the open foreign exchange
contracts were exclusively in Yen. The value of such open contracts was
approximately $1,750. The effect of these contracts on net income for the
three and nine month periods ended December 31, 1996 was not material.
8
<PAGE> 9
The Company believes that its cash flow from operations and existing
credit facilities will be sufficient to satisfy its liquidity needs for the
foreseeable future. This statement is made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995, as there
are important factors that could cause the actual results to differ materially
from those in the forward-looking statement. Such factors include significant
changes in worldwide competition or the occurrence of significant downward
economic conditions in several of the large countries in which the Company
operates.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
---------
10.1 Subscription Agreement and Plan of Acquisition of BBOX
Holding Company by Black Box Corporation dated
November 21, 1996.
10.2 Modification of Note Purchase Agreements between
Black Box-PA and Holders, dated November 21, 1996.
10.3 Amendment to Guarantee Agreement between Black Box
Corporation and Holders, dated November 21, 1996.
10.4 Second Modification of Note Purchase Agreements
between Black Box-PA and Holders, dated November 21, 1996.
10.5 Holding Company Guarantee Agreement between BBOX
Holding Company and Holders, dated November 21, 1996.
10.6 Fourth Amendment to Credit Agreement between Black
Box-PA and Mellon, dated November 21, 1996.
10.7 Fifth Amendment to Credit Agreement between Black
Box-PA and Mellon, dated November 21, 1996.
10.8 Second Amendment to Guaranty and Suretyship
Agreement between Black Box Corporation and Mellon,
dated November 21, 1996.
10.9 Guaranty and Suretyship Agreement between BBOX
Holding Company and Mellon, dated November 21, 1996.
10.10 Amendment No. 3 to the Trademark License Agreement
between BB Technologies, Inc. and Black Box-PA, dated
as of July 1, 1995
21 List of Subsidiaries
9
<PAGE> 10
27.0 Financial Data Schedules
(b) Reports on Form 8-K.
--------------------
None.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BLACK BOX CORPORATION
By: /s/ Frederick C. Young
-----------------------------
Frederick C. Young
Chief Operating Officer
February 12, 1997
10
<PAGE> 1
Exhibit 10.1
SUBSCRIPTION AGREEMENT
AND
PLAN OF ACQUISITION
1. Black Box Corporation, a Delaware corporation, hereby
subscribes for fifty (50) shares of Common Stock, par value $.01 per share, of
BBox Holding Company, a Delaware corporation (the "Corporation"), being all of
the issued and outstanding shares of capital stock of the Corporation, in
exchange for all of the issued and outstanding capital stock of Black Box
Corporation of Pennsylvania, a Delaware corporation ("Black Box PA"),
consisting of one hundred (100) shares of Common Stock of Black Box PA with a
par value of $.01 per share, on the date of this Subscription Agreement.
2. Each of the undersigned agrees to all restrictions on
transfer of the above securities required by all applicable state and federal
securities laws. Such restrictions, to be evidenced by a legend on the
certificates for the above securities, to be substantially as follows:
These securities have neither been registered under
the federal Securities Act of 1933 nor under any state
securities act (the "Acts") and may be offered and sold only
if registered pursuant to the provisions of the Acts or if an
exemption from registration is available.
3. Each of the undersigned further agrees that the
undersigned is acquiring the above securities for investment.
4. Black Box Corporation has read and approves Article 7 of
the Certificate of Incorporation of the Corporation which limits the personal
liability of directors for monetary damages in certain circumstances as
permitted by Delaware law.
IN WITNESS WHEREOF, the undersigned has signed and sealed
this Subscription Agreement on this 21st day of November, 1996.
BLACK BOX CORPORATION
By: /s/ JEFFERY M. BOETTICHER
--------------------------
Authorized Officer
95-3086563
--------------------------
Taxpayer Identification Number
BLACK BOX CORPORATION OF PENNSYLVANIA
By: /s/ JEFFERY BOETTICHER
--------------------------
Authorized Officer
<PAGE> 2
Subscription accepted and
receipt of subscription
price is acknowledged as of
the date set forth thereon.
BBOX HOLDING COMPANY
By: /s/ KENNETH KUBACKI, President
------------------------------
Authorized Officer
Date: November 21, 1996
---------------------------
<PAGE> 1
Exhibit 10.2
------------------------
MODIFICATION OF
NOTE PURCHASE AGREEMENTS
------------------------
THIS MODIFICATION OF NOTE PURCHASE AGREEMENTS (this
"MODIFICATION"), dated as of November 21, 1996, is entered into by and among
BLACK BOX CORPORATION OF PENNSYLVANIA (formerly known as Black Box Corporation;
the "COMPANY") and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA ("PRUDENTIAL"),
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES ("EQUITABLE"),
EQUITABLE VARIABLE LIFE INSURANCE COMPANY ("EQUITABLE/V") and MASSACHUSETTS
MUTUAL LIFE INSURANCE COMPANY ("MASSMUTUAL", and together with Prudential,
Equitable and Equitable/V, the "NOTEHOLDERS").
W I T N E S S E T H :
---------------------
WHEREAS, the Company and Prudential, Equitable, Equitable/V
and MassMutual are parties to those certain separate Note Purchase Agreements,
each dated as of May 6, 1994 (the "AGREEMENTS");
WHEREAS, the Company desires to make a Stock Payment to Black
Box Corporation, a Delaware corporation (formerly known as MB Communications,
Inc.; the "GUARANTOR") in the amount of $43,670,000 (the "SPECIAL DIVIDEND"),
for the purpose of repaying certain Indebtedness of the Guarantor to the
Company in the amount of $43,670,000 (the "INTERCOMPANY DEBT"), and to make
certain other modifications to the Agreements.
WHEREAS, the Company has requested and the Noteholders have
agreed to consent to the payment of the Special Dividend and to those
modifications of the Agreements pursuant to paragraph 11C thereof;
WHEREAS, each of the Agreements provides that it may be
amended (other than to make certain types of modifications not requested by the
Company) with the consent of the holders of not less than two-thirds in
aggregate principal amount of the Notes at any time outstanding under the
Agreements;
WHEREAS, Prudential, Equitable, Equitable/V and MassMutual
are, on the date hereof, the holders of 100% of the aggregate principal amount
of the Notes outstanding under the Agreements; and
NOW THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Noteholders hereby agree as follows:
1. DEFINITIONS. Unless the context otherwise requires,
capitalized terms used and not otherwise defined in this Modification shall
have the meanings assigned to them in the Agreements.
<PAGE> 2
2. MODIFICATIONS TO NOTE PURCHASE AGREEMENTS. The Company and
the Noteholders agree to the following modifications:
(a) Paragraph 6A of each of the Agreements is amended in its
entirety to read as follows:
6A. CONSOLIDATED NET WORTH. Consolidated Net Worth of the
Company shall not at any time be less than $10,000,000.
(b) Paragraph 6B of each of the Agreements is amended in its
entirety to read as follows:
6B. CASH FLOW OF THE COMPANY. As of the last day of each
fiscal quarter, the ratio of (a) the Consolidated Net Income of the Company and
its consolidated Subsidiaries, plus the amortization expense related to
intangible assets of the Company and its consolidated Subsidiaries for the four
(4) most recently completed fiscal quarters to (b) the aggregate Indebtedness
of the Company and its consolidated Subsidiaries determined in accordance with
generally accepted accounting principles shall not be less than .25 to 1.
(c) Paragraph 6H of each of the Agreements is amended in its
entirety to read as follows:
6H. DIVIDENDS AND RELATED DISTRIBUTIONS. The Company will
not, and will not permit any of its Subsidiaries to, declare or make any Stock
Payment, except as follows:
(i) Stock Payments to the Guarantor for the purposes of
paying reasonable administrative costs and salaries of the Guarantor's
employees, paying taxes and paying expenses incurred in the ordinary course of
business; provided, that no Stock Payment pursuant to this clause (i) may be
made (a) at any time when a Default or Event of Default exists or would occur
after giving effect to such Stock Payment or (b) if, after giving effect to
such Stock Payment, the aggregate amount of Stock Payments made during any
fiscal year of the Company, together with any loans and advances made pursuant
to paragraph 6G(iv) during such fiscal year, would exceed $1,500,000;
(ii) A Stock Payment to the Guarantor for the purpose of
retiring in full Indebtedness of the Guarantor to the Company in the aggregate
principal amount of $43,670,000;
(iii) A Subsidiary of the Company may declare and make Stock
Payments if all of the capital stock of such Subsidiary is owned by the Company
or by a direct or indirect Wholly-Owned Subsidiary of the Company.
(d) Paragraph 6M of each of the Agreements is amended in its
entirety to read as follows:
6M. CAPITAL EXPENDITURES. The Company will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures
- 2 -
<PAGE> 3
on or after the date hereof, except for Capital Expenditures not in excess of
$3,500,000 in the aggregate by the Guarantor and its respective Subsidiaries in
any fiscal year of the Company.
(e) The following definitions in paragraph 10B of each of the
Agreements are amended in their entirety to read as follows:
"BB TECH LICENSE AGREEMENT" shall mean the Trademark/Service
Mark License Agreement, dated as of October 1, 1992, between the Company and BB
Technologies, Inc., as amended by Amendment No. 1 to Trademark/Service Mark
License Agreement, dated as of December 21, 1993, as further amended by
Amendment No. 2 to Trademark/Service Mark License Agreement dated as of May 6,
1994, and as further amended by Amendment No. 3 to Trademark/Service Mark
License Agreement, dated as of July 1, 1995, and pursuant to paragraph 6O.
"BANK CREDIT AGREEMENT" shall mean, collectively, the Credit
Agreement, dated as of May 6, 1994, between the Bank and the Company as amended
by that certain First Amendment to Credit Agreement, dated as of March 30,
1995, by that certain Second Amended to Credit Agreement, dated as of August 1,
1995, by that certain Third Amendment to Credit Agreement, dated as of April 1,
1996 and by that certain Fourth Amendment to Credit Agreement dated as of
November 21, 1996, and any and all documents delivered in connection therewith,
including, without limitation, the Guaranty and Suretyship Agreement, dated as
of May 6, 1994, by the Guarantor in favor of the Bank as amended by that
certain First Amendment to Guaranty and Suretyship Agreement, dated as of March
30, 1995.
3. CONSENTS TO BB TECH LICENSE AGREEMENT AMENDMENT AND BANK
CREDIT AGREEMENT AMENDMENT.
(a) Pursuant to paragraph 6O of each of the Agreements, the
Noteholders consent to the amendment to the BB Tech License Agreement in
substantially the form attached to this Modification as Exhibit A (the "THIRD
LICENSE AGREEMENT AMENDMENT").
(b) Pursuant to Section 4.18 of the Guarantee Agreement, the
Noteholders consent to the Fourth Amendment to Credit Agreement, dated as of
November 21, 1996, between the Bank and the Company in substantially the form
attached to this Modification as Exhibit B the ("FOURTH AMENDMENT").
4. INDUCING REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to each Noteholder as follows:
(a) This Modification and the payment of the Special Dividend
have each been duly authorized by all necessary corporate action on the part of
the Company. This Modification, when executed and delivered by the Company will
constitute, the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (i) bankruptcy, insolvency or other similar laws affecting
creditors' rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law). Except for the consent of the Bank which has been delivered
contemporaneously herewith, no further consent of any other Person is required
for the execution, delivery and performance of this Modification.
- 3 -
<PAGE> 4
(b) The execution, delivery and performance by the Company of
this Modification and the declaration and payment of the Special Dividend will
not (i) contravene, result in any breach of, or constitute a default under, or
result in the creation of any Lien in respect of any property of the Company or
any Subsidiary under, any indenture, mortgage, deed of trust, bank loan or
credit agreement, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective properties may be bound or
affected, including without limitation the agreements or instruments set forth
in Schedule 8G to the Agreements, (ii) conflict with or result in a breach of
any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the
Company or any Subsidiary or (iii) violate any provision of any statute or
other rule or regulation of any Governmental Authority applicable to the
Company or any Subsidiary.
(c) No consent, approval or authorization of, or
registration, filing or declaration with any Governmental Authority is required
in connection with the execution, delivery or performance by the Company of
this Modification or the declaration and payment of the Special Dividend.
(d) After giving effect to each of this Modification and the
declaration and payment of the Special Dividend, (i) no Default or Event of
Default shall have occurred and be continuing, and (ii) the Company shall
deliver to each of the Noteholders an Officer's Certificate, dated as of the
Effective Date (as defined below), to such effect.
(e) The term of the Services Agreement has expired and none
of the parties to the Services Agreement has exercised any option to renew or
extend its term.
5. CONDITIONS TO EFFECTIVENESS. This Modification shall
become effective (the "EFFECTIVE DATE") when and only when each of the
following conditions has been satisfied:
(a) AMENDMENT TO BANK CREDIT AGREEMENT. The Fourth Amendment
and all other agreements delivered in connection with the Fourth Amendment
shall have been duly executed and delivered by the parties thereto, in each
case (including without limitation all schedules and exhibits thereto) in
substantially the form attached hereto as Exhibit B, and on the date hereof the
Fourth Amendment and all such other certificates, documents and agreements
shall be in full force and effect and no default or event of default shall
exist thereunder and the Noteholders shall have received an Officer's
Certificate from the Company to that effect.
(b) REPRESENTATION AND WARRANTIES TRUE AND CORRECT. The
representations and warranties of the Company made in this Modification shall
be true and correct in all material respects on and as of the Effective Date
and the Noteholders shall have received an Officer's Certificate from the
Company to that effect and covering the matters described in Section 4(d) of
this Modification.
(c) CONSENT. The Noteholders shall have received from the
Bank written consent to the execution and delivery by the Company of this
Modification.
(d) FEES AND EXPENSES. The Company shall have paid (a) the
fees and expenses of Schiff Hardin & Waite, special counsel to the Noteholders
and (b) any expenses of the Noteholders, including, without limitation fees,
expenses and disbursements of counsel, in connection with this Modification, in
each case as required under Section 11B of each of the Agreements.
- 4 -
<PAGE> 5
6. NO OTHER AMENDMENTS. Except as otherwise expressly amended
above, each of the Agreements shall remain in full force and effect and is
hereby ratified and confirmed.
- 5 -
<PAGE> 6
IN WITNESS WHEREOF, the parties have caused this Modification
of Note Purchase Agreements to be duly executed and delivered by their proper
and duly authorized officers, as of the day and year first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ KEVIN J. KRASKA
-------------------------
Name: Kevin J. Kraska
Title: Vice President
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
By: /s/ JOEL SEREBRANSKY
-------------------------
Name: Joel Serebransky
Title: Investment Officer
EQUITABLE VARIABLE LIFE INSURANCE
COMPANY
By: /s/ JOEL SEREBRANSKY
-------------------------
Name: Joel Serebransky
Title: Investment Officer
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By: /s/ MARK A. AHMED
-------------------------
Title: Managing Director
<PAGE> 7
BLACK BOX CORPORATION OF
PENNSYLVANIA
By: /s/ FREDERICK C. YOUNG
------------------------
Name: Frederick C. Young
Title: Vice President
<PAGE> 8
CONSENT OF GUARANTOR
BLACK BOX CORPORATION, a Delaware corporation (formerly known
as MB Communications, Inc.), is the Guarantor under that certain Guarantee
Agreement (the "GUARANTEE"), dated as of May 6, 1994, made by the Guarantor in
favor of each holder of any Notes (the "HOLDERS"), and as such hereby consents
to that certain Modification of Note Purchase Agreements dated as of November
21, 1996, by and among Black Box Corporation of Pennsylvania and The Prudential
Insurance Company of America, The Equitable Life Assurance Society of the
United States, Equitable Variable Life Insurance Company and Massachusetts
Mutual Life Insurance Company (the "MODIFICATION") and the amendments and
agreements contained therein and confirms and agrees that, notwithstanding the
Modification and the effectiveness of the amendments and agreements contained
therein, the Guarantee is, and shall continue to be, in full force and effect
and is hereby confirmed and ratified in all respects. Nothing herein is
intended or shall be deemed to limit any Holder's rights under the Guarantee to
take actions without the consent of the undersigned.
Dated as of November 21, 1996
BLACK BOX CORPORATION
By: /s/ FREDERICK C. YOUNG
---------------------------
Name: Frederick C. Young
Title: Vice President
<PAGE> 9
EXHIBIT A
FORM OF THIRD LICENSE AGREEMENT AMENDMENT
(See Attached)
<PAGE> 10
EXHIBIT B
FORM OF FOURTH AMENDMENT TO CREDIT AGREEMENT
(See Attached)
<PAGE> 1
Exhibit 10.3
AMENDMENT TO GUARANTEE AGREEMENT
THIS AMENDMENT TO GUARANTEE AGREEMENT (this "AMENDMENT"),
dated as of this 21st day of November, 1996, is entered into by and among BLACK
BOX CORPORATION, a Delaware corporation (formerly known as MB Communications,
Inc.; the "GUARANTOR") and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
("PRUDENTIAL"), THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
("EQUITABLE"), EQUITABLE VARIABLE LIFE INSURANCE COMPANY ("EQUITABLE/V") and
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, ("MASSMUTUAL," and together with
Prudential, Equitable and Equitable/V, the "NOTEHOLDERS").
W I T N E S S E T H :
WHEREAS, Black Box Corporation of Pennsylvania, a Delaware
corporation (formerly known as Black Box Corporation; the "COMPANY"), pursuant
to those certain separate Note Agreements, each dated as of May 6, 1994 (as
such agreements are amended, supplemented or otherwise modified, the "NOTE
AGREEMENTS"), issued and sold to the purchasers named therein $40,000,000 in
aggregate principal amount of its 8.81% Senior Notes due May 6, 1999 (the
"NOTES");
WHEREAS, the proceeds of the Notes were loaned to the
Guarantor to enable the Guarantor to repay certain indebtedness of the
Guarantor;
WHEREAS, to secure the repayment of the Notes, the Guarantor
entered into that certain Guarantee Agreement, dated as of May 6, 1994, in
favor of and for the benefit each of the holder of any Notes (the "GUARANTEE");
WHEREAS, in connection with the organization by the Guarantor
of BBox Holding Company, a Delaware corporation and Wholly-Owned Subsidiary of
the Guarantor (the "HOLDING COMPANY GUARANTOR") and the contribution by the
Guarantor to the Holding Company Guarantor of 100% of the outstanding capital
stock of the Company (the "RESTRUCTURING"), the Guarantor has requested, and
the Noteholders have agreed to consent to, certain modifications of the
Guarantee pursuant to Section 6.1 thereof; and
WHEREAS, in connection with the Restructuring, the Company
and the Noteholders are entering into that certain Second Modification of Note
Purchase Agreements, dated as of November 21, 1996 (the "SECOND MODIFICATION");
and
WHEREAS, the Guarantee provides that it may be amended (other
than to make certain types of modifications not requested by the Guarantor)
with the consent of not less than two-thirds in aggregate principal amount of
the Notes at any time outstanding under the Note Agreements; and
WHEREAS, Prudential, Equitable, Equitable/V and MassMutual
are, on the date hereof, the holders of 100% of the aggregate principal amount
of the Notes outstanding under the Agreements; and
WHEREAS, as a condition precedent to the effectiveness of the
Second Modification, the Noteholders have requested, among other things, that
the Guarantor execute and deliver this Amendment for the benefit of the Company
and the Noteholders; and
<PAGE> 2
NOW THEREFORE, for value received, to satisfy one of the
conditions precedent to the effectiveness of the Second Modification, to induce
the Noteholders to enter into the Second Modification, to induce any Transferee
to accept the transfer of all or any part of any Note, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor agrees as follows:
1. DEFINITIONS. Unless the context otherwise requires,
capitalized terms used and not otherwise defined in this Amendment shall have
the meanings assigned to them in the Guarantee.
2. AMENDMENTS TO GUARANTEE AGREEMENT.
The Guarantor and the Noteholders agree to the following
Amendments:
(a) Section 1.1 of the Guarantee is amended to add the
following definitions thereto:
"HOLDING COMPANY GUARANTOR" shall mean BBox Holding Company,
a Delaware corporation.
"HOLDING COMPANY GUARANTEE AGREEMENT" shall mean that certain
Guarantee Agreement dated as of November 21, 1996, made by the Holding Company
Guarantor in favor of the Noteholders, as amended, modified or supplemented
from time to time.
(b) The definition of "Consolidated Net Income Available for
Stock Payments" in Section 1.1 of the Guarantee is amended in its entirety to
read as follows:
"CONSOLIDATED NET INCOME AVAILABLE FOR STOCK PAYMENTS " shall
mean, with respect to any fiscal year, (i) 50% of Adjusted Consolidated Net
Income for the immediately preceding fiscal year if the Guarantor had positive
Adjusted Consolidated Net Income in such immediately preceding fiscal year, or
(ii) zero if the Guarantor had negative Adjusted Consolidated Net Income in
such immediately preceding fiscal year.
(c) Section 3.11 of the Guarantee is amended in its entirety
to read as follows:
SECTION 3.11 CONSOLIDATED TAX RETURN. The Guarantor covenants
that it will not, and will not suffer any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return with any Person
other than the Company, the Guarantor, the Holding Company Guarantor and their
respective Subsidiaries.
(d) Section 4.1 of the Guarantee is amended in its entirety
to read as follows:
SECTION 4.1 CONSOLIDATED NET WORTH. The Guarantor will not
permit the Consolidated Net Worth of the Guarantor at any time to be less than
$60,000,000; provided, that such amount shall be increased on the last day of
each fiscal year of the Guarantor, beginning with the fiscal year ending March
31, 1997, by an amount equal to 50% of the Guarantor's Consolidated Net Income
for such fiscal year, provided, further, that such amount shall not be
decreased as the result of any loss.
- 2 -
<PAGE> 3
(e) Section 4.2 of the Guarantee is amended in its entirety
to read as follows:
SECTION 4.2 CASH FLOW OF THE GUARANTOR. The Guarantor will
not permit, as of the last date of each fiscal quarter, the ratio of (a)
Consolidated Net Income of the Guarantor and its consolidated Subsidiaries plus
the amortization expense of the Guarantor and its consolidated Subsidiaries
related to intangible assets for the four (4) most recently completed fiscal
quarters to (b) the aggregate Indebtedness of the Guarantor and its
consolidated Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles, to be less than .25 to 1.
(f) Section 4.3 of the Guarantee is amended in its entirety
to read as follows:
SECTION 4.3 INDEBTEDNESS TO TOTAL CAPITALIZATION. The
Guarantor will not permit the ratio of Indebtedness of the Guarantor and its
Subsidiaries to Adjusted Total Capitalization to be greater than (a) 60% during
the period from April 1, 1996, through March 31, 1997, and (b) 55% from and
after April 1, 1997.
(g) Section 4.5 of the Guarantee is amended to add the
following new clauses (ii) and clause (iii) thereto immediately following
clause (i) and to renumber clauses (ii) and (iii) thereto as clauses (iv) and
(v):
(ii) subject to Section 4.18, the Bank Credit Agreement;
(iii) the Holding Company Guarantee Agreement;
(h) Section 4.8 of the Guarantee is amended in its entirety
to read as follows:
SECTION 4.8 CAPITAL EXPENDITURES. The Guarantor will not, and
will not permit any Subsidiary of the Guarantor to, make any Capital
Expenditures on or after the date hereof, except for Capital Expenditures not
in excess of $3,500,000 in the aggregate by the Guarantor and its Subsidiaries
in any fiscal year and subject to compliance, to the extent applicable, with
the additional restrictions contained in paragraph 6 of the Note Agreements.
(i) Clause (ii)(a) of Section 4.9 of the Guarantee is amended
in its entirety to read as follows:
a) subject, to the extent applicable, to compliance with
paragraph 6 of the Note Agreements, transfers of property between Wholly-Owned
Subsidiaries of the Guarantor and from Subsidiaries of the Guarantor to the
Guarantor or Wholly-Owned Subsidiaries of the Guarantor and the transfer of all
of the capital stock of the Company from the Guarantor to the Holding Company
Guarantor; and
(j) Section 4.17 of the Guarantee is amended in its entirety
to read as follows:
SECTION 4.17 STOCK PAYMENTS. The Guarantor covenants that it
will not, and will not permit any of its Subsidiaries to, make, directly or
indirectly, any Stock Payment unless (a) no Default or Event of Default exists
or would result therefrom or (b) immediately after giving effect to such
proposed Stock Payment, the aggregate amount of all Stock Payments for any
fiscal
- 3 -
<PAGE> 4
year, beginning with the fiscal year ending March 31, 1997, would not
exceed Consolidated Net Income Available for Stock Payments for such fiscal
year.
2. SCHEDULES AND EXHIBITS. Schedules 5.1-1 and 5.1-2 to the
Guarantee Agreement are hereby replaced by Schedules 5.1-1 and 5.1-2 attached
to this Amendment.
3. INDUCING REPRESENTATIONS AND WARRANTIES. The Guarantor
represents and warrants to each Noteholder as follows:
(a) This Amendment and the consent of the Guarantor to the
Modification to Note Purchase Agreements dated as of November 21, 1996 between
the Company and the Noteholders (the "CONSENT") and the consent of the
Guarantor to the Second Modification (the "SECOND CONSENT") have each been duly
authorized by all necessary corporate action on the part of the Guarantor. Each
of this Amendment, the Consent and the Second Consent, when executed and
delivered by the Guarantor will constitute, the legal, valid and binding
obligations of the Guarantor enforceable against the Guarantor in accordance
with its respective terms, except as such enforceability may be limited by (i)
bankruptcy, insolvency or other similar laws affecting creditors' rights
generally and (ii) general principles of equity, (regardless of whether such
enforceability is considered in a proceeding in equity or at law). No further
consent of any other Person is required for the execution, delivery and
performance of this Amendment and the Consent.
(b) The execution, delivery and performance by the Guarantor
of this Amendment, the Consent and the Second Consent will not (i) contravene,
result in any breach of, or constitute a default under, or result in the
creation of any Lien in respect of any property of the Guarantor or any
Subsidiary under, any indenture, mortgage, deed of trust, bank loan or credit
agreement, corporate charter or by-laws, or any other agreement or instrument
to which the Guarantor or any Subsidiary is bound or by which the Guarantor or
any Subsidiary or any of their respective properties may be bound or affected,
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of any order, judgment, decree, or ruling of any court, arbitrator
or Governmental Authority applicable to the Guarantor or any Subsidiary or
(iii) violate any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Guarantor or any Subsidiary.
(c) No consent, approval or authorization of, or
registration, filing or declaration with any Governmental Authority is required
in connection with the execution, delivery or performance by the Guarantor of
this Amendment or the Consent.
4. This Amendment shall become effective when and only when
each of the conditions in paragraph 4 of the Second Modification has been
satisfied.
5. This Amendment shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the laws
of the State of New York.
6. This Amendment may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one instrument.
7. Except as specifically amended by this Agreement, the
Guarantee shall remain in full force and effect and is hereby ratified and
confirmed in all respects.
- 4 -
<PAGE> 5
IN WITNESS WHEREOF, this Amendment has been duly executed by
the Guarantor as of the date first above written.
BLACK BOX CORPORATION
By: /s/ FREDERICK C. YOUNG
------------------------
Title: Vice President
<PAGE> 6
ACKNOWLEDGMENT OF CORPORATION
COMMONWEALTH OF PENNSYLVANIA )
) SS.
COUNTY OF ALLEGHENY )
The foregoing instrument was acknowledged before me this 20th
day of November, 1996, by Frederick C. Young, the Secretary of Black Box
Corporation on behalf of the corporation.
/s/ JUDITH D. BUNTING
- ------------------------
Notary Public
My commission expires:
<PAGE> 7
Acknowledged and agreed to in Newark, New Jersey as of this 21ST day
of November, 1996:
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By: /s/ KEVIN J. KRASKA
------------------------
Title: VICE PRESIDENT
<PAGE> 8
Acknowledged and agreed to in New York, New York, as of this 18TH day
of November, 1996:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
By: /s/ JOEL SEREBRANSKY
---------------------------
Title: INVESTMENT OFFICER
<PAGE> 9
Acknowledged and agreed to in New York, New York, as of this 18TH day
of November, 1996:
EQUITABLE VARIABLE LIFE INSURANCE
COMPANY
By: /s/ JOEL SEREBRANSKY
----------------------------
Title: INVESTMENT OFFICER
<PAGE> 10
Acknowledged and AGREED TO IN SPRINGFIELD, MASSACHUSETTS, AS OF THIS
21ST NOVEMBER, 1996:
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
BY: /s/ MARK A. AHMED
--------------------------
TITLE: MANAGING DIRECTOR
<PAGE> 11
SCHEDULE 5.1-1
SUBSIDIARIES
(See Attached)
<PAGE> 12
SCHEDULE 5.1-2
PARTNERSHIP AND JOINT VENTURE INTERESTS
(See Attached)
<PAGE> 1
Exhibit 10.4
SECOND MODIFICATION OF
NOTE PURCHASE AGREEMENTS
THIS SECOND MODIFICATION OF NOTE PURCHASE AGREEMENTS (this
"SECOND MODIFICATION"), dated as of November 21, 1996, is entered into by and
among BLACK BOX CORPORATION OF PENNSYLVANIA (formerly known as Black Box
Corporation; the "COMPANY") and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
("PRUDENTIAL"), THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
("EQUITABLE") and EQUITABLE VARIABLE LIFE INSURANCE COMPANY ("EQUITABLE/V") and
MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY ("MASSMUTUAL" and, together with
Prudential, Equitable and Equitable/V, the "NOTEHOLDERS").
W I T N E S S E T H :
WHEREAS, the Company and Prudential, Equitable, Equitable/V
and MassMutual are parties to those certain separate Note Purchase Agreements,
each dated as of May 6, 1994 (the "AGREEMENTS");
WHEREAS, the Company and Prudential, Equitable, Equitable/V
and MassMutual entered into that certain Modification of Note Purchase
Agreements, dated as of November 21, 1996 (the "MODIFICATION");
WHEREAS, in connection with the organization by Black Box
Corporation, a Delaware corporation (formerly known as MB Communications, Inc.;
the "GUARANTOR") of BBox Holding Company, a Delaware corporation and
Wholly-Owned Subsidiary of the Guarantor (the "HOLDING COMPANY GUARANTOR") and
the contribution by the Guarantor to the Holding Company Guarantor of 100% of
the outstanding capital stock of the Company (the "RESTRUCTURING"), the Company
has requested and the Noteholders have agreed to consent to certain
modifications of the Agreements pursuant to paragraph 11C thereof;
WHEREAS, each of the Agreements provides that it may be
amended (other than to make certain types of modifications not requested by the
Company) with the consent of the holders of not less than two-thirds in
aggregate principal amount of the Notes at any time outstanding under the
Agreements;
WHEREAS, Prudential, Equitable, Equitable/V and MassMutual
are, on the date hereof, the holders of 100% of the aggregate principal amount
of the Notes outstanding under the Agreements; and
NOW THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Noteholders hereby agree as follows:
<PAGE> 2
1. DEFINITIONS. Unless the context otherwise requires,
capitalized terms used and not otherwise defined in this Second Modification
shall have the meanings assigned to them in the Agreements.
2. MODIFICATIONS TO NOTE PURCHASE AGREEMENTS. The Company and
the Noteholders agree to the following modifications:
(a) Paragraph 5F of each of the Agreements is amended in its
entirety to read as follows:
5F. GOVERNMENTAL APPROVALS AND FILINGS. The Company covenants
that it will, and will cause each of its Subsidiaries to, keep and maintain in
full force and effect all Governmental Actions necessary or advisable in
connection with execution and delivery of this Agreement by the Company, the
Guarantee Agreement by the Guarantor and the Holding Company Guarantee Agreement
by the Holding Company Guarantor, consummation by the Company, the Guarantor and
the Holding Company Guarantor of the transactions herein or therein
contemplated, performance of or compliance with the terms and conditions hereof
or thereof by the Company, the Guarantor and the Holding Company Guarantor or to
ensure the legality, validity, binding effect, enforceability or admissibility
in evidence hereof or thereof.
(b) Paragraph 5K of each of the Agreements is amended in its
entirety to read as follows:
5K. CONSOLIDATED TAX RETURN. The Company covenants that it
will not, and will not suffer any of its Subsidiaries to, file or consent to
the filing of any consolidated income tax return with any Person other than the
Guarantor, the Holding Company Guarantor, the Company and their respective
Subsidiaries.
(c) Paragraph 6B of each of the Agreements is amended in its
entirety to read as follows:
6B. CASH FLOW OF THE GUARANTOR. As of the last day of each
fiscal quarter, the ratio of (a) the Consolidated Net Income of the Guarantor
and its consolidated Subsidiaries, plus the amortization expense related to
intangible assets of the Guarantor, the Holding Company Guarantor and the
Company and its consolidated Subsidiaries for the four (4) most recently
completed fiscal quarters to (b) the aggregate Indebtedness of the Company and
its consolidated Subsidiaries determined in accordance with generally accepted
accounting principles shall not be less than .25 to 1.
(d) Paragraph 6E of each of the Agreements is amended by
adding the following clause (vii) immediately following clause (vi) and
immediately prior to the last paragraph of the same paragraph 6E:
(vii) Indebtedness for borrowed money in the form of a note
or notes payable by the Company to the order of the Holding Company Guarantor
issued to evidence a Stock Payment made to the Holding Company Guarantor to the
extent permitted by paragraph 6H or evidencing a payment of interest with
respect to any such note or notes, which note or notes (i) shall be in
substantially the form
- 2 -
<PAGE> 3
attached hereto as EXHIBIT I or otherwise in form and substance satisfactory to
the Noteholders and the Company, the Noteholders hereby agreeing that any such
note or notes may have a stated term of seven (7) years, but be payable on
demand and require the payment of interest on an annual basis, and (ii) shall
be subordinated to the Notes on the terms identified in EXHIBIT G attached
hereto;
(e) Clause (iv) of paragraph 6G of each of the Agreements is
amended in its entirety to read as follows:
(iv) Loans or advances to the Guarantor for the purposes of
paying reasonable administrative costs and salaries of the Guarantor's
employees, paying taxes and paying expenses incurred in the ordinary course of
business or loans or advances to the Holding Company Guarantor for the purposes
of paying reasonable administrative costs and salaries of the Holding Company
Guarantor's employees, paying taxes and paying expenses incurred in the
ordinary course of business; provided, that no loan or advance pursuant to this
clause (iv) may be made (a) at any time when a Default or Event of Default
exists or would occur after giving effect to such loan or advance or (b) if,
after giving effect to such loan or advance, the aggregate amount of loans or
advances made during any fiscal year of the Company, together with any Stock
Payments made pursuant to paragraph 6H(i) during such fiscal year, would exceed
$1,500,000;
(f) Paragraph 6H of each of the Agreements is amended in its
entirety to read as follows:
6H. DIVIDENDS AND RELATED DISTRIBUTIONS. The Company will
not, and will not permit any of its Subsidiaries to, declare or make any Stock
Payment, except as follows:
(i) Stock Payments to the Holding Company Guarantor, for the
purposes of making Stock Payments to the Guarantor for the purposes of paying
reasonable administrative costs and salaries of the Guarantor's employees,
paying taxes and paying expenses incurred in the ordinary course of business or
Stock Payments to the Holding Company Guarantor for the purposes of paying
reasonable administrative costs and salaries of the Holding Company Guarantor's
employees, paying taxes and paying expenses incurred in the ordinary course of
business; provided, that no Stock Payment pursuant to this clause (i) may be
made (a) at any time when a Default or Event of Default exists or would occur
after giving effect to such Stock Payment or (b) if, after giving effect to
such Stock Payment, the aggregate amount of Stock Payments made during any
fiscal year of the Company, together with any loans and advances made pursuant
to paragraph 6G(iv) during such fiscal year, would exceed $1,500,000;
(ii) Stock Payments to the Holding Company Guarantor for the
purposes of making Stock Payments to the Guarantor for the purposes of making
Stock Payments to the extent permitted by Section 4.17 of the Guarantee
Agreement; provided, that no Stock Payment pursuant to this clause (ii) may be
made at any time when a Default or Event of Default exists or would occur after
giving effect to such Stock Payment;
(iii) Stock Payments to the Holding Company Guarantor so long
as the proceeds thereof shall be loaned to the Company as permitted by
paragraph 6E hereof; and
- 3 -
<PAGE> 4
(iv) A Subsidiary of the Company may declare and make Stock
Payments if all of the capital stock of such Subsidiary is owned by the Company
or by a direct or indirect Wholly-Owned Subsidiary of the Company.
(g) Paragraph 6M of each of the Agreements is amended in its
entirety to read as follows:
6M. CAPITAL EXPENDITURES. The Company will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures on or after
the date hereof, except for Capital Expenditures not in excess of $3,500,000 in
the aggregate by the Guarantor, the Holding Company Guarantor and their
respective Subsidiaries in any fiscal year of the Company.
(h) Paragraph 7A of each of the Agreements is amended in its
entirety to read as follows:
7A. ACCELERATION. If any of the following events shall occur
and be continuing for any reason whatsoever (and whether such occurrence shall
be voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(i) the Company defaults in (x) the payment of any principal
of, interest on or Yield-Maintenance Amount payable with respect to any Note
when the same shall become due, either by the terms thereof or otherwise as
herein provided or (y) in the performance of its obligation to prepay any Note
as provided in paragraph 4F; or
(ii) the occurrence of an "EVENT OF DEFAULT" under, and as
defined in, the Bank Credit Agreement; or
(iii) any representation or warranty made or deemed made by
the Company herein, by the Guarantor under the Guarantee Agreement, or by the
Holding Company under the Holding Company Guarantee Agreement, or any statement
made by the Company, the Guarantor, the Holding Company Guarantor, or any
Subsidiary of the Company, the Guarantor or the Holding Company Guarantor in
any financial statement, certificate, report, exhibit, document or other
writing furnished by the Company, the Guarantor, the Holding Company Guarantor
or any Subsidiary of the Company, the Guarantor or the Holding Company
Guarantor to the holder of a Note pursuant to or in connection with this
Agreement, the Guarantee Agreement or the Holding Company Guarantee Agreement
shall prove to have been false or misleading in any material respect as of the
time when made or deemed made (including by omission of material information
necessary to make such representation, warranty or statement not misleading);
or
(iv) the Guarantor, the Holding Company Guarantor or any of
their respective Subsidiaries defaults (whether as primary obligor or as
guarantor or other surety) in any payment of principal of or interest on any
other obligation for money borrowed (or any Capitalized Lease Obligation, any
obligation under a conditional sale or other title retention agreement,
obligation issued or assumed as full or partial payment for property whether or
not secured by a purchase money mortgage or an obligation under notes payable
or drafts accepted representing extensions of credit) beyond any period of
- 4 -
<PAGE> 5
grace provided with respect thereto, or the Guarantor, the Holding Company
Guarantor or any of their respective Subsidiaries fails to perform or observe
any other agreement, term or condition contained in any agreement under which
any such obligation is created (or if any other event thereunder or under any
such agreement shall occur and be continuing) and the effect of such failure or
other event is to cause, or to permit the holder or holders of such obligation
(or a trustee on behalf of such holder or holders) to cause, such obligation to
become due (or to be repurchased by the Guarantor, the Holding Company
Guarantor or any of their respective Subsidiaries) prior to any stated
maturity, provided that the aggregate amount of all obligations as to which a
payment default shall occur and be continuing or such a failure or other event
causing or permitting acceleration (or resale to the Guarantor, the Holding
Company Guarantor or any of their respective Subsidiaries) shall occur and be
continuing exceeds $100,000; or
(v) the Company fails to perform or observe any agreement
contained in paragraph 5E, 5O, 5Q or 6, the Guarantor fails to perform or
observe any agreement contained in Section 3.5, 3.15 or 3.16 or Article IV of
the Guarantee Agreement or the Holding Company Guarantor fails to perform or
observe any agreement contained in Section 3.5 or Article IV of the Holding
Company Guarantee Agreement; or
(vi) the Company, the Guarantor or the Holding Company
Guarantor fails to perform or observe any other agreement, term or condition
contained herein, in the Guarantee Agreement or in the Holding Company
Guarantee Agreement and such failure shall not be remedied within 30 days after
the earlier of any Responsible Officer obtaining actual knowledge or receiving
written notice from any holder of Notes of such failure; or
(vii) the Guarantor, the Holding Company Guarantor or any of
their respective Subsidiaries makes an assignment for the benefit of creditors
or is generally not paying its debts as such debts become due; or
(viii) any decree or order for relief in respect of the
Guarantor, the Holding Company Guarantor or any of their respective
Subsidiaries is entered under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law, whether now or hereafter in effect (herein called the "BANKRUPTCY
LAW"), of any jurisdiction; or
(ix) the Guarantor, the Holding Company Guarantor or any of
their respective Subsidiaries petitions or applies to any tribunal for, or
consents to, the appointment of, or taking possession by, a trustee, receiver,
custodian, liquidator or similar official of the Guarantor, the Holding Company
Guarantor or any of their respective Subsidiaries, or of any substantial part
of the assets of the Guarantor, the Holding Company Guarantor or any of their
respective Subsidiaries, or commences a voluntary case under the Bankruptcy Law
of the United States or any proceedings (other than proceedings for the
voluntary liquidation and dissolution of a Subsidiary of the Guarantor or a
Subsidiary of the Holding Company Guarantor permitted by paragraph 6J hereof or
Section 4.10 of the Guarantee Agreement) relating to the Guarantor, the Holding
Company Guarantor or any of their respective Subsidiaries under the Bankruptcy
Law of any other jurisdiction; or
- 5 -
<PAGE> 6
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Guarantor, the Holding Company Guarantor
or any of their respective Subsidiaries and the Guarantor, the Holding Company
Guarantor or such Subsidiary by any act indicates its approval thereof, consent
thereto or acquiescence therein, or an order, judgment or decree is entered
appointing any such trustee, receiver, custodian, liquidator or similar
official, or approving the petition in any such proceedings, and such order,
judgment or decree remains unstayed and in effect for more than 30 days; or
(xi) any order, judgment or decree is entered in any
proceedings against the Guarantor, the Holding Company Guarantor or the Company
decreeing the dissolution of the Guarantor, the Holding Company Guarantor or
the Company and such order, judgment or decree remains unstayed and in effect
for more than 30 days; or
(xii) any order, judgment or decree is entered in any
proceedings against the Guarantor, the Holding Company Guarantor or any of
their respective Subsidiaries decreeing a split-up of the Guarantor, the
Holding Company Guarantor or such Subsidiary which requires the divestiture of
assets representing a substantial part, or the divestiture of the stock of the
Company or a Subsidiary whose assets represent a substantial part, of the
consolidated assets of the Guarantor, the Holding Company Guarantor, and their
respective Subsidiaries (determined in accordance with generally accepted
accounting principles) or which requires the divestiture of assets, or stock of
the Company or a Subsidiary of the Company, which shall have contributed a
substantial part of the Consolidated Net Income of the Guarantor, the Holding
Company Guarantor and their respective Subsidiaries for any of the three fiscal
years then most recently ended, and such order, judgment or decree remains
unstayed and in effect for more than 30 days; or
(xiii) the Guarantee Agreement, the Holding Company Guarantee
Agreement or any provision thereof shall cease to be in full force and effect,
or the Guarantor shall deny or disaffirm its obligations under the Guarantee
Agreement or the Holding Company Guarantor shall deny or disaffirm its
obligation under the Holding Company Guarantee Agreement; or
(xiv) the Guarantor shall cease to own 100% of the
outstanding Capital Stock of the Holding Company Guarantor or the Holding
Company Guarantor shall cease to own 100% of the outstanding capital stock of
the Company; or
(xv) one or more judgments for the payment of money shall
have been entered against the Company, the Guarantor, the Holding Company
Guarantor or any Subsidiary of the Company, the Guarantor or the Holding
Company Guarantor, which judgment or judgments exceed $250,000 in the
aggregate, and such judgment or judgments shall have remained undischarged and
unstayed for a period of 30 consecutive days; or
(xvi) any one or more Pension-Related Events referred to in
subsection (a)(ii), (b) or (e) of the definition of "PENSION-RELATED EVENTS"
shall have occurred; or any one or more other Pension-Related Events shall have
occurred and the Required Holder(s) shall determine in good faith (which
determination shall be conclusive) that such other Pension-Related Events,
individually or in the aggregate, could have a Material Adverse Effect; or
- 6 -
<PAGE> 7
(xvii) the expiration or earlier termination of the BB Tech
License Agreement;
then (a) if such event is an Event of Default specified in
clause (i) of this paragraph 7A, the holder of any Note (other than the Company
or any of its Subsidiaries or Affiliates) may at its option, by notice in
writing to the Company, declare such Note to be, and such Note shall thereupon
be and become, immediately due and payable at par together with interest
accrued thereon, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Company, (b) if such event is an
Event of Default specified in clause (viii), (ix) or (x) of this paragraph 7A
with respect to the Company, the Guarantor or the Holding Company Guarantor,
all of the Notes at the time outstanding shall automatically become immediately
due and payable at par together with interest accrued thereon, without
presentment, demand, protest or notice of any kind, all of which are hereby
waived by the Company, and (c) if such event is not an Event of Default
specified in clause (viii), (ix) or (x) of this paragraph 7A with respect to
the Company, the Guarantor or the Holding Company Guarantor, the Required
Holder(s) may at its or their option, by notice in writing to the Company,
declare all of the Notes to be, and all of the Notes shall thereupon be and
become, immediately due and payable together with interest accrued thereon and
together with the Yield-Maintenance Amount, if any, with respect to each Note,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company.
(i) Paragraph 10B of each of the Agreements is amended to add
the following definitions thereto:
"HOLDING COMPANY GUARANTOR" shall mean BBox Holding Company,
a Delaware corporation.
"HOLDING COMPANY GUARANTEE AGREEMENT" shall mean that certain
Guarantee Agreement dated as of November 21, 1996, made by the Holding Company
Guarantor in favor of the Noteholders, as amended, modified or supplemented
from time to time.
(j) The following definition in paragraph 10B of each of the
Agreements are amended in its entirety to read as follows:
"BANK CREDIT AGREEMENT" shall mean, collectively, the Credit
Agreement, dated as of May 6, 1994, between the Bank and the Company as amended
by that certain First Amendment to Credit Agreement, dated as of March 30,
1995, by that certain Second Amendment to Credit Agreement, dated as of August
1, 1995, by that certain Third Amendment to Credit Agreement, dated as of April
1, 1996, by that certain Fourth Amendment to Credit Agreement dated as of
November 21, 1996, and by that certain Fifth Amendment to Credit Agreement,
dated as of November 21, 1996, and any and all documents delivered in
connection therewith, including, without limitation the Guaranty and Suretyship
Agreement, dated as of May 6, 1994, by the Guarantor in favor of the Bank, as
amended by that certain First Amendment to Guaranty and Suretyship Agreement,
dated as of March 30, 1995, and that certain Second Amendment to Guaranty and
Suretyship Agreement, dated as of November 21, 1996, and that certain Guaranty
and Suretyship Agreement, dated as of November 21, 1996, by the Holding Company
Guarantor in favor of the Bank.
- 7 -
<PAGE> 8
(k) New EXHIBIT I is added to each of the Agreements in the
form attached to this Second Modification as EXHIBIT I.
3. CONSENT TO BANK CREDIT AGREEMENT AMENDMENT. Pursuant to
Section 4.18 of the Guarantee Agreement, the Noteholders consent to the Fifth
Amendment to Credit Agreement, dated as of November 21, 1996, between the Bank
and the Company substantially in the form attached to this Modification as
EXHIBIT A (the "FIFTH AMENDMENT").
4. INDUCING REPRESENTATIONS AND WARRANTIES. The Company
represents and warrants to each Noteholder as follows:
(a) This Second Modification and the Restructuring have each
been duly authorized by all necessary corporate action on the part of the
Company. This Second Modification, when executed and delivered by the Company
will constitute, the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) bankruptcy, insolvency or other similar
laws affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law). Except for the consent of the Bank, which has been
delivered contemporaneously herewith, no further consent of any other Person is
required for the execution, delivery and performance of this Second
Modification.
(b) The execution, delivery and performance by the Company of
this Second Modification and the consummation by the Company of the
Restructuring will not (i) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any property
of the Company or any Subsidiary under, any indenture, mortgage, deed of trust,
bank loan or credit agreement, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective properties may
be bound or affected, including without limitation the agreements or
instruments set forth in Schedule 8G to the Agreements, (ii) conflict with or
result in a breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or Governmental Authority
applicable to the Company or any Subsidiary or (iii) violate any provision of
any statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary.
(c) No consent, approval or authorization of, or
registration, filing or declaration with any Governmental Authority is required
in connection with the execution, delivery or performance by the Company of
this Second Modification or the consummation by the Company of the
Restructuring except, in the case of the Restructuring, for any such
authorization, registration, filing or declaration which has been made or
obtained.
(d) After giving effect to each of this Second Modification
and the Restructuring, (i) no Default or Event of Default shall have occurred
and be continuing, and (ii) the Company shall deliver to each of the
Noteholders an Officer's Certificate, dated as of the Effective Date (as
defined below), to such effect.
- 8 -
<PAGE> 9
5. CONDITIONS TO EFFECTIVENESS. This Second Modification
shall become effective (the "EFFECTIVE DATE") when and only when each of the
following conditions has been satisfied:
(a) HOLDING COMPANY GUARANTEE AGREEMENT. The Holding Company
Guarantor shall have executed and delivered to the Noteholders the Holding
Company Guarantee Agreement substantially in the form of Exhibit B to this
Second Modification, and a guarantee of each of the Notes, and each of the
Holding Company Guaranty Agreement and such guaranty of the Notes shall be in
full force and effect, with no event having occurred and continuing or
conditions then existing that would constitute a default thereunder or provide
a basis for the termination thereof.
(b) AMENDMENT TO GUARANTEE AGREEMENT. The Guarantor shall
have executed and delivered to the Noteholders the Amendment to Guarantee
Agreement substantially in the form of Exhibit C attached to this Second
Modification and the Guaranty Agreement, as amended by the Amendment to
Guaranty Agreement, shall be in full force and effect, with no event having
occurred and continuing or conditions then existing that would constitute a
default thereunder or provide a basis for the termination thereof.
(c) AMENDMENTS TO BANK CREDIT AGREEMENT. The Fifth Amendment
to the Bank Credit Agreement (the "FIFTH AMENDMENT") and all other agreements
delivered in connection with the Fifth Amendment shall have been duly executed
and delivered by the parties thereto, in each case (including without
limitation all schedules and exhibits thereto) in substantially the form
attached hereto as Exhibit A, and on the date hereof the Fifth Amendment and
all such other certificates, documents and agreements shall be in full force
and effect and no default or event of default shall exist thereunder and the
Noteholders shall have received an Officer's Certificate from the Company to
that effect.
(d) CONSENT. The Noteholders shall have received from the
Bank written consent to the execution and delivery (i) by the Company of this
Second Modification, (ii) by the Guarantor of the Amendment to Guarantee
Agreement and (iii) by the Holding Company Guarantor of the Holding Company
Guarantee Agreement.
(e) CAPITALIZATION, ETC. The corporate and capital structure
of the Holding Company Guarantor, the articles of incorporation and by-laws of
the Holding Company Guarantor, and the terms, conditions, amounts and holders
of all equity, debt and other indebtedness, obligations and liabilities of the
Holding Company Guarantor, shall be satisfactory to the Noteholders.
(f) CORPORATE PROCEEDINGS. The Noteholders shall have
received the following:
(i) certificate by the Secretary or Assistant Secretary of
the Company dated as of the Effective Date as to a (a) true and correct copies
of all corporate action by the Company relating to the Second Modification and
the Restructuring and (b) the incumbency and signature of the officers of the
Company executing the Second Modification, together with satisfactory evidence
of the incumbency of such Secretary or Assistant Secretary;
- 9 -
<PAGE> 10
(ii) certificate by the Secretary or Assistant Secretary of
the Guarantor dated as of the Effective Date as to (a) true and correct copies
of all corporate action by the Guarantor relating to the Amendment to Guarantee
Agreement and the consent of the Guarantor to this Second Modification and (b)
the incumbency and signature of the officers of the Guarantor executing the
Amendment to Guarantee Agreement and the consent of the Guarantor to this
Second Modification, together with satisfactory evidence of the incumbency of
such Secretary or Assistant Secretary; and
(iii) certificate by the Secretary or Assistant Secretary of
the Holding Company Guarantor dated as of the Effective Date as to (a) true and
correct copies of the certificate of incorporation and by-laws of the Holding
Company Guarantor in effect on the date hereof, (b) true and correct copies of
all corporate action by the Holding Company Guarantor relating to the Holding
Company Guarantee Agreement, and (c) the incumbency and signature of the
officers of the Holding Company Guarantor executing the Holding Company
Guarantee Agreement, together with satisfactory evidence of the incumbency of
such Secretary or Assistant Secretary; and
(iv) certificates from the Secretary of State of the State of
Delaware dated not more than thirty (30) days before the Effective Date showing
the good standing of each of the Company, the Guarantor and Holding Company
Guarantor in the State of Delaware.
(g) OPINION OF COUNSEL TO THE COMPANY, THE GUARANTOR AND THE
HOLDING COMPANY GUARANTOR. The Noteholders shall have received from Buchanan
Ingersoll Professional Corporation, special counsel for Company, the Guarantor
and the Holding Company Guarantor, opinions addressed to the Noteholders, dated
the Effective Date, satisfactory to the Noteholders and substantially in the
form of Exhibits D-1, D-2 and D-3, respectively, attached to this Second
Modification, and the Company, by its execution of this Second Modification,
authorizes and directs such counsel to render such opinions to Noteholders.
(h) REPRESENTATIONS AND WARRANTIES TRUE AND CORRECT. The
representations and warranties of each of the Company, the Guarantor and the
Holding Company Guarantor made in this Second Modification, in the Amendment to
Guarantee Agreement and the Holding Company Guarantee Agreement, respectively,
shall be true and correct in all material respects on and as of the Effective
Date and the Noteholders shall have received an Officer's Certificate from each
of the Company, the Guarantor and the Holding Company Guarantor to that effect
and, in the case of the Company, covering the matters described in Section 4(d)
of this Second Modification.
(i) FEES AND EXPENSES. The Company shall have paid (a) the
fees and expenses of Schiff Hardin & Waite, special counsel to the Noteholders
and (b) any expenses of the Noteholders, including, without limitation fees,
expenses and disbursements of counsel, in connection with this Second
Modification, in each case as required under Section 11B of each of the
Agreements.
6. NO OTHER AMENDMENTS. Except as otherwise expressly
amended above, the Agreements shall remain in full force and effect and are
hereby ratified and confirmed.
- 10 -
<PAGE> 11
IN WITNESS WHEREOF, the parties have caused this Second
Modification of Note Purchase Agreements to be duly executed and delivered by
their proper and duly authorized officers, as of the day and year first above
written.
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By: /s/ KEVIN J. KRASKA
-----------------------
Name: Kevin J. Kraska
Title: Vice President
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
By: /s/ JOEL SEREBRANSKY
-----------------------
Name: Joel Serebransky
Title: Investment Officer
EQUITABLE VARIABLE LIFE INSURANCE
COMPANY
By: /s/ JOEL SEREBRANSKY
-----------------------
Name: Joel Serebransky
Title: Investment Officer
<PAGE> 12
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By: /s/ MARK A. AHMED
-----------------------------
Name: Mark A. Ahmed
Title: Managing Director
BLACK BOX CORPORATION OF PENNSYLVANIA
By: /s/ FREDERICK C. YOUNG
-----------------------------
Name: Frederick C. Young
Title: Vice President
<PAGE> 13
CONSENT OF GUARANTOR
BLACK BOX CORPORATION, a Delaware corporation (formerly known
as MB Communications, Inc.), is the Guarantor under that certain Guarantee
Agreement (the "GUARANTEE"), dated as of May 6, 1994, as amended, made by the
Guarantor in favor of each holder of any Notes (the "HOLDERS"), and as such
hereby consents to that certain Modification of Note Purchase Agreements dated
as of November 21, 1996, by and among Black Box Corporation of Pennsylvania and
The Prudential Insurance Company of America, The Equitable Life Assurance
Society of America Equitable Variable Life Insurance Company and Massachusetts
Mutual Life Insurance Company (the "SECOND MODIFICATION") and the amendments
and agreements contained therein and confirms and agrees that, notwithstanding
the Modification and the effectiveness of the amendments and agreements
contained therein, the Guarantee is, and shall continue to be, in full force
and effect and is hereby confirmed and ratified in all respects. Nothing herein
is intended or shall be deemed to limit any Holder's rights under the Guarantee
to take actions without the consent of the undersigned.
Dated as of November 21, 1996
BLACK BOX CORPORATION
By:
----------------------------
Name: Frederick C. Young
Title: Vice President
<PAGE> 14
EXHIBIT A
FORM OF FIFTH AMENDMENT TO CREDIT AGREEMENT
(See Attached)
<PAGE> 15
EXHIBIT B
FORM OF HOLDING COMPANY GUARANTY AGREEMENT
(See Attached)
<PAGE> 16
EXHIBIT C
FORM OF AMENDMENT TO GUARANTY AGREEMENT
(See Attached)
<PAGE> 17
EXHIBIT D-1
FORM OF OPINION OF COUNSEL TO THE COMPANY
(See Attached)
<PAGE> 18
EXHIBIT D-2
FORM OF OPINION OF COUNSEL TO THE GUARANTOR
(See Attached)
<PAGE> 19
EXHIBIT D-3
FORM OF OPINION OF COUNSEL TO THE HOLDING COMPANY GUARANTOR
(See Attached)
<PAGE> 20
EXHIBIT I
FORM OF DEMAND NOTE
(See Attached)
<PAGE> 1
Exhibit 10.5
- -------------------------------------------------------------------------------
BBOX HOLDING COMPANY
HOLDING COMPANY
GUARANTEE AGREEMENT
Dated as of November 21, 1996
- -------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS 1
Section 1.1 Definitions 1
Section 1.2 Other Definitions 2
ARTICLE II. THE GUARANTEE 2
Section 2.1 Holding Company Guarantee of Payment and
Performance of Obligations 2
Section 2.2 Obligations Unconditional 3
Section 2.3 Holder's Freedom to Act 5
Section 2.4 Waivers of Holding Company Guarantor; Subrogation 5
Section 2.5 Revival 6
Section 2.6 Subordination 7
Section 2.7 Bankruptcy 7
Section 2.8 Termination 7
ARTICLE III. AFFIRMATIVE COVENANTS 7
Section 3.1 Information 7
Section 3.2 Notice of Certain Events 7
Section 3.3 Insurance 8
Section 3.4 Payment of Taxes and Other Potential Charges and
Priority Claims 8
Section 3.5 Preservation of Corporate Status 9
Section 3.6 Governmental Approvals and Filings 9
Section 3.7 Maintenance of Properties 9
Section 3.8 Avoidance of Other Conflicts 9
Section 3.9 Financial Accounting Practices 10
Section 3.10 Continuation of or Change in Business 10
Section 3.11 Consolidated Tax Return 10
Section 3.12 Fiscal Year 10
Section 3.13 Inspection of Property 10
Section 3.14 Covenant to Secure Note Equally 11
ARTICLE IV. NEGATIVE COVENANTS 11
Section 4.1 Liens 11
Section 4.2 Limitation on Other Restrictions on Liens. 12
Section 4.3 Capital Expenditures 12
Section 4.4 Dividends and Related Distributions 13
ARTICLE V. REPRESENTATIONS, COVENANTS AND WARRANTIES 13
Section 5.1 Organization 13
Section 5.2 Power and Authority 14
Section 5.3 Actions Pending 14
- 1 -
<PAGE> 3
Section 5.4 Title to Properties 14
Section 5.5 Taxes 14
Section 5.6 Conflicting Agreements and Other Matters 15
Section 5.7 ERISA 15
Section 5.8 Governmental and Other Third Party Consent 16
Section 5.9 Environmental Compliance 16
Section 5.10 Regulatory Status 17
Section 5.11 Permits and Other Operating Rights 17
Section 5.12 Disclosure 17
Section 5.13 Solvency 18
ARTICLE VI. MISCELLANEOUS 18
Section 6.1 Consent to Amendments 18
Section 6.2 Survival of Representations and Warranties;
Entire Agreement 18
Section 6.3 Successors and Assigns 18
Section 6.4 Notices 19
Section 6.5 Governing Law 19
Section 6.6 Severability 19
Section 6.7 Descriptive Headings 19
Section 6.8 Counterparts 19
Section 6.9 Severability of Obligations 19
- 2 -
<PAGE> 4
HOLDING COMPANY GUARANTEE AGREEMENT
THIS HOLDING COMPANY GUARANTEE AGREEMENT (this "Holding
Company Guarantee") is entered into as of November 21, 1996, by BBox Holding
Company, a Delaware corporation (the "Holding Company Guarantor"), in favor of
and for the benefit of each holder of any Notes (the "Holders").
WHEREAS, Black Box Corporation of Pennsylvania, a Delaware
corporation (formerly known as Black Box Corporation; the "Company"), pursuant
to those certain separate Note Agreements, each dated as of May 6, 1994 (as
such agreements are amended, supplemented or otherwise modified, the "Note
Agreements"), issued and sold to the purchasers named therein $40,000,000 in
aggregate principal amount of its 8.81% Senior Notes due May 6, 1999 (the
"Notes");
WHEREAS, the proceeds of the Notes were loaned to Black Box
Corporation (formerly known as MB Communications, Inc.; the "Guarantor ") to
enable the Guarantor to repay certain indebtedness of the Guarantor;
WHEREAS, to secure the repayment of the Notes, the Guarantor
entered into that certain Guarantee Agreement, dated as of May 6, 1994, in
favor of and for the benefit each holder of any Notes;
WHEREAS, in connection with the organization by the Guarantor
of the Holding Company Guarantor, a Wholly-Owned Subsidiary of the Guarantor,
and the contribution by the Guarantor to the Holding Company Guarantor of 100%
of the outstanding capital stock of the Company (the "Restructuring"), the
Noteholders are entering into that certain Second Modification of Note Purchase
Agreements dated as of November 21, 1996 (the "Second Modification"); and
WHEREAS, as a condition precedent to the effectiveness of the
Second Modification, the Holders have requested, among other things, that the
Holding Company Guarantor execute this Holding Company Guarantee for the
benefit of the Company and the Holders.
NOW THEREFORE, for value received, to satisfy one of the
conditions precedent to the effectiveness of the Second Modification, to induce
the Holders to enter into the Second Modification, to induce any Transferee to
accept the transfer of all or any part of any Note, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Holding Company Guarantor agrees as follows:
ARTICLE I. DEFINITIONS
Section 1.1 Definitions. As used in this Holding Company
Guarantee, the following terms shall have the following meanings:
- 1 -
<PAGE> 5
"Guaranteed Obligations" shall mean (i) all of the
indebtedness, obligations, liabilities existing on the date hereof or arising
from time to time thereafter, whether 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, of
the Company to the Holders under or in respect of any one or more of the Note
Agreements or the Notes, including, without limitation, (a) the principal of
and interest and Yield Maintenance Amount, if any, on the Notes (including,
without limitation, interest accruing before, during or after any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt, liquidation or
dissolution proceeding, and, if interest ceases to accrue by operation of law
by reason of any such proceeding, interest which otherwise would have accrued
in the absence of such proceeding) and (b) all reasonable costs and reasonable
expenses, including, without limitation, all court costs and attorneys' fees
and expenses, paid or incurred in endeavoring to collect all or any part of the
Guaranteed Obligations from, or in pursuing any action against, the Company,
the Holding Company Guarantor or any other guarantor of all or any part of the
Guaranteed Obligations or in any security for the liability of the Holding
Company Guarantor or any other such guarantor and (ii) all agreements,
covenants and conditions of the Company under the Note Agreements.
"Responsible Environmental Officer" shall mean with respect
to the Holding Company Guarantor or any of its Subsidiaries, any Responsible
Officer or any other officer or employee of the Holding Company Guarantor or
such Subsidiary responsible for the administration of environmental compliance
of the administration of the handling of Environmental Concern Materials,
including, without limitation, all officers or employees holding the titles set
forth in Part 8L to the Disclosure Schedule referred to in the Note Agreements
and any Person who, regardless of title, is performing the duties of any such
officers or employees.
"Responsible Officer" shall mean the chief executive officer,
chief operating officer, chief financial officer, chief accounting officer or
general counsel of the Holding Company Guarantor or any other officer of the
Holding Company Guarantor involved principally in its financial administration
or its controllership function or, in each case, any Person who, regardless of
title, is performing the duties of any of the foregoing.
Section 1.2 Other Definitions. Capitalized terms that are
used in this Holding Company Guarantee and are not defined in this Holding
Company Guarantee shall have the meanings ascribed to them in the Note
Agreements, except that with respect to the terms "Plan" and "Controlled Group
Member" as they are defined in the Note Agreements, each reference to "Company"
in such definitions shall be a reference to the "Holding Company Guarantor" for
purposes herein. Unless the context of this Holding Company Guarantee otherwise
clearly requires, references to the plural include the singular, the singular
include the plural and "or" has the inclusive meaning represented by the phrase
"and/or."
- 2 -
<PAGE> 6
ARTICLE II. THE GUARANTEE
A. Holding Company Guarantee of Payment and Performance of
Obligations. The Holding Company Guarantor unconditionally and irrevocably
guarantees the full and prompt payment and performance of the Guaranteed
Obligations as and when such payment or performance shall become due (at
scheduled maturity, a stated prepayment date or earlier by reason of
acceleration or otherwise) in accordance with the terms of the Note Agreements.
This Holding Company Guarantee is an agreement of suretyship as well as of
guaranty, is a guarantee of payment and performance and not merely of
collectibility, and is in no way conditioned upon any attempt to collect from or
proceed against the Company or any other Person or any other event or
circumstance. The obligations of the Holding Company Guarantor under this
Holding Company Guarantee are direct and primary obligations of the Holding
Company Guarantor and are independent of the Guaranteed Obligations, and a
separate action or actions may be brought against the Holding Company Guarantor
regardless of whether action is brought against the Company or any other Person
or whether the Company or any other Person is joined in any such action or
actions.
B. Obligations Unconditional. The Holding Company Guarantor
hereby agrees that the obligations of the Holding Company Guarantor under this
Holding Company Guarantee shall be continuing, absolute and unconditional,
irrespective of:
(i) any lack of genuineness, legalism, validity,
enforceability or allowability (in bankruptcy, insolvency,
reorganization or similar proceeding, or otherwise) of the Guaranteed
Obligations or the Note Agreements or any part thereof;
(ii) the absence of any attempt to collect the Guaranteed
Obligations from the Company or any other guarantor of all or any part
of the Guaranteed Obligations, any failure to assert any breach of or
default under any of the Note Agreements or the Guaranteed
Obligations, or any other failure, omission, breach, default, delay or
wrongful action in connection with any exercise or non-exercise, of
any right or remedy against the Company or any other Person under or
in connection with any of the Note Agreements or any of the Guaranteed
Obligations;
(iii) any refusal of payment or performance of any of the
Guaranteed Obligations, whether or not with any reservation of rights
against the Holding Company Guarantor;
(iv) any taking, exchange, amendment, modification,
supplement, termination, subordination, release, loss or impairment
of, or any failure to protect, perfect, or preserve the value of, or
any enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or any failure, omission,
breach, default, delay or wrongful action by any of the Holders or any
other Person in connection with the enforcement of, realization upon,
or exercise of rights or remedies under or in connection with, or any
other action or inaction by any of the Holders or any other Person in
respect of, any direct or indirect security for any of the Guaranteed
Obligations. As used in this Holding Company Guarantee, "direct or
indirect security" for the Guaranteed Obligations, and similar
phrases, includes but is not limited to any collateral security,
guaranty, suretyship, letter of credit, capital maintenance agreement,
put option, subordination agreement or other right or arrangement of
any nature providing direct
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<PAGE> 7
or indirect assurance of payment or performance of any of the
Guaranteed Obligations, made or on behalf of any Person;
(v) any merger, consolidation, liquidation, dissolution,
winding-up, charter revocation or forfeiture, or other change in,
restructuring or termination of the corporate structure or existence
of, the Company or any other Person;
(vi) any defense arising by reason of any disability or other
defense (other than a defense of payment, unless the payment on which
such defense is based was or is subsequently invalidated, declared to
be fraudulent or preferential, otherwise avoided or required to be
repaid to the Company, the Holding Company Guarantor, the estate of
either the Company or the Holding Company Guarantor, a trustee,
receiver or any other Person under any bankruptcy law, state or
federal law, common law or equitable cause, in which case there shall
be no defense of payment with respect to such payment) of Company or
any other Person liable on the Guaranteed Obligations or any portion
thereof;
(vii) a Holder's election, in any proceeding instituted under
the Federal Bankruptcy Code (11 U.S.C. ss.101 et seq.) (the
"Bankruptcy Code"), of the application of Section 1111(b)(2) of the
Bankruptcy Code;
(viii) any borrowing from or grant of a security interest to
any Holder by the Company, as debtor-in-possession, under Section 364
of the Bankruptcy Code, or any extension of credit, under Section 364
of the Bankruptcy Code;
(ix) the disallowance or avoidance or subordination of all or
any portion of a Holder's claim(s) for repayment of the Guaranteed
Obligations under the Bankruptcy Code or any similar state law;
(x) any change in the time, manner, method or place of
payment or performance of, or in any other term of, the Guaranteed
Obligations, or any amendment to, waiver or modification of, or
consent under any provision of the Note Agreements or applicable law;
(xi) any change in any provision of applicable law or
regulation;
(xii) any agreement or stipulation as to the provision of
adequate protection in any bankruptcy proceeding;
(xiii) any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or dissolution
proceeding commenced by or against the Company, the Holding Company
Guarantor or any other guarantor, maker or endorser, including without
limitation, any discharge of, or bar or stay against collecting or
accelerating, all or any of the Guaranteed Obligations in or as a
result of any such proceeding;
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<PAGE> 8
(xiv) any failure by any Holder to file or enforce a claim
against the Company or its estate in any bankruptcy or insolvency
case or proceeding;
(xv) any action taken by any Holder that is authorized by
this Holding Company Guarantee, or any order, judgment, writ, award
or decree of any court, arbitrator or governmental authority,
domestic or foreign, binding on or affecting the Holding Company
Guarantor or the Company or any of their respective assets;
(xvi) any mortgage, indenture, lease, contract, or other
agreement (including without limitation any agreement with
stockholders), instrument or undertaking to which the Holding Company
Guarantor or the Company is a party or which purports to be binding
on or affect the Holding Company Guarantor or any of their respective
assets; or
(xvii) any other circumstance which might otherwise
constitute a legal or equitable discharge or defense of a guarantor.
C. Holder's Freedom to Act. Any Holder is hereby authorized,
without notice to the Holding Company Guarantor and without affecting the
liability of the Holding Company Guarantor hereunder to such Holder or any other
Holder, from time to time to (i) renew, extend, accelerate or otherwise change
the time for payment of, or other terms relating to, the Guaranteed Obligations,
or otherwise modify, amend or change the terms of any of the Note Agreements and
the Notes; (ii) accept partial payments on the Guaranteed Obligations; (iii)
take and hold security or additional guarantees or sureties for the Guaranteed
Obligations or any part thereof or any other liabilities of the Company, the
obligations of the Holding Company Guarantor under this Holding Company
Guarantee and the obligations under any other guarantees of the Guaranteed
Obligations, and exchange, enforce, waive, release, sell, transfer, assign or
otherwise deal with any such security, guarantee or surety; (iv) apply such
security or any proceeds thereof and direct the order or manner of sale thereof
as each Holder may determine in its discretion; (v) settle, release, compromise,
collect or otherwise liquidate the Guaranteed Obligations or any portion thereof
and any security therefor in any manner; (vi) extend additional loans, credit
and financial accommodations and otherwise create additional Guaranteed
Obligations; (vii) waive strict compliance with the terms of the Note Agreements
or the Notes and otherwise forbear from asserting such Holder's rights and
remedies thereunder; (viii) alter or enforce or forbear from enforcing the
guarantee or surety of any other guarantor or surety of all or any part of the
Guaranteed Obligations or release any such guarantor or surety; and (ix) assign
this Holding Company Guarantee in part or in whole in connection with any
assignment of any part or all of the Guaranteed Obligations; (x) add, release or
substitute any one or more other guarantors, makers or endorsers of all or any
part of the Guaranteed Obligations and otherwise deal with the Company or any
other guarantor, maker or endorser as any Holder may elect in its sole
discretion; and (xi) apply any and all payments or recoveries from the Holding
Company Guarantor, from the Company or from any other guarantor, maker or
endorser of all or any part of the Guaranteed Obligations in such order as any
Holder in its sole discretion may determine, whether such Guaranteed Obligations
is secured or unsecured or guaranteed or not guaranteed by others.
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<PAGE> 9
Any Holder's failure at any time or times hereafter to
require strict performance by the Holding Company Guarantor of any of the
covenants, provisions, warranties, terms and conditions contained in this
Holding Company Guarantee or any other promissory note, loan agreement, lease,
security agreement, mortgage, agreement, instrument or other document now or at
any time or times hereafter executed by the Holding Company Guarantor and
delivered to any Holder shall not waive, affect or diminish any right of any
Holder at any time or times hereafter to demand strict performance therewith
and no waiver of any such right shall be deemed to occur by any act or
knowledge of any Holder, its agents, officers or employees or be binding
against any Holder, except as expressly set forth in a writing duly signed and
delivered on that Holder's behalf by an officer of Holder, other than
amendments, consents or waivers pursuant to Section 6.1. No waiver by any
Holder of any default shall operate as a waiver of any other default or the
same default on a future occasion, and no action by any Holder permitted
hereunder shall in any way affect or impair any Holder's rights or the
obligations of the Holding Company Guarantor under this Holding Company
Guarantee. Any determination by a court of competent jurisdiction of the amount
of any part of the Guaranteed Obligations owing by the Company to any Holder at
any time shall be conclusive and binding on the Holding Company Guarantor
irrespective of whether the Holding Company Guarantor was a party to the suit
or action in which such determination was made.
D. Waivers of Holding Company Guarantor; Subrogation. (a)
Holding Company Guarantor waives (i) any requirements of diligence or promptness
on the part of any Holder; (ii) presentment, demand for payment or performance
and protest and notice of protest with respect to the Guaranteed Obligations or
any guarantee with respect thereto; (iii) notices (a) of nonperformance, (b) of
acceptance of this Holding Company Guarantee, (c) of default in respect of the
Guaranteed Obligations, (d) of the existence, creation or incurrence of new or
additional indebtedness, arising either from additional loans extended to the
Company or otherwise, (e) that the principal amount of, or any portion thereof,
or any interest or Yield Maintenance Amount on all or any part of the Guaranteed
Obligations is due, (f) of any and all proceedings to collect from the Company,
any maker, endorser or any other guarantor of all or any part of the Guaranteed
Obligations, or from anyone else, and (g) of exchange, sale, surrender,
creation, perfection or other handling of any security or collateral given to
any Holder to secure payment of the Guaranteed Obligations or any guarantee
therefor; (iv) any right to require any Holder to (a) proceed first against the
Company, or any other Person whatsoever, (b) proceed against or exhaust any
security given to or held by any Holder in connection with the Guaranteed
Obligations or any guarantee therefor or (c) pursue any other remedy in any
Holder's power whatsoever; (v) any defense arising by reason of (a) any
disability or other defense of the Company, (b) the cessation from any cause
whatsoever of the liability of the Company, (c) any act or omission of any
Holder or other Person which directly or indirectly, by operation of law or
otherwise, results in or aids the discharge or release of the Company or any
security given to or held by any Holder in connection with the Guaranteed
Obligations or any guarantee therefor; and (vi) any and all other suretyship
defenses under applicable law.
(b) The Holding Company Guarantor hereby waives and releases
the Company from any and all "claims" (as defined in Section 101(4) of the
Bankruptcy Code) to which the Holding Company Guarantor is or would at any time
be entitled by virtue of its obligations under this Holding Company Guarantee,
including, without limitation, any right of subrogation (whether contractual,
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<PAGE> 10
under Section 509 of the Bankruptcy Code or otherwise), reimbursement,
contribution, indemnity, exoneration or similar right against the Company. The
Holding Company Guarantor further waives any right to demand security from
Company and any benefit of, and any right to participate in, any security given
to a Holder to secure payment of the Guaranteed Obligations or any other
liability of Company to any Holder. All waivers granted by the Holding Company
Guarantor hereunder, including, without limitation, the waiver by the Holding
Company Guarantor of all rights of subrogation to any Holder's rights against
the Company, shall be unconditional and irrevocable irrespective of whether the
Guaranteed Obligations have been paid in full by the Holding Company Guarantor
or any other party.
E. Revival. The Holding Company Guarantor further agrees that,
if any payment made by the Company or any other Person is applied to the
Guaranteed Obligations and is at any time annulled, set aside, rescinded,
invalidated, declared to be fraudulent or preferential or otherwise required to
be refunded or repaid, or the proceeds of any security given to a Holder to
secure payment of the Guaranteed Obligations are required to be returned by any
Holder to the Company, its estate, trustee, receiver or any other Person,
including, without limitation, the Holding Company Guarantor, under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, the Holding Company Guarantor's
liability hereunder (and any lien, security interest or other collateral
securing such liability) shall be and remain in full force and effect, as fully
as if such payment had never been made, or, if prior thereto this Holding
Company Guarantee shall have been canceled or surrendered (and if any lien,
security interest or other collateral securing Holding Company Guarantor's
liability hereunder shall have been released or terminated by virtue of such
cancellation or surrender), this Holding Company Guarantee (and such lien,
security interest or other collateral) shall be reinstated in full force and
effect, and such prior cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of the Holding Company
Guarantor in respect of the amount of such payment (or any lien, security
interest or other collateral securing such obligation).
F. Subordination. The Holding Company Guarantor further agrees
that any and all present and future debts and obligations of the Company, any
endorser, or any guarantor of any part or all of the Guaranteed Obligations to
the Holding Company Guarantor and any and all claims of the Holding Company
Guarantor against the Company, any endorser, or any guarantor of any part or all
of the Guaranteed Obligations, or any of their respective properties, howsoever
arising, shall be subordinate and subject in right of payment to the prior
payment, in full, of the Guaranteed Obligations and as security for this Holding
Company Guarantee, the Holding Company Guarantor hereby assigns to each Holder
all claims of any nature which the Holding Company Guarantor may now or
hereafter have against the Company.
G. Bankruptcy. If any Event of Default specified in clauses
(viii) to (x), inclusive, of paragraph 7A of the Note Agreements shall occur and
be continuing, the Holding Company Guarantor shall, at the option of any Holder,
forthwith pay the entire outstanding balance of the Guaranteed Obligations.
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<PAGE> 11
H. Termination. The Holding Company Guarantor covenants that
it will not be discharged except by complete performance of the obligations
contained herein or by payment in full of the Guaranteed Obligations.
ARTICLE III. AFFIRMATIVE COVENANTS
I. Information. The Holding Company Guarantor covenants that
it will, as soon as practicable, deliver to each Significant Holder such
information and in such form as such Significant Holder may from time to time
reasonably request.
J. Notice of Certain Events. The Holding Company Guarantor
also covenants that immediately after any Responsible Officer obtains knowledge
of:
(i) an Event of Default or Default;
(ii) the occurrence of a Change of Control Event;
(iii) any material adverse change in the business condition
(financial or otherwise), operations or prospects of the Holding
Company Guarantor or any Subsidiary of the Holding Company Guarantor;
(iv) any pending or threatened action, suit, proceeding or
investigation by or before any Governmental Authority against or
affecting the Holding Company Guarantor or any Subsidiary of the
Holding Company Guarantor, including, without limitation, with respect
to the matters in Section 5.9, except for matters that if adversely
decided, individually or in the aggregate, could not have a Material
Adverse Effect;
(v) any material violation, breach or default by the Holding
Company Guarantor or any Subsidiary of the Holding Company Guarantor
of or under any agreement or instrument material to the business
operations, condition (financial or otherwise) or prospects of the
Holding Company Guarantor and its Subsidiaries taken as a whole;
(vi) any Pension-Related Event;
(vii) the expiration or earlier termination of the BB Tech
License Agreement; or
(viii) any proposed amendment, waiver, consent or other
change to the terms of the Bank Credit Agreement;
the Holding Company Guarantor will deliver to each Significant Holder an
Officer's Certificate specifying the nature and period of existence thereof and
what action the Holding Company Guarantor proposes to take with respect thereto
and, in the case of a Pension-Related Event such Certificate shall be
accompanied by (A) a copy of any notice, request, return, petition or other
document received by
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<PAGE> 12
the Holding Company Guarantor or any Controlled Group Member from any Person,
or which has been or is to be filed with or provided to any Person (including
without limitation the Internal Revenue Service, Pension Benefit Guaranty
Corporation or any Plan participant, beneficiary, alternate payee or employer
representative), in connection with such Pension-Related Event, and (B) in the
case of any Pension-Related Event with respect to a Plan, the most recent
Annual Report (5500 Series), with attachments thereto, and the most recent
actuarial valuation report, for such Plan.
K. Insurance. The Holding Company Guarantor covenants that it
will, and will cause each Subsidiary of the Holding Company Guarantor to,
maintain with financially sound and reputable insurers insurance with respect to
its properties and business and against such liabilities, casualties and
contingencies and of such types and in such amounts as is customary in the case
of other corporations of established reputations engaged in the same or similar
businesses or having similar properties similarly situated.
L. Payment of Taxes and Other Potential Charges and Priority
Claims. The Holding Company Guarantor will, and will cause each of its
Subsidiaries to, pay or discharge:
a. on or prior to the date on which penalties attach thereto,
all taxes, assessments and other governmental charges imposed upon it
or any of its properties;
b. on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons which, if unpaid, might result in the creation of a Lien
upon any such property; and
c. on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such
property or which, if unpaid, might give rise to a claim entitled to
priority over general creditors of the Holding Company Guarantor or
such Subsidiary in a case under Title 11 (Bankruptcy) of the United
States Code, as amended;
provided, that unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced the Holding Company Guarantor or such
Subsidiary need not pay or discharge any such tax, assessment, charge or claim
so long as (x) the validity thereof is contested in good faith and by
appropriate proceedings diligently conducted, (y) such reserves or other
appropriate provisions as may be required by generally accepted accounting
principles shall have been made therefor.
M. Preservation of Corporate Status. The Holding Company
Guarantor covenants that it will, and will cause each of its Subsidiaries to,
maintain its status as a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and to be
duly qualified to do business as a foreign corporation and in good standing in
all jurisdictions in which the ownership of its properties or the nature of its
business or both make such qualification necessary or advisable.
N. Governmental Approvals and Filings. The Holding Company
Guarantor covenants that it will, and will cause each Subsidiary of the Holding
Company Guarantor to, keep and
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<PAGE> 13
maintain in full force and effect all Governmental Actions necessary or
advisable in connection with execution and delivery of this Holding Company
Guarantee by the Holding Company Guarantor and the Modification by the Company,
consummation by the Holding Company Guarantor and the Company of the
transactions herein or therein contemplated, performance of or compliance with
the terms and conditions of the Holding Company Guarantee, the Note Agreements
or the Modification by the Holding Company Guarantor and the Company or to
ensure the legality, validity, binding effect, enforceability or admissibility
in evidence hereof or thereof.
O. Maintenance of Properties. The Holding Company Guarantor
covenants that it will and will cause each Subsidiary of the Holding Company
Guarantor to, maintain or cause to be maintained in good repair, working order
and condition the properties now or hereafter owned, leased or otherwise
possessed by it (ordinary wear and tear excepted) and shall make or cause to be
made all needful and proper repairs, renewals, replacements and improvements
thereto so that the business carried on in connection therewith may be properly
and advantageously conducted at all times. The Holding Company Guarantor will,
and will cause each of its Subsidiaries to, procure and maintain in full force
and effect all franchises, patents, trademarks, trade names, service marks,
copyrights, licenses and other rights, in each case, that are necessary in any
material respect for the business and operation of the Holding Company Guarantor
and its Subsidiaries, taken as a whole.
P. Avoidance of Other Conflicts. (a) The Holding Company
Guarantor covenants that it will not, and will not permit any of its
Subsidiaries to, violate or conflict with, be in violation of or conflict with,
or be or remain subject to any liability (contingent or otherwise) on account of
any violation or conflict with:
(i) any Law;
(ii) its certificate of incorporation or by-laws (or other
constituent documents); or
(iii) any agreement or instrument to which it is party or by
which any of them or any of their respective Subsidiaries is a party
or by which any of them or any of their respective properties (now
owned or hereafter acquired) may be subject or bound;
except for matters that could not, individually or in the aggregate, have a
Material Adverse Effect.
(b) The Holding Company Guarantor will, and will cause each
of its Subsidiaries and each of its Environmental Affiliates to, comply with,
or operate pursuant to valid waivers of, applicable Environmental Laws and
Environmental Permits, including, without limitation, to the extent required by
applicable Environmental Laws or Environmental Permits, conducting, on a timely
basis, periodic tests and monitoring for contamination of ground water, surface
water, air and land and for biological toxicity and completing proper, thorough
and effective clean-up, removal, remediation and/or restoration, except to the
extent that failure so to comply with any Environmental Law or Environmental
Permit does not have a Material Adverse Effect, and except that, with respect
to any testing, monitoring, clean-up, removal, remediation or other such action
required pursuant to such laws or permits, neither the Holding Company
Guarantor nor any of its Subsidiaries or Environmental
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<PAGE> 14
Affiliates shall be required to perform any such action if the applicability or
validity thereof is being contested in good faith by appropriate proceedings
and adequate reserves have been established in accordance with generally
accepted accounting principles.
Q. Financial Accounting Practices. The Holding Company
Guarantor covenants that it will, and will cause each of its Subsidiaries to,
make and keep books, records and accounts which, in reasonable detail,
accurately and fairly reflect its transactions and dispositions of its assets
and maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (a) transactions are executed in accordance with
management's general or specific authorization, (b) transactions are recorded as
necessary (i) to permit preparation of financial statements in conformity with
generally accepted accounting principles and (ii) to maintain accountability for
assets, (c) access to assets is permitted only in accordance with management's
general or specific authorization and (d) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
R. Continuation of or Change in Business. The Holding Company
Guarantor covenants that it will, and will cause each of its Subsidiaries to,
continue to engage in its business substantially as conducted and operated
during the present and preceding fiscal year, and the Holding Company Guarantor
will not, and will not permit any Subsidiary of the Holding Company Guarantor
to, engage in any other business.
S. Consolidated Tax Return. The Holding Company Guarantor
covenants that it will not, and will not suffer any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
other than the Company, the Guarantor, the Holding Company Guarantor and their
respective Subsidiaries.
T. Fiscal Year. The Holding Company Guarantor covenants that
it will not, and will not suffer any of its Subsidiaries to, change its fiscal
year or fiscal quarter.
U. Inspection of Property. The Holding Company Guarantor
covenants that it will permit any Person designated by any Significant Holder in
writing, at the Holding Company Guarantor's expense while an Event of Default is
continuing and otherwise at such Significant Holder's expense, to visit and
inspect any of the properties of the Holding Company Guarantor and its
Subsidiaries, to examine the corporate books and financial records of the
Holding Company Guarantor and its Subsidiaries and make copies thereof or
extracts therefrom and to discuss the affairs, finances and accounts of any of
such corporations with the directors, officers and key employees of the Holding
Company Guarantor or their independent public accountants, all at such
reasonable times and as often as such Significant Holder may reasonably request.
V. Covenant to Secure Note Equally. The Holding Company
Guarantor covenants that, if it or any Subsidiary of the Holding Company
Guarantor shall create or assume any Lien upon any of its property or assets,
whether now owned or hereafter acquired, other than Liens permitted by the
provisions of Section 4.1 (unless prior written consent to the creation or
assumption thereof shall have been obtained pursuant to Section 6.1), it will
make or cause to be made effective
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<PAGE> 15
provision satisfactory in form and substance to the Required Holder(s)
(including, without limitation, opinions of counsel relating thereto) whereby
the Notes will be secured by such Lien equally and ratably with any and all
other Indebtedness thereby secured so long as any such other Indebtedness shall
be so secured. Securing the Notes as provided in this Section 3.14 shall not
permit the existence of any Lien not permitted by Section 4.1.
ARTICLE IV. NEGATIVE COVENANTS
The Holding Company Guarantor covenants that, so long as any
Note is outstanding or any amount owing under this Holding Company Guarantee
remains unpaid:
W. Liens. The Holding Company Guarantor will not, and will not
permit any of its Subsidiaries to, at any time create, incur, assume or suffer
to exist any Lien on any of its property (whether now owned or hereafter
acquired and whether or not provision is made for equally and ratably securing
the Notes as provided in Section 3.14 hereof and paragraph 5P of the Note
Agreements), except for the following:
(i) Liens existing as of May 6, 1994, securing obligations
existing as of May 6, 1994, as such Liens and obligations are listed
in SCHEDULE 4.6 attached to that certain Guarantee Agreement, dated as
of May 6, 1994, made by the Guarantor in favor of the Holders (as
amended by that certain Amendment to Guarantee Agreement dated as of
November 21, 1996, by and among the Guarantor and the Holders, the
"Black Box Guarantee");
(ii) Liens arising from taxes, assessments, charges or claims
described in Section 3.4 that are not yet due or that remain payable
without penalty or to the extent permitted to remain unpaid under the
proviso to Section 3.4;
(iii) Liens (other than ERISA Liens) incurred or deposits or
pledges of cash or securities in the ordinary course of business to
secure (i) workmen's compensation, unemployment insurance or other
social security obligations, (ii) performance of bids, tenders, trade
contracts (other than for payment of money) or leases, (iii) stay,
surety or appeal bonds, or (iv) other obligations of a like nature
incurred in the ordinary course of business, provided that such Liens
do not, in the aggregate, materially detract from the value of the
property and assets of the Holding Company Guarantor and its
Subsidiaries or impair the use thereof by the Holding Company
Guarantor and its Subsidiaries or the operation of their respective
businesses;
(iv) Liens consisting of Capitalized Leases, provided that
(a) such Lien is created before or substantially simultaneously with
the purchase of the property that is the subject of such Capitalized
Lease, (b) such Lien is confined solely to the property so leased,
improvements thereto and proceeds thereof, (c) the amount secured by
such Lien described in this Section 4.1(iv) shall not at any time
exceed the lesser of cost or fair market value (plus
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<PAGE> 16
installation costs, to the extent they have not been expensed) of the
property so leased; (d) the Indebtedness represented by such
Capitalized Leases is permitted by Sections 4.3, 4.4 and 4.5 of the
Black Box Guarantee, and, to the extent applicable, paragraph 6 of the
Note Agreements; and (e) no Default or Event of Default shall have
occurred and be continuing or shall occur after giving effect thereto
or the lease of such property; and
(v) Liens on property securing all or part of the purchase
price thereof and Liens (whether or not assumed) existing in property
at the time of purchase thereof by the Holding Company Guarantor or a
Subsidiary of the Holding Company Guarantor, PROVIDED that (a) such
Lien is created before or substantially simultaneously with the
purchase of such property, (b) such Lien is confined solely to the
property so purchased, improvements thereto and proceeds thereof, (c)
the amount secured by such Lien described in this Section 4.1(v) shall
not at any time exceed the lesser of cost or fair market value of the
property so purchased; (d) the Indebtedness secured by such Lien is
permitted by Sections 4.3, 4.4 and 4.5 of the Black Box Guarantee and,
to the extent applicable, paragraph 6 of the Note Agreements; and (e)
no Default or Event of Default shall have occurred and be continuing
or shall occur after giving effect thereto or the purchase of such
property; and
(vi) Liens renewing or extending any Lien described in
clauses (i), (iv) or (v) above, provided (a) neither the Indebtedness
secured thereby is increased nor the weighted average life to maturity
thereof reduced as a result thereof, (b) such Lien is confined solely
to the property so purchased or leased, improvements thereto and
proceeds thereof; (c) the Indebtedness secured thereby is permitted
under Sections 4.3, 4.4 and 4.5 of the Black Box Guarantee and, to the
extent applicable, paragraph 6 of the Note Agreements; and (d) no
Default or Event of Default shall have occurred and be continuing or
shall occur after giving effect thereto.
X. Limitation on Other Restrictions on Liens. The Holding
Company Guarantor will not enter into, become or remain subject to any
agreement or instrument to which the Holding Company Guarantor is a
party or by which it or any of its properties (now owned or hereafter
acquired) may be subject or bound that would prohibit the grant of any
Lien upon any of its properties (now owned or hereafter acquired),
except (i) the Bank Credit Agreement, as amended by that certain First
Amendment to Credit Agreement, dated as of March 30, 1995, by that
certain Second Amendment to Credit Agreement, dated as of August 1,
1995, by that certain Third Amendment to Credit Agreement, dated as of
April 1, 1996, by that certain Fourth Amendment to Credit Agreement
dated as of November 21, 1996, and by that certain Fifth Amendment to
Credit Agreement dated as of November 21, 1996 and (ii) the Note
Agreements, as modified by the Modification of Note Purchase
Agreements, dated as of November 21, 1996, and by the Second
Modification.
Y. Capital Expenditures. The Holding Company Guarantor will
not, and will not permit any Subsidiary of the Holding Company Guarantor to,
make any Capital Expenditures on or after the date hereof, except for Capital
Expenditures not in excess of $3,500,000 in the aggregate by the Holding
Company Guarantor and its Subsidiaries in any fiscal year and subject to
compliance, to the extent applicable, with the additional restrictions
contained in paragraph 6 of the Note Agreements.
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<PAGE> 17
Z. Dividends and Related Distributions. The Holding Company
Guarantor covenants that it will not, and will not permit any of its
Subsidiaries to, make, directly or indirectly, any Stock Payment, except:
(i) Stock Payments by a Subsidiary of the Holding Company
Guarantor to the Holding Company Guarantor, for the purposes of making
Stock Payments to the Guarantor for the purposes of paying reasonable
administrative costs and salaries of the Guarantor's employees, paying
taxes and paying expenses incurred in the ordinary course of business
or Stock Payments by a Subsidiary of the Holding Company Guarantor to
the Holding Company Guarantor for the purposes of paying reasonable
administrative costs and salaries of the Holding Company Guarantor's
employees, paying taxes and paying expenses incurred in the ordinary
course of business; PROVIDED, that no Stock Payment pursuant to this
clause (i) may be made (a) at any time when a Default or Event of
Default exists or would occur after giving effect to such Stock
Payment or (b) if, after giving effect to such Stock Payment, the
aggregate amount of Stock Payments made during any fiscal year of the
Company, together with any loans and advances made by the Company
pursuant to paragraph 6G(iv) of the Note Agreements during such fiscal
year, would exceed $1,500,000;
(ii) Stock Payments to the Holding Company Guarantor for the
purposes of making Stock Payments to the Guarantor for the purposes of
making Stock Payments to the extent permitted by Section 4.17 of the
Black Box Guarantee; PROVIDED, that no Stock Payment pursuant to this
clause (ii) may be made at any time when a Default or Event of Default
exists or would occur after giving effect to such Stock Payment;
(iii) Stock Payments to the Holding Company Guarantor so long
as the proceeds thereof shall be loaned to the Company as permitted by
paragraph 6E of the Note Agreements; and
(iv) A Subsidiary of the Company may declare and make Stock
Payments if all of the capital stock of such Subsidiary is owned by
the Company or by a direct or indirect Wholly- Owned Subsidiary of the
Company.
ARTICLE V. REPRESENTATIONS, COVENANTS AND WARRANTIES
The Holding Company Guarantor represents, covenants and
warrants as follows:
AA. Organization. The Holding Company Guarantor is a
corporation duly organized and existing in good standing under the laws of the
State of Delaware and each of its Subsidiaries is duly organized and existing in
good standing under the laws of the jurisdiction in which it is incorporated.
The Holding Company Guarantor and each Subsidiary of the Holding Company
Guarantor is duly qualified and authorized to transact business as a foreign
corporation and is in good standing in every jurisdiction in which the nature of
the business conducted by it or the ownership of its properties or assets makes
such qualification necessary, except where the failure to be in good standing or
to be so qualified or authorized would not have a Material Adverse Effect on the
Holding Company Guarantor or such Subsidiary, as the case may be. The names of
the Subsidiaries of the Holding Company Guarantor on the Effective Date (as such
term is defined in the Second Modification), the jurisdictions in which each
such Subsidiary is
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<PAGE> 18
organized, each Subsidiary's form of organization and the capital stock of each
such Subsidiary issued and outstanding and the holders by percent of such stock
are as set forth in SCHEDULE 5.1. As of the date hereof, the Holding Company
Guarantor owns beneficially and of record 100% of the issued and outstanding
capital stock of the Company. Neither the Holding Company Guarantor nor any of
its Subsidiaries is a partner (general or limited) of any partnership, is a
party to any joint venture or owns (beneficially of record) any equity or
similar interest in any Person (including but not limited to any interest
pursuant to which the Holding Company Guarantor or any of its Subsidiaries has
or may in any circumstance have the obligation to make capital contributions
to, or be generally liable for on account of the liabilities, acts or omissions
of such other Person), except for (i) capital stock of the Subsidiaries listed
on SCHEDULE 5.1-1, (ii) equity Investments permitted under Section 4.16 of the
Black Box Guarantee and (iii) matters set forth in SCHEDULE 5.1-2.
BB. Power and Authority. The Holding Company Guarantor and
each Subsidiary of the Holding Company Guarantor has all requisite corporate
power to conduct its business as currently conducted and as currently proposed
to be conducted. The Holding Company Guarantor has all requisite corporate
power to execute, deliver and perform its obligations under this Holding
Company Guarantee. The execution, delivery and performance by the Holding
Company Guarantor of this Holding Company Guarantee have been duly authorized
by all requisite corporate action on the part of the Holding Company Guarantor.
The Holding Company Guarantor has duly executed and delivered this Holding
Company Guarantee, and this Holding Company Guarantee constitutes the legal,
valid and binding obligation of the Holding Company Guarantor, enforceable
against the Holding Company Guarantor in accordance with its terms.
CC. Actions Pending. There is no action, suit, investigation
or proceeding pending or, to the knowledge of the Holding Company Guarantor,
threatened against the Holding Company Guarantor or any of its Subsidiaries, or
any properties or rights of the Holding Company Guarantor or any of its
Subsidiaries, by or before any court, arbitrator or administrative or
governmental body in which the judgment sought or the potential liability to
the Holding Company Guarantor or any of its Subsidiaries exceeds $100,000.
DD. Title to Properties. The Holding Company Guarantor has
and each of its Subsidiaries has good and indefeasible title to its respective
real properties (other than properties which it leases) and good title to all
of its other respective properties and assets, subject to minor defects in
title such as are customarily encountered in properties of like site and
character and which do not impair the Holding Company Guarantor's or any
Subsidiary's use of such properties. All leases necessary in any material
respect for the conduct of the respective businesses of the Holding Company
Guarantor and its Subsidiaries are valid and subsisting and are in full force
and effect.
EE. Taxes. The Holding Company Guarantor has and each of its
Subsidiaries has filed all federal, state and other income tax returns which,
to the knowledge of the officers of the Holding Company Guarantor, are required
to be filed, and each has paid all taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have become due,
except such taxes as are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with generally accepted accounting principles, and the Holding Company
Guarantor has no knowledge of any basis for any further material assessment to
the Holding Company Guarantor or any of its Subsidiaries that has not been
adequately so provided for on the books of the Holding Company Guarantor.
- 15 -
<PAGE> 19
FF. Conflicting Agreements and Other Matters. Neither the
Holding Company Guarantor nor any of its Subsidiaries is a party to any
contract or agreement or subject to any charter or other corporate restriction
which materially and adversely affects its business, property or assets, or
financial condition or prospects. Neither the execution nor delivery of this
Holding Company Guarantee, nor fulfillment of nor compliance with the terms and
provisions hereof or thereof, will conflict with, or result in a breach of the
terms, conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any of the
properties or assets of the Holding Company Guarantor or any of its
Subsidiaries pursuant to, the charter or by-laws of the Holding Company
Guarantor or any of its Subsidiaries, any award of any arbitrator or any
agreement (including any agreement with stockholders), instrument, order,
judgment, decree, statute, law, rule or regulation to which the Holding Company
Guarantor or any of its Subsidiaries is subject. Neither the Holding Company
Guarantor nor any of its Subsidiaries is a party to, or otherwise subject to
any provision contained in, any instrument evidencing Indebtedness of the
Holding Company Guarantor or such Subsidiary, any agreement relating thereto or
any other contract or agreement (including its charter) which limits the amount
of, or otherwise imposes restrictions on the creation of, any Holding Company
Guarantee.
GG. ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan. No liability to the Pension Benefit Guaranty
Corporation has been or is expected by the Holding Company Guarantor or any
Controlled Group Member to be incurred with respect to any Plan by the Holding
Company Guarantor, any Subsidiary of the Holding Company Guarantor or any
Controlled Group Member which does or would have a Material Adverse Effect.
Neither the Holding Company Guarantor, any Subsidiary of the Holding Company
Guarantor nor any Controlled Group Member has contributed or presently
contributes to any Multiemployer Plan. The execution and delivery of this
Holding Company Guarantee and the transactions contemplated by the Modification
will be exempt from, or will not involve any transaction which is subject to,
the prohibitions of section 406 of ERISA and will not involve any transaction
in connection with which a penalty could be imposed under section 502(i) of
ERISA or a tax could be imposed pursuant to section 4975 of the Code. The
represen tation by the Holding Company Guarantor in the next preceding sentence
is made in reliance upon and subject to the accuracy of each Purchaser's
representation in paragraph 9B of the Note Agreements. A copy of the most
recent Annual Report (5500 Series Form) as of the date hereof including all
attachments thereto as filed with the Internal Revenue Service for each Plan
has been provided to the Purchasers and fairly presents the funding status of
each Plan. There has been no material deterioration in any Plan's funding
status since the date of such Annual Report. SCHEDULE 5.7 sets forth as of the
date hereof a list of all Plans and Multiemployer Plans. Except as set forth in
SCHEDULE 5.7, neither the Holding Company Guarantor nor any Subsidiary of the
Holding Company Guarantor has any liability (contingent or otherwise) for, or
in connection with, and none of their respective properties is subject to a
Lien in connection with, any Pension-Related Event. Neither the Holding Company
Guarantor nor any Subsidiary of the Holding Company Guarantor has any liability
(contingent or otherwise) for, or in connection with, any Postretirement
Benefits.
HH. Governmental and Other Third Party Consent. Neither the
nature of the Holding Company Guarantor or of any Subsidiary, nor any of their
respective businesses or properties, nor any relationship between the Holding
Company Guarantor or any Subsidiary and any other Person, nor any circumstance
in connection with the execution or delivery of this Holding Company Guarantee
is such as to require any authorization, consent, approval, exemption or other
action by or notice to or filing with any court or administrative or
governmental body or any other Person in connection with the execution and
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<PAGE> 20
delivery of this Holding Company Guarantee or fulfillment of or compliance with
the terms and provisions hereof.
II. Environmental Compliance. (a) To the best knowledge of
any Responsible Environmental Officer, (i) the Holding Company Guarantor and
its Subsidiaries and Environmental Affiliates and all of their respective
properties and facilities have complied at all times and in all respects with
all applicable Environmental Laws and all administrative orders, judgments,
rulings and regulations relating to protection of the Environment, except, in
any such case, where failure to comply would not result in a Material Adverse
Effect, and (ii) neither the Holding Company Guarantor nor any of its
Subsidiaries nor any Environmental Affiliate are reasonably expected to have
any liability, under any applicable Environmental Laws, which, either in any
case or in the aggregate, could result in a Material Adverse Effect.
(b) Without limiting the foregoing, except as described in
part 8L to the Disclosure Schedule referred to in the Note Agreements, neither
the Holding Company Guarantor nor any of its Subsidiaries nor Environmental
Affiliate has any knowledge of the Release or Threat of Release of any
Environmental Concern Materials on, in, under, or in the vicinity of any of the
properties owned or operated by the Holding Company Guarantor or any of its
Subsidiaries or any Environmental Affiliate that may be required to be
remediated under any applicable Environmental Law. No Lien has been imposed on
any of the properties owned or operated by the Holding Company Guarantor or any
of its Subsidiaries by any governmental agency at the federal, state, or local
level in connection with the presence on or off such property of any
Environmental Concern Materials, except as described in part 8L to the
Disclosure Schedule referred to in the Note Agreements. Except as described in
part 8L to the Disclosure Schedule referred to in the Note Agreements, to the
best knowledge of any Responsible Environmental Officer, neither the Holding
Company Guarantor nor any of its Subsidiaries nor any Environmental Affiliate
has in the previous five years: (i) entered into or been subject to any consent
decree, compliance order, or administrative order under any applicable
Environmental Laws with respect to any of the properties owned or operated by
the Holding Company Guarantor or any of its Subsidiaries or Environmental
Affiliates or any facilities or improvements or any operations or activities
thereon, (ii) received notice under the citizen suit provision of any
applicable Environmental Law in connection with any of the properties owned or
operated by the Holding Company Guarantor or any of its Subsidiaries or
Environmental Affiliates or any facilities or improvements or any operations or
activities thereon; (iii) received any request for information, notice, demand
letter, administrative inquiry, or formal or informal complaint or claim with
respect to environmental matters relating to any of the properties owned or
operated by the Holding Company Guarantor or any of its Subsidiaries or
Environmental Affiliate thereof or any facilities or improvements or any
operations or activities thereon that may be required or may require any
environmental investigation, environmental site assessment, corrective action
or environmental remediation; or (iv) been subject to or threatened with any
governmental or citizen enforcement action under any applicable Environmental
Laws with respect to any of the properties owned or operated by the Holding
Company Guarantor or any of its Subsidiaries or Environmental Affiliate or any
facilities or improvements or any operations or activities thereon. To the best
knowledge of any Responsible Environmental Officer, except as described in part
8L to the Disclosure Schedule referred to in the Note Agreements, neither the
Holding Company Guarantor nor any of its Subsidiaries has any reason to believe
that any of the above will be forthcoming, the effect of which could reasonably
have a Material Adverse Effect. The Holding Company Guarantor and its
Subsidiaries have all Environmental Permits necessary for all facilities,
operations, activities, improvements, and alterations, including past or
ongoing improvements or alterations, at the properties
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<PAGE> 21
owned or operated by the Holding Company Guarantor or any of its Subsidiaries,
except where the failure to have such permits would not have a Material Adverse
Effect.
JJ. Regulatory Status. Neither the Company or the Holding
Company Guarantor nor any Subsidiary of the Company or the Holding Company
Guarantor is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company" or a "subsidiary company" or an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Act of 1935, as amended, or
(iii) a "public utility" within the meaning of the Federal Power Act, as
amended.
KK. Permits and Other Operating Rights. The Holding Company
Guarantor and each Subsidiary has all such valid and sufficient certificates of
convenience and necessity, franchises, licenses, permits, operating rights and
other authorizations from federal, state, regional, municipal and other local
regulatory bodies or administrative agencies or other governmental bodies
having jurisdiction over the Holding Company Guarantor or the Subsidiary or any
of its respective properties, as are necessary for the ownership, operation and
maintenance of its businesses and properties, subject to exceptions and
deficiencies which do not materially affect the business and operations of the
Holding Company Guarantor or such Subsidiary or any material part thereof, and
such certificates of convenience and necessity, franchises, licenses, permits,
operating rights and other authorizations from federal, state, regional,
municipal and other local regulatory bodies or administrative agencies or other
governmental bodies having jurisdiction over the Holding Company Guarantor or
any such Subsidiary or any of its properties are free from burdensome
restrictions or conditions of an unusual character or restrictions or
conditions materially adverse to the business or operations of the Holding
Company Guarantor or such Subsidiary, and neither the Holding Company Guarantor
nor any Subsidiary is in violation of any thereof in any material respect.
LL. Disclosure. Neither this Holding Company Guarantee nor
any other document, certificate or statement furnished to the Holders by or on
behalf of the Holding Company Guarantor in connection herewith or therewith
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and therein not
misleading. There is no fact peculiar to the Holding Company Guarantor or any
of its Subsidiaries which materially adversely affects or in the future may (so
far as the Holding Company Guarantor can now foresee) materially adversely
affect the business, property or assets, or financial condition of the Holding
Company Guarantor or any of its Subsidiaries and which has not been set forth
in this Holding Company Guarantee or in the other documents, certificates and
statements furnished to the Holders by or on behalf of the Holding Company
Guarantor prior to the date hereof in connection with the transactions
contemplated hereby.
MM. Solvency. On and as of the date hereof, after giving
effect to the consummation of the transactions contemplated in the Modification
and the Second Modification and in this Holding Company Guarantee and after
giving effect to the Restructuring, the Holding Company Guarantor and its
Subsidiaries will be Solvent.
ARTICLE VI. MISCELLANEOUS
NN. Consent to Amendments. This Holding Company Guarantee may
be amended, and the Holding Company Guarantor may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
if the Holding Company Guarantor shall obtain the written consent to
- 18 -
<PAGE> 22
such amendment, action or omission to act, of the Required Holder(s) except
that, without the written consent of all of the Holders, the Holding Company
Guarantor shall not be released from this Holding Company Guarantee and no
amendment, consent or waiver with respect to Article II of this Holding Company
Guarantee or change to the proportion of the principal amount of the Notes
required with respect to any consent, amendment or waiver shall be effective.
Each Holder of any Note at the time or thereafter outstanding shall be bound by
any consent authorized by this Section 6.1, whether or not such Note shall have
been marked to indicate such consent, but any Notes issued thereafter may bear
a notation referring to any such consent. No course of dealing between the
Holding Company Guarantor and the holder of any Note nor any delay in
exercising any rights hereunder or under any Note shall operate as a waiver of
any rights of any holder of such Note. As used herein, the term "this Holding
Company Guarantee" and references thereto shall mean this Holding Company
Guarantee as it may from time to time be amended or supplemented. If, in
connection with any proposed or consummated amendment or waiver of this Holding
Company Guarantee or delivery of any consent to action or inaction hereunder, a
fee is to be paid to any Holder of Notes (excluding fees or expenses paid as
reimbursement for their out-of-pocket expenses pursuant to paragraph 11B of the
Note Agreements) by the Holding Company Guarantor or any of its Subsidiaries,
the Holding Company Guarantor shall be required to pay such fee ratably to all
Holders of Notes.
OO. Survival of Representations and Warranties; Entire
Agreement. All representations and warranties contained herein or made in
writing by or on behalf of the Holding Company Guarantor in connection herewith
shall survive the execution and delivery of this Holding Company Guarantee, the
transfer by any Holder of any Note or portion thereof or interest therein and
the payment of any Note, and may be relied upon by any Transferee, regardless
of any investigation made at any time by or on behalf of any Holder. Subject to
the preceding sentence, this Holding Company Guarantee embodies the entire
agreement and understanding between the Purchaser and the Holding Company
Guarantor and supersedes all prior agreements and understandings relating to
the subject matter hereof.
PP. Successors and Assigns. All covenants and other agreements
in this Holding Company Guarantee contained by or on behalf of the Holding
Company Guarantor shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including, without limitation,
any Transferee) whether so expressed or not, provided, that the Holding Company
Guarantor may not transfer or assign any of its obligations hereunder except in
compliance with Section 6.1.
QQ. Notices. All written communications provided for
hereunder shall be sent by first class mail or nationwide overnight delivery
service (with charges prepaid) and (i) if to a Holder, addressed to it at the
address specified for such communications in the Purchaser Schedule attached to
the Note Agreement to which such Holder is a party, or at such other address as
it shall have specified to the Holding Company Guarantor in writing and (ii) if
to the Holding Company Guarantor, addressed to it at 911 Washington Street,
Wilmington, Delaware 19801-1545, Attention: Kenneth J. Kubacki, with a copy to
1000 Park Drive, Lawrence, Pennsylvania 15055, Attention: Frederick C. Young,
or at such other address as the Holding Company Guarantor shall have specified
to the Holder of each Note in writing; provided, however, that any such
communication to the Holding Company Guarantor may also, at the option of the
Holder, be delivered by any other means either to the Holding Company Guarantor
at its address specified above or to any officer of the Holding Company
Guarantor. Any such communications which satisfy the foregoing provisions of
this Section 6.4 shall be deemed to have been given for purposes hereof when
actually received, or on the 5th Business Day after deposit in the United
States mail in the case of
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<PAGE> 23
communication by first class mail, or, on the 1st Business Day after deposit
with a nationwide overnight delivery service in the case of communication by
nationwide overnight delivery service.
RR. Governing Law. This Holding Company Guarantee shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the law of the State of New York.
SS. Severability. Any provision of this Holding Company
Guarantee which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
TT. Descriptive Headings. The descriptive headings of the
several subsections, sections and articles of this Holding Company Guarantee
are inserted for convenience only and do not constitute a part of this Holding
Company Guarantee.
UU. Counterparts. This Holding Company Guarantee may be
executed in any number of counterparts, each of which shall be an original but
all of which together shall constitute one instrument.
VV. Severability of Obligations. The sales of Notes to the
Purchasers are to be several sales, and the obligations of the Purchasers under
the Note Agreements are several obligations.
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<PAGE> 24
IN WITNESS WHEREOF, this Holding Company Guarantee has been
duly executed by the Holding Company Guarantor as of the date first above
written.
BBOX HOLDING COMPANY
By: /s/ KENNETH J. KUBACKI
------------------------
Title: Kenneth J. Kubacki
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<PAGE> 25
ACKNOWLEDGMENT OF CORPORATION
STATE OF DELAWARE )
) SS.
COUNTY OF NEW CASTLE )
The foregoing instrument was acknowledged before me this 19th
day of November, 1996 by Kenneth J. Kubacki, the President of BBox Holding
Company, on behalf of the corporation.
/s/ CAROLIE M. TERRY
-------------------------
Notary Public
My commission expires:
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<PAGE> 26
Acknowledged and agreed to in Newark, New Jersey as of this ___ day of
November, 1996:
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By: /s/ KEVIN J. KRASKA
----------------------------
Title: Vice President
- 23 -
<PAGE> 27
Acknowledged and agreed to in New York, New York as of this 18th day of
November, 1996:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF
THE UNITED STATES
By: /s/ JOEL SEREBRANSKY
-------------------------
Title: Investment Officer
- 24 -
<PAGE> 28
Acknowledged and agreed to in Springfield, Massachusetts as of this 21st day of
November, 1996:
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By: /s/ MARK A. AHMED
---------------------------
Title: Managing Director
- 25 -
<PAGE> 29
SCHEDULE 5.1-1
SUBSIDIARIES
[SEE ATTACHED]
- 26 -
<PAGE> 30
SCHEDULE 5.1-2
PARTNERSHIP AND JOINT VENTURE INTERESTS
[SEE ATTACHED]
- 27 -
<PAGE> 31
SCHEDULE 5.7
ERISA
[SEE ATTACHED]
<PAGE> 1
Exhibit 10.6
FOURTH AMENDMENT TO CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"),
dated as of this 21st day of November, 1996, between BLACK BOX CORPORATION OF
PENNSYLVANIA, a Delaware corporation formerly known as Black Box Corporation
(the "Borrower"), and MELLON BANK, N.A., a national banking association (the
"Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender have entered into that
certain Credit Agreement, dated as of May 6, 1994, as amended by that certain
First Amendment to Credit Agreement, dated as of March 30, 1995, by that
certain Second Amendment to Credit Agreement, dated as of August 1, 1995, and
by that certain Third Amendment to Credit Agreement, dated as of April 1, 1996
(as amended, the "Credit Agreement"); and
WHEREAS, the Borrower and the Lender have agreed to further
amend the Credit Agreement as hereinafter set forth.
NOW, THEREFORE, intending to be legally bound and for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Section 7.01 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.01. CONSOLIDATED NET WORTH. Consolidated Net Worth of the
Borrower shall not at any time be less than $10,000,000.
2. Section 7.07 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.07. DIVIDENDS AND RELATED DISTRIBUTIONS. The Borrower shall
not, and shall not permit any Subsidiary of the Borrower to, declare
or make any Stock Payment, except as follows:
(a) So long as no Event of Default or Potential Default shall
have occurred and be continuing or shall occur after giving effect
thereto, Stock Payments to the Guarantor for the purposes of paying
reasonable administrative costs and salaries of the Guarantor's
employees, paying taxes, paying expenses incurred in the ordinary
course of business and making payments required under the Services
Agreement; PROVIDED, that no Stock Payment pursuant to this Section
7.07(a) may be made if, after giving effect to such Stock Payment, the
aggregate amount of Stock Payments made during any fiscal year of the
Borrower, together with any loans and advances made pursuant to
Section 7.06(b)(ii) (other than to the Guarantor for the purpose of
paying in full the Indebtedness secured by the Senior Subordinated
<PAGE> 2
Indenture) during such fiscal year, would exceed $1,500,000, less the
amount paid directly by the Borrower and its Subsidiaries in such
fiscal year under the Services Agreement;
(b) So long as no Event of Default or Potential Default shall
have occurred and be continuing or shall occur after giving effect
thereto, Stock Payments to the Guarantor for the purpose of making
Stock Payments to the extent permitted by Section 5.03 of the
Guaranty;
(c) Stock Payments to the Guarantor for the purpose of
repaying certain Indebtedness of the Guarantor to the Borrower in the
principal amount of $43,670,000; and
(d) A Subsidiary of the Borrower may declare and make Stock
Payments if all of the capital stock of such Subsidiary is owned by
the Borrower or by a direct or indirect wholly-owned Subsidiary of the
Borrower.
3. The Lender hereby consents to the amendment to the License
Agreement in substantially the form attached hereto as Exhibit A.
4. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
5. Except as specifically amended by this Amendment, the
terms and conditions of the Credit Agreement shall remain in full force and
effect and shall be binding upon the parties hereto and their respective
successors and assigns.
6. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
BLACK BOX CORPORATION OF PENNSYLVANIA
By: /s/ FREDERICK C. YOUNG
--------------------------
Title: Vice President
MELLON BANK, N.A.
By: /s/ MARK LATTERNER
-------------------------
Title: Asst. Vice President
[Signatures to Fourth Amendment to Credit Agreement]
- 2 -
<PAGE> 3
CONSENT OF GUARANTOR
BLACK BOX CORPORATION, a Delaware corporation formerly known
as MB Communications, Inc., the Guarantor under that certain Guaranty and
Suretyship Agreement (the "Guaranty"), dated as of May 6, 1994, made by the
Guarantor in favor of Mellon Bank, N.A., hereby consents to the within Fourth
Amendment to Credit Agreement and confirms and reaffirms its obligations under
the Guaranty.
BLACK BOX CORPORATION
By:
--------------------------
Title:
<PAGE> 1
Exhibit 10.7
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment"),
dated as of this 21st day of November, 1996, between BLACK BOX CORPORATION OF
PENNSYLVANIA, a Delaware corporation formerly known as Black Box Corporation
(the "Borrower"), and MELLON BANK, N.A., a national banking association (the
"Lender").
W I T N E S S E T H:
WHEREAS, the Borrower and the Lender have entered into that
certain Credit Agreement, dated as of May 6, 1994, as amended by that certain
First Amendment to Credit Agreement, dated as of March 30, 1995, by that
certain Second Amendment to Credit Agreement, dated as of August 1, 1995, by
that certain Third Amendment to Credit Agreement, dated as of April 1, 1996,
and by that certain Fourth Amendment to Credit Agreement, dated as of November
21, 1996 (as amended, the "Credit Agreement"); and
WHEREAS, the Borrower and the Lender have agreed to further
amend the Credit Agreement as hereinafter set forth.
NOW, THEREFORE, intending to be legally bound and for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto covenant and agree as follows:
1. Section 1.01 of the Credit Agreement is hereby amended by
adding the following defined terms thereto:
"Holding Company Guarantor" shall mean BBox Holding Company,
a Delaware corporation.
"Holding Company Guaranty" shall mean that certain Guaranty
and Suretyship Agreement, dated as of November 21, 1996, made by the
Holding Company Guarantor in favor of the Lender, as amended, modified
or supplemented from time to time.
2. Section 1.01 of the Credit Agreement is hereby amended by
deleting the definitions of "License Agreement", "Loan Documents" and "Loan
Party" appearing therein and inserting the following definitions in lieu
thereof:
"License Agreement" shall mean that certain Trademark/Service
Mark License Agreement, dated as of October 1, 1992, between BB
Technologies, Inc. and the Borrower, as amended by Amendment No. 1 to
the Trademark/Service Mark License Agreement, dated as of December 21,
1993, by Amendment No. 2 to the Trademark/Service Mark License
Agreement, dated as of May 6, 1994, and by Amendment No. 3 to the
Trademark/Service Mark License Agreement, dated as of July 1, 1995, in
substantially the form attached hereto as Exhibit E, and, subject to
Section 7.14, as amended, modified or supplemented from time to time
hereafter.
<PAGE> 2
"Loan Documents" shall mean this Agreement, the Revolving
Credit Note, the Guaranty, the Holding Company Guaranty and all other
agreements and instruments extending, renewing, refinancing or
refunding any indebtedness, obligation or liability arising under any
of the foregoing, in each case as the same may be amended, modified or
supplemented from time to time hereafter.
"Loan Party" shall mean the Borrower, the Guarantor and the
Holding Company Guarantor.
3. In order to correct a typographical error in the Third
Amendment to Credit Agreement between the Borrower and the Lender (which
mistakenly referenced Section 2.02 of the Credit Agreement), Section 2.03 of
the Credit Agreement is hereby amended by deleting clause (c) in its entirety
and inserting the following cause in lieu thereof:
(c) The interest rate Option or Options selected in
accordance with Section 2.04(a) hereof and the principal amounts
selected in accordance with Section 2.04(c) hereof of the Base Rate
Portion and the ABS Rate Portion and each Funding Segment of the
Euro-Rate Portion of such proposed Revolving Credit Loan; and
4. Section 4.15 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
4.15. OWNERSHIP AND CONTROL. Schedule 4.15 hereof
states as of the date hereof the authorized capitalization of
each Loan Party and the number of shares of each class of
capital stock issued and outstanding of each Loan Party. All
of the issued and outstanding shares of capital stock of the
Borrower are owned beneficially and of record by the Holding
Company Guarantor. All of the issued and outstanding shares
of capital stock of the Holding Company Guarantor are owned
beneficially and of record by the Guarantor. The outstanding
shares of capital stock of each Loan Party have been duly
authorized and validly issued and are fully paid and
nonassessable. There are no options, warrants, calls,
subscriptions, conversion rights, exchange rights, preemptive
rights or other rights, agreements or arrangements
(contingent or otherwise) which may in any circumstances now
or hereafter obligate the Borrower to issue any shares of its
capital stock.
5. Section 4.26 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
4.26. REGULATORY STATUS. Neither the Borrower, the
Holding Company Guarantor, the Guarantor nor any
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<PAGE> 3
Subsidiary of the Borrower, the Holding Company Guarantor or
the Guarantor is (i) an "investment company" or a company
"controlled" by an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, (ii) a
"holding company" or a "subsidiary company" or an "affiliate"
of a "holding company" or a "subsidiary company" of a
"holding company", within the meaning of the Public Utility
Act of 1935, as amended, or (iii) a "public utility" within
the meaning of the Federal Power Act, as amended.
6. Section 6.11 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
6.11. CONSOLIDATED TAX RETURN. The Borrower shall
not, and shall not suffer any of its Subsidiaries to, file or
consent to the filing of any consolidated income tax return
with any Person other than the Guarantor, the Holding Company
Guarantor, the Borrower and their respective Subsidiaries.
7. Section 7.02 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.02. CASH FLOW OF THE GUARANTOR. As of the last day
of each fiscal quarter, the ratio of (a) the Consolidated Net
Income of the Guarantor, plus the amortization expense
related to intangible assets of the Guarantor, the Holding
Company Guarantor and the Borrower (without duplication),
without giving effect, in the case of the Guarantor and its
Subsidiaries, to reductions in income attributable to
amortization of original issue discount with respect to the
promissory notes of the Guarantor delivered pursuant to the
Senior Subordinated Indenture, for the four (4) most recently
completed fiscal quarters to (b) the aggregate Indebtedness
of the Guarantor, the Holding Company Guarantor and the
Borrower determined in accordance with GAAP (exclusive of
principles of consolidation) shall not be less than .25 to 1.
8. Section 7.04 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.04. INDEBTEDNESS. The Borrower shall not, and
shall not permit any Subsidiary of the Borrower to, at any
time create, incur, assume or suffer to exist any
Indebtedness, except:
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<PAGE> 4
(a) Indebtedness to the Lender pursuant to this
Agreement and the other Loan Documents and Indebtedness
pursuant to the Term Loan Documents;
(b) Indebtedness of the Borrower and its
Subsidiaries existing on the date hereof and listed in
Schedule 7.04 hereof, but not any extensions, renewals or
refinancings thereof;
(c) Indebtedness for borrowed money incurred by the
Borrower and its Subsidiaries from time to time; PROVIDED,
that the aggregate principal amount of such Indebtedness
shall not exceed $3,000,000 at any time;
(d) Capitalized Lease Obligations of the Borrower
and its Subsidiaries in an aggregate amount not in excess of
$5,000,000 at any one time, provided such Capitalized Leases
are otherwise permitted by Section 7.12;
(e) Indebtedness for borrowed money incurred by the
Borrower and the Japanese Joint Venture in connection with
the acquisition by the Borrower of the interest in the
Japanese Joint Venture that the Borrower does not currently
own; PROVIDED, that such Indebtedness shall not exceed an
amount equal to $4,000,000, less the amount of any loans or
advances to or investments in the Japanese Joint Venture as
permitted by Section 7.06(f) hereof; and
(f) Indebtedness for borrowed money in the form of a
note or notes payable by the Borrower to the order of the
Holding Company Guarantor issued in connection with a Stock
Payment made to the Holding Company Guarantor to the extent
permitted by Section 7.07 or in connection with the payment
of interest with respect to any such note or notes, which
note or notes (i) shall be in substantially the form attached
hereto as Exhibit L or otherwise in form and substance
satisfactory to the Lender and the Borrower, the Lender
hereby agreeing that any such note or notes may have a stated
term of seven (7) years, but be payable on demand and require
the payment of interest on an annual basis, and (ii) shall be
subordinated to the Revolving Credit Note on the terms
identified in Exhibit J attached hereto;
PROVIDED, HOWEVER, that in no event shall the aggregate
amount of the Indebtedness of the Subsidiaries of the
Borrower exceed $3,000,000 at any time; PROVIDED, FURTHER,
however, that, Indebtedness borrowed by the Borrower from any
Affiliate shall be subordinated to the Revolving Credit Note
on the terms identified in Exhibit J attached hereto.
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<PAGE> 5
9. Section 7.06 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.06. LOANS, ADVANCES AND INVESTMENTS. The Borrower
shall not, and shall not permit any Subsidiary of the
Borrower to, at any time make or suffer to exist or remain
outstanding any loan or advance to, OR purchase, acquire or
own (beneficially or of record) any stock, bonds, notes or
securities of, or any partnership interest (whether general
or limited) in, or any other interest in, OR make any capital
contribution to or other investment in, any other Person,
except:
(a) The capital stock of a Subsidiary of the
Borrower owned on the date hereof and listed on Schedule 4.13
hereto and the matters set forth on Schedule 4.14 hereto;
(b) Loans or advances (i) so long as no Event of
Default or Potential Default shall have occurred and be
continuing or shall occur after giving effect thereto, to
Subsidiaries of the Borrower in an aggregate amount not in
excess at any time of an amount equal to $10,000,000, or (ii)
to the Guarantor for the purposes of paying in full the
Indebtedness secured by the Senior Subordinated Indenture,
and so long as no Event of Default or Potential Default shall
have occurred and be continuing or shall occur after giving
effect thereto, paying reasonable administrative costs and
salaries of the Guarantor's employees, paying taxes and
paying expenses incurred in the ordinary course of business
and to the Holding Company Guarantor, so long as no Event of
Default or Potential Default shall have occurred and be
continuing or shall occur after giving effect thereto, for
the purposes of paying reasonable administrative costs and
salaries of the Holding Company Guarantor's employees, paying
taxes and paying expenses incurred in the ordinary course of
business; PROVIDED, that no loans or advances may be made
pursuant to clause (ii) of this Section 7.06(b) (other than
to the Guarantor for the purpose of paying in full the
Indebtedness secured by the Senior Subordinated Indenture)
if, after giving effect to such loan or advance, the
aggregate amount of loans or advances made during any fiscal
year of the Borrower, together with any Stock Payments made
pursuant to Section 7.07(a) during such fiscal year, would
exceed $1,500,000;
(c) So long as no Event of Default or Potential
Default shall have occurred and be continuing or shall occur
after giving effect thereto, additional capital stock of any
of the Subsidiaries listed on Schedule 4.13 hereto and
additional interests with respect to those
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<PAGE> 6
matters set forth on Schedule 4.14 hereto; PROVIDED, that the
acquisition of such additional interests shall not require
the expenditure of more than $4,000,000 in the aggregate;
(d) So long as no Event of Default or Potential
Default shall have occurred and be continuing or shall occur
after giving effect thereto, investments in any other Person;
provided, that (i) such Person is in the same or a similar
line of business as the Borrower, (ii) the Borrower acquires
all or substantially all of the assets of such Person
(whether by acquisition of such assets or the stock of such
Person) and (iii) the investment in any one (1) Person shall
not exceed $5,000,000;
(e) Cash Equivalent Investments; and
(f) Loans or advances to or investments in a
Subsidiary of the Borrower or the Japanese Joint Venture in
connection with the acquisition by the Borrower of the
interest in the Japanese Joint Venture that the Borrower does
not currently own; provided, that such loans, advances and
investments shall not exceed in the aggregate an amount equal
to $4,000,000, less the amount of any Indebtedness incurred
in connection with such acquisition as permitted by Section
7.04(e).
10. Section 7.07 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.07. DIVIDENDS AND RELATED DISTRIBUTIONS. The
Borrower shall not, and shall not permit any Subsidiary of
the Borrower to, declare, or make any Stock Payment, except
as follows:
(a) So long as no Event of Default or Potential
Default shall have occurred and be continuing or shall occur
after giving effect thereto, Stock Payments to the Holding
Company Guarantor for the purposes of paying reasonable
administrative costs and salaries of the Holding Company
Guarantor's employees, paying taxes and paying expenses
incurred in the ordinary course of business and of making
Stock Payments to the Guarantor for the purposes of paying
reasonable administrative costs and salaries of the
Guarantor's employees, paying taxes and paying expenses
incurred in the ordinary course of business; provided, that
no Stock Payment pursuant to this Section 7.07(a) may be made
if, after giving effect to such Stock Payment, the aggregate
amount of Stock Payments made during any fiscal year of the
Borrower, together with any loans and advances made pursuant
to Section 7.06(b)(ii) (other than to the
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<PAGE> 7
Guarantor for the purpose of paying in full the Indebtedness
secured by the Senior Subordinated Indenture) during such
fiscal year, would exceed $1,500,000;
(b) So long as no Event of Default or Potential
Default shall have occurred and be continuing or shall occur
after giving effect thereto, Stock Payments to the Holding
Company Guarantor for the purpose of making Stock Payments to
the Guarantor for the purpose of making Stock Payments to the
extent permitted by Section 5.03 of the Guaranty;
(c) Stock Payments to the Holding Company Guarantor
for the purpose of making Stock Payments to the Guarantor for
the purpose of repaying certain Indebtedness of the Guarantor
to the Borrower in the principal amount of $43,670,000;
(d) Stock Payments to the Holding Company Guarantor
so long as the proceeds thereof shall be loaned to the
Borrower as permitted by Section 7.04 hereof; and
(e) A Subsidiary of the Borrower may declare and
make Stock Payments if all of the capital stock of such
Subsidiary is owned by the Borrower or by a direct or
indirect wholly-owned Subsidiary of the Borrower.
11. Section 7.12 of the Credit Agreement is hereby deleted in
its entirety and the following Section is hereby inserted in lieu thereof:
7.12. CAPITAL EXPENDITURES. The Borrower shall not,
and shall not permit any Subsidiary of the Borrower to, make
any Capital Expenditures on or after the date hereof, except
for Capital Expenditures not in excess of $3,500,000 in the
aggregate by the Guarantor, the Holding Company Guarantor,
the Borrower and their respective Subsidiaries in any fiscal
year.
12. Section 8.01 of the Credit Agreement is hereby amended by
deleting clause (c) in its entirety and inserting the following clause in lieu
thereof:
(c) Any Loan Party shall default in the performance
or observance of any material covenant, agreement or duty
under this Agreement, the Guaranty, the Holding Company
Guaranty or any other Loan Document.
13. Section 8.01 of the Credit Agreement is hereby amended by
deleting clause (l) in its entirety and inserting the following clause in lieu
thereof:
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<PAGE> 8
(l) The Guaranty, the Holding Company Guaranty or
any provision of either thereof shall cease to be in full
force and effect, the Guarantor shall deny or disaffirm its
obligations under the Guaranty, or the Holding Company
Guarantor shall deny or disaffirm its obligations under the
Holding Company Guaranty.
14. Section 8.01 of the Credit Agreement is hereby amended by
deleting clause (m) in its entirety and inserting the following clause in lieu
thereof:
(m) The Guarantor shall cease to own one hundred
percent (100%) of the outstanding capital stock of the
Holding Company Guarantor or the Holding Company Guarantor
shall cease to own one hundred percent (100%) of the
outstanding capital stock of the Borrower.
15. Section 9.13 of the Credit Agreement is hereby amended by
deleting clause (b)(iv) in its entirety and inserting the following clause in
lieu thereof:
(iv) the Lender may enter into any amendment to this
Agreement or to any of the other Loan Documents without the
prior consent of any such Participant, except any amendment
which would (A) increase the Revolving Credit Committed
Amount, (B) extend the maturity of the principal of or any
interest on any amount owed to the Lender by the Borrower
under this Agreement or any of the other Loan Documents, (C)
reduce the principal amount of or the rate of interest on any
amount owed to the Lender by the Borrower under this
Agreement or any of the other Loan Documents, (D) waive any
Event of Default under this Agreement, (E) release the
Guarantor from any obligation under the Guaranty, or (F)
release the Holding Company Guarantor from any obligation
under the Holding Company Guaranty.
16. Schedules 4.01, 4.13 and 4.15 to the Credit Agreement are
hereby replaced by Schedules 4.01, 4.13 and 4.15 attached hereto.
17. This Amendment and the Second Amendment to Guaranty of
even date herewith between Guarantor (as defined in the Credit Agreement) and
Lender are subject to the satisfaction of each of the following conditions
precedent:
(a) HOLDING COMPANY GUARANTY. The Lender shall have
received from the Holding Company Guarantor (as defined in
the Amendment), the Holding Company Guaranty (as defined in
the Amendment) substantially in the form of Exhibit A hereto,
duly executed on behalf of the Holding Company Guarantor.
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<PAGE> 9
(b) CAPITALIZATION, ETC. The corporate and capital
structure of the Holding Company Guarantor, the articles of
incorporation and by-laws of the Holding Company Guarantor,
and the terms, conditions, amounts and holders of all equity,
debt and other indebtedness, obligations and liabilities of
the Holding Company Guarantor, shall be satisfactory to the
Lender.
(c) CORPORATE PROCEEDINGS. The Lender shall have
received a certificate executed by the Secretary or Assistant
Secretary of the Holding Company Guarantor dated as of the
date of this Amendment as to (i) true copies of the articles
of incorporation and by-laws of the Holding Company Guarantor
in effect on such date, (ii) true copies of all corporate
action taken by the Holding Company Guarantor relative to the
Holding Company Guaranty and (iii) the incumbency and
signature of the officers of the Holding Company Guarantor
executing the Holding Company Guaranty, together with
satisfactory evidence of the incumbency of such Secretary or
Assistant Secretary. The Lender shall have received a
certificate from the Secretary of State of the State of
Delaware dated not more than thirty (30) days before the date
of this Amendment showing the good standing of the Holding
Company Guarantor in the State of Delaware.
(d) LEGAL OPINION OF COUNSEL TO THE HOLDING COMPANY
GUARANTOR. The Lender shall have received an opinion
addressed to the Lender, dated the date of the Amendment, of
counsel to the Holding Company Guarantor as to such matters
as may be requested by the Lender and in form and substance
satisfactory to the Lender.
(e) FEES, EXPENSES, ETC. The Borrower shall have
paid all out-of-pocket costs and expenses incurred by the
Lender in connection with the preparation, execution and
delivery of the Amendment, the Holding Company Guaranty and
the other documents executed in connection with the
transactions contemplated thereby, including without
limitation attorney's fees and costs.
18. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
19. Except as specifically amended by this Amendment, the
terms and conditions of the Credit Agreement shall remain in full force and
effect and shall be binding upon the parties hereto and their respective
successors and assigns.
20. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
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<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
BLACK BOX CORPORATION OF PENNSYLVANIA
By: /s/ FREDERICK C. YOUNG
---------------------------
Title: Vice President
MELLON BANK, N.A.
By: /s/ MARK LATTERNER
--------------------------
Title: Asst. Vice President
[Signatures to Fifth Amendment to Credit Agreement]
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<PAGE> 11
CONSENT OF GUARANTOR
BLACK BOX CORPORATION, a Delaware corporation formerly known
as MB Communications, Inc., the Guarantor under that certain Guaranty and
Suretyship Agreement (the "Guaranty"), dated as of May 6, 1994, made by the
Guarantor in favor of Mellon Bank, N.A., hereby consents to the within Fifth
Amendment to Credit Agreement and confirms and reaffirms its obligations under
the Guaranty.
BLACK BOX CORPORATION
By: /s/ FREDERICK C. YOUNG
--------------------------
Title: Vice President
- 1 -
<PAGE> 1
Exhibit 10.8
SECOND AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT
THIS SECOND AMENDMENT TO GUARANTY AND SURETYSHIP AGREEMENT
(this "Amendment"), dated as of this 21st day of November, 1996, between BLACK
BOX CORPORATION, a Delaware corporation formerly known as MB Communications,
Inc. (the "Guarantor"), and MELLON BANK, N.A., a national banking association
(the "Lender").
W I T N E S S E T H:
WHEREAS, the Guarantor executed and delivered that certain
Guaranty and Suretyship Agreement, dated as of May 6, 1994, in favor of the
Lender, as amended by that certain First Amendment to Guaranty and Suretyship
Agreement, dated as of March 30, 1995 (as amended, the "Guaranty"); and
WHEREAS, the Lender and the Guarantor have agreed to further
amend the Guaranty as hereinafter set forth.
NOW, THEREFORE, intending to be legally bound and for good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto covenant and agree as follows:
1. The Guaranty is hereby amended by deleting Section 4.18
thereof and inserting the following Section in lieu thereof:
4.18. CONSOLIDATED TAX RETURN. The Guarantor shall not, and
shall not suffer any of its Subsidiaries to, file or consent to the
filing of any consolidated income tax return with any Person other
than the Borrower, the Guarantor, the Holding Company Guarantor and
their respective Subsidiaries.
2. The Guaranty is hereby amended by deleting Section 5.01
thereof and inserting the following Section in lieu thereof:
5.01. CONSOLIDATED NET WORTH. Consolidated Net Worth of the
Guarantor shall not be less than $60,000,000; PROVIDED, that such
amount shall be increased on the last day of each fiscal year of the
Guarantor, beginning with the fiscal year ending on or about March 31,
1997, by an amount equal to fifty percent (50%) of the Guarantor's
Consolidated Net Income for such fiscal year, PROVIDED, FURTHER, that
such amount shall not be decreased as the result of any loss.
3. The Guaranty is hereby amended by deleting Section 5.03
thereof and inserting the following Section in lieu thereof:
5.03. DIVIDENDS AND RELATED DISTRIBUTIONS. The Guarantor
shall not declare or make any Stock Payment, except that the Guarantor
may make Stock Payments during any fiscal
<PAGE> 2
year in an amount not in excess of fifty percent (50%) of Guarantor's
Consolidated Net Income.
4. The Guaranty is hereby amended by deleting Section 5.04
thereof and inserting the following Section in lieu thereof:
5.04. CAPITAL EXPENDITURES. The Guarantor shall not, and
shall not permit any Subsidiary of the Guarantor to, make any Capital
Expenditures on or after the date hereof, except for Capital
Expenditures not in excess of $3,500,000 in the aggregate by the
Guarantor and its Subsidiaries in any fiscal year.
5. The Guaranty is hereby amended by deleting Section 5.06
thereof and inserting the following Section in lieu thereof:
5.06. CASH FLOW OF THE GUARANTOR. As of the last date of each
fiscal quarter, the ratio of (a) the Consolidated Net Income of the
Guarantor plus the amortization expense related to intangible assets,
without giving effect, in the case of the Guarantor and its
Subsidiaries, to reductions in income attributable to amortization of
original issue discount with respect to the promissory note of the
Guarantor delivered pursuant to the Senior Subordinated Indenture, for
the four (4) most recently completed fiscal quarters to (b) the
aggregate Indebtedness of the Guarantor and its consolidated
Subsidiaries determined on a consolidated basis in accordance with
GAAP shall not be less than .25 to 1.
6. Section 5.07 of the Guaranty is hereby deleted in its
entirety and the following Section is hereby inserted in liue thereof:
5.07. INDEBTEDNESS TO TOTAL CAPITALIZATION. The Guarantor
shall not permit the ratio of Indebtedness of the Guarantor and its
Subsidiaries to Adjusted Total Capitalization to be greater than (a)
sixty percent (60%) during the period from April 1, 1996, through
March 31, 1997, and (b) fifty-five percent (55%) from and after April
1, 1997.
7. Section 5.09 of the Guaranty is hereby deleted in its
entirety and the following Section is hereby inserted in lieu thereof:
5.09. INDEBTEDNESS. The Guarantor shall not, and shall not
permit any of its Subsidiaries to, at any time create, incur, assume
or suffer to exist any Indebtedness except:
(i) Indebtedness incurred in connection with the Credit
Agreement;
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<PAGE> 3
(ii) Indebtedness incurred in connection with the Term Loan
Documents;
(iii) subject to compliance with Section 5.08, Indebtedness
of any Subsidiary of the Guarantor to the Guarantor or any Subsidiary
of the Guarantor; and
(iv) other Indebtedness of the Guarantor or any of its
Subsidiaries, provided (a) after giving effect thereto and to the
application of the proceeds thereof, the Guarantor and its
Subsidiaries are in compliance with all provisions of this Article V
and, to the extent applicable, Article VII of the Credit Agreement and
(b) no Potential Default or Event of Default exists or would occur as
a result of the creation, incurrence, assumption or existence thereof;
provided, however, that Indebtedness of the Guarantor from any
Affiliate (other than the Borrower) shall be subordinated to the
Guarantor's obligations hereunder on the terms identified in Exhibit J
to the Credit Agreement.
8. Section 5.10 of the Guaranty is hereby deleted in its
entirety and the following Section is hereby inserted in lieu thereof:
5.10. DISPOSITION OF PROPERTIES AND ASSETS. The Guarantor
shall not, and shall not permit any of its Subsidiaries to, sell,
lease, transfer or otherwise dispose of, voluntarily or involuntarily,
any of its properties or assets, except:
(i) sales of inventory in the ordinary course of business;
(ii) if no Potential Default or Event of Default exists, the
following:
(a) subject, to the extent applicable, to
compliance with Article VII of the Credit Agreement,
transfers of property between wholly-owned
Subsidiaries of the Guarantor and from Subsidiaries
of the Guarantor to the Guarantor or wholly-owned
Subsidiaries of the Guarantor and the transfer of
all of the capital stock of the Borrower from the
Guarantor to the Holding Company Guarantor;
(b) the Spin-Off; and
(c) assets (other than any capital stock of
the Borrower) with an Asset Percentage Value, when
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<PAGE> 4
combined with the Asset Purchase Value of any other
assets disposed of pursuant to this clause (c)
during the preceding four (4) fiscal quarters of the
Guarantor, of not more than ten percent (10%) and
for consideration representing the fair market value
of such asset at the time of such disposition,
provided, that in no event shall the total assets
disposed of pursuant to this clause (c) have a value
(taken at the higher of book value or the fair
market value thereof as determined in good faith by
the Board of Directors of the Guarantor) exceeding
fifteen percent (15%) of Consolidated Total Assets;
provided, however, that in the case of clause (ii)(b) above,
all agreements and instruments entered into in connection
with the Spin-Off shall be in form and substance satisfactory
to the Lender.
9. This Amendment shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
10. Except as specifically amended by this Amendment, the
terms and conditions of the Guaranty shall remain in full force and effect and
shall be binding upon the parties hereto and their respective successors and
assigns.
11. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
BLACK BOX CORPORATION
By: /s/ FREDERICK C. YOUNG
--------------------------
Title: Vice President
MELLON BANK, N.A.
By: /s/ MARK LATTERNER
-------------------------
Title: Asst. Vice President
[Signatures to Second Amendment
to Guaranty and Suretyship Agreement]
- 4 -
<PAGE> 1
Exhibit 10.9
GUARANTY AND SURETYSHIP AGREEMENT
THIS GUARANTY AND SURETYSHIP AGREEMENT (this "Agreement"),
dated as of November 21, 1996, made by BBOX HOLDING COMPANY, a Delaware
corporation (the "Guarantor"), in favor of MELLON BANK, N.A., a national
banking association (the "Lender").
W I T N E S S E T H:
WHEREAS, Black Box Corporation of Pennsylvania, a Delaware
corporation formerly known as Black Box Corporation (the "Borrower"), and the
Lender have entered into that certain Credit Agreement, dated as of May 6,
1994, as amended by that certain First Amendment to Credit Agreement, dated as
of March 30, 1995, by that certain Second Amendment to Credit Agreement, dated
as of August 1, 1995, by that certain Third Amendment to Credit Agreement,
dated as of April 1, 1996, by that certain Fourth Amendment to Credit
Agreement, dated as of November , 1996, and by that certain Fifth Amendment to
Credit Agreement, dated as of November 21, 1996 (as amended and as further
amended from time to time, the "Credit Agreement");
WHEREAS, the Guarantor, as owner of all of the outstanding
shares of stock of the Borrower, derives substantial direct and indirect
benefit from the transactions contemplated by the Credit Agreement;
WHEREAS, it is a condition precedent to the effectiveness of
the Fifth Amendment to Credit Agreement that the Guarantor execute and deliver
this Agreement; and
WHEREAS, this Agreement is made by the Guarantor among other
things to induce the Lender to enter into the Fifth Amendment to Credit
Agreement.
NOW, THEREFORE, in consideration of the premises, and
intending to be legally bound, the Guarantor hereby agrees as follows:
ARTICLE I
DEFINITIONS
1.01. DEFINITIONS. Capitalized terms not otherwise defined
herein shall have the meanings given to them in, or by reference in, the
Credit Agreement. In addition to the other terms defined elsewhere in this
Agreement, the following terms shall have the following meanings:
"Guaranteed Obligations" shall mean all obligations from time
to time of the Borrower to the Lender under or in connection with any
Loan Document, whether for principal, interest, fees, indemnities,
expenses or otherwise, and all refinancings or refundings thereof,
whether such obligations are direct or indirect, otherwise secured or
unsecured, joint or several, absolute or contingent, due or to become
due, whether for payment or performance, now existing or hereafter
<PAGE> 2
arising (specifically including but not limited to obligations arising
or accruing after the commencement of any bankruptcy, insolvency,
reorganization or similar proceeding with respect to the Borrower or
any other Person, or which would have arisen or accrued but for the
commencement of such proceeding, even if the claim for such obligation
is not enforceable or allowable in such proceeding). Without
limitation of the foregoing, such obligations include all obligations
arising from any extensions of credit under or in connection with the
Loan Documents from time to time, regardless of whether any such
extensions of credit are in excess of the amount committed under or
contemplated by the Loan Documents or are made in circumstances in
which any condition to extension of credit is not satisfied. Without
limitation of the foregoing, the Lender (or any successive assignee or
transferee) from time to time may assign or otherwise transfer all or
any portion of its rights or obligations under the Loan Documents
(including, without limitation, all or any portion of any commitment
to extend credit), or any other Guaranteed Obligations, to any other
Person, and such Guaranteed Obligations (including, without
limitation, any Guaranteed Obligations resulting from extension of
credit by such other Person under or in connection with the Loan
Documents) shall be and remain Guaranteed Obligations entitled to the
benefit of this Agreement.
"Responsible Officer" shall mean the chief executive officer,
chief operating officer, chief financial officer, chief accounting
officer or general counsel of the Guarantor or any other officer of
the Guarantor involved principally in its financial administration or
its controllership function or, in each case, any Person who,
regardless of title, is performing the duties of any of the foregoing.
ARTICLE II
GUARANTY AND SURETYSHIP
2.01. GUARANTY AND SURETYSHIP. The Guarantor hereby
absolutely, unconditionally and irrevocably guarantees and becomes surety for
the full and punctual payment and performance of the Guaranteed Obligations as
and when such payment or performance shall become due (at scheduled maturity,
by acceleration or otherwise) in accordance with the terms of the Loan
Documents. This Agreement is an agreement of suretyship as well as of
guaranty, is a guarantee of payment and performance and not merely of
collectability, and is in no way conditioned upon any attempt to collect from
or proceed against the Borrower or any other Person or any other event or
circumstance. The obligations of the Guarantor under this Agreement are direct
and primary obligations of the Guarantor and are independent of the Guaranteed
Obligations, and a separate action or actions may be brought
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against the Guarantor regardless of whether action is brought against the
Borrower or any other Person or whether the Borrower or any other Person is
joined in any such action or actions.
2.02. OBLIGATIONS ABSOLUTE. The Guarantor agrees that the
Guaranteed Obligations will be paid and performed strictly in accordance with
the terms of the Loan Documents, regardless of any law, regulation or order now
or hereafter in effect in any jurisdiction affecting the Guaranteed
Obligations, any of the terms of the Loan Documents or the rights of the Lender
or any other Person with respect thereto. The obligations of the Guarantor
under this Agreement shall be absolute, unconditional and irrevocable,
irrespective of any of the following:
(a) Any lack of genuineness, legality, validity,
enforceability or allowability (in a bankruptcy, insolvency, reorganization or
similar proceeding, or otherwise), or any avoidance or subordination, in whole
or in part, of any Loan Document or any of the Guaranteed Obligations.
(b) Any increase, decrease or change in the amount, nature,
type or purpose of any of the Guaranteed Obligations (whether or not
contemplated by the Loan Documents as presently constituted); any change in the
time, manner, method or place of payment or performance of, or in any other
term of, any of the Guaranteed Obligations; any execution or delivery of any
additional Loan Documents; or any amendment, modification or supplement to, or
refinancing or refunding of, any Loan Document or any of the Guaranteed
Obligations.
(c) Any failure to assert any breach of or default under any
Loan Document or any of the Guaranteed Obligations; any extensions of credit in
excess of the amount committed under or contemplated by the Loan Documents, or
in circumstances in which any condition to such extensions of credit has not
been satisfied; any other exercise or non-exercise, or any other failure,
omission, breach, default, delay or wrongful action in connection with any
exercise or non-exercise, of any right or remedy against the Borrower or any
other Person under or in connection with any Loan Document or any of the
Guaranteed Obligations; any refusal of payment or performance of any of the
Guaranteed Obligations, whether or not with any reservation of rights against
the Guarantor; or any application of collections (including but not limited to
collections resulting from realization upon any direct or indirect security for
the Guaranteed Obligations) to other obligations, if any, not entitled to the
benefits of this Agreement, in preference to Guaranteed Obligations entitled to
the benefits of this Agreement, or if any collections are applied to Guaranteed
Obligations, any application to particular Guaranteed Obligations.
(d) Any taking, exchange, amendment, modification,
supplement, termination, subordination, release, loss or impairment of, or any
failure to protect, perfect, or preserve the
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value of, OR any enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or any failure, omission, breach,
default, delay or wrongful action by the Lender or any other Person in
connection with the enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, OR any other action or inaction by the
Lender or any other Person in respect of, any direct or indirect security for
any of the Guaranteed Obligations. As used in this Agreement, "direct or
indirect security" for the Guaranteed Obligations, and similar phrases,
includes but is not limited to any collateral security, guaranty, suretyship,
letter of credit, capital maintenance agreement, put option, subordination
agreement or other right or arrangement of any nature providing direct or
indirect assurance of payment or performance of any of the Guaranteed
Obligations, made or on behalf of any Person.
(e) Any merger, consolidation, liquidation, dissolution,
winding-up, charter revocation or forfeiture, or other change in, restructuring
or termination of the corporate structure or existence of, the Borrower or any
other Person; any bankruptcy, insolvency, reorganization or similar proceeding
with respect to the Borrower or any other Person; or any action taken or
election made by the Lender (including but not limited to any election under
Section 1111(b)(2) of the United States Bankruptcy Code), the Borrower or any
other Person in connection with any such proceeding.
(f) Any defense, setoff or counterclaim (excluding only the
defense of full, strict and indefeasible payment and performance), which may at
any time be available to or be asserted by the Borrower or any other Person
with respect to any Loan Document or any of the Guaranteed Obligations; or any
discharge by operation of law or release of the Borrower or any other Person
from the performance or observance of any Loan Document or any of the
Guaranteed Obligations.
(g) Any other event or circumstance, whether similar or
dissimilar to the foregoing, and whether known or unknown, which might
otherwise constitute a defense available to, or limit the liability of, the
Guarantor, a guarantor or a surety, excepting only full, strict and
indefeasible payment and performance of the Guaranteed Obligations in full.
2.03. WAIVERS, ETC. The Guarantor hereby waives any defense
to or limitation on its obligations under this Agreement arising out of or
based on any event or circumstance referred to in Section 2.02 hereof. Without
limitation, the Guarantor waives each of the following:
(a) All notices, disclosures and demands of any nature which
otherwise might be required from time to time to preserve intact any rights
against the Guarantor, including without limitation the following: any notice
of any event or circumstance described in Section 2.02 hereof; any notice
required by any law,
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regulation or order now or hereafter in effect in any jurisdiction; any notice
of nonpayment, nonperformance, dishonor, or protest under any Loan Document or
any of the Guaranteed Obligations; any notice of the incurrence of any
Guaranteed Obligation; any notice of any default or any failure on the part of
the Borrower or any other Person to comply with any Loan Document or any of the
Guaranteed Obligations or any direct or indirect security for any of the
Guaranteed Obligations; and any notice of any information pertaining to the
business, operations, condition (financial or otherwise) or prospects of the
Borrower or any other Person.
(b) Any right to any marshalling of assets, to the filing of
any claim against the Borrower or any other Person in the event of any
bankruptcy, insolvency, reorganization or similar proceeding, or to the
exercise against the Borrower or any other Person of any other right or remedy
under or in connection with any Loan Document or any of the Guaranteed
Obligations or any direct or indirect security for any of the Guaranteed
Obligations; any requirement of promptness or diligence on the part of the
Lender or any other Person; any requirement to exhaust any remedies under or in
connection with, or to mitigate the damages resulting from default under, any
Loan Document or any of the Guaranteed Obligations or any direct or indirect
security for any of the Guaranteed Obligations; any benefit of any statute of
limitations; and any requirement of acceptance of this Agreement, and any
requirement that the Guarantor receive notice of such acceptance.
(c) Any defense or other right arising by reason of any law
now or hereafter in effect in any jurisdiction pertaining to election of
remedies (including but not limited to anti-deficiency laws, "one action" laws
or the like), or by reason of any election of remedies or other action or
inaction by the Lender (including but not limited to commencement or completion
of any judicial proceeding or nonjudicial sale or other action in respect of
collateral security for any of the Guaranteed Obligations), which results in
denial or impairment of the right of the Lender to seek a deficiency against
the Borrower or any other Person or which otherwise discharges or impairs any
of the Guaranteed Obligations.
2.04. REINSTATEMENT. This Agreement shall continue to be
effective, or be automatically reinstated, as the case may be, if at any time
payment of any of the Guaranteed Obligations is avoided, rescinded or must
otherwise be returned by the Lender for any reason (including, without
limitation, by reason of such payment being a preference or fraudulent
conveyance), all as though such payment had not been made.
2.05. NO STAY. Without limitation of any other provision of
this Agreement, if any declaration of default or acceleration or other exercise
or condition to exercise of rights or remedies under or with respect to any
Guaranteed Obligation
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<PAGE> 6
shall at any time be stayed, enjoined or prevented for any reason (including
but not limited to stay or injunction resulting from of the pendency against
the Borrower or any other Person of a bankruptcy, insolvency, reorganization or
similar proceeding), the Guarantor agrees that, for purposes of this Agreement
and its obligations hereunder, the Guaranteed Obligations shall be deemed to
have been declared in default or accelerated, and such other exercise or
conditions to exercise shall be deemed to have been taken or met.
2.06. PAYMENTS. All payments to be made by Guarantor pursuant
to this Agreement shall be made at the times and in the manner prescribed for
payments in Section 2.09 of the Credit Agreement, without setoff, counterclaim,
withholding or other deduction of any nature.
2.07. SUBROGATION, ETC. The Guarantor hereby agrees that any
and all rights it now has or hereafter may have (known and unknown, whether
arising by operation of law, by agreement or otherwise) against the Borrower or
any other Person arising from the existence, payment, performance or
enforcement of any of the obligations of the Guarantor under or in connection
with this Agreement, including without limitation any and all rights of
subrogation, reimbursement, exoneration, contribution and indemnity or similar
rights which the Guarantor may have against the Borrower at any time shall be
subordinate in any and all events to any and all rights which the Lender may
have against the Borrower in respect of the Guaranteed Obligations, and the
Guarantor will not enforce any such right until the Guaranteed Obligations have
been paid and performed in full and all commitments to extend credit under the
Loan Documents have been fully terminated.
2.08. CONTINUING GUARANTY. This Agreement is a continuing
agreement and shall continue in full force and effect (notwithstanding that no
Guaranteed Obligations may be outstanding from time to time, or any other event
or circumstance) until all Guaranteed Obligations and all other amounts payable
under this Agreement have been paid and performed in full, and all commitments
to extend credit under the Loan Documents have terminated, subject in any event
to reinstatement in accordance with Section 2.04 hereof. Any purported
termination, revocation or discharge of this Agreement shall be void and of no
effect. For purposes of this Agreement the Guaranteed Obligations shall not be
deemed to have been paid in full until the Lender shall have received payment
of the Guaranteed Obligations in full and in cash and all commitments to extend
credit under the Loan Documents have terminated.
2.09. SUBORDINATION. The Guarantor further agrees that any
and all present and future debts and obligations of the Borrower, any endorser,
or any guarantor of any part or all of the Guaranteed Obligations to the
Guarantor and any and all claims of the Guarantor against the Borrower, any
endorser, or any guarantor
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<PAGE> 7
of any part or all of the Guaranteed Obligations, or any of their respective
properties, howsoever arising, shall be subordinate and subject in right of
payment to the prior payment, in full, of the Guaranteed Obligations and as
security for this Agreement, the Guarantor hereby assigns to the Lender all
claims of any nature which the Guarantor may now or hereafter have against the
Borrower.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants to the Lender as
follows:
3.01. CORPORATE STATUS. The Guarantor and each Subsidiary of
the Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. The Guarantor and
each Subsidiary of the Guarantor has corporate power and authority to own its
property and to transact the business in which it is engaged or presently
proposes to engage. The Guarantor and each Subsidiary of the Guarantor is duly
qualified to do business as a foreign corporation and is in good standing in
all jurisdictions in which the ownership of its properties or the nature of its
activities or both makes such qualification necessary or advisable. Schedule
4.01 to the Credit Agreement states as of the date hereof the jurisdiction of
incorporation of the Guarantor and each Subsidiary of the Guarantor, and the
jurisdictions in which the Guarantor and each Subsidiary of the Guarantor is
qualified to do business as a foreign corporation.
3.02. CORPORATE POWER AND AUTHORIZATION. The Guarantor has
corporate power and authority to execute, deliver, perform, and take all
actions contemplated by, this Agreement, and all such action has been duly and
validly authorized by all necessary corporate proceedings on its part.
3.03. EXECUTION AND BINDING EFFECT. This Agreement has been
duly and validly executed and delivered by the Guarantor. This Agreement
constitutes the legal, valid and binding obligation of the Guarantor,
enforceable against the Guarantor in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency or other
similar laws of general application affecting the enforcement of creditors'
rights or by general principles of equity limiting the availability of
equitable remedies.
3.04. GOVERNMENTAL APPROVALS AND FILINGS. No approval, order,
consent, authorization, certificate, license, permit or validation of, or
exemption or other action by, or filing, recording or registration with, or
notice to, any Governmental Authority is or will be necessary or advisable in
connection with execution and delivery of this Agreement by the Guarantor,
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<PAGE> 8
consummation by the Guarantor of the transactions herein contemplated,
performance of or compliance with the terms and conditions hereof by the
Guarantor or to ensure the legality, validity, binding effect, enforceability
or admissibility in evidence hereof.
3.05. ABSENCE OF CONFLICTS. Neither the execution and
delivery of this Agreement by the Guarantor, nor consummation by the Guarantor
of the transactions herein contemplated, nor performance of or compliance with
the terms and conditions hereof by the Guarantor does or will
(a) violate or conflict with any Law, or
(b) violate, conflict with or result in a breach of any term
or condition of, OR constitute a default under, OR result in (or give rise to
any right, contingent or otherwise, of any Person to cause) any termination,
cancellation, prepayment or acceleration of performance of, OR result in the
creation or imposition of (or give rise to any obligation, contingent or
otherwise, to create or impose) any Lien upon any property of the Guarantor or
any Subsidiary of the Guarantor pursuant to, OR otherwise result in (or give
rise to any right, contingent or otherwise, of any Person to cause) any change
in any right, power, privilege, duty or obligation of the Guarantor or any
Subsidiary of the Guarantor under or in connection with,
(i) the articles of incorporation or by-laws (or other
constituent documents) of the Guarantor or any Subsidiary of the
Guarantor,
(ii) any material agreement or instrument creating, evidencing or
securing any Indebtedness or Guaranty Equivalent to which the
Guarantor or any Subsidiary of the Guarantor is a party or by which
any of them or any of their respective properties (now owned or
hereafter acquired) may be subject or bound, or
(iii) any other material agreement or instrument to which the
Guarantor or any Subsidiary of the Guarantor is a party or by which
any of them or any of their respective properties (now owned or
hereafter acquired) may be subject or bound.
3.06. ACCURATE AND COMPLETE DISCLOSURE. All information
heretofore, contemporaneously or hereafter provided (orally or in writing) by
or on behalf of the Guarantor or any Subsidiary of the Guarantor to the Lender
pursuant to or in connection with any Loan Document or any transaction
contemplated hereby or thereby is or will be (as the case may be) true and
accurate in all material respects on the date as of which such information is
dated (or, if not dated, when received by the Lender) and does not or will not
(as the case may be) omit to state any material fact necessary to make such
information not
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misleading at such time in light of the circumstances in which it was provided.
The Guarantor has disclosed to the Lender in writing every fact or circumstance
which has, or which could have, a Material Adverse Effect.
3.07. SUBSIDIARIES. Schedule 4.13 to the Credit Agreement
states as of the date hereof the authorized capitalization of each Subsidiary
of the Guarantor, the number of shares of each class of capital stock issued
and outstanding of each such Subsidiary, and the number and percentage of
outstanding shares of each such class of capital stock owned by the Guarantor.
The outstanding shares of each Subsidiary of the Guarantor have been duly
authorized and validly issued and are fully paid and nonassessable. The
Guarantor owns beneficially and of record and has good title to all of the
shares it is listed as owning in such Schedule 4.13, free and clear of any
Lien. There are no options, warrants, calls, subscriptions, conversion rights,
exchange rights, preemptive rights or other rights, agreements or arrangements
(contingent or otherwise) which may in any circumstances now or hereafter
obligate any Subsidiary of the Guarantor to issue any shares of its capital
stock.
3.08. PARTNERSHIPS, ETC. The Guarantor is not a partner
(general or limited) of any partnership or a party to any joint venture nor
does the Guarantor own (beneficially or of record) any equity or similar
interest in any Person (including but not limited to any interest pursuant to
which the Guarantor has or may in any circumstance have an obligation to make
capital contributions to, or be generally liable for or on account of the
liabilities, acts or omissions of such other Person), except for capital stock
of Subsidiaries of the Guarantor referred to in Section 3.07 hereof.
3.09. OWNERSHIP AND CONTROL. Schedule 4.15 to the Credit
Agreement states as of the date hereof the authorized capitalization of the
Guarantor and the number of shares of each class of capital stock issued and
outstanding of the Guarantor. The outstanding shares of capital stock of the
Guarantor have been duly authorized and validly issued and are fully paid and
nonassessable.
3.10. LITIGATION. There is no pending or (to the Guarantor's
knowledge after due inquiry) threatened action, suit, proceeding or
investigation by or before any Governmental Authority against or affecting the
Guarantor or any Subsidiary of the Guarantor, except for (i) matters that if
adversely decided, individually or in the aggregate, could not have a Material
Adverse Effect and (ii) the matters set forth on Schedule 4.16 to the Credit
Agreement.
3.11. ABSENCE OF EVENTS OF DEFAULT. No event has occurred and
is continuing and no condition exists which constitutes an Event of Default or
Potential Default.
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3.12. ABSENCE OF OTHER CONFLICTS. Neither the Guarantor nor
any Subsidiary of the Guarantor is in violation of or conflict with, or is
subject to any contingent liability on account of any violation of or conflict
with:
(a) any Law,
(b) its articles of incorporation or by-laws (or other
constituent documents), or
(c) any agreement or instrument to which it is party or by
which it or any of its properties (now owned or hereafter acquired) may be
subject or bound, except for matters that, individually or in the aggregate,
could not have a Material Adverse Effect.
3.13. INSURANCE. The Guarantor and each Subsidiary of the
Guarantor maintains with financially sound and reputable insurers insurance
with respect to its properties and business and against at least such
liabilities, casualties and contingencies and in at least such types and
amounts as is customary in the case of corporations engaged in the same or a
similar business or having similar properties similarly situated.
3.14. TITLE TO PROPERTY. The Guarantor and each Subsidiary of
the Guarantor has good and marketable title in fee simple to all real property
owned or purported to be owned by it and good title to all other property of
whatever nature owned or purported to be owned by it, in each case free and
clear of all Liens, except as set forth in Schedule 4.20 to the Credit
Agreement and other Liens permitted by Section 7.03 of the Credit Agreement.
3.15. INTELLECTUAL PROPERTY. The Guarantor and each
Subsidiary of the Guarantor owns, or is licensed or otherwise has the right to
use, all the patents, trademarks, service marks, names (trade, service,
fictitious or otherwise), copyrights, technology (including but not limited to
computer programs and software), processes, data bases and other rights, free
from burdensome restrictions, necessary to own and operate its properties and
to carry on its business as presently conducted and presently planned to be
conducted without conflict with the rights of others.
3.16. TAXES. All tax and information returns required to be
filed by or on behalf of the Guarantor or any Subsidiary of the Guarantor have
been properly prepared, executed and filed. All taxes, assessments, fees and
other governmental charges upon the Guarantor or any Subsidiary of the
Guarantor or upon any of their respective properties, incomes, sales or
franchises which are due and payable have been paid.
3.17. EMPLOYEE BENEFITS. No accumulated funding deficiency
(as defined in section 302 of ERISA and section 412 of
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the Code), whether or not waived, exists with respect to any Plan. No liability
to the PBGC has been or is expected by the Guarantor or any Controlled Group
Member to be incurred with respect to any Plan by the Guarantor, any Subsidiary
of the Guarantor or any Controlled Group Member which does or would have a
Material Adverse Effect. Neither the Guarantor, any Subsidiary of the Guarantor
nor any Controlled Group Member has contributed or presently contributes to any
Multiemployer Plan. The execution and delivery of this Agreement and the
consummation of the transactions contemplated by the Credit Agreement will be
exempt from, or will not involve any transaction which is subject to, the
prohibitions of section 406 of ERISA and will not involve any transaction in
connection with which a penalty could be imposed under section 502(i) of ERISA
or a tax could be imposed pursuant to section 4975 of the Code. A copy of the
most recent Annual Report (5500 Series Form) as of the date hereof including
all attachments thereto as filed with the Internal Revenue Service for each
Plan has been provided to the Lender and fairly presents the funding status of
each Plan. There has been no material deterioration in any Plan's funding
status since the date of such Annual Report. Schedule 4.23 to the Credit
Agreement sets forth as of the date hereof a list of all Plans and
Multiemployer Plans, and all information available to the Guarantor with
respect to the direct, indirect or potential withdrawal liability to any
Multiemployer Plan of any Loan Party or any Controlled Group Member. Except as
set forth in such Schedule 4.23, no Loan Party and no Subsidiary of any Loan
Party has any liability (contingent or otherwise) for, or in connection with,
and none of their respective properties is subject to a Lien in connection
with, any Pension-Related Event. No Loan Party and no Subsidiary of any Loan
Party has any liability (contingent or otherwise) for, or in connection with,
any Postretirement Benefits. The PBGC premiums and contributions required to
meet the minimum funding requirements of ERISA and the Code for all Plans have
not exceeded $1,000,000 on an annual basis for any of the past three (3) years.
The amount of unfunded benefit liabilities (as defined in Section 4001(a)(16)
of ERISA), as certified to by the Plan's actuary, for any Plan do not exceed
$1,000,000 and for all Plans do not exceed $1,000,000.
3.18. ENVIRONMENTAL MATTERS.
(a) The Guarantor and each Subsidiary of the Guarantor and
each of their respective Environmental Affiliates is and has been in full
compliance with all applicable Environmental Laws, except for matters which,
individually or in the aggregate, could not have a Material Adverse Effect.
There are no circumstances that may prevent or interfere with such full
compliance in the future.
(b) The Guarantor and each Subsidiary of the Guarantor and
their respective Environmental Affiliates have all Environmental Approvals
necessary or desirable for the ownership and operation of their respective
properties, facilities and
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businesses as presently owned and operated and as presently proposed to be
owned and operated, except for matters which, individually or in the aggregate,
could not have a Material Adverse Effect.
(c) There is no Environmental Claim pending or to the
knowledge of the Guarantor after due inquiry threatened, and there are no past
or present acts, omissions, events or circumstances that could form the basis
of any Environmental Claim, against the Guarantor or any Subsidiary of the
Guarantor or any of their respective Environmental Affiliates, except for
matters which, if adversely decided, individually or in the aggregate, could
not have a Material Adverse Effect.
(d) No facility or property now or previously owned, operated
or leased by the Guarantor or any Subsidiary of the Guarantor or any of their
respective Environmental Affiliates is an Environmental Cleanup Site. Neither
the Guarantor nor any Subsidiary of the Guarantor nor any of their respective
Environmental Affiliates has directly transported or directly arranged for the
transportation of any Environmental Concern Materials to any Environmental
Cleanup Site. No Lien exists, and no condition exists which could result in the
filing of a Lien, against any property of the Guarantor or any Subsidiary of
the Guarantor or any of their respective Environmental Affiliates, under any
Environmental Law.
3.19. SOLVENCY. On and as of the date hereof, after
consummation of the transactions contemplated in the [Sixth] Amendment to
Credit Agreement and after giving effect to all Revolving Credit Loans, Letters
of Credit and other obligations and liabilities incurred pursuant to the Credit
Agreement, and on the date of each subsequent Revolving Credit Loan, issuance
of a Letter of Credit or other extension of credit under the Credit Agreement
and after giving effect to application of the proceeds thereof in accordance
with the terms of the Loan Documents, the Guarantor is and will be Solvent.
3.20. NO CONDITIONS PRECEDENT. There are no conditions
precedent to the effectiveness of this Guaranty that have not been satisfied or
waived.
3.21. NO RELIANCE. The Guarantor has, independently and
without reliance upon the Lender and based upon such documents and information
as it has deemed appropriate, made its own credit analysis and decision to
enter into this Agreement.
3.22. USE OF PROCEEDS. Neither the Guarantor nor any
Subsidiary of the Guarantor owns or has any present intention of acquiring any
"margin stock" as defined in Regulation G (12 CFR Part 207) of the Board of
Governors of the Federal Reserve System (herein called "margin stock"). None of
the proceeds of borrowings under the Credit Agreement have been used, directly
or indirectly, for the purpose, whether immediate, incidental or
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ultimate, of purchasing or carrying any margin stock or for the purpose of
maintaining, reducing or retiring any Indebtedness which was originally
incurred to purchase or carry any stock that is currently a margin stock or for
any other purpose which might constitute this transaction a "purpose credit"
within the meaning of such Regulation G. Neither the Guarantor nor any agent
acting on its behalf has taken or will take any action which might cause this
Agreement or the Revolving Credit Note to violate Regulation G, Regulation T or
any other regulation of the Board of Governors of the Federal Reserve System or
to violate the Exchange Act, in each case as in effect now or as the same may
hereafter be in effect.
3.23. REGULATORY STATUS. Neither the Borrower, the Guarantor
nor any Subsidiary of the Borrower or the Guarantor is (i) an "investment
company" or a company "controlled" by an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, (ii) a "holding
company" or a "subsidiary company" or an "affiliate" of a "holding company" or
a "subsidiary company" of a "holding company", within the meaning of the Public
Utility Act of 1935, as amended, or (iii) a "public utility" within the meaning
of the Federal Power Act, as amended.
3.24. PERMITS AND OTHER OPERATING RIGHTS. The Guarantor and
each Subsidiary of the Guarantor has all such valid and sufficient certificates
of convenience and necessity, franchises, licenses, permits, operating rights
and other authorizations from federal, state, regional, municipal and other
local regulatory bodies or administrative agencies or other governmental bodies
having jurisdiction over the Guarantor or such Subsidiary or any of its
respective properties, as are necessary for the ownership, operation and
maintenance of its businesses and properties, subject to exceptions and
deficiencies which do not materially affect the business and operations of the
Guarantor or such Subsidiary or any material part thereof, and such
certificates of convenience and necessity, franchises, licenses, permits,
operating rights and other authorizations from federal, state, regional,
municipal and other local regulatory bodies or administrative agencies or other
governmental bodies having jurisdiction over the Guarantor or such Subsidiary
or any of its properties are free from burdensome restrictions or conditions of
an unusual character or restrictions or conditions materially adverse to the
business or operations of the Guarantor or such Subsidiary, and neither the
Guarantor nor any Subsidiary is in violation of any thereof in any material
respect.
3.25. REPRESENTATIONS AND WARRANTIES REMADE AT EACH EXTENSION
OF CREDIT. Each request (including any deemed request) by the Borrower for any
extension of credit under any Loan Document shall be deemed to constitute a
representation and warranty by the Guarantor to the Lender that the
representations and warranties made by the Guarantor in this Article III are
true and correct on and as of the date of such request with the same effect as
though made on and as of such date. Failure by the
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Lender to receive notice from the Guarantor to the contrary before the Lender
makes any extension of credit under any Loan Document shall constitute a
further representation and warranty by the Guarantor to the Lender that the
representations and warranties made by the Borrower in this Article III are
true and correct on and as of the date of such extension of credit with the
same effect as though made on and as of such date.
ARTICLE IV
AFFIRMATIVE COVENANTS
The Guarantor agrees that, until all Guaranteed Obligations
and all other amounts payable under this Agreement have been paid in full and
all commitments to extend credit under the Loan Documents have terminated, the
Guarantor will do the following:
4.01. INFORMATION. The Guarantor will promptly furnish to the
Lender such information and in such form as the Lender may reasonably request
from time to time.
4.02. NOTICE OF CERTAIN EVENTS. The Guarantor also covenants
that immediately after any Responsible Officer obtains knowledge of:
(i) an Event of Default or Potential Default;
(ii) the occurrence of a Change of Control Event;
(iii) any material adverse change in the business
condition (financial or otherwise), operations or prospects
of the Guarantor or any Subsidiary of the Guarantor;
(iv) any pending or threatened action, suit, proceeding
or investigation by or before any Governmental Authority
against or affecting the Guarantor or any Subsidiary of the
Guarantor, except for matters that if adversely decided,
individually or in the aggregate, could not have a Material
Adverse Effect;
(v) any material violation, breach or default by the
Guarantor or any Subsidiary of the Guarantor of or under any
agreement or instrument material to the business operations,
condition (financial or otherwise) or prospects of the
Guarantor and its Subsidiaries taken as a whole;
(vi) any Pension-Related Event;
(vii) the expiration or earlier termination of the License
Agreement; or
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<PAGE> 15
(viii) any proposed amendment, waiver, consent or other
change to the terms of any of the Term Loan Documents;
the Guarantor will deliver to the Lender written notice specifying the nature
and period of existence thereof and what action the Guarantor proposes to take
with respect thereto and, in the case of a Pension-Related Event, such written
notice shall be accompanied by (A) a copy of any notice, request, return,
petition or other document received by the Guarantor or any Controlled Group
Member from any Person, or which has been or is to be filed with or provided to
any Person (including without limitation the Internal Revenue Service, PBGC or
any Plan participant, beneficiary, alternate payee or employer representative),
in connection with such Pension-Related Event, and (B) in the case of any
Pension-Related Event with respect to a Plan, the most recent Annual Report
(5500 Series), with attachments thereto, and the most recent actuarial
valuation report, for such Plan.
4.03. INSURANCE. The Guarantor shall, and shall cause each
Subsidiary of the Guarantor to, maintain with financially sound and reputable
insurers insurance with respect to its properties and business and against such
liabilities, casualties and contingencies and of such types and in such amounts
as is customary in the case of other corporations of established reputations
engaged in the same or similar businesses or having similar properties
similarly situated.
4.04. PAYMENT OF TAXES AND OTHER POTENTIAL CHARGES AND
PRIORITY CLAIMS. The Guarantor shall, and shall cause each of its Subsidiaries
to, pay or discharge
(i) on or prior to the date on which penalties
attach thereto, all taxes, assessments and other governmental
charges imposed upon it or any of its properties;
(ii) on or prior to the date when due, all lawful claims
of materialmen, mechanics, carriers, warehousemen, landlords
and other like Persons which, if unpaid, might result in the
creation of a Lien upon any such property; and
(iii) on or prior to date when due, all other lawful
claims which, if unpaid, might result in the creation of a
Lien upon any such property or which, if unpaid, might give
rise to a claim entitled to priority over general creditors
of the Guarantor or such Subsidiary in a case under Title 11
(Bankruptcy) of the United States Code, as amended;
provided, that unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have been commenced, the Guarantor or such Subsidiary need
not pay or discharge any such tax,
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<PAGE> 16
assessment, charge or claim so long as (x) the validity thereof is contested in
good faith and by appropriate proceedings diligently conducted and (y) such
reserves or other appropriate provisions as may be required by GAAP shall have
been made therefor.
4.05. PRESERVATION OF CORPORATE STATUS. The Guarantor shall,
and shall cause each of its Subsidiaries to, maintain its status as a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and to be duly qualified to do
business as a foreign corporation and in good standing in all jurisdictions in
which the ownership of its properties or the nature of its business or both
make such qualification necessary or advisable.
4.06. GOVERNMENTAL APPROVALS AND FILINGS. The Guarantor
shall, and shall cause each Subsidiary of the Guarantor to, keep and maintain
in full force and effect all Governmental Actions necessary or advisable in
connection with execution and delivery of this Agreement by the Guarantor and
the Credit Agreement by the Borrower, consummation by the Guarantor and the
Borrower of the transactions herein or therein contemplated, performance of or
compliance with the terms and conditions hereof or thereof by the Guarantor and
the Borrower or to ensure the legality, validity, binding effect,
enforceability or admissibility in evidence hereof or thereof.
4.07. MAINTENANCE OF PROPERTIES. The Guarantor shall and
shall cause each Subsidiary of the Guarantor to, maintain or cause to be
maintained in good repair, working order and condition the properties now or
hereafter owned, leased or otherwise possessed by it (ordinary wear and tear
excepted) and shall make or cause to be made all needful and proper repairs,
renewals, replacements and improvements thereto so that the business carried in
connection therewith may be properly and advantageously conducted at all times.
The Guarantor shall, and shall cause each of its Subsidiaries to, procure and
maintain in full force and effect all franchises, patents, trademarks, trade
names, service marks, copyrights, licenses and other rights, in each case, that
are necessary in any material respect for the business and operation of the
Guarantor and its Subsidiaries, taken as a whole.
4.08. AVOIDANCE OF OTHER CONFLICTS.
(a) The Guarantor shall not, and shall not permit any of its
Subsidiaries to, violate or conflict with, be in violation of or conflict with,
or be or remain subject to any liability (contingent or otherwise) on account
of any violation or conflict with:
(i) any Law;
(ii) its certificate of incorporation or by-laws (or
other constituent documents); or
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<PAGE> 17
(iii) any agreement or instrument to which it is a party
or by which any of them or any of their respective
Subsidiaries is a party or by which any of them or any of
their respective properties (now owned or hereafter acquired)
may be subject or bound;
except for matters that could not, individually or in the aggregate, have a
Material Adverse Effect.
(b) The Guarantor shall, and shall cause each of its
Subsidiaries and each of its Environmental Affiliates to, comply with, or
operate pursuant to valid waivers of, applicable Environmental Laws, including,
without limitation, to the extent required by applicable Environmental Laws,
conducting, on a timely basis, periodic tests and monitoring for contamination
of ground water, surface water, air and land and for biological toxicity and
completing proper, thorough and effective clean-up, removal, remediation and/or
restoration, except to the extent that failure so to comply with any
Environmental Law does not have a Material Adverse Effect, and except that,
with respect to any testing, monitoring, clean-up, removal, remediation or
other such action required pursuant to such laws or permits, neither the
Guarantor nor any of its Subsidiaries or Environmental Affiliates shall be
required to perform any such action if the applicability or validity thereof is
being contested in good faith by appropriate proceedings and adequate reserves
have been established in accordance with GAAP.
4.09. FINANCIAL ACCOUNTING PRACTICES. The Guarantor shall,
and shall cause each Subsidiary of the Guarantor to, make and keep books,
records and accounts which, in reasonable detail, accurately and fairly reflect
its transactions and dispositions of its assets and maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general or
specific authorizations, (b) transactions are recorded as necessary (i) to
permit preparation of financial statements in conformity with generally
accepted accounting principles and (ii) to maintain accountability for assets,
(c) access to assets is permitted only in accordance with management's general
or specific authorization and (d) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
4.10. CONTINUATION OF OR CHANGE IN BUSINESS. The Guarantor
shall, and shall cause each of its Subsidiaries to, continue to engage in its
business substantially as conducted and operated during the present and
preceding fiscal year, and the Guarantor shall not, and shall not permit any
Subsidiary of the Guarantor to, engage in any other business.
4.11. CONSOLIDATED TAX RETURN. The Guarantor shall not, and
shall not suffer any of its Subsidiaries to, file or consent to the filing of
any consolidated income tax return with
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<PAGE> 18
any Person other than the Borrower, the Guarantor, Black Box Corporation and
their respective subsidiaries.
4.12. FISCAL YEAR. The Guarantor shall not, and shall not
suffer any of its Subsidiaries to, change its fiscal year or fiscal quarter.
4.13. INSPECTION OF PROPERTY. The Guarantor shall permit any
Person designated by the Lender in writing, at the Guarantor's expense while an
Event of Default is continuing and otherwise at the Lender's expense, to visit
and inspect any of the properties of the Guarantor and its Subsidiaries, to
examine the corporate books and financial records of the Guarantor and its
Subsidiaries and make copies thereof or extracts therefrom and to discuss the
affairs, finances and accounts of any of such corporations with the directors,
officers and key employees of the Guarantor or their independent public
accountants, all at such reasonable times and as often as the Lender may
reasonably request.
4.14. COVENANT TO SECURE REVOLVING CREDIT NOTE AND
REIMBURSEMENT OBLIGATIONS EQUALLY. The Guarantor covenants that, if it or any
Subsidiary of the Guarantor shall create or assume any Lien upon any of its
property or assets, whether now owned or hereafter acquired, other than Liens
permitted by the provisions of Section 5.01 (unless prior written consent to
the creation or assumption thereof shall have been obtained pursuant to Section
6.01), it shall make or cause to be made effective provision satisfactory in
form and substance to the Lender (including, without limitation, opinions of
counsel relating thereto) whereby the Revolving Credit Note and the
Reimbursement Obligations shall be secured by such Lien equally and ratably
with any and all other Indebtedness thereby secured so long as any such other
Indebtedness shall be so secured. Securing the Revolving Credit Note and the
Reimbursement Obligations as provided in this Section 4.14 shall not permit the
existence of any Lien not permitted by Section 5.01.
ARTICLE V
NEGATIVE COVENANTS
The Guarantor hereby covenants that, until all Guaranteed
Obligations and all other amounts payable under this Agreement have been paid
in full and all commitments to extend credit under the Loan Documents have
terminated:
5.01. LIENS. The Guarantor shall not, and shall not permit
any of its Subsidiaries to, at any time create, incur, assume or suffer to
exist any Lien on any of its property (whether now owned or hereafter acquired
and whether or not provision is made for equally and ratably securing the
Revolving Credit Note and the Reimbursement Obligations as provided in Section
4.14 hereof and Section 6.13 of the Credit Agreement), except for the
following:
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<PAGE> 19
(i) Liens existing as of May 6, 1994, securing
obligations existing as of May 6, 1994, as such Liens and
obligations are listed in Schedule 7.03 to the Credit
Agreement;
(ii) Liens arising from taxes, assessments, charges or
claims described in Section 4.04 that are not yet due or that
remain payable without penalty or to the extent permitted to
remain unpaid under the proviso to Section 4.04;
(iii) Liens (other than ERISA Liens) incurred or deposits
or pledges of cash or securities in the ordinary course of
business to secure (a) workmen's compensation, unemployment
insurance or other social security obligations, (b)
performance of bids, tenders, trade contracts (other than for
payment of money) or leases, (c) stay, surety or appeal
bonds, or (d) other obligations of a like nature incurred in
the ordinary course of business, provided that such Liens do
not, in the aggregate, materially detract from the value of
the property and assets of the Guarantor and its Subsidiaries
or impair the use thereof by the Guarantor and its
Subsidiaries or the operation of their respective businesses;
(iv) Liens consisting of Capitalized Leases, provided
that (a) such Lien is created before or substantially
simultaneously with the purchase of the property that is the
subject of such Capitalized Lease, (b) such Lien is confined
solely to the property so leased, improvements thereto and
proceeds thereof, (c) the amount secured by such Lien
described in this Section 5.01(iv) shall not at any time
exceed the lesser of cost or fair market value (plus
installation costs, to the extent they have not be expensed)
of the property so leased; (d) the Indebtedness represented
by such Capitalized Leases is permitted by Sections 5.07,
5.08 and 5.09 of that certain Guaranty and Suretyship
Agreement, dated as of May 6, 1994, made by MB
Communications, Inc. (n/k/a Black Box Corporation) in favor
of the Lender (as amended, the "Black Box Guaranty") and, to
the extent applicable, Article VII of the Credit Agreement;
and (e) no Potential Default or Event of Default shall have
occurred and be continuing or shall occur after giving effect
thereto or the lease of such property; and
(v) Liens on property securing all or part of the
purchase price thereof and Liens (whether or not assumed)
existing in property at the time of purchase
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<PAGE> 20
thereof by the Borrower or a Subsidiary of the Borrower,
provided that (a) such Lien is created before or
substantially simultaneously with the purchase of such
property, (b) such Lien is confined solely to the property so
purchased, improvements thereto and proceeds thereof, (c) the
amount secured by such Lien described in this Section 5.01(v)
shall not at any time exceed the lesser of cost or fair
market value of the property so purchased; (d) the
Indebtedness secured by such Lien is permitted by Sections
5.07, 5.08 and 5.09 of the Black Box Guaranty and, to the
extent applicable, Article VII of the Credit Agreement; and
(e) no Potential Default or Event of Default shall have
occurred and be continuing or shall occur after giving effect
thereto or the purchase of such property; and
(vi) Liens renewing or extending any Lien described in
clauses (i), (iv) and (v) above, provided (a) neither the
Indebtedness secured thereby is increased nor the weighted
average life to maturity thereof reduced as a result thereof,
(b) such Lien is confined solely to the property so purchased
or leased, improvements thereto and proceeds thereof; (c) the
Indebtedness secured thereby is permitted under Sections
5.07, 5.08 and 5.09 of the Black Box Guaranty and, to the
extent applicable, Article VII of the Credit Agreement; and
(d) no Potential Default or Event of Default shall have
occurred and be continuing or shall occur after giving effect
thereto.
5.02. CAPITAL EXPENDITURES. The Guarantor shall not, and
shall not permit any Subsidiary of the Guarantor to, make any Capital
Expenditures on or after the date hereof, except for Capital Expenditures not
in excess of $3,500,000 in the aggregate by Black Box Corporation, the sole
shareholder of the Guarantor, the Guarantor and their respective Subsidiaries
in any fiscal year.
5.03. DIVIDENDS AND RELATED DISTRIBUTIONS. The Guarantor
shall not, and shall not permit any Subsidiary of the Guarantor to, declare or
make any Stock Payment, except as follows:
(a) So long as no Event of Default or Potential Default shall
have occurred and be continuing or shall occur after giving
effect thereto, Stock Payments made directly or indirectly to
Black Box Corporation (the "Parent") or, in the case of any
Subsidiary of the Guarantor, to the Guarantor for the
purposes of paying reasonable administrative costs and
salaries of the Parent's or, in the case of Stock Payments
made directly or indirectly to the Guarantor by any
Subsidiary of the Guarantor, the Guarantor's employees,
paying taxes and paying expenses incurred in the ordinary
course of
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business; provided, that no Stock Payment pursuant to this
Section 5.03(a) may be made if, after giving effect to such
Stock Payment, the aggregate amount of Stock Payments made
during any fiscal year of the Guarantor, together with any
loans and advances made by the Borrower pursuant to Section
7.06(b)(ii) of the Credit Agreement (other than to the Parent
for the purpose of paying in full the Indebtedness secured by
the Senior Subordinated Indenture) during such fiscal year,
would exceed $1,500,000;
(b) So long as no Event of Default or Potential Default shall
have occurred and be continuing or shall occur after giving
effect thereto, Stock Payments to the Guarantor for the
purpose of making Stock Payments to the extent permitted by
Section 5.03 of the Black Box Guaranty;
(c) Stock Payments to the Parent for the purpose of repaying
certain Indebtedness of the Parent to the Borrower in the
principal amount of $43,670,000;
(d) Stock Payments made by the Borrower to the Guarantor so
long as the proceeds thereof shall be loaned to the Borrower
as permitted by Section 7.04 of the Credit Agreement; and
(e) A Subsidiary of the Borrower may declare and make Stock
Payments if all of the capital stock of such Subsidiary is
owned by the Borrower or by a direct or indirect wholly-owned
Subsidiary of the Borrower.
5.04. LIMITATION ON OTHER RESTRICTIONS ON LIENS. The
Guarantor shall not enter into, become or remain subject to any agreement or
instrument to which the Guarantor is a party or by which it or any of its
properties (now owned or hereafter acquired) may be subject or bound that would
prohibit the grant of any Lien upon any of its properties (now owned or
hereafter acquired), except the Loan Documents and the Term Loan Documents.
ARTICLE VI
MISCELLANEOUS
6.01. AMENDMENTS, ETC. No amendment to or waiver of any
provision of this Agreement, and no consent to any departure by the Guarantor
herefrom, shall in any event be effective unless in a writing manually signed
by or on behalf of the Lender. Any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
6.02. NO IMPLIED WAIVER; REMEDIES CUMULATIVE. No delay or
failure of the Lender in exercising any right or remedy under this Agreement
shall operate as a waiver thereof; nor shall any
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<PAGE> 22
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy. The
rights and remedies of the Lender under this Agreement are cumulative and not
exclusive of any other rights or remedies available hereunder, under any other
agreement or instrument, by law, or otherwise.
6.03. NOTICES. Except to the extent, if any, otherwise
expressly provided hereunder, all notices, requests, demands, directions and
other communications (collectively "notices") under this Agreement shall be in
writing (including telexed and telefaxed communication) and shall be sent by
first-class mail, by nationally-recognized overnight courier, by personal
delivery, or by telex or telefax (with confirmation by first-class mail,
nationally-recognized overnight courier, or personal delivery), in all cases
with charges prepaid. All notices shall be sent, if to the Guarantor, to its
address specified on the signature page hereof, or if to the Lender, to its
address specified in the Credit Agreement, or, in any case, to such other
address as shall have been designated by the applicable party by notice to the
other party hereto. Any properly given notice shall be effective on the
earliest to occur of receipt, telephone confirmation of receipt of telecopy
communication, one (1) Business Day after delivery to a nationally-recognized
overnight courier, or three (3) Business Days after deposit in the mail. The
Lender may rely on any notice (whether or not made in a manner contemplated by
this Agreement) purportedly made by or on behalf of the Guarantor, and the
Lender shall have no duty to verify the identity or authority of the Person
giving such notice.
6.04. EXPENSES. Without limitation of any other rights the
Lender may have, the Guarantor agrees to pay upon demand all reasonable
expenses (including but not limited to reasonable fees and expenses of counsel)
which the Lender may incur from time to time arising from or relating to the
administration of, or exercise, enforcement or preservation of rights or
remedies under, this Agreement.
6.05. PRIOR UNDERSTANDINGS. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter
hereof and supersedes all prior and contemporaneous understandings and
agreements.
6.06. SURVIVAL. All representations and warranties of the
Guarantor contained in or made in connection with this Agreement shall survive,
and shall not be waived by, the execution and delivery of this Agreement, any
investigation by or knowledge of the Lender, any extension of credit, or any
other event or circumstance whatever.
6.07. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument.
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<PAGE> 23
6.08. SETOFF. In the event that at any time any obligation of
the Guarantor now or hereafter existing under this Agreement shall have become
due and payable, the Lender shall have the right from time to time, without
notice to the Guarantor, to set off against and apply to such due and payable
amount any obligation of any nature of the Lender to the Guarantor, including
but not limited to all deposits (whether time or demand, general or special,
provisionally credited or finally credited, however evidenced) now or hereafter
maintained by the Guarantor with the Lender. Such right shall be absolute and
unconditional in all circumstances and, without limitation, shall exist whether
or not the Lender shall have given any notice or made any demand under this
Agreement or under such obligation to the Guarantor, whether such obligation to
the Guarantor is absolute or contingent, matured or unmatured (it being agreed
that the Lender may deem such obligation to be then due and payable at the time
of such setoff), and regardless of the existence or adequacy of any collateral,
guaranty or other direct or indirect security, right or remedy available to the
Lender. The rights of the Lender under this Section are in addition to such
other rights and remedies (including, without limitation, other rights of
setoff and banker's lien) which the Lender may have, and nothing in this
Agreement or in any other Loan Document shall be deemed a waiver of or
restriction on the right of setoff or banker's lien of the Lender. The
Guarantor hereby agrees that, to the fullest extent permitted by law, any
affiliate of the Lender, and any holder of a participation in any obligation of
the Guarantor under this Guaranty, shall have the same rights of setoff as the
Lender as provided in this Section (regardless of whether such affiliate or
participant otherwise would be deemed a creditor of the Guarantor).
6.09. CONSTRUCTION. The section and other headings contained
in this Agreement are for reference purposes only and shall not affect
interpretation of this Agreement in any respect. This Agreement has been fully
negotiated between the applicable parties, each party having the benefit of
legal counsel, and accordingly neither any doctrine of construction of
guaranties or suretyships in favor of the guarantor or surety, nor any doctrine
of construction of ambiguities in agreements or instruments against the party
controlling the drafting thereof, shall apply to this Agreement.
6.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Guarantor, its successors and assigns, and shall inure to the benefit
of and be enforceable by the Lender and its successors and assigns. Without
limitation of the foregoing, the Lender (and any successive assignee or
transferee) from time to time may assign or otherwise transfer all or any
portion of its rights or obligations under the Loan Documents (including,
without limitation, all or any portion of any commitment to extend credit), or
any other Guaranteed Obligations, to any other Person, and such Guaranteed
Obligations (including, without limitation,
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<PAGE> 24
any Guaranteed Obligations resulting from extension of credit by such other
Person under or in connection with the Loan Documents) shall be and remain
Guaranteed Obligations entitled to the benefit of this Agreement, and to the
extent of its interest in such Guaranteed Obligations such other Person shall
be vested with all the benefits in respect thereof granted to the Lender in
this Agreement or otherwise.
6.11. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
(b) CERTAIN WAIVERS. THE GUARANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY:
(i) AGREES THAT ANY ACTION, SUIT OR PROCEEDING BY ANY PERSON
ARISING FROM OR RELATING TO THIS AGREEMENT OR ANY STATEMENT, COURSE OF
CONDUCT, ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH OR
THEREWITH (COLLECTIVELY, "RELATED LITIGATION") MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT OF COMPETENT JURISDICTION SITTING IN ALLEGHENY
COUNTY, PENNSYLVANIA, SUBMITS TO THE JURISDICTION OF SUCH COURTS, AND
TO THE FULLEST EXTENT PERMITTED BY LAW AGREES THAT IT WILL NOT BRING
ANY RELATED LITIGATION IN ANY OTHER FORUM (BUT NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE LENDER TO BRING ANY ACTION, SUIT OR PROCEEDING
IN ANY OTHER FORUM);
(ii) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO
THE LAYING OF VENUE OF ANY RELATED LITIGATION BROUGHT IN ANY SUCH
COURT, WAIVES ANY CLAIM THAT ANY SUCH RELATED LITIGATION HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM, AND WAIVES ANY RIGHT TO OBJECT, WITH
RESPECT TO ANY RELATED LITIGATION BROUGHT IN ANY SUCH COURT, THAT SUCH
COURT DOES NOT HAVE JURISDICTION OVER THE GUARANTOR;
(iii) CONSENTS AND AGREES TO SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER LEGAL PROCESS IN ANY RELATED LITIGATION BY
REGISTERED OR CERTIFIED U.S. MAIL, POSTAGE PREPAID, TO THE GUARANTOR
AT THE ADDRESS FOR NOTICES DESCRIBED IN THIS AGREEMENT, AND CONSENTS
AND AGREES THAT SUCH SERVICE SHALL CONSTITUTE IN EVERY RESPECT VALID
AND EFFECTIVE SERVICE (BUT NOTHING HEREIN SHALL AFFECT THE VALIDITY OR
EFFECTIVENESS OF PROCESS SERVED IN ANY OTHER MANNER PERMITTED BY LAW);
AND
(iv) WAIVES THE RIGHT TO TRIAL BY JURY IN ANY RELATED
LITIGATION.
(c) LIMITATION OF LIABILITY. TO THE FULLEST EXTENT PERMITTED
BY LAW, NO CLAIM MAY BE MADE BY THE GUARANTOR OR ANY OTHER PERSON AGAINST THE
LENDER OR ANY AFFILIATE, DIRECTOR,
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<PAGE> 25
OFFICER, EMPLOYEE, ATTORNEY OR AGENT OF THE LENDER FOR ANY SPECIAL, INDIRECT,
CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM ARISING FROM OR
RELATING TO THIS AGREEMENT OR ANY STATEMENT, COURSE OF CONDUCT, ACT, OMISSION,
OR EVENT OCCURRING IN CONNECTION HEREWITH (WHETHER FOR BREACH OF CONTRACT, TORT
OR ANY OTHER THEORY OF LIABILITY); AND THE GUARANTOR HEREBY WAIVES, RELEASES
AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT
ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.
IN WITNESS WHEREOF, the undersigned has caused this Agreement
to be duly executed and delivered as of the date first above written.
BBOX HOLDING COMPANY
By /s/ KENNETH KUBACKI
--------------------------
Title: President
Address for Notices:
1000 Park Drive
Lawrence, PA 15055
Attn: Frederick C. Young
Telephone: 412/873-6780 Telefax:
412/873-6784
<PAGE> 1
Exhibit 10.10
AMENDMENT NO. 3
TO THE
TRADEMARK/SERVICE MARK LICENSE AGREEMENT
THIS AMENDMENT, dated as of July 1, 1995 (the "Amendment"), to the
TRADEMARK/SERVICE MARK LICENSE AGREEMENT, dated as of October 1, 1992, as
amended, December 21, 1993 and May 6, 1994 (the "License Agreement"), by and
between BB Technologies, Inc., a Delaware corporation ("BB Tech"), and Black
Box Corporation of Pennsylvania (formerly Black Box Corporation), a Delaware
corporation ("BBC"),
WITNESSETH:
WHEREAS, BB Tech and BBC are parties to the License Agreement; and
WHEREAS, BBC and BB Tech desire to amend certain terms of the License
Agreement as set forth herein;
NOW, THEREFORE, in consideration of the terms and conditions set forth
herein, and other good and valuable consideration receipt of which is hereby
acknowledged by BBC, BB Tech and BBC intending to be legally bound hereby,
agree as follows :
1. DEFINED TERMS. Unless otherwise defined herein, capitalized terms which are
defined in the License Agreement are used herein as therein defined.
2. AMENDMENT OF SUBSECTION 6.1. Subsection 6.1 of the License Agreement is
hereby amended and restated by deleting such subsection in its entirety and
substituting therefor the following:
6.1 As consideration for the rights granted hereunder,
BBC shall pay to BB Tech royalties equal to (i) 5%
of BBC's gross selling price for the sale of the
Products under the Marks and (ii) an amount equal to
5% of the gross selling price for the sale of any
devices or equipment not originally purchased from
BBC but sold under the Marks by or on behalf of any
of BBC's authorized distributors, subsidiaries, or
joint venture companies under sublicense from either
BB Tech or BBC. For purposes of this Agreement,
"gross selling price" shall mean the gross sales
price for Products or devices or equipment less any
reasonable (i) returns for which credit is given and
(ii) government sales taxes or value added taxes
(but not income taxes).
3. AMENDMENT OF SUBSECTION 6.2. Subsection 6.2 of the License Agreement is
hereby amended and restated by deleting such subsection in its entirety and
substituting therefor the following:
6.2 Royalties shall not be required to be paid by BBC in
any transfer of Products under the Marks by BBC for
give-away or promotional purposes.
4. CONFIGURATION. Except as set forth herein, the License Agreement is in all
respects confirmed and preserved.
<PAGE> 2
5. COUNTERPARTS. This Amendment may be executed in any number of counterparts,
each of which, when so executed, shall be deemed to be an original, but all
of which shall together constitute but one and the same instrument.
6. EFFECTIVENESS. The provisions of this Amendment shall take effect as of the
date first set forth above (subject to receipt of all consents to this
Amendment required by law or by any agreement to which BBC or BB Tech is a
party).
7. GOVERNING LAW. This Amendment shall be construed in accordance with and
governed by the laws of the State of Delaware without regard to the
conflicts of laws provisions thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed, all as of the date and year first above written.
BB TECHNOLOGIES, INC.
By: /s/ KENNETH KUBACKI
---------------------------
Kenneth Kubacki, President
BLACK BOX CORPORATION OF PENNSYLVANIA
By: /s/ JEFFREY M. BOETTICHER
---------------------------
Jeffery M. Boetticher
President & Chief Executive Officer
2
<PAGE> 1
Exhibit 21
SUBSIDIARIES OF THE COMPANY
<TABLE>
<CAPTION>
State of
Name Location Incorporation
---- -------- -------------
<S> <C> <C>
Black Box Corporation Lawrence, Delaware
Pennsylvania, USA
BBOX Holding Company Wilmington, Delaware, Delaware
USA
Black Box of Pennsylvania Lawrence, Delaware
Pennsylvania, USA
BB Technologies, Inc. Wilmington, Delaware, Delaware
USA
Black Box Foreign Sales Corporation St. Thomas, U.S.V.I.
Black Box Communication SANV Zaventum, Belgium
Black Box do Brazil Industria e Comercio Ltda. Sao Paulo, Brazil
Black Box Canada Corporation Ontario, Canada
Black Box Catalogue, Ltd. Reading England
Black Box France, S.A. Rungis, France
Black Box Deutschland GmbH Munich, Germany
Black Box Italia, SpA Vimodrone, Italy
Black Box Japan Kabushiki Kaisha Tokyo, Japan
Black Box de Mexico, S.A. de C.V. Mexico City, Mexico
Black Box Datacom, B.V. Utrecht, Netherlands
Datacom Black Box Services AG Altendorf, Switzerland
Datacom Black Box Holding, AG Zug, Switzerland
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND INCOME STATEMENT OF THE THIRD QUARTER FISCAL 1997 FORM 10-Q AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000849547
<NAME> BLACK BOX CORPORATION
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 1,567
<SECURITIES> 0
<RECEIVABLES> 38,831
<ALLOWANCES> 2,552
<INVENTORY> 25,135
<CURRENT-ASSETS> 71,150
<PP&E> 23,376
<DEPRECIATION> 11,076
<TOTAL-ASSETS> 161,133
<CURRENT-LIABILITIES> 35,677
<BONDS> 24,734
0
0
<COMMON> 16
<OTHER-SE> 88,126
<TOTAL-LIABILITY-AND-EQUITY> 161,133
<SALES> 166,677
<TOTAL-REVENUES> 166,677
<CGS> 77,514
<TOTAL-COSTS> 133,951
<OTHER-EXPENSES> (176)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,023
<INCOME-PRETAX> 29,879
<INCOME-TAX> 12,738
<INCOME-CONTINUING> 17,141
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,141
<EPS-PRIMARY> 0.99
<EPS-DILUTED> 0.99
</TABLE>
