CREDIT AND SECURITY AGREEMENT
BETWEEN
APPLIED BIOSCIENCE INTERNATIONAL INC.
(LENDER)
AND
ENVIRON HOLDINGS, INC.,
AND
APBI ENVIRONMENTAL SCIENCES GROUP, INC.
(BORROWER)
DATED AS OF FEBRUARY 2, 1999
(EFFECTIVE DATE)
TABLE OF CONTENTS
PAGE NO.
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ARTICLE I CONSTRUCTION AND DEFINED TERMS............................................................1
SECTION 1.01.Articles and Sections..............................................................1
SECTION 1.02.Exhibits and Schedules.............................................................1
SECTION 0.00.Xxxxxx Documents...................................................................1
SECTION 1.04.Discretionary Consents.............................................................1
SECTION 1.05.Accounting Terms...................................................................1
SECTION 1.06.Time...............................................................................1
SECTION 1.07.Defined Terms......................................................................1
ARTICLE II-A CREDIT FACILITY - REVOLVING CREDIT LOANS..............................................23
SECTION 2A.01. Revolving Credit Loans.......................................................23
SECTION 2A.02. Requests.....................................................................23
SECTION 2A.03. Covenant to Pay; Revolving Credit Notes.....................................24
SECTION 2A.04. Interest Payments............................................................24
SECTION 2A.05. Principal Payments...........................................................24
SECTION 2A.06. Collateral Account Payments..................................................24
SECTION 2A.07. Use of Revolving Credit Loan Proceeds........................................25
ARTICLE II-B CREDIT FACILITY - TERM LOAN...........................................................25
SECTION 2B.01. Term Loan....................................................................25
SECTION 2B.02. Covenant to Pay; Term Note..................................................25
SECTION 2B.03. Payment Schedule.............................................................25
SECTION 2B.04. Use of Term Loan Proceeds....................................................25
ARTICLE II-C CREDIT FACILITY - LETTERS OF CREDIT...................................................26
SECTION 2C.01. Letter of Credit Applications................................................26
SECTION 2C.02. Letter of Credit Expiry Dates................................................26
SECTION 2C.03. Letter of Credit Fees........................................................26
SECTION 2C.04. Letter of Credit Reserves....................................................26
SECTION 2C.05. Payments on Letters of Credit................................................26
SECTION 2C.06. Instruction to Pay; Indemnification..........................................27
SECTION 2C.07. Use of Letters of Credit.....................................................29
SECTION 2C.08. Letters of Credit Denominated in Other Than U.S. Dollars.....................29
ARTICLE II-D CREDIT FACILITY - GENERAL CREDIT PROVISIONS...........................................29
SECTION 2D.01. Lender Records...............................................................29
SECTION 2D.02. Computation of Interest......................................................29
SECTION 2D.03. Late Charges; Default Interest...............................................29
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SECTION 2D.04. Commitment Fee.....................................ERROR! BOOKMARK NOT DEFINED
SECTION 2D.05. Unused Credit Fee............................................................30
SECTION 2D.06. Mandatory Additional Payments................................................30
SECTION 2D.07. Prepayments..................................................................30
SECTION 2D.08. Manner of Payments...........................................................30
SECTION 2D.09. Application of Payments......................................................30
SECTION 2D.10. Capital Adequacy.............................................................31
SECTION 2D.11. Rate Adequacy................................................................31
SECTION 2D.12. Regulatory Change............................................................31
SECTION 2D.13. Designation of Agent and Attorney-in-Fact....................................32
SECTION 2D.14. Net Payments.................................................................32
ARTICLE II-E CREDIT FACILITY - CONDITIONS..........................................................33
SECTION 2E.01. Fulfillment of Conditions....................................................33
SECTION 2E.02. Conditions to all Loans and Letters of Credit................................33
SECTION 2E.03. Conditions to Term Loan......................................................34
SECTION 2E.04. Conditions to All Revolving Credit Including the Initial Revolving Credit....36
ARTICLE III REPRESENTATIONS AND WARRANTIES.........................................................37
SECTION 3.01.Conditions........................................................................37
SECTION 3.02.Existence.........................................................................37
SECTION 3.03.Action............................................................................38
SECTION 3.04.Approvals.........................................................................38
SECTION 3.05.Ownership.........................................................................38
SECTION 3.06.Subsidiaries......................................................................38
SECTION 0.00.Xxxxxxxxx Statements..............................................................39
SECTION 3.08.Solvency..........................................................................39
SECTION 0.00.Xxxxxxxxxxx.......................................................................39
SECTION 3.10.Deposit Accounts..................................................................39
SECTION 3.11.Indebtedness......................................................................39
SECTION 3.12.Liens.............................................................................40
SECTION 3.13.Material Agreements...............................................................40
SECTION 0.00.Xxxxx Proceedings.................................................................40
SECTION 3.15.Accounts..........................................................................40
SECTION 0.00.Xxxxxxxxx.........................................................................40
SECTION 3.17.Intellectual Property.............................................................40
SECTION 3.18.Special Property..................................................................41
SECTION 3.19.Margin Stock......................................................................41
SECTION 0.00.Xxx Identification Numbers........................................................41
SECTION 0.00.Xxxxxxxx..........................................................................41
SECTION 0.00.Xxxx, Structure...................................................................41
SECTION 3.23.Designated Locations..............................................................41
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SECTION 3.24.Labor Status......................................................................41
SECTION 3.25.ERISA Status......................................................................42
SECTION 3.26.Environmental Status..............................................................44
SECTION 3.27.Investment Company Act............................................................45
SECTION 3.28.Public Utility Holding Company Act.(Omitted)......................................45
SECTION 3.29.Commercial Loan...................................................................45
SECTION 0.00.Xx Broker.........................................................................45
SECTION 3.31.Obligor Information...............................................................46
SECTION 3.32.Independent Access................................................................46
SECTION 3.33.Taxes.............................................................................46
SECTION 3.34.Applicable Laws...................................................................46
SECTION 3.35.Risk Management Agreements........................................................46
SECTION 3.36.Year 2000 Issues..................................................................46
SECTION 0.00.Xxxxxx Obligation; Full Faith and Credit..........................................46
SECTION 0.00.Xx Recordation Necessary..........................................................47
SECTION 3.39.Wages, Severance Pay, Etc.........................................................47
SECTION 3.40.Stock Purchase Agreement..........................................................47
SECTION 3.41.On-Going Business. (Omitted).....................................................47
SECTION 3.42.Regulation O. (Omitted)........................................................47
ARTICLE IV AFFIRMATIVE COVENANTS...................................................................47
SECTION 4.01.Information.......................................................................47
SECTION 4.02.Reporting Notification Events.....................................................49
SECTION 4.03.Existence.........................................................................49
SECTION 4.04.Places of Business................................................................49
SECTION 0.00.Xxxxxxxx..........................................................................49
SECTION 0.00.Xxxxxxxxx.........................................................................50
SECTION 4.07.Taxes.............................................................................50
SECTION 4.08.Compliance with Laws..............................................................51
SECTION 4.09.Material Agreements...............................................................51
SECTION 4.10.Permitted Indebtedness............................................................51
SECTION 4.11.Maintenance of Primary Account.(Omitted)..........................................51
SECTION 0.00.Xxxxxx Administration Costs; Brokers.............................................51
SECTION 0.00.Xxxxxx and Audit..................................................................51
SECTION 4.14.Rate Hedging......................................................................51
SECTION 4.15.Use of Loan Proceeds..............................................................52
SECTION 4.16.ERISA and Related Matters.........................................................52
SECTION 4.17.Environmental Matters.............................................................52
SECTION 4.18.Year 2000 Compatibility...........................................................53
SECTION 4.19.Consolidated Funded Debt to EBITDA................................................53
SECTION 4.20.Senior Funded Debt to EBITDA......................................................53
SECTION 0.00.Xxx Worth.........................................................................53
SECTION 4.22.Debt Service Coverage.............................................................54
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SECTION 4.23.Negative Net Income...............................................................54
SECTION 4.24.Key Principals....................................................................54
ARTICLE IV-A ADDITIONAL SECURITY PROVISIONS........................................................54
SECTION 4A.01. Security Interest............................................................54
SECTION 4A.02. Chattel Paper and Instruments................................................56
SECTION 4A.03. Borrower's Collection Privileges.............................................57
SECTION 4A.04. Collateral Account...........................................................57
SECTION 4A.05. Lock-Box.....................................................................57
SECTION 4A.06 Additional Collateral........................................................57
SECTION 4A.07 Further Assurances of Collateral.............................................57
ARTICLE V NEGATIVE COVENANTS.......................................................................58
SECTION 5.01.Restricted Payments...............................................................58
SECTION 0.00.Xxxxxxxxxxx.......................................................................58
SECTION 5.02.Indebtedness......................................................................58
SECTION 5.03.Maintenance of Permitted Indebtedness.............................................58
SECTION 5.04.Judgments.........................................................................58
SECTION 5.05.Selling Shareholder Transactions; Affiliate Transactions..........................58
SECTION 5.07.Line of Business; Name; Structure.................................................59
SECTION 5.08.Stock.............................................................................59
SECTION 5.09.Dividends; Distributions; Repurchases.............................................59
SECTION 5.10.Subsidiaries......................................................................59
SECTION 5.11.Control...........................................................................59
SECTION 5.12.Consolidations; Mergers; Dispositions; Acquisitions...............................59
SECTION 5.13.Liens; Bailments; Certain Sales...................................................60
SECTION 5.14.Risk Management Agreements........................................................60
ARTICLE VI EVENTS OF DEFAULT; CERTAIN REMEDIES UPON DEFAULT.......................................60
SECTION 0.00.Xxxxxx of Default.................................................................60
SECTION 6.02.Acceleration......................................................................63
SECTION 6.03.Other Remedies....................................................................63
SECTION 6.04.Receiver..........................................................................65
SECTION 6.05.Waivers...........................................................................65
SECTION 6.06.Arbitration.......................................................................66
ARTICLE VII MISCELLANEOUS..........................................................................67
SECTION 7.01.Further Assurances................................................................67
SECTION 7.02.Successors and Assigns............................................................67
SECTION 7.03.Severability......................................................................67
SECTION 7.04.Governing Law.....................................................................68
SECTION 7.05.Jurisdiction; Venue; Service......................................................68
SECTION 7.06.Counterparts......................................................................68
SECTION 7.07.Survival..........................................................................68
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SECTION 7.08.Notices...........................................................................69
SECTION 7.09.Lender Appointed Attorney-in-Fact.................................................69
SECTION 7.10.Remedies Cumulative...............................................................70
SECTION 7.11.Amendments, Waivers and Consents..................................................70
SECTION 7.12.Waivers of Claims; Consequential and Punitive Damages.............................70
SECTION 0.00.Xx Third Party Beneficiaries......................................................70
SECTION 7.14.Entire Agreement..................................................................71
SECTION 7.16.WAIVER OF JURY TRIAL..............................................................71
SECTION 7.17.Judgment Currency.................................................................71
SECTION 7.18.Waiver of Immunity................................................................72
SECTION 7.19.Publicity.........................................................................72
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SCHEDULES
SCHEDULE 3.05 Ownership Disclosure
SCHEDULE 3.09 Investment Disclosure
SCHEDULE 3.10 Deposit Accounts Disclosure
SCHEDULE 3.11 Indebtedness Disclosure
SCHEDULE 3.12 Lien Disclosure
SCHEDULE 3.13 Material Agreements Disclosure
SCHEDULE 3.14 Proceedings Disclosure
SCHEDULE 3.16 Insurance Disclosure
SCHEDULE 3.17 Intellectual Property Disclosure
SCHEDULE 3.18 Special Property Disclosure
SCHEDULE 3.19 Margin Stock Disclosure
SCHEDULE 3.20 Tax Identification Number Disclosure
SCHEDULE 3.21 Business Disclosure
SCHEDULE 3.22 Name, Structure Disclosure
SCHEDULE 3.23 Designated Locations Disclosure
SCHEDULE 3.24 Labor Disclosure
SCHEDULE 3.25 ERISA Disclosure
SCHEDULE 3.25A UK Plan Disclosure
SCHEDULE 3.26 Environmental Disclosure
SCHEDULE 3.35 Risk Management Agreements Disclosure
SCHEDULE 3.39 Benefits Disclosure
SCHEDULE 3.43 Principals Disclosure
SCHEDULE I
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CREDIT AND SECURITY AGREEMENT
THIS AGREEMENT made as of the 2nd day of February, 1999, (the
"EFFECTIVE DATE") among APPLIED BIOSCIENCE INTERNATIONAL INC. , ("LENDER");
ENVIRON HOLDINGS, INC., a Delaware corporation ("EHI"); and APBI ENVIRONMENTAL
SCIENCES GROUP, INC.), a Virginia corporation ("US CORPORATION").
In consideration of the mutual promises herein contained, the parties
intending to be legally bound agree as follows:
ARTICLE I
CONSTRUCTION AND DEFINED TERMS
SECTION 1.01. ARTICLES AND SECTIONS. The Article and Section headings
and captions in this Agreement are for convenience only and shall not affect the
construction or interpretation of this Agreement. The references in this
Agreement to Articles and Sections shall be read as Articles or Sections of this
Agreement unless otherwise specifically provided.
SECTION 1.02. EXHIBITS AND SCHEDULES. The references in this Agreement
to specific Exhibits and Schedules shall be read as references to such specific
Exhibits and Schedules attached, or intended to be attached, to this Agreement
and any counterpart of this Agreement and regardless of whether they are in fact
attached to this Agreement, and including any amendments, supplements, and
replacements thereto from time to time.
SECTION 1.03. CREDIT DOCUMENTS. References in this Agreement to Credit
Documents, and any of the documents that are included within the definition of
Credit Documents, shall include such amendments, supplements, and replacements
as may be made thereto or therefor from time to time.
SECTION 1.04. DISCRETIONARY CONSENTS. Wherever a provision of this
Agreement or any other Credit Document provides for Lender's consent, any such
consent may be provided or withheld in Lender's reasonable discretion (unless
otherwise expressly provided herein or in such other Credit Document) and the
granting of consent in one instance shall not constitute or imply the granting
of consent in any similar or other instance.
SECTION 1.05. ACCOUNTING TERMS. Accounting terms used but not otherwise
defined in this Agreement shall have the meanings provided by, and be construed
in accordance with, GAAP.
SECTION 1.06. TIME. Time is of the essence of this Agreement.
SECTION 1.07. DEFINED TERMS. Unless otherwise expressly stated in this
Agreement, capitalized terms used in this Agreement shall have the following
meanings:
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"ACCOUNT DEBTOR" Any Person as to whom any Borrower is a
creditor, and including any person obligated to any Borrower pursuant to any
Account, Instrument, Chattel Paper, General Intangible, Document, Investment
Property, charter or lease, and including any guarantor, endorser, or surety of
any of the foregoing Property, and any Person that provides security for any of
the foregoing Property, and any maker or endorser of any Item of Payment given
to Debtor other than cash.
"ACCOUNTS" As defined in Section 4A.01.
"ACQUISITION LOAN". The acquisition loan referred to in
Article II-B of this Agreement.
"ADDITIONAL LIBOR COSTS" Costs that Lender determines are
attributable to Lender's making or maintaining Loans based upon the LIBOR Rate
or its obligation to make Loans based upon the LIBOR Rate under this Agreement,
or any reduction in any amount receivable by Lender under this Agreement in
respect of any such Loans or such obligation.
"AFFILIATE" means, as to any Person, any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with such specified Person, and including any Subsidiary of such Person.
For purposes of this definition, "control" (including, with correlative
meanings, the terms "controlling," "controlled by," and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through ownership of voting securities, by
agreement or otherwise; provided that legal or beneficial ownership of thirty
percent (30%) or more of the voting securities (or other ownership interests
other than limited partnership interests) of a Person shall in any event be
deemed to be control.
"APPLICABLE LAW" As to any Person, all Laws applicable to such
Person and all Laws applicable to any Property of such Person.
"APPLICABLE REVOLVING CREDIT LOAN INTEREST RATE" The floating
and fluctuating interest rate per annum at all times equal to the LIBOR Market
Index Rate plus the Applicable Revolving Credit Loan Margin. The Applicable
Revolving Credit Loan Interest Rate shall increase or decrease, as the case may
be, with increases and decreases in the LIBOR Market Index Rate.
"APPLICABLE REVOLVING CREDIT LOAN MARGIN" Two percent (2.00%)
per annum.
"APPLICABLE TERM LOAN INTEREST RATE" The floating and
fluctuating interest rate per annum at all times equal to the LIBOR Rate plus
the Applicable Term Loan Margin. At the commencement of each Interest period,
the Applicable Term Loan Interest Rate shall increase or decrease, as the case
may be, with increases and decreases in the LIBOR Rate.
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The Applicable Term Loan Interest Rate shall remain in effect, subject to the
provisions of this Agreement, from and including the first day of the Interest
Period to and excluding the last day of the Interest Period for which it is
determined.
"APPLICABLE TERM LOAN MARGIN" As set forth in the following
schedule:
-------------------------------------- ------------------------------------
CONSOLIDATED FUNDED DEBT TO EBITDA APPLICABLE TERM LOAN MARGIN
-------------------------------------- ------------------------------------
=> 4.0:1 235 basis points
-------------------------------------- ------------------------------------
=> 3.0:1, but < 4.0:1 225 basis points
-------------------------------------- ------------------------------------
=> 2.5:1, but < 3.0:1 215 basis points
-------------------------------------- ------------------------------------
<2.5:1 175 basis points
-------------------------------------- ------------------------------------
"ARTICLE 8" Article 8 of the UCC.
"ARTICLE 9" Article 9 of the UCC.
"ARTICLES OF INCORPORATION" As to any corporation, the
Articles of Incorporation or Certificate of Incorporation, or similar charter
document, and all amendments thereto.
"AVAILABLE LETTER OF CREDIT AMOUNT" The amount equal to the
lesser of (a) the Letter of Credit Maximum Amount, or (b) the Available
Revolving Credit Amount.
"AVAILABLE REVOLVING CREDIT AMOUNT" As of any date of
determination, the amount equal to (a) the Revolving Credit Committed Amount
less (b) the aggregate of the outstanding principal balances of any Revolving
Credit Loans and the aggregate face amounts of any outstanding Letters of
Credit.
"LENDER ACCOUNTS" As defined in Section 0X.00.
"XXXXXXXX" or "BORROWERS" EHI and US Corporation, individually
or collectively.
"BORROWER GROUP" The Borrowers and their Consolidated
Subsidiaries.
"BORROWER GROUP AGENT" As defined in Section 2D.13.
"BUSINESS DAY" Any day other than a Saturday, Sunday or legal
holiday on which Lender is open for the transaction of a substantial part of its
business.
"CAPITAL ADEQUACY REQUIREMENT" Any law, rule, regulation or
guideline regarding capital adequacy (including any law, rule, regulation or
guideline adopted pursuant to or arising out of the report of the Basle
Committee on Lending Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards"
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dated July 1988 (as amended, modified and supplemented and in effect from time
to time or any replacement thereof)), or the adoption or implementation of any
Regulatory Change regarding capital adequacy, or any change in the
interpretation or administration of any thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by
Lender (or Lender's holding company) with any request or directive, regarding
capital adequacy (whether or not having the force of law) of any Governmental
Authority.
"CAPITAL EXPENDITURE" For any Person, expenditures (including
the aggregate amount of Capital Lease Obligations incurred during such period)
made by such Person to acquire, use, or construct fixed assets, plant or
equipment (including office equipment, software, hardware and other computer
equipment), or Real Estate Property and including renewals, improvements and
replacements, but excluding repairs, computed in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" For any Person, all obligations of
such Person to pay rent or other amounts under a lease of Property, or other
agreement conveying the right to use Property, to the extent such obligations
are required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP, and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP. Notwithstanding the foregoing, Capital Lease Obligations
shall also include so-called synthetic leases that would not otherwise be
classified as capital leases under GAAP and the amount of such obligations shall
be the capitalized amount thereof determined as though such obligations were
classified as capital leases under GAAP.
"CHANGE OF CONTROL" A change in the power to direct or cause
the direction of the management or policies of any Obligor, whether through
ownership of voting securities, by agreement or otherwise. Without limiting the
generality of the foregoing, each of the following shall be deemed to constitute
a Change in Control: (a) a change in the legal or beneficial ownership of fifty
percent (50%) or more of the voting securities (or other ownership interests
other than limited partnership interests) of any Obligor, or (b) except as
contemplated in the Shareholder Agreement, if any Obligor is a corporation, the
replacement of a majority of the Board of Directors of such Obligor from the
Directors who constituted the Board of Directors of such Obligor on the later of
(i) the date of election of the original Board of Directors of such Obligor, or
(ii) the Effective Date, or (c) if any Obligor is a partnership or limited
liability company, the replacement of the managing general partner or managing
member, as the case may be, or (d) the sale, transfer, or other disposition of
all or substantially all of such Obligor's assets in one or a series of
transactions to the extent such sale, transfer or other disposition constitutes
a material portion of Borrower Group's business..
"CHATTEL PAPER" As defined in Section 4A.01.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" As defined in Section 4A.01.
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"COLLATERAL ACCOUNT" A non-interest bearing deposit account,
or at Lender's election, an interest-bearing deposit account, , controlled by
Lender, into which Items of Payment processed through the Lock-Box or otherwise
received by any Borrower or Lender are to be deposited after an Event of Default
and demand by Lender.
"COLLECTION COSTS" All commercially reasonable costs and
expenses of administering and enforcing this Agreement and the other Credit
Documents, and including any and all costs and expenses of collecting the
Obligations and exercising Lender's rights and remedies under the Credit
Documents as against the Collateral and any other Property intended by this
Agreement and the other Credit Documents to be given to Lender as security for
the Obligations.
"CONSOLIDATED" When used with reference to the Consolidated
financial statements of the Borrower Group, shall mean the financial statements
of EHI and its Consolidated Subsidiaries as consolidated in accordance with
GAAP, after the elimination of inter-company items.
"CONSOLIDATED FUNDED DEBT" The sum of all indebtedness for
borrowed money, including, without limitation, capital lease obligations,
subordinated debt (including debt subordinated to Lender), and unreimbursed
drawings under letters of credit, or any other monetary obligation evidenced by
a note, bond, debenture or other agreement of that person or entity.
"CONSOLIDATED SUBSIDIARIES" Any Person the assets and
liabilities of which are required to be consolidated with those of any Borrower
in its consolidated financial statements in accordance with GAAP.
"CONSOLIDATED TANGIBLE NET WORTH" The sum of the following in
respect of the Borrower Group (on a consolidated basis and excluding
intercompany items): (i) the amount of issued and outstanding share capital,
plus (ii) the amount of additional paid-in-capital and retained income (or, in
the case of a deficit, minus the amount of such deficit), minus (iii) the sum of
the following (without duplication of deductions in respect of items already
deducted in arriving at surplus and retained earning): the book value of all
assets which would be treated as intangibles under the generally accepted
accounting principles and practices in the United States of America including,
without limitation, capitalized expenses, goodwill, trademarks, trade names,
franchises, copyrights, patents and unamortized debt discount and expenses.
"CREDIT COMMENCEMENT DATE" The Effective Date.
"CREDIT DOCUMENT" or "CREDIT DOCUMENTS" This Agreement, the
Notes, each Pledge Agreement, each Seller Subordination Agreement, each UK
Credit Document, and each and every other agreement (of any kind), promissory
note, instrument, allonge, letter of
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credit application, assignment, certificate, guaranty, indemnity, bond,
financing statement, annex, exhibit, schedule, notice, request or other document
that evidences, secures, guarantees or otherwise relates directly or indirectly
to the Obligations or Lender's rights and remedies with respect thereto, or that
is given to Lender to induce Lender to make, issue or extend the Obligations or
any thereof. "Credit Document" shall not include any swap agreement (as defined
in 11 U.S.C. ss.101.
"CREDIT TERMINATION DATE" March 1, 2002, as the same may be
extended with respect to the Revolving Credit Loans pursuant to this Agreement.
"DEFAULT" Any event, occurrence, circumstance, act, or failure
to act which is or with the giving of notice and/or the passage of time would
become an Event of Default.
"DEFAULT RATE" As applicable to any Loan, the interest rate
per annum that is three percent (3.00%) per annum greater than the interest rate
that would be applicable to such Loan prior to the occurrence of an Event of
Default.
"DEPOSITARY LENDER" The Lender and each other Lender or other
financial institution at which any Borrower has a deposit account or a
securities account or a Lender Account.
"DEPOSITARY LENDER AGREEMENT" A written agreement,
satisfactory to Lender in form and substance, among Borrower, Lender and a
Depositary Lender.
"DESIGNATED LOCATION" Any place of business or other location
for each Borrower Group member listed on Schedule 3.23.
"DISCLOSURE LETTER" The disclosure letter delivered by Selling
Shareholders to EHI pursuant to and concurrently with the Stock Purchase
Agreement.
"DOCUMENTS" As defined in Section 4A.01.
"DOLLARS" The lawful currency of the United States of America.
"EAGL" Environmental Assessment Group Limited, a private
company limited by shares incorporated in England and Wales, which, upon
consummation of the purchase of the Shares, shall be wholly owned by EHI.
"EBITDA" For any period, on a rolling four (4) quarter period
basis, the consolidated net income of the Borrower Group for such period, after
all expenses and other proper charges, except interest, depreciation,
amortization and income taxes, determined in accordance with GAAP, and net of
incentive compensation, and eliminating, without duplication: (i) all
intercompany items, (ii) all earnings attributable to equity interests in
persons that are not subsidiaries unless actually received by the Borrower
Group, (iii) all income arising from the forgiveness, adjustment, or negotiated
settlement of any indebtedness (except for the
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recovery of trade account receivables previously charged off directly against
income in the ordinary course of business not to exceed three percent (3%) of
EBITBA for such period), (iv) any extraordinary items of income or expense, (v)
any increase or decrease in income arising from any change in the Borrower
Group's method of accounting, and (vi) any interest income.
"EHI PRINCIPALS" Xxxxxxxx X. Xxxxx, Xxxxxx X. Highland, Ph.D.,
and the other individuals listed in Schedule 3.43, who are residents of the
United States and management employees of the U.S. Corporation as of the
Effective Date and are the sole shareholders of EHI.
"EIL" Environ International Limited, a private company limited
by shares incorporated in England and Wales, which, upon consummation of the
purchase of the Shares, shall be wholly owned by EHI.
"EFFECTIVE DATE" The Effective Date as set forth on the first
page of this Agreement.
"ENVIRONMENTAL AFFILIATE" As to any Person (referred to in
this definition as the "successor"), any other Person whose liability
(contingent or otherwise) for an Environmental Claim the successor has retained,
assumed or otherwise become or remained liable for, whether by contract,
operation of law or otherwise.
"ENVIRONMENTAL CLAIM" With respect to any Person, any written
notice, claim, suit, order, information request, demand or other communication
(referred to in this definition collectively as a "claim") by any other Person
alleging, asserting or relating to such first Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, release, or
threatened release into the environment, of any Regulated Substance at any
location, whether or not owned by such Person, or (ii) circumstances forming the
basis of any liability or violation under any Environmental Law. Environmental
Claim shall include any claim by any governmental authority or other person for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence of Regulated Substances or arising
from alleged injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL LAWS" Any statute, regulation, rule, permit,
code, common law, judicial decision, order or judgment of any applicable
federal, state, local or foreign jurisdiction relating to pollution, hazardous
substances, hazardous wastes, petroleum or otherwise relating to protection of
the environment, natural resources or human health, including, by way of example
and not by way of limitation, the Clean Air Act, the Clean Water Act, the
Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), the Toxic Substances
Control Act, and the Emergency Planning and Community Right-to-Know Act, all as
amended.
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"ENVIRONMENTAL PERMITS" All registrations, licenses, permits,
authorizations and approvals that are required by any Environmental Laws or any
Governmental Authority responsible for the administration of any Environmental
Laws, including any necessary National Pollution Discharge Elimination System
Permits.
"ERISA" The Employee Retirement Income Security Act of 1974
and the regulations promulgated and rulings issued thereunder, as amended from
time to time.
"ERISA AFFILIATE" Any trade or business (whether or not
incorporated) which is treated as a single employer with any Borrower under
Section 414 of the Code.
"ERISA EVENT" Any of the following: (i) a Reportable Event
with respect to a Qualified Plan or a Multiemployer Plan; (ii) any prohibited
transaction described in Section 406 of ERISA which is not exempt by reason of
Section 408 of ERISA, or any prohibited transaction described in Section 4975(c)
of the Code which is not exempt by reason of Section 4975(c) or (d) of the Code,
with respect to any Plan (other than a Multiemployer Plan); (iii) a complete or
partial withdrawal from a Multiemployer Plan by any Borrower or any ERISA
Affiliate; (iv) the complete or partial withdrawal of any Borrower or an ERISA
Affiliate from a Qualified Plan during a plan year in which the withdrawing
entity was, or was treated as, a "substantial employer" as defined in Section
4001(a)(2) of ERISA; (v) a failure to pay when due any amount which, under the
provisions of any Plan or applicable law relating to any Plan, Borrower or any
ERISA Affiliate is required to pay; (vi) the filing of a notice of intent to
terminate, or the treatment of a plan amendment as a termination, under Sections
4041 or 4041A of ERISA; (vii) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Qualified Plan or
Multiemployer Plan; (viii) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon Borrower or any ERISA Affiliate; (ix) a violation of Sections 404 or
405 of ERISA, or of the exclusive benefit rule under Section 403(c) of ERISA, by
any fiduciary (as defined in Section 3(21) of ERISA) or disqualified person (as
defined in Section 4975(e) of the Code) with respect to any Plan for which any
Borrower or any ERISA Affiliate may be directly or indirectly liable; (x) the
incurrence by any Borrower or any ERISA Affiliate of an obligation to pay
additional premiums to the PBGC under Section 4006(a)(3)(E) of ERISA with
respect to any Plan; and (xi) any lien on the assets of any Borrower arising in
connection with any Plan.
"EQUIPMENT" As defined in Section 4A.01.
"EVENT OF DEFAULT" An Event of Default set forth in Article VI
"FINANCIAL COVENANTS" The financial covenants of the Borrower
Group set forth in Section 4.19 through 4.23 of this Agreement.
"GAAP OR GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" Generally
accepted accounting principles in the United States of America as in effect from
time to time as set forth in
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the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board which are applicable
to the circumstances as of the date of determination consistently applied. For
Persons incorporated outside the United States, "GAAP" shall mean the accounting
principles that are generally accepted within the jurisdiction of such Person's
incorporation.
"GENERAL INTANGIBLES" As defined in Section 4A.01.
"GOVERNMENTAL AUTHORITY" Any executive, judicial, legislative
or other branch, department, office, commission, board, bureau, agency, or
instrumentality of the government of any jurisdiction, including the federal
government of the United States and any foreign country, and any state,
provincial, local or municipal government, and including any monetary authority,
and including the Persons holding or exercising the powers, privileges,
discretions, titles, offices or authorities of any thereof, and including any
central Lender or comparable authority or agency.
"GUARANTEE" A guaranty or endorsement of, contingent agreement
to purchase or to furnish funds for the payment or maintenance of, or otherwise
to be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, or an agreement to purchase, sell, lease (as
lessee or lessor), or license (as licensee or licensor) Property, products,
materials, supplies or services primarily for the purpose of enabling a debtor
to make payment of such debtor's obligations or an agreement to assure a
creditor against loss, and including causing a Lender or other financial
institution to issue a letter of credit or other similar instrument for the
benefit of another Person, but excluding endorsements for collection or deposit
in the ordinary course of business.
"GUARANTOR" Any Person other than Borrower who at any time
provides to Lender collateral security or other credit support for the
Obligations, including any co-borrower, endorser, guarantor, surety, or
accommodation party, any Person who furnishes, issues, confirms, or advises any
letter of credit for the benefit of Lender, any Person who furnishes any bond
for the benefit of Lender, any person who makes any guaranty, security
agreement, pledge agreement, negative pledge agreement, collateral assignment,
indemnity agreement, deed of trust, or similar collateral security arrangement
for the benefit of Lender, any Person who hypothecates, pledges or delivers any
Property to Lender to secure the Obligations.
"GUARANTY AGREEMENT" With regard to each Guarantor, a Guaranty
Agreement satisfactory to Lender in form and substance.
"HELD ITEMS" As defined in Section 4A.01.
"INCLUDE AND INCLUDING" Unless otherwise expressly limited
herein, the words "include" and "including" shall be read to mean "include,
without limitation," and "including, without limitation," as the case may be.
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"INDEBTEDNESS" As applied to any Person, and as measured
without duplication, all items (except items of capital stock, capital or
paid-in-surplus or of retained earnings) (a) which in accordance with GAAP,
would be included in determining total liabilities as shown on the liability
side of a balance sheet of such Person, and (b) to the extent not otherwise
included in clause (a) of this definition, all of such Person's (i) Indebtedness
for Borrowed Money, (ii) trade accounts payable, and (iii) indebtedness of
another Person secured by any Lien to which any Property owned or held by such
Person is subject, whether or not the indebtedness secured thereby shall have
been assumed, and (v) obligations under any Guarantee.
"INDEBTEDNESS FOR BORROWED MONEY" As applied to any Person,
and as measured without duplication, all of such Person's Indebtedness from (a)
obligations in respect of money borrowed, and including those evidenced by
bonds, debentures, notes and other debt instruments, (b) Capital Lease
Obligations, (c) Indebtedness on which interest is accrued or charged, (d)
reimbursement obligations under letters of credit, liquidated, contingent or
otherwise, (e) obligations of, or indebtedness issued or assumed by, such
Person, to pay the deferred purchase price or acquisition price of Property or
services, and including (i) Capital Expenditures, (ii) trade accounts that are
payable more than thirty (30) days after the date the respective goods are
delivered or the respective services are rendered, and (iii) trade accounts
payable that have been outstanding more than thirty (30) days, and (f)
obligations as a guarantor, surety, or accommodation party of items of another
Person that as to such other Person would constitute Indebtedness for Borrowed
Money of such other Person under the preceding clauses of this definition.
"INSTRUMENTS" As defined in Section 4A.01.
"INTELLECTUAL PROPERTY" Patents, trademarks, service marks,
collective marks, certification marks, trade names, commercial names, brand
names, copyrights, and mask works, and including other intangible Property with
respect to which a security interest in such Property would be subject to a
statute of the United States or any Law of any foreign jurisdiction (to the
extent that such statute or Law governs the rights of parties to, and third
parties affected by, transactions in such particular types of Property), and
rights relating to any of the foregoing, and applications, registrations,
re-applications, and re-registrations for any of the foregoing, and amendments,
reissues, renewals, or supplementations of, or substitutions or replacements
for, any of the foregoing, and including other rights or interests in any of the
foregoing, and rights to xxx for past, present or future violations or
infringements of any of the foregoing, and including any agreements, rights,
options, or licenses to purchase or otherwise acquire or use or benefit from (or
to sell or otherwise permit any other Person to acquire or use or benefit from)
any of the foregoing, and goodwill associated with or related to any of the
foregoing or any Borrower or any Borrower's business. Intellectual Property
includes manufacturing formulas, trade secrets, know how, shop rights, designs,
logos, tags, labels, franchises, distributorships, customer lists, rights to
contract and/or insurance expirations and renewals, personal services contracts,
employment contracts, confidentiality agreements and similar covenants, rights
under agreements not to compete and similar covenants of any Person regarding
any of the foregoing, and including opinions and advice of counsel, consultants,
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advisors, and experts (including research materials, engineering reports and
other work product of employees), as memorialized in any form, regarding any of
the foregoing.
"INTEREST PERIOD" Initially, the period commencing on the date
hereof and ending on the first Payment Date, and thereafter, each period
commencing on the first day after the last day of the immediately preceding
Interest Period and ending on the next Payment Date, provided, (i) any Interest
Period that would otherwise end on a day that is not a New York business day
shall be extended to the next New York business day, unless such extension would
carry such Interest Period into the next month, in which event such Interest
Period shall end on the preceding New York business day; (ii) any Interest
Period that ends in a month for which there is no day which numerically
corresponds to the Payment Date shall end on the last New York business day of
such month, and (iii) any Interest Period that would otherwise extend past the
maturity date of the applicable Loan shall end on the maturity date of such
Loan.
"INVENTORY" As defined in Section 4A.01.
"INVESTMENT PROPERTY" As defined in Section 4A.01.
"INVESTMENTS" With respect to any Person: , (a) any
Indebtedness for Borrowed Money of any other Person owed to such Person; (b) the
acquisition (whether for cash, Property, services or securities or otherwise) of
capital stock, bonds, notes, debentures, partnership interests or other
ownership interests or other securities of any other Person or any agreement to
make any such acquisition (including any "short sale" or any sale of any
securities at a time when such securities are not owned by the Person entering
into such sale); (c) acquire by purchase or otherwise any of the outstanding
capital stock of, or all or substantially all of the business, property or
assets of, any Person, (d) the making of any deposit with, or advance, loan or
extension of credit to, any other Person (including the purchase of Property
from another Person subject to an understanding or agreement, contingent or
otherwise, to resell such Property to such Person, but excluding trade credit
extended by a Person arising from inventory sold or services provided in the
ordinary course of such Person's business).
"ITEM OF PAYMENT" As to any Person, all checks, drafts, cash,
and other remittances of payment of, or on account of, any Accounts,
Instruments, Chattel Paper, Documents, or General Intangibles, or Investment
Property or received as proceeds of the sale or lease of any Property or as
payment for any services rendered.
"LAWS" At any time, all laws, statutes, regulations,
ordinances, rules, codes, decrees, orders, and other directives of any federal,
state, district, territorial, or local government within the United States of
America (or any national, state, provincial or local government outside the
United States), or any branch, department, agency or office thereof, applicable
to any party to any Credit Document, or to any Property (including any
Collateral) of any party to any Credit Document, or to any business, industry,
or other activity in which any party to the Credit Documents may be engaged from
time to time, including all Environmental Laws.
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"LETTER OF CREDIT" Any standby letter of credit issued by
Lender under this Agreement or any other Credit Document in a face amount
denominated in Dollars or British currency for Borrower's account.
"LETTER OF CREDIT APPLICATION" A letter of credit application
completed on Lender's customary form, or such other form that Lender may find
satisfactory in Lender's discretion, and executed and submitted to Lender by
Borrower, together with such other information, documents, and instruments as
Lender may request Borrower to submit to Lender with such application form.
"LETTER OF CREDIT COLLATERAL ACCOUNT" Any deposit account, at
and/or for the benefit of Lender, into which Borrower may be required by Lender,
from time to time, and in accordance with the terms of this Agreement, to make
cash deposits to be held by Lender as cash collateral to secure Borrower's
contingent and other reimbursement obligations to Lender under outstanding
Letters of Credit.
"LETTER OF CREDIT FEE" The amount equal to two percent (2.0%)
per annum of the face amount of each Letter of Credit (with a minimum fee of
Three Hundred Dollars ($300).
"LETTER OF CREDIT MAXIMUM AMOUNT" Five Hundred Thousand
Dollars ($500,000).
"LETTER OF CREDIT RESERVE AMOUNT" An amount reasonably
determined by Lender to reserve against fluctuations in conversion rates between
U.S. Dollars and Other Currency in the event Lender issues Letters of Credit in
Other Currency. Such amount shall reduce the Letter of Credit Maximum Amount and
shall be subject to recalculation from time to time in Lender's reasonably
discretion whenever there are outstanding Letters of Credit in Other Currency.
"LIBOR BUSINESS DAY" Any Business Day that is also a day for
trading by and between Lenders in Dollar deposits in the London interbank
market.
"LIBOR MARKET INDEX RATE" For any day, the rate for 1-month
U.S. dollar deposits as reported on Telerate page 3750 as of 11:00 a.m., London
time, on such day, or if such day is not a London business day, then the
immediately preceding London business day (or if not so reported, then as
determined by Lender from another recognized source or interLender quotation).
"LIBOR RATE" With respect to each day during each Interest
Period, the rate for U.S. dollar deposits of 1-month maturity as reported on
Telerate page 3750 as of 11:00 a.m., London time, on the second London business
day before the relevant Interest Period begins (or if not so reported, then as
determined by Lender from another recognized source or interLender quotation).
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"LIBOR RATE LOANS" Loans bearing interest at a rate determined
on the basis of the LIBOR Rate.
"LIBOR RESERVE REQUIREMENT" For any day as used in the
determination of the LIBOR Rate, the aggregate (without duplication) of the
rates (expressed as a decimal fraction) or reserve requirements in effect on
such day under any regulations of the Board of Governors of the Federal Reserve
System (or other Governmental Authority having jurisdiction with respect
thereto) prescribed for eurocurrency funding (currently referred to as
Eurocurrency liabilities in Regulation D) maintained by a member Lender of such
system.
"LIEN" means any security interest, security agreement, real
estate mortgage, chattel mortgage, deed of trust, title retention contract,
security title, factor's lien, assignment, pledge, grant or conveyance for
security purposes or in settlement of debt, or other arrangement for security
purposes, deed-in-lieu of foreclosure or to secure debt, judgment lien or other
lien, charge or encumbrance of any kind, or condemnation or other taking of
Property by any Governmental Authority (and including the commencement or
pendency of any proceedings relating to any proposed condemnation or other
taking) and including any of the foregoing arising by operation of statute or
other law or the application of equitable principles, whether perfected or
unperfected, avoidable or unavoidable, consensual or nonconsensual.
"LIEN NOTICE" means any instrument, document, agreement, or
notice given to, or filed, recorded, or registered with, any Person (including
any Governmental Authority), and regardless of whether required by any Law, for
the purpose of effecting, perfecting, protecting, maintaining, registering, or
giving notice of any Lien (or the possibility of a Lien and regardless of
whether any Lien other than the Lien Notice exists or the effect of the Lien
Notice) upon any of any Borrower's Property, or for any precautionary purposes,
including any of the following that may be given to, or filed, recorded, or
registered with, any Person (including any Governmental Authority) for any of
the foregoing purposes, financing statements, vehicle security interest or lien
filings, mortgages, deeds of trust, judgments, leases, indentures, security
agreements, collateral assignments, and notices of any of the foregoing.
"LOAN REQUEST" Any written request for a Revolving Credit Loan
substantially in the form of Exhibit A and executed and delivered to Lender by
Borrower.
"LOANS" Individually and collectively, the Revolving Credit
Loans, Term Loan and the Acquisition Loan made under this Agreement.
"LOCK-BOX" Any Obligor's lock-box administered by Lender, in
accordance with the terms of a lock-box agreement with such Obligor in form and
substance satisfactory to Lender, to which address such Obligor instructs
Account Debtors to mail or deliver Items of Payment.
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"MARGIN STOCK" means margin stock within the meanings of
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System (or any successor) as the same may be modified and supplemented and in
effect from time to time.
"MATERIAL ADVERSE EFFECT" A material adverse effect on (a) the
property, business, operations, financial condition, prospects, liabilities or
capitalization of the Obligors on a consolidated basis, (b) the ability of the
Obligors on a consolidated basis to perform their obligations under any of the
Credit Documents, (c) the validity or enforceability of any of the Credit
Documents, or (d) the rights and remedies of Lender under any Credit Documents.
"MATERIAL AGREEMENT" Any contract or agreement if the breach
of such contract or agreement by any Person or the modification or termination
of such contract or agreement by any Person would be likely to have a Material
Adverse Effect.
"MULTIEMPLOYER PLAN" A multiemployer plan as defined in
Sections 3(37) or 4001(a)(3) of ERISA or Section 414 of the Code in which
employees of any Borrower or an ERISA Affiliate participate or to which any
Borrower or any ERISA Affiliate contribute or are required to contribute.
"NET INCOME" For any period, as applied to any Person, the net
income (or deficit) of such Person for such period (taken as a cumulative
whole), after giving effect to deduction of or provision for all operating
expenses, all taxes and all other proper deductions, for such period, all as
determined in accordance with GAAP.
"NET WORTH" At any date, total assets minus total liabilities.
For the purposes of this computation, total liabilities shall include all
subordinated debt.
"NON-LOAN LENDER CREDIT RESERVE" A non-cash reserve required
by Lender in its reasonable discretion for indebtedness, liabilities and other
obligations to Lender arising out of automated clearing house transactions, cash
management transactions, swap agreements, or other non-loan credit risks.
"NOTES" The Term Note, Revolving Credit Notes and Seller Note
under this Agreement.
"NOTIFICATION EVENT" Any of the following events or
occurrences: (a) any Default or Event of Default; or (b) any Lien or Lien Notice
upon any Property of any Borrower other than Permitted Liens; or (c) any
Proceedings other than those disclosed on Schedule 3.13 are commenced or
Threatened if such pending or Threatened Proceeding could reasonably be expected
to have a Material Adverse Effect; or (d) any ERISA Event; or (e) the occurrence
of any event or condition that, with respect to any Borrower, gives rise to
unfunded pension liabilities or similar liabilities, severance liabilities,
unemployment liabilities, wage claims, or the like, in favor of any Person,
including without limitation, any tax authority or Governmental Authority, if
such claims or liabilities could, individually or in the aggregate, have a
Material
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Adverse Effect; or (f) any Environmental Claim; or (g) the occurrence of any
event or condition that constitutes a default or event of default under any
Indebtedness of any Borrower (other than the Obligations) if the acceleration of
such Indebtedness as a result of such default or event of default would have a
Material Adverse Effect; or (h) any event or fact (or change of fact) or any
circumstance (or change of circumstance) that warrants the revision of any
Obligor Information in order to cause such Obligor Information to be, and to
continue to be, true, accurate and complete in all material respects at all
times; or (i) any change in incumbency in one or more of the following offices
of any Borrower's management: Chief Executive Officer, Chief Operating Officer,
Treasurer, or Director of Finance; or (j) any occurrence, that would not
otherwise be a Notification Event within the scope of the foregoing clauses of
this definition of Notification Event, which has or reasonably may have a
Material Adverse Effect.
"OBLIGATIONS" All now existing and hereafter arising
obligations, indebtedness, and liabilities of any Borrower to Lender of any
kind, whether primary, secondary, contingent, direct or indirect, joint or
several, or for payment or for performance, and including any Borrower's
obligations to pay to Lender as and when due all principal, interest, costs and
expenses, and fees arising from or relating to loans made, or other credits
granted or created, or financial accommodations extended, by Lender to any
Borrower at any time and in any amount, and including such thereof as may arise
in respect of letters of credit issued, advised, confirmed, or paid by Lender on
any Borrower's application or for any Borrower's account, and including all of
any Borrower's obligations, indebtedness, and liabilities to Lender for payment
or performance under this Agreement and the other Credit Documents, and
including any other claims or judgments that Lender may have against any
Borrower at any time, and including all of each Borrower's now existing or
future obligations to Lender under or in connection with any swap agreements (as
defined in 11 U.S.C. Section 101), and including any of the foregoing arising
before, during, or after the initial or any renewal term of the Credit Documents
after the commencement of any case with respect to any Borrower under the United
States Lenderruptcy Code or any similar statute (including the payment of
interest and other amounts which would accrue and become due but for the
commencement and pendency of such case). Without limiting the generality of the
foregoing, the Obligations include the Loans.
"OBLIGOR INFORMATION" Any information furnished to Lender by
or on behalf of any Obligor at any time, including all such information
furnished to Lender in connection with Borrower's application for the credits
and other accommodations contemplated by this Agreement and the other Credit
Documents, including any information contained in any credit or loan
application, or letter of credit application, and in any financial statements,
tax returns, appraisals, environmental audits, reports, correspondence, opinion
letters, annexes, schedules, lists and exhibits relating to such application or
otherwise relating to the matters and transactions contemplated by the Credit
Documents, and including all representations and other information made to or
furnished to Lender in the Credit Documents and in the Exhibits, Schedules and
certificates relating thereto, and including any and all financial statements,
tax returns, reports, certificates, notices, annexes, schedules, lists and
exhibits, furnished to Lender
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from time to time in accordance with the terms of the Credit Documents or
otherwise relating to any Obligor.
"OBLIGORS" Each Borrower and any Guarantor.
"OPENING DAY BALANCE SHEETS" The opening day balance sheets of
each Borrowing Group member, which are more specifically described in Section
2E.03 and 4.01.
"OPERATING LEASE" Any lease of Property other than a lease
that is a Capital Lease Obligation.
"OPERATING LEASE OBLIGATIONS" For any Person, expenditures
made by such Person or any of its Subsidiaries to lease any Property, other than
expenditures under Capital Lease Obligations.
"ORIGINAL CURRENCY" As defined in Section 7.17.
"OTHER CURRENCY" As defined in Section 7.17.
"OTHER PERSONALTY" As defined in Section 4A.01.
"PAYMENT DATE" As defined in Section 2A.04.
"PAYMENT OFFICE" Lender's office at 0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000, or such other location as may be
designated by Lender upon written notice to Borrower.
"PBGC" The Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED INDEBTEDNESS" Any of the following Indebtedness of
any Borrower: (a) Indebtedness arising in the ordinary course of business, other
than Indebtedness for Borrowed Money, that is classified as a current liability
under GAAP, (b) Indebtedness arising in the ordinary course of business, other
than Indebtedness for Borrowed Money, that is not classified as a current
liability under GAAP, (c) Permitted Indebtedness for Borrowed Money, (d)
Indebtedness under swap agreements (as defined in 11 U.S.C. ss.101) with Lender
or any of its Affiliates and any swap agreements (as defined in 11 U.S.C.
ss.101) executed in conformance with Section 4.14; (e) Indebtedness under the
Seller Note; (f) purchase of EHI stock pursuant to the Shareholder Agreement;
and (g) any other Indebtedness specifically listed on Schedule 3.11 on the
Effective Date.
"PERMITTED INDEBTEDNESS FOR BORROWED MONEY" Collectively, the
Obligations and any other Indebtedness for Borrowed Money specifically listed on
Schedule 3.11 on the Effective Date.
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"PERMITTED INVESTMENTS" With respect to any Borrower (a) any
Investment in any Person that is a direct wholly-owned Subsidiary of such
Borrower on the Effective Date; (b) loans in the ordinary course of business to
employees of any Borrower or any direct wholly-owned Subsidiary of any Borrower
for any Borrower's or such Subsidiary's business purposes and not to exceed Two
Hundred Fifty Thousand Dollars ($250,000) in the aggregate outstanding at any
time; (c) normal and customary advances of sales commissions to employees of any
Borrower; (d) endorsements of negotiable instruments and similar negotiable
documents in the ordinary course of any Borrower's business; (e) deposits with,
including certificates of deposit issued by, Lender or Lender's parent; (f)
Investments made through Lender, which must be reasonably acceptable to Lender;
(g) swap agreements (as defined in 11 U.S.C. ss.101) with Lender or any of its
Affiliates and any swap agreements (as defined in 11 U.S.C. ss.101) executed in
conformance with Section 4.14; (h) any Investments specifically listed on
Schedule 3.09 on the Effective Date; and (i) purchases of EHI stock pursuant to
the Shareholder Agreement; and (i) any Investments which, during any twenty-four
(24) month period, do not exceed in the aggregate Five Hundred Thousand Dollars
($500,000).
"PERMITTED LICENSE" With regard to any Obligor, the use by any
other Person of Intellectual Property of such Obligor in accordance with an
arms-length written license agreement pursuant to which royalties are paid to
such Obligor in the ordinary course of business.
"PERMITTED LIEN" Each Lien listed on Schedule 3.12 and any of
the following Liens: (i) any Lien in favor of Lender; (ii) Liens for taxes which
are not yet delinquent; (iii) security interests that secure the Seller Note
that are (1) by their terms expressly subordinate to the security interests of
Lender, (2) if recorded, subordinate of record to the security interests of
Lender, and (3) subject to the terms of the Seller Subordination Agreement; (iv)
on a consolidated basis, (1) Liens on equipment and other personal property
(which Liens secure only such purchase-money financing) or (2) capital leases,
the sum of which Liens on equipment and other personal property and capital
leases not to exceed in the aggregate Five Hundred Thousand Dollars ($500,000)
in any fiscal year or Two Million Dollars ($2,000,000) cumulatively between the
Effective Date and the maturity of the Loans; and (v) customary landlord Liens
under Operating Leases, which Liens are limited to tangible personal property on
the leased premises and security deposits.
"PERSON" Any natural person, corporation, limited liability
company, partnership, joint venture, entity, association, joint-stock company,
trust or unincorporated organization and any Governmental Authority.
"PLAN" An employee benefit plan (as defined in Section 3(3) of
ERISA) which any Borrower or any ERISA Affiliate sponsors or maintains or to
which any Borrower or any ERISA Affiliate is making or is obligated to make
contributions, including any Multiemployer Plan or Qualified Plan.
-17-
"PLEDGE AGREEMENT" Any written pledge agreement in form and
substance satisfactory to Lender, given by any Person to pledge to Lender such
Person's capital stock in Borrower or any other Person to secure all or any part
of the Obligations.
"PPDI" Pharmaceutical Product Development, Inc., the parent
corporation of Selling Shareholders.
"PRIMARY RESPONSIBLE OFFICER" As to any Obligor, the Chief
Executive Officer, the President, the Treasurer and the Director of Finance of
such Obligor.
"PRIME RATE" The rate of interest announced by a bank
identified by Lender from time to time as its prime rate. Such Prime Rate is not
represented to be the lowest rate of interest offered by any such bank. The rate
of interest shall change automatically and immediately as of the date of any
change in the Prime Rate, without notice to Borrower or any endorser, surety or
guarantor.
"PRINCIPALS" Collectively, the EHI Principals and the UK
Principals.
"PROCEEDINGS" Any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative,
investigative, or informal) commenced, brought, conducted, or heard by or
before, or otherwise involving any Governmental Authority or arbitrator.
"PROCEEDS" As defined in Section 4A.01.
"PRODUCTS" As defined in Section 4A.01.
"PROPERTY" Any right or interest in or to property of any kind
whatsoever, whether real, personal, or mixed, and whether tangible or
intangible.
"PURCHASE PRICE" The purchase price payable by EHI to acquire
the Shares pursuant to the Stock Purchase Agreement.
"QUALIFIED PLAN" A pension plan (as defined in Section 3(2) of
ERISA) intended to be tax-qualified under Section 401(a) of the Code which any
Borrower or any ERISA Affiliate sponsors or maintains, or to which any such
person is making, or is obligated to make, contributions, or, in the case of a
multiple-employer plan (as described in Section 4064(a) of ERISA), has made
contributions at any time during the immediately preceding period covering at
least five (5) plan years, but excluding any Multiemployer Plan.
"QUARTERLY PAYMENT DATES" January 10, April 10, July 10, and
October 10 of each year prior to the Credit Termination Date.
"REAL ESTATE PROPERTY" As to any Person, any now owned or
hereafter acquired right, title or interest in, and any right to occupy or to
use, any Property that is land,
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improvements to land (and/or space in such improvements), any condominium unit
or cooperative unit, or fixtures, and any equipment and other personal property
used or useful in the connection with the occupancy, use, improvement or
operation thereof, including any fee interest and any leasehold interest, and
including all easements and other appurtenances relating thereto, and all rents,
incomes, and profits arising therefrom from time to time, and including any
rights (but not any duties) arising under any deeds, leases, contracts or other
instruments relating thereto.
"RECEIVER" Any receiver, trustee, custodian, liquidator or
similar fiduciary.
"RECORDS" As defined in Section 4A.01.
"REGULATED SUBSTANCE OR REGULATED SUBSTANCES" Any substance,
material, or waste that is regulated or listed under any Environmental Laws, and
such substances, materials, or wastes include, but are not limited to, any whose
release or threatened release may pose a risk to human health or the
environment, and also include (a) asbestos in any form, (b) urea formaldehyde
foam insulation, (c) paint containing lead, (d) transformers or other equipment
that contain dielectric fluid polychlorinated biphenyls at levels of fifty (50)
parts per million or more, (e) radioactive materials, and (f) petroleum or
petroleum hydrocarbons in any form.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements
"REGULATORY CHANGE" Any change after the Effective Date in
United States federal, state or foreign law or regulation (including Regulation
D), including the issuance of any final regulations or guidelines, or the
adoption or making of any interpretation, directive or request applying to a
class of Lenders, including Lender, of or under any United States federal, state
or foreign law or regulations (whether or not having the force of law and
whether or not failure to comply therewith would be illegal) by any Governmental
Authority charged with the interpretation or enforcement thereof.
"REPORTABLE EVENT" Any event described in Section 4043 of
ERISA or in regulations of the PBGC (other than an event for which the thirty
(30) day notice to the PBGC is waived by regulations).
"RESPONSIBLE OFFICER" With respect to the subject matter of
any representation, warranty, covenant, agreement, obligation, notification
requirement, or certificate contained in or delivered to Lender pursuant to any
of the Credit Documents, the President, the Chief Financial Officer, or the
Treasurer of any Obligor, or any other corporate officer of such Obligor who in
the normal performance of his or her operational responsibilities should have
knowledge of such matter and the requirements with respect thereto.
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"RESPONSIBLE OFFICER'S CERTIFICATE" A certificate in form and
substance satisfactory to Lender and signed by a Responsible Officer to the
effect that to the best knowledge and belief of such Responsible Officer, after
due inquiry of each Primary Responsible Officer, no Default or Event of Default
exists, or if any Default or Event of Default does exist, specifying the nature
and extent thereof and what action Borrower proposes to take with respect
thereto, and which certificate shall also demonstrate compliance with the
financial covenants of this Agreement.
"REVOLVING CREDIT" Revolving Credit Loans and Letters of
Credit.
"REVOLVING CREDIT COMMITTED AMOUNT" The lesser of (a) Three
Million Five Hundred Thousand Dollars ($3,500,000) or (b) the sum of (X) Two
Million Dollars ($2,000,000) plus (Y) the amount equal to one-third (1/3) of the
amount of the principal payments made by Borrower to Lender on the Term Loan.
"REVOLVING CREDIT LOANS" The revolving credit loans referred
to in Section 2A.01.
"REVOLVING CREDIT NOTE" Any promissory note, in form and
substance satisfactory to Lender, executed and delivered to Lender by the
Borrowers to further evidence the Borrowers' agreement and obligation to repay
Revolving Credit Loans.
"RISK MANAGEMENT AGREEMENT" Any interest rate swap agreement,
basis swap, forward rate agreement, commodity swap, interest rate option,
forward foreign exchange agreement, rate cap agreement, rate floor agreement,
rate collar agreement, currency swap agreement, cross-currency rate swap
agreement, currency option, equity or equity index option, bond option, or any
similar agreement or derivative product (including any option to enter into any
of the foregoing and including any master agreement for any of the foregoing
together with all supplements) or similar arrangement between any Borrower and
one or more financial institutions or other intermediaries, counterparties or
participants.
"SELLER NOTE" The Promissory Note dated of even date from EHI
made payable to the Selling Shareholders in the amount of Eighteen Million
Dollars ($18,000,000). "SELLER SUBORDINATED OBLIGATIONS" All now existing and
hereafter arising indebtedness and other obligations of the Borrowers or the
Guarantors to the Lender under the Seller Note which are subordinated in
accordance with the terms of this Agreement upon and subject to the terms
generally set forth on Schedule 1 attached hereto. Lender agrees to subordinate
the Seller Note in accordance with terms and conditions to be set forth in the
Subordination Agreement, which terms and conditions must be reasonably
acceptable to Lender. The Subordination Agreement must contain provisions
reflective of the general terms set forth on Schedule 1 and such other terms and
conditions required by Lender.
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"SELLER SUBORDINATION AGREEMENT" The Subordination Agreement
described on Schedule 1 attached hereto.
"SELLING SHAREHOLDERS" Collectively, (1) Applied Bioscience
International, Inc., a Delaware corporation and seller of all of the shares in
the US Corporation and (2) PPD UK Holding Limited, a private company
incorporated in England and Wales and seller of all of the shares of the UK
Corporations.
"SHAREHOLDER AGREEMENT" The Shareholder Agreement dated as of
January 31, 1999 among the Principals.
"SHARES" Collectively, all of the capital stock in the US
Corporation and the UK Corporations.
"SOLVENT" (a) The fair market value of each Borrower's
Property is greater than the total amount of such Borrower's liabilities
(including such Borrower's contingent liabilities), (b) the present fair salable
value of each Borrower's assets is not less than the amount that will be
required to pay such Borrower's probable liabilities on its debts as they become
absolute and matured, (c) each Borrower does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Borrower's ability to pay
as such debts and liabilities mature, and (d) each Borrower is not engaged in
business or a transaction for which such Borrower's assets would constitute
unreasonably small capital. For such purposes, any contingent liability
(including pending litigation, Guarantees, other off-balance-sheet liabilities,
unfunded vested liabilities under Plans and claims for federal, state, local and
foreign taxes, if any) is to be valued at the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"SPECIAL PROPERTY" Vehicles, trailers, rolling stock, shipping
containers, airplanes, ships, boats, barges and other vessels, broadcasting and
other communications transmission equipment, satellites, and any engines, parts,
components, or accessories to any of the foregoing, farm products, minerals, and
timber, goods that are or are to become fixtures, Intellectual Property, any
property with respect to which a security interest in such property would be
subject to any statute of the United States or any statute or other law of any
foreign jurisdiction, to the extent that such statute or law governs the rights
of parties to any third parties affected by transactions in particular types of
property, and any tangible personal property not located at a Designated
Location.
"STOCK PURCHASE AGREEMENT" The Stock Purchase Agreement dated
January 31, 1999 among the Selling Shareholders, as sellers, and EHI, as
purchaser.
"SUBSIDIARY" As to any Person, (i) any corporation or limited
liability company (A) that is directly or indirectly controlled by such Person
or any Subsidiary of such Person or (B) if more than fifty percent (50%) of the
voting and/or non-voting stock or other
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ownership shares of such corporation or limited liability company is owned by
such Person or any Subsidiary of such Person, (ii) any joint venture or
partnership (A) in which such Person or any Subsidiary of such Person is a
general partner or (B) if more than fifty percent (50%) of the partnership
interests in such venture or partnership are owned by such Person or any
Subsidiary of such Person, (iii) any trust for the benefit of such Person or any
Subsidiary of such Person, or any other organization, trust or other entity as
to which such Person or any Subsidiary of such Person is in control, and (iv) to
the extent not otherwise included by the preceding clauses, any Subsidiary of
any corporation, limited liability company, partnership, organization, trust or
other entity described in clauses (i), (ii), or (iii).
"TERM LOAN" The term loan referred to in Article II-B of this
Agreement.
"TERM NOTE" A term promissory note, in form and substance
satisfactory to Lender, executed and delivered to Lender by Borrower to further
evidence the Borrowers' agreement and obligation to repay the Term Loan.
"THREATENED" A claim, Proceeding, dispute, action, or other
matter will be deemed to have been "Threatened" if any demand or statement has
been made in writing or any notice has been given in writing, or if any other
event has occurred or any other circumstance exists, that would lead a prudent
Person to conclude that such a claim, Proceeding, dispute, action, or other
matter is likely to be asserted, commenced, taken, or otherwise pursued in the
future.
"UCC" The Virginia Uniform Commercial Code.
"UK CORPORATIONS" Collectively EAGL and EIL.
"UK CREDIT DOCUMENTS" The Guaranty Agreements executed by each
of the UK Corporations and any other documents executed by the UK Corporation in
connection with the Guaranty Agreements and for the benefit of Lender.
"UK PRINCIPALS" The individuals listed on Schedule 3.43, who
are residents of the United Kingdom and management employees of EHI or EAGL and
EIL upon and after the Effiective Date.
"UK TRANSACTION" The purchase of all of the Shares in the UK
Corporations by EHI pursuant to the Stock Purchase Agreement.
"UNFUNDED BENEFIT LIABILITY" The excess of a Plan's benefit
liabilities (as defined in Section 4001(a)(16) of ERISA) over the current value
of such Plan's assets, determined in accordance with the assumptions used by the
Plan's actuaries for funding the Plan pursuant to Section 412 of the Code for
the applicable plan year.
"UNUSED CREDIT FEE" A fee payable on the unused portion of the
Revolving Credit in accordance with the following schedule:
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---------------------------------------- --------------------------------------
CONSOLIDATED FUNDED DEBT TO EBITDA
UNUSED CREDIT FEE
---------------------------------------- --------------------------------------
=> 4.0:1 50 basis points
---------------------------------------- --------------------------------------
=> 3.0:1, but < 4.0:1 37.5 basis points
---------------------------------------- --------------------------------------
=> 2.5:1, but < 3.0:1 25 basis points
---------------------------------------- --------------------------------------
<2.5:1 25 basis points
---------------------------------------- --------------------------------------
"US TRANSACTION" The purchase of all of the Shares in the US
Corporation by EHI pursuant to the Stock Purchase Agreement.
"YEAR 2000 ISSUES" With respect to any Person, anticipated
costs, problems and uncertainties associated with the inability of certain
computer applications and imbedded systems to effectively handle data, including
dates, on and after January 1, 2000, as it affects the business, operations, and
financial condition of such Person, and such Person's customers, suppliers and
vendors.
ARTICLE II-A
CREDIT FACILITY - REVOLVING CREDIT LOANS
In the event Lender subordinates the Seller Note to a revolving credit
facility in accordance with Schedule 1 attached hereto, then the provisions of
this Article II-A shall cease to be of further force and effect, and in such
event all amounts outstanding under the Revolving Credit Loans and the Term Loan
shall be repaid in full prior to Lender's subordination of the Seller Note to
any revolving credit facility.
SECTION 2A.01. REVOLVING CREDIT LOANS. Lender shall, upon the terms and
subject to the conditions hereinafter set forth, and from time to time on or
after the Credit Commencement Date and before the Credit Termination Date, make
Revolving Credit Loans to the Borrower in an aggregate amount not to exceed, at
any time, the Revolving Credit Committed Amount less the sum of (a) the
aggregate face amounts of all outstanding Letters of Credit caused to be issued
by the Lender under this Agreement or any other Credit Documents, (b) the Letter
of Credit Reserve Amount, if any, and (c) the Non-Loan Lender Credit Reserve, if
any. With the written consent of each Borrower and each Guarantor, Lender may,
in Lender's sole and absolute discretion, extend the Credit Termination Date at
any time for up to an additional twelve (12) months.
SECTION 2A.02. REQUESTS. From time to time on or after the Credit
Commencement Date and before the Credit Termination Date, Borrower may request
Revolving Credit Loans by giving Loan Requests to Lender, provided that:
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(a) Borrower shall not request Revolving Credit Loans in an
amount which, if advanced, would cause the Available Revolving Credit Amount to
be less than One Dollar ($1.00);
(b) each Loan Request shall be given to Lender at least one
(1) Business Day prior to the proposed date of such Revolving Credit Loan and
shall state the proposed Business Day on which to make the Revolving Credit
Loan; and
(c) all Revolving Credit Loans shall be made in amounts of
even multiples of Fifty Thousand Dollars ($50,000).
SECTION 2A.03. COVENANT TO PAY; REVOLVING CREDIT NOTES. Borrower
jointly and severally covenants and agrees to repay the Revolving Credit Loans
to Lender, together with all accrued interest and late charges thereon, and all
out-of-pocket expenses of Lender and fees relating thereto, without set-off,
defense or counterclaim of any kind, in accordance with the terms of this
Agreement, the Revolving Credit Notes and the other Credit Documents. Borrower's
agreement and obligation to pay Revolving Credit Loans, together with all
accrued interest and late charges thereon, and all out-of-pocket expenses of
Lender and fees relating thereto, shall in Lender's discretion be further
evidenced by one or more Revolving Credit Notes, and each Revolving Credit Note
may evidence one or more Revolving Credit Loans, and Borrower shall promptly,
upon Lender's request from time to time, execute and deliver to Lender Revolving
Credit Notes as further evidence of Borrower's agreement and obligation to pay
the Revolving Credit Loans. Lender is irrevocably authorized but not obligated
to record the date and amount of each Revolving Credit Loan, and each payment
made to Lender on the Revolving Credit Loans, on the Revolving Credit Notes or
on schedules attached to the Revolving Credit Notes or otherwise in Lender's
discretion, provided that the failure to record such information shall not
affect the Borrower's obligation to repay the Revolving Credit Loans.
SECTION 2A.04. INTEREST PAYMENTS. Interest on the outstanding principal
balances of Revolving Credit Loans shall accrue and be payable at the Applicable
Revolving Credit Loan Interest Rate, and payments of accrued and unpaid interest
on the Revolving Credit Loans shall be made monthly in arrears on the first
(1st) day of each month (the "Payment Date").
SECTION 2A.05. PRINCIPAL PAYMENTS. Unless otherwise set forth in any
applicable Revolving Credit Note, and subject to acceleration upon the
occurrence of an Event of Default and such mandatory prepayments as may be
required in accordance with the terms of this Agreement, unless sooner paid in
full, the outstanding balances of all Revolving Credit Loans shall be due and
payable on the Credit Termination Date.
SECTION 2A.06. COLLATERAL ACCOUNT PAYMENTS. Upon and after the
occurrence of an Event of Default, Lender shall be entitled to apply the
collected balances in the Collateral Account, or any portion thereof, at any
time and from time to time, against the outstanding balance of any Loans, and/or
to make deposits to the Letter of Credit Collateral Account in
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accordance with the terms of this Agreement, in such order as Lender may
determine in Lender's discretion.
SECTION 2A.07. USE OF REVOLVING CREDIT LOAN PROCEEDS. The proceeds of
the Revolving Credit Loans shall be used solely to provide working capital to
the US Corporation in the ordinary course of its business. The proceeds of the
Revolving Credit Loans shall not be used for any acquisition-related costs or
expenses in connection with the acquisition of the Shares.
ARTICLE II-B
CREDIT FACILITY - TERM LOAN AND ACQUISITION LOAN
SECTION 2B.01. TERM LOAN. Lender agrees, upon the terms and subject to
the conditions of this Agreement, to make a Term Loan to Borrower in the amount
of up to Seven Million Dollars ($7,000,000). Bank further agrees, upon the terms
subject to the conditions of this Agreement, to make an Acquisition Loan to
Borrower in the amount of Eighteen Million Dollars ($18,000,000).
SECTION 2B.02. COVENANT TO PAY; TERM NOTE. Borrower jointly and
severally covenants and agrees to execute and deliver to Lender the Term Note
and the Seller Note immediately upon the execution and delivery of this
Agreement and to repay the Term Loan and Acquisition Loan to Lender, together
with all accrued interest and late charges thereon, and all expenses, costs and
fees relating thereto, without set-off, defense or counterclaim of any kind, in
accordance with the terms of this Agreement and the Term Note and the Seller
Note.
SECTION 2B.03. PAYMENT SCHEDULE. The Term Loan shall be repayable
beginning on March 1, 1999 in forty-seven (47) equal consecutive monthly
payments of principal in the amount of One Hundred Forty-Five Thousand Eight
Hundred Thirty-Three and 33/100 Dollars ($145,833.33) each, plus, on each
Payment Date, a payment of interest on the unpaid principal balance at the
Applicable Term Loan Interest Rate, and one final installment of the entire
unpaid principal balance and all accrued but unpaid interest thereon due and
payable on February 1, 2003. The Acquisition Loan shall be repayable in
accordance with the terms set forth in the Seller Note to be delivered upon
execution of this Agreement.
SECTION 2B.04. USE OF TERM LOAN AND ACQUISITION LOAN PROCEEDS. The
proceeds of the Term Loan and the Acquisition Loan shall be used solely to pay a
portion of the Purchase Price.
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ARTICLE II-C
CREDIT FACILITY - LETTERS OF CREDIT
SECTION 2C.01. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
issued under this Agreement shall be issued pursuant to a Letter of Credit
Application and shall be issued in form and substance satisfactory to Lender in
Lender's discretion. In the event of a conflict between the terms of this
Agreement and the terms of a Letter of Credit Application, the terms of this
Agreement shall control unless otherwise expressly stated in the Letter of
Credit Application accepted by Lender. Borrower may from time to time submit
Letter of Credit Applications to Lender in accordance with the terms of this
Agreement, and upon such applications Lender may cause to be issued Letters of
Credit for Borrower's account. Letter of Credit Applications shall be submitted
to Lender not later than 10:00 a.m., Eastern Time, at least five (5) Business
Days prior to the Business Day on which Borrower requests that the Letter of
Credit be issued. Borrower shall not submit any Letter of Credit Application to
Lender for a Letter of Credit in a face amount that, if issued, would cause the
aggregate face amounts of all outstanding Letters of Credit to exceed the
Available Letter of Credit Amount.
SECTION 2C.02. LETTER OF CREDIT EXPIRY DATES. Each Letter of Credit
shall expire on a date not more than one (1) year after the date that the Letter
of Credit is issued, provided that no Letter of Credit shall be issued with an
expiration date on or after the Credit Termination Date.
SECTION 2C.03. LETTER OF CREDIT FEES. Borrower shall pay to Lender a
Letter of Credit Fee for each Letter of Credit issued under this Agreement, and
such Letter of Credit Fee shall be due and payable at the time of issuance of
the Letter of Credit. Borrower shall also pay to Lender on demand such issuance,
amendment, and letter of credit transaction fees as may be announced by Lender
from time to time.
SECTION 2C.04. LETTER OF CREDIT RESERVES. If any change in any Law or
in the interpretation thereof by any court or other governmental authority
charged with administration thereof shall either (a) impose, modify or deem
applicable any reserve, special deposit or similar requirement against any
Letter of Credit, or (b) impose on Lender any other condition regarding this
Agreement or any Letter of Credit, and the result of any event referred to in
clauses (a) or (b) of this Section shall be to increase the cost to Lender of
issuing any Letter of Credit, then upon demand by Lender, Borrower shall pay to
Lender such additional amounts as may be necessary to compensate Lender for such
increased costs. A certificate submitted by Lender to Borrower, stating such
increased costs of issuing Letters of Credit, shall be conclusive, absent
manifest error, as to the amount of such increased costs.
SECTION 2C.05. PAYMENTS ON LETTERS OF CREDIT.
(a) Borrower covenants and agrees to immediately and without
demand, and without set-off, defense or counterclaim of any kind, reimburse
Lender in Dollars in immediately available funds all amounts drawn under Letters
of Credit.
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(b) Prior to the occurrence of an Event of Default, and unless
otherwise immediately reimbursed to Lender in Dollars in immediately available
funds by Borrower, but only to the extent that Revolving Credit Loans may be
made under this Agreement in the necessary amounts at such times, all amounts
drawn under Letters of Credit may be reimbursed to Lender with proceeds of
Revolving Credit Loans made by Lender to Borrower (and regardless of whether
Borrower shall have requested such Revolving Credit Loans) for the purpose of
making such reimbursements. All such amounts reimbursed with the proceeds of
Revolving Credit Loans shall be repayable in accordance with the terms of this
Agreement and the other Credit Documents.
(c) Upon the occurrence of an Event of Default, all of
Borrower's reimbursement obligations under Letters of Credit, including
Borrower's obligations to reimburse Lender for amounts drawn under Letters of
Credit and Borrower's contingent obligations for amounts not yet drawn under
outstanding Letters of Credit, whether then due or otherwise, shall be
immediately due and payable by Borrower. All amounts paid to Lender in respect
of such contingent obligations for amounts not yet drawn shall be held by Lender
in the Letter of Credit Collateral Account as cash collateral and applied by
Lender to reimburse Lender from time to time for amounts drawn under Letters of
Credit until all Letters of Credit have expired and Lender shall have been
reimbursed for all amounts drawn under Letters of Credit, and Borrower hereby
assigns to Lender and grants Lender a security interest in all amounts so held
in any Letter of Credit Collateral Account as cash collateral for Borrower's
reimbursement obligations under Letters of Credit. If Borrower fails to pay such
reimbursement obligations immediately, including such amounts as are required to
be held in the Letter of Credit Collateral Account, Lender may, in Lender's
discretion and without any obligation to do so, and regardless of whether
Borrower shall have requested such Revolving Credit Loans or given Lender
instructions to the contrary, make Revolving Credit Loans to Borrower and
directly apply the proceeds of such Revolving Credit Loans to the payment of
some or all of such reimbursement obligations and to the funding of some or all
such amounts to be held in, and disbursed to Lender from, the Letter of Credit
Collateral Account. All such amounts paid or held from the proceeds of Revolving
Credit Loans shall be repayable in accordance with the terms of this Agreement
and the other Credit Documents.
(d) Borrower's agreement and obligation to reimburse Lender
for amounts due and payable as set forth in the preceding clauses of this
Section (including all such amounts in respect of contingent obligations) shall
be absolute and unconditional under all circumstances and shall be paid without
set-off, counterclaim, or defense to payment that Borrower may have against the
beneficiary of any such Letter of Credit or Lender or any other Person,
including any set-off, counterclaim or defense based on any drawing documents
proving to be forged, fraudulent or invalid, or the legality, validity,
regularity or enforceability of such Letter of Credit or any Letter of Credit
Application, this Agreement, the Notes, or any other Credit Documents.
SECTION 2C.06. INSTRUCTION TO PAY; INDEMNIFICATION.
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(a) Borrower hereby irrevocably instructs Lender to pay any
draft complying with the terms of any Letter of Credit. Borrower assumes all
risks of the acts and omissions of the beneficiary and other users of any Letter
of Credit.
(b) Lender and its branches, affiliates and/or correspondents
shall not be responsible for and Borrower shall indemnify and hold Lender and
its branches, affiliates and correspondents harmless from and against all
liability, loss and expense (including reasonable attorney's fees and costs)
incurred by Lender or its branches, affiliates or correspondents relative to or
as a consequence of (i) any failure of Borrower to perform the agreements
hereunder and under any Letter of Credit Application, (ii) any Letter of Credit
Application, this Agreement, any Letter of Credit and any drafts and acceptances
under or purporting to be under any Letter of Credit, (iii) any action taken or
omitted by Lender or its branches, affiliates or correspondents at the request
of the Revolving Credit Loan Borrower Group, (iv) any failure or inability to
perform in accordance with the terms of any Letter of Credit by reason of any
control or restriction rightfully or wrongfully exercised by any de facto or de
jure government, group or individual asserting or exercising governmental
powers, and (v) any consequences arising from causes beyond the control of
Lender or its branches, affiliates or correspondents.
(c) Except for gross negligence and willful misconduct of
Lender, and its branches, affiliates and correspondents, Lender and its
branches, affiliates and correspondents, shall not be liable or responsible in
any respect for any (i) error, omission, interruption or delay in transmission,
dispatch or delivery of any one or more messages or advices in connection with
any Letter of Credit, whether transmitted by cable, telegraph, mail or otherwise
and despite any cipher or code which may be employed, or (ii) action, inaction
or omission which may be taken or suffered by it or them in good faith or
through inadvertence in identifying or failing to identify any beneficiary or
otherwise in connection with any Letter of Credit.
(d) Any Letter of Credit may be amended, modified or revoked
only upon the receipt by Lender from Borrower and the beneficiary (including any
transferees and assignees of the original beneficiary), of a written consent and
request for such amendment, modification or revocation, and then only on such
terms and conditions as Lender may prescribe in Lender's discretion.
(e) If any Laws, orders of court and/or rulings or regulations
of any governmental authorities of the United States, any state, or foreign
government permits the beneficiary under a Letter of Credit to require Lender or
its branches, affiliates or correspondents to pay drafts under or purporting to
be under a Letter of Credit after the expiration date of the Letter of Credit,
Borrower shall reimburse Lender for any such payment pursuant to Section 2C.05.
(f) Except as may otherwise be specifically provided in a
Letter of Credit or Letter of Credit Application, the laws of the Commonwealth
of Virginia and the Uniform Customs and Practice for Documentary Credits, 1993
Revision, International Chamber of Commerce Publication No. 500 shall govern the
Letters of Credit. In the event of a conflict
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between the Uniform Customs and Practice for Documentary Credits and the laws of
the Commonwealth of Virginia, the Uniform Customs and Practice for Documentary
Credits shall prevail.
SECTION 2C.07. USE OF LETTERS OF CREDIT. Each Letter of Credit shall be
used solely for a general corporate purposes of the US Corporation. In addition,
the US Corporation may have Letters of Credit issued on behalf of the UK
Corporations in other than U.S. Dollars.
SECTION 2C.08 LETTERS OF CREDIT DENOMINATED IN OTHER THAN U.S. DOLLARS.
For purposes of determining the outstanding balance of Letters of Credit, the
aggregate principal amount of Letters of Credit issued and outstanding in other
than U.S. Dollars shall be converted to the U.S. Dollar equivalent amount, as
calculated by Lender in Lender's reasonable discretion, on the date of such
determination.
ARTICLE II-D
CREDIT FACILITY - GENERAL CREDIT PROVISIONS
SECTION 2D.01. LENDER RECORDS. Absent manifest error, Lender's records
of Loans made and payments received in respect of Loans, including Lender's
entries on any Revolving Credit Notes or schedules that may be attached to
Revolving Credit Notes from time to time, and of Letters of Credit, and all
amounts drawn thereunder and all reimbursements thereof, shall be presumed
correct. Notwithstanding the foregoing, the absence of a Revolving Credit Note
or Lender's failure to record loan amounts or payments or other related
information (or any error in recording such amounts or other information) shall
not limit or affect any Borrower's agreement and obligation to repay the Loans,
and all accrued interest and other amounts on the Loans, in accordance with the
terms of this Agreement, the Notes, and the other Credit Documents.
SECTION 2D.02. COMPUTATION OF INTEREST. All interest shall accrue based
on a 360-day year for the actual number of days outstanding.
SECTION 2D.03. LATE CHARGES; DEFAULT INTEREST. If any payment of
principal or interest due on either of the Loans, or any payment under any
reimbursement obligation in respect of any Letter of Credit, is not paid to
Lender within ten (10) days after the date that such payment is due, then
Lender, in Lender's sole discretion, shall be entitled to impose on Borrower a
"late charge" equal to five percent (5%) of the amount not paid when due, and
Borrower and the Guarantors shall be obligated to pay each such late charge to
Lender immediately upon the imposition thereof by Lender. In Lender's
discretion, upon and after the occurrence of an Event of Default, interest on
the outstanding principal balances of all Loans shall accrue and be payable at
the Default Rate.
SECTION 2D.04. Omitted.
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SECTION 2D.05. UNUSED CREDIT FEE. Borrower shall pay to Bank the Unused
Credit Fee for each year or portion thereof prior to the termination of Bank's
obligations to extend Revolving Credit under this Agreement. The accrued portion
of the Unused Credit Fee shall be due and payable to Bank in arrears on each
Quarterly Payment Date. Borrower hereby authorizes Bank to debit Borrower's
account maintained with Bank to pay the Unused Credit Fee on each Quarterly
Payment Date. For purposes of the calculation of the Unused Credit Fee, the
unused portion of the Revolving Credit shall be the average daily Available
Revolving Credit Amount during the applicable quarter. The Unused Credit Fee
shall be based upon the Consolidated Funded Debt to EBITDA ratio for the
preceding fiscal quarter for which Bank shall have received quarterly financial
statements pursuant to this Agreement, E.G. the Unused Credit Fee for the period
from January through March of a particular year shall be based upon the
quarterly financial statements for the fiscal quarter ending the immediately
preceding December.
SECTION 2D.06. MANDATORY ADDITIONAL PAYMENTS. At any time that the
aggregate outstanding principal balance of Revolving Credit Loans, plus the
aggregate face amounts of outstanding Letters of Credit, exceeds the Revolving
Credit Committed Amount, Borrower shall immediately and without demand, and
without set-off, defense or counterclaim of any kind, make payments to Lender of
Revolving Credit Loans in the amount necessary in order to reduce the aggregate
outstanding balance of Revolving Credit Loans so that the aggregate outstanding
balance of Revolving Credit Loans, plus the aggregate face amounts of
outstanding Letters of Credit, will not exceed the Revolving Credit Committed
Amount.
SECTION 2D.07. PREPAYMENTS. Borrower may prepay Revolving Credit Loans,
the Term Loan and the Acquisition Loan in whole or in part at any time without
premium or penalty. All prepayments of the Term Loan or the Acquisition Loan
shall be applied in inverse order of the maturity of the scheduled payments. Any
prepayment of the Loans shall not affect Borrower's obligation to continue to
make payments under and in accordance with any swap agreement (as defined in 11
U.S.C. ss.101), which payments shall be governed exclusively by the term of such
swap agreement.
SECTION 2D.08. MANNER OF PAYMENTS. All payments to be made to Lender
shall be made in Dollars in immediately available funds without set-off,
defense, counterclaim or deduction of any kind, not later than 12:00 noon,
Eastern Time, at the Payment Office on the dates specified for such payments
under this Agreement, the Revolving Credit Notes, the Term Note, the Seller Note
or the other Credit Documents. Borrower's failure to make any such payments by
12:00 noon, Eastern Time, on the dates on which such payments are due shall not
be an Event of Default so long as such payments are made later on the day that
such payments are due provided that any such payments made after 12:00 noon,
Eastern Time, on the dates such payment are due shall be deemed to have been
made on the next Business Day thereafter for purposes of calculating interest on
amounts outstanding under the Loans. Payments made in other than Dollars shall
be accepted subject to collection.
SECTION 2D.09. APPLICATION OF PAYMENTS. Payments made by Borrower to
Lender shall be applied in such order as Lender may determine in Lender's
discretion.
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SECTION 2D.10. CAPITAL ADEQUACY. Borrower shall pay to Lender from time
to time upon Lender's demand such additional amounts as Lender may determine in
Lender's discretion to be necessary to compensate Lender for any reduction in
the rate of return on Lender's capital (or on the capital of Lender's holding
company, if any) due to the applicability of any Capital Adequacy Requirement,
as a consequence of the existence of Lender's obligations under this Agreement,
to a level below, by an amount reasonably deemed by Lender to be material, that
which Lender (or Lender's holding company) could have achieved but for such
Capital Adequacy Requirement.
SECTION 2D.11. RATE ADEQUACY. If Lender reasonably determines in
Lender's reasonable discretion that (a) deposits in Dollars (in the applicable
amounts) or quotations of interest rates for the relevant deposits are not being
offered to Lender in the relevant amounts or for the relevant maturities for
purposes of determining the rates of interest on LIBOR Rate Loans under this
Agreement, or (b) the applicable LIBOR Rate will not adequately and fairly
reflect Lender's cost of funding LIBOR Rate Loans for such Interest Periods,
then any obligation to make such LIBOR Rate Loans under this Agreement shall be
suspended until such time as the inadequacy or unavailability of LIBOR Rate
Loans no longer exists. In the event LIBOR Rate Loans are not available on
account of operation of this Section, Lender shall use the Prime Rate as an
alternate index or reference rate.
SECTION 2D.12. REGULATORY CHANGE. Borrower shall pay to Lender from
time to time, upon Lender's demand, such additional amounts as Lender may
determine in Lender's reasonable discretion to be necessary to compensate Lender
for any Additional LIBOR Costs resulting from any Regulatory Change that: (a)
subjects Lender to any tax, duty or other charge in respect of the LIBOR Rate
Loans (or the Notes evidencing LIBOR Rate Loans) or subjects the Lender to
changes in the basis of taxation of any amounts payable to Lender under this
Agreement (or the Notes) in respect of any LIBOR Rate Loans or Lender's
obligations to make LIBOR Rate Loans (excluding changes in the rate of tax on
the overall net income of Lender by the jurisdiction in which Lender has its
principal office); or (b) imposes, modifies, or deems applicable any reserve,
special deposit or similar requirements (other than the LIBOR Reserve
Requirements used in the calculation of the LIBOR Rate under this Agreement)
relating to any extensions of credit or against assets of, or any deposits with,
or other liabilities of, Lender (including any LIBOR Rate Loans or any deposits
referred to in the definition of LIBOR Base Rate in this Agreement), or Lender's
commitment to make LIBOR Rate Loans under this Agreement; or (c) imposes any
other condition affecting this Agreement or the Notes (or any of such extensions
or credit or liabilities) or Lender's commitment to make LIBOR Rate Loans under
this Agreement. Additionally, if any Regulatory Change or any event affecting
the United States money markets or the London interLender market, causes Lender
to either (X) incur Additional LIBOR Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of Lender that includes deposits by reference to which the interest
rate on LIBOR Rate Loans is determined as provided in this Agreement or a
category of extensions of credit or other assets of Lender that includes LIBOR
Rate Loans, or (Y) become subject to restrictions on the amount of such category
of liabilities or assets that it may hold, then, if Lender
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so elects, the obligation of Lender to make or renew LIBOR Rate Loans under this
Agreement shall be suspended until such Regulatory Change ceases to be in effect
or the effects of such other event cease.
SECTION 2D.13. DESIGNATION OF AGENT AND ATTORNEY-IN-FACT. Each Borrower
that is a party to any Credit Document hereby irrevocably appoints EHI (referred
to herein as the "BORROWER GROUP AGENT") as the agent and attorney-in-fact for
such Borrower with full power and authority to act on behalf of such Borrower in
all respects with respect to any actions, waivers, consents, payments, receipts,
or notices, whether or not required under this Agreement or the other Credit
Documents, or as the Borrower Group Agent may engage in, provide, give or take
in its sole and unfettered discretion. Each such Borrower agrees that all
actions taken, waivers or consents provided, payments made or received, or
notices given or received, by Lender, in each case by or to the Borrower Group
Agent, shall be effective as to such Borrower regardless of whether such action,
waiver, consent or notice was taken or approved by, or given or received by, any
Person other than the Borrower Group Agent. In all respects and circumstances,
Lender is entitled to rely without limitation on any and all actions, waivers,
consents, and notices of the Borrower Group Agent as actions, waivers, consents
or notices of all such Borrowers, including any and all agreements to modify or
amend in any respect, or grant any waiver or consent under, or to give or
receive any notice with respect to, this Agreement or any other Credit
Documents, and Lender is under no expectation or obligation whatsoever to
inquire as to whether any such action or waiver was approved or ratified by, or
notice given or received by, any such Borrower, and may act as if any such
action, waiver, consent, or notice was engaged in, provided, taken, given or
received by each such Borrower. In this respect, absent written notice to the
contrary with respect to a specified matter, it is agreed that, in each and
every circumstance insofar as Lender is concerned, any action taken, waiver or
consent given, or notice given or received by the Borrower Group Agent, shall be
deemed taken, given or received by each such Borrower even absent an express
indication that such action is taken, such waiver or consent is given, or such
notice is given or received by any such Borrower.
SECTION 2D.14. NET PAYMENTS. Any and all payments of principal,
interest, fees and other Obligations by Borrower hereunder and under the Notes
and the other Credit Documents shall be made free and clear of and without
deduction for any and all Taxes. As used herein, "TAXES" means (a) All present
or future taxes, levies, imposts, deductions, charges or withholding, and all
liabilities, imposed by any taxing authority in any jurisdiction (other than the
United States, except as otherwise provided in clause (b) of this sentence) by
reason of the payment of principal, interest, fees and other Obligations
hereunder, and (b) shall also include taxes imposed by any United States taxing
authority by reason of the payment of increased amounts pursuant to clause (i)
of the next sentence, but only to the extent attributable to such increase. If
any such Taxes shall be required by law to be deducted from or in respect of any
principal, interest, fees or other Obligations payable to Lender hereunder: (i)
the sum payable by Borrower shall be increased as necessary so that after taking
all such Taxes into account, Lender shall receive an amount equal to the sum it
would have received had no such deductions been made; (ii) the applicable
Borrower Group shall make all required deductions for such
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Taxes; and (iii) the applicable Borrower Group shall pay the full amount
deducted to the relevant taxing authority in accordance with applicable law and
shall furnish Lender with proof of such payment. The term "Taxes" shall not
include any taxes imposed on the income of the Lender.
ARTICLE II-E
CREDIT FACILITY - CONDITIONS
SECTION 2E.01. FULFILLMENT OF CONDITIONS. In requesting, applying for,
or taking the Term Loan or any Revolving Credit Loan or any Letter of Credit
from Lender, Borrower shall be deemed to have represented and warranted to
Lender that each of the following conditions in this Article have been
fulfilled. Borrower's failure to fulfill one or more of the following conditions
shall not be relieved by the making of any Loan or the issuance of any Letter of
Credit. Neither the making of any Loan nor the issuance of any Letter of Credit
shall constitute a waiver of any of the following conditions.
SECTION 2E.02. CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT. The
following are conditions precedent to the making of the Term Loan and all
Revolving Credit and must be fulfilled to Lender's satisfaction:
(a) On and as of the date each Loan is made, and on and as of
the date each Letter of Credit is issued, each representation and each warranty
made in this Agreement and in any other Credit Documents shall be true,
accurate, and complete;
(b) On and as of the date each Loan is made, and on and as of
the date that each Letter of Credit is issued, no Default or Event of Default
shall have occurred and be continuing;
(c) All Credit Documents required by Lender from time to time
shall have been fully executed by the parties thereto and delivered to Lender;
stock certificates representing all of the Shares and stock powers for such
Shares signed in blank shall have been delivered to Lender; and all actions
necessary for the perfection and protection of Lender's security interests under
this Agreement and the other Credit Documents, and all actions necessary to
maintain the first priority of such security interests, shall have been taken
and completed; notwithstanding the foregoing, execution and delivery of the UK
Credit Documents shall not be required as a condition to funding of the Term
Loan;
(d) Borrower shall have paid to Lender in the manner described
herein all out-of-pocket expense of Lender and all fees then due and payable
through the date of the making of such Loan or the issuance of such Letter of
Credit;
(e) After the Effective Date, and as of the date each Loan is
made or Letter of Credit is issued, there shall not have occurred any material
and adverse change in the
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Obligors' consolidated financial position, nor any condition, event, or act
which would have a Material Adverse Effect; and
(f) Lender shall have received certificates of insurance,
satisfactory to Lender in form and substance with copies of each insurance
policy required under this Agreement or any of the other Credit Documents
endorsed in favor of Lender as required by the Credit Documents to be delivered
promptly following the Effective Date, and such insurance shall be in full force
and effect.
SECTION 2E.03. CONDITIONS TO TERM LOAN AND THE ACQUISITION LOAN. The
following are conditions precedent to the making of the Term Loan and the
Acquisition Loan and must be fulfilled to Lender's satisfaction:
(a) Lender shall have received the following:
(i) copies of resolutions of the Board of Directors
of each Borrower, authorizing the execution, delivery and performance of this
Agreement and the other Credit Documents, and the borrowing hereunder, and such
other matters as Lender may require, in form and substance satisfactory to
Lender, certified by the Secretary or Assistant Secretary of such Borrower;
(ii) a certificate of the Secretary or Assistant
Secretary of each Borrower as to the correctness and completeness of the copy of
the By-laws of such Borrower attached thereto and as to the incumbency and
signatures of the officers of such Borrowers who execute the Credit Documents;
(iii) a copy of the Articles of Incorporation of each
Borrower, certified by an officer of such Borrower as being correct and
complete, together with a certificate of the appropriate officer or department
of the state in which such Borrower is incorporated as to the good standing and,
if applicable, authority of such Borrower, with copies of the Articles of
Incorporation of such Borrower on file;
(iv) certificates of the appropriate officers or
departments of the states in which each Borrower is not incorporated but does
business as to such Borrower's qualification and good standing to conduct
business as a foreign corporation in such states;
(v) an opinion letter or opinion letters from counsel
(including Virginia counsel) to each Obligor in form and substance satisfactory
to Lender;
(vi) Omitted.
(vii) unless otherwise provided in accordance with
preceding clauses (i) through (vi), the corresponding certificates, documents,
and opinion letters required in the foregoing clauses (i) through (vi), as
applicable, for TAS; and
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(viii) such additional supporting certifications and
other documents as Lender may reasonably request.
(b) The US Transaction and the UK Transaction shall each have
occurred subject only to the funding of the Term Loan and the Acquisition Loan.
The Borrowers shall have delivered to Lender a complete copy of the fully
executed Stock Purchase Agreement, with complete copies of all exhibits
(executed, as applicable) and schedules, and complete copies of all documents,
letters, disclosures (including all Disclosure Letters referred to in the Stock
Purchase Agreement), certificates, instruments (including instruments or
certificates representing the Shares) and any other materials delivered to the
Obligors in connection with or pursuant to the terms of the Stock Purchase
Agreement, and Lender shall have found such items to be satisfactory in the
Lender's sole discretion. The Stock Purchase Agreement shall not have been
amended, nor shall any obligations, rights, or remedies thereunder have been
waived, without prior written notice to, and the prior written consent of,
Lender.
(c) The Collateral has a value acceptable to Lender.
(d) Omitted.
(e) Lender shall have received the estimated Opening Day
Balance Sheets prepared by Borrower.
(f) Lender shall have received such information regarding the
Principals as Lender may have requested. All information provided to Lender
regarding the Principals shall be subject to Lender's review and must be
satisfactory to Lender in Lender's sole discretion.
(g) Lender shall have received for each Borrower, and for each
of the Principals, copies of all shareholder agreements, employment agreements,
confidentiality agreements, information protection agreements and the like,
which shareholder agreements, employment agreements, non-competition agreements,
confidentiality agreements, information protection agreements and the like in
form and substance satisfactory to Lender.
(h) Omitted.
(i) Obligors' intangible assets shall include, without
limitation, on the Effective Date the worldwide trademark rights to the use (and
to license others to use) the names "Environ" and "Environ International" and
"Environ International Corporation" (and any related tradenames) in the same
manner in which they are currently used by the US Corporation and the UK
Corporations, which rights must be unencumbered except by the security interests
and collateral assignments in favor of Lender or by Permitted Liens. As used in
the preceding sentence, "worldwide" means the United States of America, and its
territories and possessions (and the Commonwealth of Puerto Rico), the United
Kingdom and any other jurisdictions in which any of the Obligors does business.
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(j) The Principals shall have made a minimum cash equity
contribution to EHI of One Million Dollars ($1,000,000) in the aggregate prior
to the purchase of the Shares and the funding of the Term Loan and the
Acquisition Loan.
SECTION 2E.04. CONDITIONS TO ALL REVOLVING CREDIT INCLUDING THE INITIAL
REVOLVING CREDIT. The following are conditions precedent to the making of all
Revolving Credit Loans and the issuance of all Letters of Credit and must be
fulfilled to Lender's satisfaction:
(a) The Term Loan and the Acquisition Loan shall not be in
default.
(b) With respect to the UK Corporations, Lender shall have
received each of the following:
(i) Guarantor Board Resolutions - In respect of each
Guarantor, a copy, certified as true, complete and up-to-date, of minutes of the
meeting(s) of the Board of Directors of such Guarantor at which valid
resolutions were adopted approving the Credit Documents to which it is party and
the assumption of its obligations thereunder and authorizing a person or persons
to execute and deliver such Credit Documents and all notices, communications or
documents to be given by such Guarantor or on its behalf pursuant to or in
connection therewith, together with certified copies of unanimous shareholders
resolutions approving and authorizing the execution of such Credit Documents;
(ii) Shareholder Resolutions - certified copies of
shareholder resolutions of the Guarantors [and their subsidiaries] resolving to
make such amendments to their Memoranda and Articles of Association as Lender
shall have specified prior to the Effective Date;
(iii) Legal Due Diligence Report - an original copy
of the legal due diligence report, if any, prepared by Xxxxx & Xxxxx on behalf
of the Borrowers and addressed to, among others, Lender;
(iv) Pension Report - an original copy of the
actuarial report prepared by an actuary (or other person in Lender's discretion)
acceptable to Lender on behalf of the Borrowers and addressed to, among others,
Lender;
(v) Accountant's Report - an original copy of the
accountant's financial due diligence report prepared by accountants acceptable
to Lender in respect of the Guarantors and addressed to, among others, Lender;
(vi) Membership of Board - confirmation of the
approval by Lender of the membership of the Board of Directors of the
Guarantors;
(vii) Statutory Declaration and Report - a certified
copy of the statutory declaration made in the prescribed form by all of the
directors of each Guarantor as
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required by Section 155(b) of the Companies Xxx 0000 and of the statutory report
of each of the Guarantor's auditors required under Section 156(4) of the
Companies Xxx 0000;
(viii) Net Asset Confirmation - a letter from the
auditors of each Guarantor, addressed to Lender and confirming that the
provisions of Section 155(2) of the Companies Xxx 0000 are not being breached by
any such Guarantor.
(c) Lender shall have received an opinion letter or opinion
letters from both United States and United Kingdom counsel to each UK
Corporation in form and substance satisfactory to Lender.
(d) Borrowers and Guarantors shall have executed and delivered
to Lender such Credit Documents and amendments to Credit Documents as Lender may
request.
(e) Immediately upon making the Revolving Credit Loan or
issuing the Letter of Credit, as the case may be, (i) the sum of (A) the
aggregate outstanding principal balances of the Revolving Credit Loans plus (B)
the aggregate of the face amounts of the outstanding Letters of Credit, if any,
will not exceed the Revolving Credit Committed Amount, and (ii) the aggregate of
the face amounts of the outstanding Letters of Credit, if any, will not exceed
the Letter of Credit Maximum Amount.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Borrower hereby makes the following representations and warranties
to Lender (a) on and as of the Effective Date, (b) at the time that each Loan is
made, and (c) at the time that each Letter of Credit is issued.
SECTION 3.01. CONDITIONS. All conditions precedent to the making of the
applicable Loan or Letter of Credit as set forth in Article II have been
satisfied in full.
SECTION 3.02. EXISTENCE. Each Borrower:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization;
(b) has all requisite corporate power, and has all material
governmental licenses, authorizations, consents and approvals to own its assets
and carry on its business as now being or as proposed to be conducted; and
(c) is qualified to do business and is in good standing in all
jurisdictions in which the nature of the business conducted by it makes such
qualification necessary and where failure so to qualify could (either
individually or in the aggregate) have a Material Adverse Effect.
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SECTION 3.03. ACTION.
(a) Each Borrower has all necessary corporate power, authority
and legal right to execute, deliver and perform Borrower's obligations under
each of the Credit Documents; and
(b) The execution, delivery and performance by each Borrower
of each of the Credit Documents have been duly authorized by all necessary
corporate or other action on Borrower's part (including any required shareholder
or like approvals); and
(c) This Agreement has been duly and validly executed and
delivered by each Borrower and constitutes, and the Term Note and other Credit
Documents, when executed and delivered by such Borrower, will constitute such
Borrower's, legal, valid and binding obligation, enforceable against such
Borrower, as the case may be, in accordance with its terms.
SECTION 3.04. APPROVALS. No authorizations, approvals or consents of,
and no filings or registrations with, any governmental or regulatory authority
or agency, or any securities exchange, are necessary for the execution, delivery
or performance of the Credit Documents by any Borrower or for the legality,
validity or enforceability thereof, except for financing statement filings in
respect of the security interests created in favor of Lender pursuant to this
Agreement and the other Credit Documents. The borrowings hereunder, and the
execution, delivery and performance of each of the Credit Documents will not (a)
contravene any applicable provision of law, any applicable order of any court or
other agency of government, or (b) contravene the Articles of Incorporation or
By-laws or any indenture, agreement or other instrument binding upon any
Borrower, or (c) be in conflict with, result in the breach of or constitute
(with due notice or lapse of time or both) a default under any such indenture,
agreement or other instrument binding upon any Borrower, or (d) result in the
creation or imposition of any Lien, charge or encumbrance of any nature
whatsoever upon any of the property or assets of any Borrower, except pursuant
to this Agreement and the other Credit Documents.
SECTION 3.05. OWNERSHIP. Schedule 3.05 contains a true, accurate, and
complete description of the capital structure of each Borrower and identifies
each Person who owns or holds any equity right, title or interest in each
Borrower.
SECTION 3.06. SUBSIDIARIES. US Corporation has no Subsidiaries other
than TAS. EAGL has no Subsidiaries other than EAG, a private company limited by
shares incorporated in England and Wales. EIL has no Subsidiaries other than
Integrated Systems Assessment Limited, a private company limited by shares
incorporated in England and Wales. US Corporation, EAGL, EIL, EAG, TAS and
Integrated Systems Assessment Limited have and shall have no Affiliates other
than each other.
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SECTION 3.07. FINANCIAL STATEMENTS.
(a) The financial statements of the US Corporation and the UK
Corporation provided to Lender dated as of November 30, 1998, together with
related consolidated statements of income, stockholders' equity and changes in
financial position or cash flow are true, accurate, and complete in all material
respects and fairly represent the financial condition of such Persons (and their
Consolidated Subsidiaries, if any) as of such date; such financial statements
were prepared in accordance with GAAP applied on a consistent basis (except as
noted therein); and since the date of such financial statements there has been
no material adverse change in the financial condition of the US Corporation and
the UK Corporation (and their Consolidated Subsidiaries, if any). Since November
30, 1998 no dividends, distributions, loans or advancements of any kind have
been made or given to any Person holding any equity right, title or interest in
the US Corporation and the UK Corporation other than compensation in the
ordinary course of business, that, if this Agreement had been in effect during
the period from November 30, 1998 through the date of this Agreement, would not
conflict with any provision of this Agreement.
(b) The Opening Day Balance Sheets, which have been prepared
and certified by the treasurer or other officer of each member of the Borrower
Group, are true and correct.
SECTION 3.08. SOLVENCY. Each Borrower is, and after giving effect to
the consummation of this Agreement and the incurrence of any Obligations
incurred hereunder, will be, Solvent. No Borrower is contemplating either the
filing of a petition by such Borrower under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of such Borrower's
Property, and such Borrower has no knowledge of any Person contemplating the
filing of any such petition against such Borrower. No Borrower is currently the
subject of any bankruptcy or similar proceeding under any state or federal law
and none of such Borrower's Property is under the jurisdiction of any bankruptcy
court or other court having similar jurisdiction.
SECTION 3.09. INVESTMENTS. Schedule 3.09 contains a true, accurate, and
complete listing of each Investment of each Borrower. No Borrower has any
Investments other than Permitted Investments.
SECTION 3.10. DEPOSIT ACCOUNTS. Schedule 3.10 contains a true,
accurate, and complete listing of each deposit account of each Borrower.
SECTION 3.11. INDEBTEDNESS. Schedule 3.11 contains a true, accurate,
and complete listing of all Indebtedness of each Borrower. No Borrower has any
Indebtedness other than Permitted Indebtedness.
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SECTION 3.12. LIENS. Each Borrower has good and marketable title to its
Property free of all Liens, except for Permitted Liens. Schedule 3.12 contains a
true, accurate, and complete listing of each Lien on each Borrower's Property.
SECTION 3.13. MATERIAL AGREEMENTS. Schedule 3.13 contains a true,
accurate, and complete listing of each Material Agreement that burdens any
Borrower or from which any Borrower derives direct or indirect benefits. To each
Borrower's knowledge, no default or event of default by any Person under any
Material Agreement has occurred and is continuing. No Borrower is a party to, or
bound by, any contract or instrument, or subject to any charter or other
corporate restriction, materially and adversely affecting the business,
property, assets, operations or condition, financial or otherwise, of any
Borrower.
SECTION 3.14. LEGAL PROCEEDINGS. Except as set forth in Schedule 3.14,
there is no pending Proceeding that has been commenced by or against any Obligor
that relates to or may be reasonably expected to materially adversely affect on
a consolidated basis the business of or the Property owned by or used by the
Obligors and, to each Borrower's knowledge, no such Proceeding has been
Threatened.
SECTION 3.15. ACCOUNTS. All Accounts that may be listed on any accounts
aging or listing furnished to Lender by or on behalf of Borrower at any time,
and all Accounts included in Borrower's assets on any financial statement
furnished to the Lender by or on behalf of Borrower at any time (including,
without limitation, the Opening Day Balance Sheets), and unless otherwise
expressly and clearly stated on such aging, listing or financial statement and
thereby disclosed to the Lender: (a) shall have arisen from services performed
by Borrower for, or goods sold by Borrower to, the appropriate Account Debtor in
a commercial transaction; (b) the Account is based on an enforceable order or
contract, written or oral, for services performed or goods sold, and the same
were performed or sold in accordance with such order or contract; (c) Borrower's
title to the Account is good and marketable and is not subject to any Lien other
than Lender's security interest; (d) the amount shown on the books of Borrower
and on any invoice or statement delivered to Lender regarding the Account is
owing to Borrower.
SECTION 3.16. INSURANCE. Schedule 3.16 contains a true, accurate, and
complete listing of each insurance policy (including policies of worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) maintained in full force and effect by each Borrower.
SECTION 3.17. INTELLECTUAL PROPERTY. Each Borrower holds, owns, or is
licensed to use, all Intellectual Property necessary to conduct its businesses
as now conducted or intended to be conducted, free of burdensome restrictions,
and without known conflict with the rights of others. All of the Intellectual
Property held, owned by, used by, or licensed to, each Borrower, or in which any
Borrower has any right or interest, is listed on Schedule 3.17. Except as may be
expressly stated on Schedule 3.17, each Borrower holds, owns, and has the
exclusive right or license to use the Intellectual Property listed on Schedule
3.17, subject to no rights of any other Person.
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SECTION 3.18. SPECIAL PROPERTY. No Borrower uses, owns or otherwise has
rights to any Special Property, other than Special Property that is (a)
Intellectual Property listed on Schedule 3.17 or (b) Property listed on Schedule
3.18.
SECTION 3.19. MARGIN STOCK. No Borrower is engaged principally, or as
one of its activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying Margin Stock,
and no part of the proceeds of any extension of credit hereunder will be used to
buy or carry any Margin Stock. No Borrower owns Margin Stock except as disclosed
on Schedule 3.19, and as of the date hereof the aggregate value of all Margin
Stock owned by any Borrower does not exceed twenty-five percent (25%) of the
assets of such Borrower.
SECTION 3.20. TAX IDENTIFICATION NUMBERS. The tax identification number
for each Borrower and Guarantor is correctly set forth opposite its name on
Schedule 3.20. EHI does not have a tax identification number on the Effective
Date, but EHI has applied for it as of the Effective Date.
SECTION 3.21. BUSINESS. The business of each Borrower is as described
on Schedule 3.21.
SECTION 3.22. NAME, STRUCTURE. Except for the name change of the US
Corporation contemporaneously with the execution of this Agreement to Environ
International Corporation or as otherwise listed on Schedule 3.22, no Borrower
has changed its name or organizational structure within the two (2) year period
immediately preceding the Effective Date or purchased or acquired any Property
from any Person other than Property which in the hands of such Person was such
Person's inventory and was sold to Borrower in the ordinary course of such
Person's business.
SECTION 3.23. DESIGNATED LOCATIONS. The street address, and county and
state, of each place of business of each Borrower and each place where such
Borrower has, leases, maintains or stores Property, are listed on Schedule 3.23.
The mailing address of Borrower's chief executive office is 0000 Xxxxx Xxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, which is in Arlington County,
Virginia. As of the Effective Date, and except as disclosed on Schedule 3.23,
Borrower does not own any interest, including any leasehold interest, in real
estate.
SECTION 3.24. LABOR STATUS. No Borrower has experienced a strike, labor
dispute, slowdown or work stoppage due to labor disagreements which could have a
Material Adverse Effect and there is no such strike, dispute, slowdown or work
stoppage threatened against any Borrower. Except as disclosed on Schedule 3.24,
no Borrower is a party to any labor, employment or management contracts between
such Borrower and any of its employees or any person or group that represents
any of its employees.
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SECTION 3.25. ERISA STATUS.
(a) Schedule 3.25 is a true, accurate, and complete listing of
each Plan. Each Plan is in compliance in all material aspects with the
applicable provisions of ERISA and the Code. Except as otherwise expressly
indicated on Schedule 3.25, each Qualified Plan and each Multiemployer Plan has
been determined by the Internal Revenue Service to qualify under Section 401 of
the Code, and the trusts created thereunder have been determined to be exempt
from tax under Section 501 of the Code, and nothing has occurred that would
cause the loss of such qualification or tax-exempt status. There are no
outstanding liabilities under Title IV of ERISA with respect to any Plan which
could reasonably be expected to have a Material Adverse Effect. No Plan subject
to Title IV of ERISA has any Unfunded Benefit Liability which could reasonably
be expected to have a Material Adverse Effect. Neither Borrower nor any ERISA
Affiliate has transferred any Unfunded Benefit Liability to a person other than
an ERISA Affiliate or has otherwise engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA which could reasonably be expected
to have a Material Adverse Effect. Neither any Borrower nor any ERISA Affiliate
has incurred nor reasonably expects to incur (x) any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan, or (y) any liability under Title IV of ERISA (other than
premiums due but not delinquent under Section 4007 of ERISA) with respect to a
Plan, which could, in either event, reasonably be expected to have a Material
Adverse Effect. No application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan (other than a Multiemployer Plan). No ERISA Event has
occurred or is reasonably expected to occur with respect to any Plan which could
reasonably be expected to have a Material Adverse Effect. Each Borrower and each
ERISA Affiliate has complied in all material respects with the notice and
continuation coverage requirements of Section 4980B of the Code. Neither any
Borrower nor any ERISA Affiliate has any contingent liability for
post-retirement benefits under a welfare plan (as defined in Section 3(1) of
ERISA), other than liability for continuation of coverage described in Section
4980B of the Code, except as disclosed on the financial statements of each
Borrower prepared in accordance with GAAP applied on a consistent basis and
delivered to Lender.
(b) In respect of the UK Corporations, Schedule 3.25A contains
a true, accurate and complete listing of all agreements or arrangements for the
provision of pensions, allowances, lump sums or other similar benefits on
retirement, death or long term ill health for the benefit of any current or
former employee of either UK Corporation or their dependents, including ex
gratia arrangements (each a "UK PLAN"). To the best knowledge of Obligors:
(i) Full and accurate particulars of each UK Plan
have been disclosed including, without limitation, copies of the current trust
deed and rules plus any amending deeds or resolutions, members' booklets plus
any subsequent announcements to members, membership details, details of
contributions payable by and in respect of members, most recent actuarial report
and valuation, most recent scheme accounts, evidence of Inland Revenue approval
and contracting-out status and evidence of compliance with the Pensions Xxx 0000
and regulations.
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(ii) Other than as disclosed there are no other
Pension Schemes for current or past directors or employees of the Company.
(iii) In relation to each UK Plan within the three
years ending on the date of this agreement no power to augment benefits has been
exercised, no discretion has been exercised to admit an employee to membership
of the pension scheme who would not otherwise be eligible and no discretion has
been exercised to provide a benefit which would not otherwise be provided; all
benefits (other than a refund of contributions with interest where appropriate)
payable under each UK Plan on the death of a member while in an employment to
which the pension scheme relates are fully insured by a policy with an insurance
company of good repute; there are no contributions to a UK Plan which are due
but unpaid and have remained unpaid for more than one month and in any event
contributions have been paid which are at least equal to and by the due date
specified in any schedule of contributions or payments applicable under Section
58 or 87 of the Pensions Xxx 0000; no takeover protection provision will be
triggered by Completion; each UK Plan is sufficiently funded on an ongoing basis
using the assumptions used in the last actuarial valuation to secure at least
the benefits accrued to Completion (other than those which are insured) and in
addition is sufficiently funded to meet the minimum funding requirement as
defined in Section 56 of the Pensions Xxx 0000, and all information provided to
the Pension Scheme actuary for the purposes of the last actuarial valuation was
true, accurate and complete in all respects and there have been no events since
the date of that valuation which would show a deterioration of the funding
position of a UK Plan were such a valuation to be undertaken at the date of
Completion.
(iv) Each UK Plan is either approved by the Board of
Inland Revenue for the purposes of Chapter I Part XIV of the Income and
Corporation Taxes Act 1988 or is a scheme under which the benefits provided or
to be provided are consistent with the approval of the scheme by the Board of
Inland Revenue for such purposes and is a scheme in respect of which an
application for such approval has been made and has not been withdrawn or
refused and the Board of Inland Revenue have not given notice to the applicant
that they believe the application has been dropped; is established under
irrevocable trusts; has been administered in accordance with all applicable laws
(including Article 119 of the Treaty of Rome), regulations and requirements of
any competent governmental body or regulatory authority and the trusts and rules
of the UK Plan; has not been the subject of any report of wrongdoing or
irregularities to the Occupational Pensions Regulatory Authority nor are there
any circumstances which would justify such a report; is a scheme in respect of
which all actuarial, consultancy, legal and other fees, charges or expenses have
been paid and for which no services have been provided for which an account or
invoice has not been rendered; and has no investment in employer-related assets
as defined in Section 40 of the Pensions Xxx 0000.
(v) No claim has been threatened or made or
litigation commenced against the trustees or administrators of any UK Plan or
against UK Corporations or any other person whom either UK Corporation is or may
be liable to indemnify or compensate in respect of any matter arising out of or
in connection with any UK Plan. There are no circumstances which
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may give rise to any such claim or litigation. There are no unresolved disputes
under any UK Plan's internal dispute resolution procedure.
SECTION 3.26. ENVIRONMENTAL STATUS. Except as set forth in Schedule
3.26:
(a) Each Borrower has obtained and maintained all
Environmental Permits necessary to conduct its business, both as done currently
and as proposed except insofar as collectively any non-compliance would not have
a Material Adverse Effect..
(b) Each Borrower has complied with all Environmental Laws
(including Environmental Permits) except insofar as collectively any
non-compliance would not have a Material Adverse Effect.
(c) To the knowledge of each Borrower, neither any Borrower
nor any Environmental Affiliate known to it, whether actively or passively, has
released, emitted, buried, leaked, or disposed of Regulated Substances on any
Property ever owned, leased or operated by any of them.
(d) To the best knowledge of each Borrower, no one else,
whether actively or passively, has released, emitted, buried, leaked, or
otherwise disposed of Regulated Substances on any Property while owned, operated
or leased by any Borrower or any Environmental Affiliate known to it.
(e) To Borrower's knowledge, there are no asbestos containing
materials, polychlorinated biphenyls or radioactive substances located on
Property now owned, operated or leased by any Borrower.
(f) Neither any Borrower nor any Environmental Affiliate known
to it has operated a treatment, storage or disposal facility requiring a permit
or having interim status under the Resource Conservation and Recovery Act, as
amended, or any comparable state laws, nor, to Borrower's knowledge, has any
Property of any Borrower or any Environmental Affiliate known to it been used
for such purposes.
(g) To Borrower's knowledge, there have been no underground
storage tanks, pipelines or surface impoundments at any Properties ever owned,
leased or operated by Borrower or any Environmental Affiliate known to it which
was violative of any Environmental Law during such period of ownership, use or
operation.
(h) Neither any Borrower nor any Environmental Affiliate known
to it has received any Environmental Claim pursuant to any Environmental Law or
relating to any potential environmental liability which is not resolved and
which is likely to have a Material Adverse Effect.
(i) To the best knowledge of each Borrower, no other party has
received any Environmental Claim pursuant to any Environmental Law, including
CERCLA or any
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comparable state law or relating to any environmental liability relating to any
Borrower or any Environmental Affiliate known to it, any of their Property or
any property where wastes generated by any of them have been sent which is not
resolved and which is likely to have a Material Adverse Effect.
(j) To Borrower's knowledge, none of the Property ever owned,
operated or leased by any Borrower or any known Environmental Affiliate is
listed on any environmental regulatory list of contaminated properties,
including the National Priorities List promulgated pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, the CERCLIS or any
federal, state or local counterpart with respect to such period of Borrower's
ownership, operation and lease which is not resolved and which is likely to have
a Material Adverse Effect.
(k) To Borrower's knowledge, there are no conditions on any
adjacent or neighboring properties which threaten the Property of any Borrower.
(l) To Borrower's knowledge, no Liens exist under or pursuant
to any Environmental Laws on any Property owned, operated or leased by any
Borrower, and to Borrower's knowledge no government action has been taken or is
in process that could subject any such Property to such Liens and no Borrower
would be required to place any notice or restriction relating to the presence of
Regulated Substances at any Property owned or leased by it in any deed or lease
to such Property.
(m) Each Borrower has disclosed to Lender, prior to the date
of this Agreement, its waste practices, its use of regulated substances and all
potentially material environmental matters and has disclosed all reports,
assessments, remedial action plans or other similar documents relating to any
material environmental condition of Property or operations of any Borrower and
any Environmental Affiliates known to it.
SECTION 3.27. INVESTMENT COMPANY ACT. No Borrower is an "investment
company," or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
SECTION 3.28. Omitted.
SECTION 3.29. COMMERCIAL LOAN. The Loans made under this Agreement are
made solely for a business or commercial purpose and not for any personal,
family, or household purpose. The terms of this Agreement and Notes do not
violate any Laws that regulate credit, including any applicable Laws regarding
usury and the charging of interest, late charges, fees, or any costs and charges
under this Agreement.
SECTION 3.30. NO BROKER. No Borrower has made any agreement or taken
any action that may cause anyone to become entitled to a commission or finder's
fee or other compensation
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of any kind attributable to any extensions of credit or other matters or
transactions contemplated under this Agreement and the other Credit Documents.
SECTION 3.31. OBLIGOR INFORMATION. There is no fact or circumstance or
anticipated event known to any Responsible Officer that could have a Material
Adverse Effect that has not been disclosed to Lender in this Agreement, the
other Credit Documents, or in another writing furnished to Lender on or before
the Effective Date for use in connection with the transactions contemplated by
this Agreement and the other Credit Documents. The Obligor Information furnished
to Lender on or before the Effective Date is true, accurate, and complete in all
material respects, and does not omit any material fact or facts necessary to
make the Obligor Information not misleading, and all Obligor Information
furnished to Lender after the Effective Date shall be true, accurate and
complete in all material respects.
SECTION 3.32. INDEPENDENT ACCESS. Each Obligor has adequate means to
obtain from each other Obligor, on a continuing basis, information concerning
the condition, financial and otherwise, of all other Obligors, and the Obligors
are not relying on Lender to furnish such information either now or in the
future. Neither Lender, nor any Affiliate of Lender, nor any of its or their
employees, attorneys, accountants, appraisers or other consultants or advisers
have made any representations, warranties or agreements of any kind to or with
the Principals, EHI, or the other Obligors, regarding the Stock Purchase
Agreement or the matters and transactions contemplated thereby, or the
businesses and assets that are directly or indirectly the subject matter
thereof.
SECTION 3.33. TAXES. Each Borrower has filed and will continue to file
all United States income tax returns and all state income tax returns that are
required to be filed, and has paid, or made adequate provisions for the payment
of, all taxes which have or may become due pursuant to said returns or pursuant
to any assessment received by Borrower except such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided.
SECTION 3.34. APPLICABLE LAWS. Each Borrower is in compliance, in all
material respects, with all Applicable Laws.
SECTION 3.35. RISK MANAGEMENT AGREEMENTS. No Borrower is a party to any
Risk Management Agreement, except as listed on Schedule 3.35.
SECTION 3.36. YEAR 2000 ISSUES. Each Borrower and its subsidiaries have
made a full and complete assessment of the Year 2000 Issues and have a realistic
and achievable program for remediating any applicable Year 2000 Issues on a
timely basis. Based on this assessment and program, each Borrower reasonably
believes that Year 2000 Issues cannot be expected to have a Material Adverse
Effect.
SECTION 3.37. DIRECT OBLIGATION; FULL FAITH AND CREDIT. This Agreement,
the Notes, and the other Credit Documents to which any Borrower is a party, and
each of the Obligations of each Borrower hereunder or thereunder, are direct,
unconditional and general obligations of each
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Borrower jointly and severally for the payment of which the full faith and
credit of each Borrower is pledged.
SECTION 3.38. NO RECORDATION NECESSARY. This Agreement and each of the
other Credit Documents are in proper form under Virginia law for the enforcement
hereof or thereof against each Borrower under Virginia law, and to ensure the
legality, validity, enforceability, priority or admissibility in evidence of
this Agreement and the other Credit Documents, it is not necessary that this
Agreement or any other Credit Document or any other document, except UCC
financing statements, be filed, registered or recorded with, or executed or
notarized before, any court or other authority in Virginia or that any
registration charge or stamp or similar tax be paid on or in respect of this
Agreement or any other Credit Document or any other document.
SECTION 3.39. WAGES, SEVERANCE PAY, ETC. No Borrower has pension
benefits, wages, severance pay or unemployment benefits unpaid and owing to any
employees currently employed or severed or retired, except as described on
Schedule 3.39.
SECTION 3.40. STOCK PURCHASE AGREEMENT. The Stock Purchase Agreement is
in full force and effect, complies with all Applicable Laws, has not been
modified or amended, and no obligations, rights, or remedies thereunder have
been waived.
SECTION 3.41. Omitted.
SECTION 3.42. Omitted.
SECTION 3.43. PRINCIPALS. All of the Principals are identified in
Schedule 3.43.
ARTICLE IV
AFFIRMATIVE COVENANTS
Each Borrower covenants and agrees that from the date hereof and until
the later of the Credit Termination Date or payment in full of all Obligations
owed by any Borrower to Lender, unless Lender shall otherwise consent in
writing:
SECTION 4.01. INFORMATION. Each Borrower shall deliver to Lender, or
cause to be delivered to Lender, the following:
(a) Omitted.
(b) as soon as available, but in any event within ninety (90)
days after the close of each fiscal year of each Borrower (and Guarantors),
audited financial statements reflecting their operations during such fiscal
year, including, without limitation, a balance sheet, profit and loss statement
and statement of cash flows, with supporting schedules, all on a
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consolidated and consolidating basis, and setting forth in comparative form
consolidated figures for the preceding fiscal year, all in reasonable detail and
audited by a certified public accountant of recognized national standing
reasonably acceptable to Lender, whose opinion shall be unqualified and shall be
to the effect that such consolidated financial statements have been prepared in
accordance with GAAP applied on a consistent basis (excepting changes noted
thereon with which such accountants concur);
(c) as soon as available, but in no event more than forty-five
(45) days after the end of each of the first three fiscal quarters, a balance
sheet of each Borrower (and Guarantors) and statements of income and retained
earnings and of cash flows for each Borrower (and the Guarantors) for such
quarterly period and for the portion of the fiscal year ending with such period,
all on a consolidated and consolidating basis, in each case setting forth in
comparative form consolidated figures for the corresponding period of the
preceding fiscal year (except that the balance sheet shall be compared to that
at prior year end), all in reasonable form and detail acceptable to Lender, and
accompanied by the certificate of the Director of Finance of the applicable
Borrower (and the Guarantors) to the best of his or her knowledge, information
and belief, as being true and correct in all material respects and as having
been prepared in accordance with GAAP applied on a consistent basis, subject to
changes resulting from normal year-end audit adjustments;
(d) at the time of the delivery of the financial statements
provided for in Sections 4.01 (a) and (b), a Responsible Officer's Certificate;
(e) within the period for delivery of the annual financial
statements provided in Section 4.01(a), a certificate of the accountants
conducting the annual audit stating that they have reviewed this Agreement and
stating further whether, in the course of their audit, they have become aware of
any Default or Event of Default existing on the date of such statements arising
as a result of a violation of any financial covenants of this Agreement, and if
any such Default or Event of Default exists, specifying the nature and extent
thereof;
(f) promptly upon transmission thereof, copies of any filings
and registrations with, and reports to, the Securities and Exchange Commission,
or any successor agency, by any Borrower or Guarantor, and copies of all
financial statements, proxy statements, notices and reports as such Borrower or
Guarantor shall send to its shareholders or to the holders of any other
Indebtedness of any Borrower or Guarantor in their capacity as holders;
(g) within the period for quarterly and annual financial
statements, summary agings of accounts receivable, and accounts payable
listings, for each Borrower and the Guarantors each current as of the last day
of the then most recently ended quarter, together with such other information as
Lender may reasonably request regarding the accounts receivable and accounts
payable;
(h) within thirty (30) days after each filing by each Borrower
and each Guarantor of any tax return or extension thereof pursuant to the taxing
authority of any
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Governmental Authority, a photocopy of each such tax return, with all related
forms, schedules, and related information signed and certified by the applicable
Borrower or Guarantor as true and complete;
(i) with reasonable promptness upon any such request, such
other information regarding the business, properties or financial or operating
condition of any Borrower or Guarantor as Lender may reasonably request.
SECTION 4.02. REPORTING NOTIFICATION EVENTS. Immediately upon any
Responsible Officer obtaining knowledge thereof, but in any event within five
(5) Business Days after any Responsible Officer obtains such knowledge, each
Borrower shall give Lender written notice of each Notification Event, which
written notice shall include (i) a description of the Notification Event
(including an estimate of any anticipated liability or Material Adverse Effect
that may arise from such Notification Event other than the occurrence of a
Default or Event of Default), (ii) the date of the Notification Event and the
date that the Responsible Officer first obtained knowledge of the Notification
Event, and (iii) a description of the manner in which any Borrower has addressed
or otherwise responded to the Notification Event or intends to address or
otherwise respond to the Notification Event.
SECTION 4.03. EXISTENCE. Each Borrower shall maintain its corporate or
other legal existence, in each jurisdiction in which it is incorporated or
otherwise formed, and in each jurisdiction where it is required to register or
qualify to do business except for failures to register or qualify which,
individually or in the aggregate, would not have a Material Adverse Effect.
SECTION 4.04. PLACES OF BUSINESS. Borrower shall give Lender at least
thirty (30) days' prior written notice of the intended opening of any new
location in addition to the Designated Locations. Prior to such opening, such
Borrower shall deliver to Lender a revised Schedule 3.26 adding such new
location as a Designated Location and shall execute and deliver, or cause to be
executed and delivered, to Lender such agreements, documents, and instruments as
Lender may deem necessary or desirable in Lender's discretion to protect
Lender's interest in the Collateral at such new location, including UCC
financing statements. Such Borrower shall provide to Lender such UCC financing
statement search reports as Lender may reasonably request to confirm the absence
of competing Lien Notices and to confirm the priority of Lender's UCC financing
statements. If Borrower closes for business at any Designated Location, such
Borrower shall give Lender at least thirty (30) days' prior written notice with
a written explanation of the reason for closing such Designated Location. Upon
and after the occurrence of an Event of Default which remains uncured, no
Borrower shall open or close any place of business without Lender's prior
written consent, which consent shall not be unreasonably withheld, delayed or
conditioned.
SECTION 4.05. PROPERTY. Each Borrower shall maintain, preserve and
protect all Property that is material to the business of such Borrower and keep
such Property in good repair, working order and condition, normal wear and tear
excepted, and from time to time as necessary make, or cause to be made, all
repairs, renewals, additions, improvements, and replacements
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thereto as necessary in order that the business carried on in connection
therewith may be properly conducted at all times in accordance with customary
and prudent business practices for similar businesses.
SECTION 4.06. INSURANCE. Each Borrower shall maintain in full force and
effect at all times insurance (including worker's compensation insurance,
liability insurance, casualty insurance and business interruption insurance) in
such amounts, covering such risks and liabilities, and with such deductibles as
are in accordance with normal industry practice unless higher limits or other
types of coverage are required by the terms of the other Credit Documents,
provided that the insurance coverages maintained by each Borrower shall at all
times be at least comparable in amount and in all other material respects, as
the coverages described on Schedule 3.16. Each Borrower shall provide to Lender
promptly upon Lender's request from time to time certificates, policies or
endorsements as Lender shall require as proof of such insurance, and if any
Borrower fails to do so, Lender is authorized, but not required, to obtain such
insurance at the expense of the Obligors. All insurance policies shall provide
for at least thirty (30) days' prior written notice to Lender of any
cancellation or reduction in coverage and Lender may act as attorney-in-fact for
any Borrower in obtaining, and at any time an Event of Default exists,
adjusting, settling, amending and canceling such insurance. Each Borrower shall
cause Lender to be named as a loss payee and an additional insured (but without
any liability for any premiums) under all such insurance policies as to which
such is obtainable at no or reasonable cost and shall cause each Borrower to
obtain non-contributory Lender's loss payable endorsements to all such insurance
policies in form and substance satisfactory to Lender. Such Lender's loss
payable endorsements shall specify that the proceeds of such insurance shall be
payable to Lender as its interests may appear and further specify that Lender
shall be paid regardless of any act or omission by any Borrower or any other
Person. To the extent Borrower defaults in regularly scheduled payments on the
Notes or other Credit Documents, all proceeds of such casualty insurance and
business interruption insurance not applied to repair and replacement of the
Property shall be paid to Lender for application to the Obligations in
accordance with the terms of this Agreement and the other Credit Documents or
otherwise. Lender shall not be responsible for any failure to collect any
insurance proceeds due under the terms of any policy regardless of the cause of
such failure.
SECTION 4.07. TAXES. Each Borrower shall pay and discharge, or cause to
be paid and discharged, promptly all taxes, assessments, and governmental
charges or levies imposed upon any Borrower or upon any Borrower's income and
profits, or upon any of its Property or any part thereof, before the same shall
become in default, as well as all lawful claims for labor, materials and
supplies or otherwise which, if unpaid, might become a Lien upon such Property
or any part thereof; PROVIDED, HOWEVER, THAT no Borrower shall be required to
pay and discharge or to cause to be paid and discharged any such tax,
assessment, charge, levy or claim so long as the validity thereof shall be
contested in good faith by appropriate proceedings and such Borrower shall have
set aside on its books adequate reserves with respect to any such tax,
assessment, charge, levy or claim, so contested.
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SECTION 4.08. COMPLIANCE WITH LAWS. Each Borrower shall comply, in all
material respects, with all Applicable Laws.
SECTION 4.09. MATERIAL AGREEMENTS. Each Borrower shall comply, in all
material respects, with all Material Agreements, and shall diligently preserve,
protect, and enforce such Borrower's rights and remedies under all Material
Agreements.
SECTION 4.10. PERMITTED INDEBTEDNESS. Each Borrower shall pay all of
its Permitted Indebtedness promptly and in accordance with the contractual terms
of such Permitted Indebtedness as set forth in the documentation for such
Permitted Indebtedness.
SECTION 4.11. MAINTENANCE OF PRIMARY ACCOUNT. Omitted.
SECTION 4.12. CREDIT ADMINISTRATION COSTS; BROKERS. Each Borrower shall
pay and cause all other Obligors to pay all out-of-pocket costs and expenses of
Lender in connection with the Loans promptly upon Lender's demand from time to
time. Each Borrower shall indemnify and hold harmless Lender from and against
any claim by any Person not contracted with by Lender for a commission or
finder's fee or other compensation of any kind attributable to any extensions of
credit or other matters or transactions contemplated under this Agreement and
the other Credit Documents, and shall pay Lender's attorney's fees, litigation
expenses and court costs in defending any such claims.
SECTION 4.13. REVIEW AND AUDIT. Each Borrower shall maintain its
financial books and records in accordance with GAAP. Lender shall be permitted
access to all Records at any location, including any Designated Location during
normal business hours on reasonable notice and shall be permitted to take
copies, at Borrower's expense, of such Records as Lender may request. Each
Borrower shall permit and authorize Lender through any Person designated by
Lender ("LENDER'S DESIGNEE"), at such times and as often as Lender may
reasonably request, to visit, inspect, examine, audit and verify any of the
properties and Records of each Borrower relevant to the subject matter of this
Agreement or any other Credit Documents or any Obligor Information or the
financial condition of each Borrower. The actions of Lender and Lender's
Designee pursuant to this Section shall be scheduled and conducted so as not to
be unreasonably disruptive to Borrower's operations.
SECTION 4.14. RATE HEDGING. Upon the request of Lender, Borrower shall
hedge the floating interest expense of the Term Loan for the full term of the
Term Loan by maintaining one or more interest rate swap transactions with Lender
or with another financial institution approved by Lender in writing in an
aggregate notional amount equal to at least fifty percent (50%) of the initial
amount funded under the Term Loan, with Borrower making fixed rate payments and
receiving floating rate payments to offset changes in the variable interest
expense of the Term Loan, all upon terms and subject to such conditions as shall
be acceptable to Lender (or if such transaction is with another financial
institution, all upon terms and subject to conditions as shall be approved by
Lender in writing).
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SECTION 4.15. USE OF LOAN PROCEEDS. The proceeds of the Loans shall be
used solely for the purpose expressly permitted in Article II.
SECTION 4.16. ERISA AND RELATED MATTERS. Each Borrower shall promptly
furnish to Lender copies prepared or received by such Borrower or any ERISA
Affiliate of: (i) at the request of Lender, each annual report (Internal Revenue
Service Form 5500 series) and all accompanying schedules, actuarial reports,
financial information concerning the financial status of each Plan, and
schedules showing the amounts contributed to each Plan by or on behalf of
Borrower or any ERISA Affiliates for the most recent three (3) plan years; (ii)
all notices of intent to terminate or to have a trustee appointed to administer
any Plan under Title IV of ERISA; (iii) all written demands by the PBGC under
Subtitle D of Title IV of ERISA; (iv) all notices required to be sent to
employees or to the PBGC under Section 302 of ERISA or Section 412 of the Code;
(v) all written notices received with respect to a Multiemployer Plan concerning
(x) the imposition or amount of withdrawal liability pursuant to Section 4202 of
ERISA, (y) a termination described in Section 4041A of ERISA, or (z) a
reorganization or insolvency described in Subtitle E of Title IV of ERISA; (vi)
any new Plan that is subject to Title IV of ERISA or Section 412 of the Code
adopted by Borrower or any ERISA Affiliate; (vii) any amendment to any Plan that
is subject to Title IV of ERISA or Section 412 of the Code, if such amendment
results in a material increase in benefits or Unfunded Benefit Liability; or
(viii) at the request of Lender, information regarding any unfunded pension
liabilities or similar liabilities, severance liabilities, unemployment
liabilities, wage claims, or the like, if favor of any Person including without
limitation, an tax authority or Governmental Authority; and, in respect of each
UK Plan copies of (ix) any actuarial report and valuation of that UK Plan, and
any other actuarial advice material to the funding of the UK Plan; (x) any
amending deeds or documents; (xi) notification of any decision to terminate the
UK Plan; (xii) and notification of any litigation commenced or threatened
against the UK Plan, its trustees or the applicable UK Corporation in respect of
the UK Plan including any complaint made to the Pensions Ombudsman.
SECTION 4.17. ENVIRONMENTAL MATTERS. Each Borrower shall cause all
Property owned or operated by Borrower to be kept free of contamination from
Regulated Substance and any other harmful or physical conditions except as
otherwise would be in compliance with applicable Environmental Laws. If any
Obligor receives notice or becomes aware of any Environmental Claim or any
violation of Environmental Laws or any contamination with Regulated Substances
that relates to any of them or their respective Properties, then Obligor shall
promptly provide written notice thereof to Lender and, upon written request of
Lender, shall provide Lender with such reports, certificates, engineering
studies or other written material or data as Lender may require so as to satisfy
Lender that Obligor reasonably is in compliance with its obligations under this
Agreement. In addition, if Lender shall at any time have reason to believe that
any of the representations and warranties contained in Section 3.26 of this
Agreement is not accurate in any respect, or that any Borrower is in breach of
its obligations under the foregoing provisions of this Section, Lender shall
have the right at any time and from time to time to employ, or to require any
Obligors at the Obligors' expense to employ, a qualified environmental
consultant acceptable to Lender to conduct a pertinent environmental review,
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audit, assessment or report concerning the pertinent Borrower's operations and
Property. Each Borrower shall cooperate fully with such consultant in any such
audits, including by providing such access to any Borrower's books, records,
Property, employees and agents and by furnishing such written and oral
information as such consultant may reasonably request in connection with any
such audits. Each Obligor (jointly and severally) shall indemnify and hold
harmless Lender (and Lender's employees, agents, officers, directors,
successors, and assigns) from all Environmental Claims directly or indirectly
relating to or arising out of or based upon any presence or threatened presence
of Regulated Substances at any Property owned or operated by any Borrower at any
time or based upon any conduct or omission of any Borrower at any time or upon
the breach by any Borrower of any covenant, agreement, representation, or
warranty contained in this Agreement or any other Credit Documents or upon the
violation of any Environmental Laws. This indemnity shall include (a) any
Environmental Claim for personal injury (including sickness, disease, or death
or the fear of any thereof), tangible property damage, nuisance, pollution,
contamination, leak, spill, release, or other effect on the environment, and (b)
the cost of any required, necessary, or appropriate response, investigation,
repair, clean-up, treatment, removal, remediation, or detoxification of any
Property or other properties affected by such release or threatened release, and
the preparation and implementation of any other required, necessary or
appropriate actions in connection with any Property or other properties affected
by such release or threatened release. The covenants, agreements,
representations, and warranties of Borrower contained in this Section shall
survive the payment of the Obligations and the termination of this Agreement.
SECTION 4.18. YEAR 2000 COMPATIBILITY. Each Borrower shall take all
action necessary to assure that such Borrower's computer based systems are able
to operate and effectively process data including dates on and after January 1,
2000. At the request of Lender, each Borrower shall provide Lender with
assurance acceptable to Lender of such Borrower's Year 2000 compatibility.
SECTION 4.19. CONSOLIDATED FUNDED DEBT TO EBITDA. The ratio of
Consolidated Funded Debt to EBITDA for the Borrower Group shall not exceed the
following:
----------------------------------------------- ---------------------------
APPLICABLE PERIOD RATIO
----------------------------------------------- ---------------------------
Effective Date through December 31, 1999 5.00:1
----------------------------------------------- ---------------------------
January 1, 2000 to December 31, 2000 4.50:1
----------------------------------------------- ---------------------------
January 1, 2001 to December 31, 2001 4.00:1
----------------------------------------------- ---------------------------
January 1, 2002 and thereafter 3.50:1
----------------------------------------------- ---------------------------
SECTION 4.20. SENIOR FUNDED DEBT TO EBITDA. The Borrower Group's ratio
of Senior Funded Debt to EBITDA shall not exceed 2.50:1.
SECTION 4.21. CONSOLIDATED TANGIBLE NET WORTH. Borrower Group's
Consolidated Tangible Net Worth shall increase by $1,000,000 each year by
December 31 of each year until
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the Seller Note and all Obligations to Lender have been repaid in full. For the
first year of the term of the Seller Note, the increase in Consolidated Tangible
Net Worth shall be determined as of December 31, 1999 (and calculated by
subtracting Borrower Group's Consolidated Net Worth as of December 31,1998). For
each year thereafter until the Seller Note and all Obligations to Lender are
paid in full, the increase in Borrower Group's Consolidated Tangible Net Worth
shall be determined as December 31 of each such succeeding year by subtracting
therefrom Borrower Group's Consolidated Tangible Net Worth as of December 31 of
the immediately preceding year.
SECTION 4.22. DEBT SERVICE COVERAGE. The Borrower Group's ratio of (a)
consolidated EBITDA, net of incentive compensation, to (b) the sum of (i)
consolidated portion of long term debt, (ii) consolidated current portion of
long term capital leases, and (iii) consolidated interest expense shall be at
least 1.30:1.
SECTION 4.23. NEGATIVE NET INCOME. At no time shall any Borrower or
Guarantor sustain losses (negative Net Income) in any two consecutive fiscal
quarters or for any fiscal year.
SECTION 4.24. PRINCIPALS. The Principals shall maintain in full force
and effect employment agreements and such other agreements that contain economic
disincentives to competition provisions covering at least one year after
termination of employment with any Borrower or Guarantor.
SECTION 4.25. Capital Contribution. As of the date of this Agreement,
the shareholders of EHI, as a group, have contributed to the capital of EHI cash
in an amount of not less than One Million Dollars ($1,000,000).
ARTICLE IV-A
ADDITIONAL SECURITY PROVISIONS
SECTION 4A.01. SECURITY INTEREST. To further secure the Obligations,
and without limiting the legal operation and effect of any other Credit
Document, each Borrower hereby collaterally assigns to Lender, and grants Lender
a security interest in, all of such Borrower's Property described below, now
owned and hereafter acquired, created or arising, and all of such Borrower's
Property listed on any Schedule to this Agreement, now owned and hereafter
acquired, created or arising, and in each case regardless of where such Property
may be located and whether such Property may be in the possession of any
Borrower, Lender, or a third party, and, if any of such Property may be held or
stored with any Person other than a Borrower, together with all of each
Borrower's rights now owned and hereafter acquired, created or arising relating
to the storage and retrieval thereof and access thereto (all of which Property
described below or listed on any such Schedule and all such rights of storage,
retrieval and access being referred to herein as "COLLATERAL"):
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(a) All of each Borrower's "accounts" (as defined in Article
9), and including all obligations for the payment of money arising out of each
Borrower's rendition of services, or sale, lease or other disposition of each
Borrower's goods or other property, and including all rentals, lease payments,
and other moneys earned and to be earned, due and to become due, under any
lease, and all rights of stoppage in transit, replevin, repossession and
reclamation and other rights and remedies of an unpaid vendor, lienor or secured
party, and all guaranties or other contracts of suretyship with respect to any
of the foregoing property, and all deposits, letters of credit, and other
security for the obligation of any Account Debtor relating in any way to any of
the foregoing property, and all credit and other insurance for any of the
foregoing property and all contract rights ("ACCOUNTS"); and
(b) All of each Borrower's right, title and interest in any
and all depositary accounts, including any and all other demand, time, savings,
passbook and like accounts, and including any Lock-Box, collateral accounts,
cash management accounts, safe-keeping accounts, and safe-deposit boxes, and
including any and all amounts and contents therein and thereof and all of each
Borrower's rights under agreements relating thereto, and all of each Borrower's
rights relating to the storage and retrieval thereof and access thereto ("LENDER
ACCOUNTS"); and
(c) All of each Borrower's "chattel paper" (as defined in
Article 9) ("CHATTEL PAPER"); and
(d) All of each Borrower's "documents" (as defined in Article
9) ("DOCUMENTS"); and
(e) All of each Borrower's "equipment" (as defined in Article
9) and goods which are or are to become fixtures ("EQUIPMENT"); and
(f) All of each Borrower's "general intangibles" (as defined
in Article 9) of every kind and description, and including all (i)
advertisements in any medium (and other marketing and promotional materials in
any medium), brochures, signs, stationery, business forms, packaging and
shipping materials, telephone numbers, post office addresses, mailing addresses,
e-mail addresses, so-called "web" sites and addresses and all codes and rights
relating thereto, programs and software, licenses, permits, consents, and
approvals of any Governmental Authorities and other Persons, federal, state, and
local tax refund claims, financing statements in which any Borrower's interest
appears as a secured party or lessor, and things in action, (ii) Intellectual
Property, (iii) to the extent not otherwise included as Intellectual Property,
all goodwill associated with or related to any of the foregoing or each Borrower
or each Borrower's business, (iv) all obligations and indebtedness owing to any
Borrower (other than Accounts), and (v) all rights and claims in respect of
refunds for taxes paid ("GENERAL INTANGIBLES"); and
(g) All of each Borrower's moneys, securities and other
property, now or hereafter held or received by, or in transit to, Lender,
whether for safekeeping, pledge, custody, transmission, collection or otherwise,
and any balances, sums and credits of each Borrower held
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by Lender at any time existing and all of each Borrower's Lender Accounts at
Lender ("HELD ITEMS"); and
(h) All of each Borrower's promissory notes or other
instruments or agreements evidencing any Borrower's right to payment from any
Person or Persons, and including, without limitation, all of each Borrower's
"instruments" (as defined in Article 9), and letters of credit ("INSTRUMENTS");
and
(i) All of each Borrower's "inventory" (as defined in Article
9), including all raw materials, work in process, parts, components, assemblies,
supplies and materials used or consumed in any Borrower's business, all goods,
wares and merchandise, finished or unfinished, held for sale or lease or leased
or furnished or to be furnished under contracts of service or hire
("INVENTORY"); and
(j) All of each Borrower's "securities" (whether certificated
or uncertificated), "security entitlements," "securities accounts," "commodity
contracts," "commodity accounts" and other "investment property" (as defined in
Article 8A or Article 9, as the case may be) ("INVESTMENT PROPERTY"); and
(k) All of each Borrower's right, title and interest in any
tangible or intangible personal property that is not described within the other
defined terms included within the definition of Collateral ("OTHER PERSONALTY");
and
(l) All cash and non-cash "proceeds" (as the term is used in
Article 9) and all other amounts received in respect of any sale, exchange,
lease, license or other disposition of any Collateral, and including insurance
proceeds ("PROCEEDS"); and
(m) All products of Collateral ("PRODUCTS"); and
(n) All of each Borrower's books, records, documents, ledger
cards, invoices, bills of lading and other shipping evidence, credit files,
computer programs, tapes, discs, diskettes, and other data and software storage
medium and devices, customer lists, mailing lists, mailing labels, business
forms and stationery, and other property and general intangibles evidencing or
relating to each Borrower's Accounts, Inventory and/or other Collateral, or any
Account Debtor, (including any rights of any Borrower with respect to the
foregoing maintained with or by any other person) ("RECORDS").
SECTION 4A.02. CHATTEL PAPER AND INSTRUMENTS. Each Borrower shall xxxx
or stamp the first page and the signature page of all Chattel Paper with a
legend clearly and conspicuously stating that such Chattel Paper is subject to a
continuing security interest in favor of Lender, and promptly upon Lender's
request from time to time, and at each Borrower's sole cost and expense, and
without limiting the effect of any other provision of this Agreement or any
other Credit Document, each Borrower shall: (i) deliver to Lender such Chattel
Paper, and execute and deliver to Lender such assignments of Chattel Paper and
related endorsements of Chattel Paper,
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as Lender may request, and shall cause the makers of the Chattel Paper to
deliver to Lender such acknowledgments of the assignments of Chattel Paper as
Lender may request; and (ii) deliver to Lender such Instruments, and execute and
deliver to Lender such collateral assignments of Instruments and related
endorsements of Instruments, as Lender may request, and shall cause the makers
of the Instruments to deliver to Lender such acknowledgments of assignment of
Instruments as Lender may request.
SECTION 4A.03. BORROWER'S COLLECTION PRIVILEGES. To further secure the
Obligations, and in addition to Lender's other rights, powers, and remedies
under this Agreement, including those under Section 7.09, each Borrower agrees
that Lender shall have the exclusive right to collect from Account Debtors, in
the name of such Borrower or Lender, or in the name of Lender's designee, all
Accounts, Chattel Paper, Documents, General Intangibles, Instruments, Investment
Property and similar Collateral; PROVIDED, HOWEVER, THAT prior to the revocation
of the privilege by Lender in writing in Lender's discretion at any time after
the occurrence of a Default, each Borrower shall be privileged to collect such
Borrower's Accounts, Chattel Paper, Documents, General Intangibles, Instruments,
Investment Property and similar Collateral in the ordinary course of such
Borrower's business so long as such Borrower shall apply all proceeds of such
Collateral and collections in accordance with the terms of this Agreement.
Nothing in this Agreement shall be construed as obligating Lender to take any
actions to collect any Collateral.
SECTION 4A.04. COLLATERAL ACCOUNT. Following the occurrence of an Event
of Default and requirement by Lender that any Borrower maintain a Lock-Box, each
Borrower shall maintain a Collateral Account into which Items of Payment
received and processed through the Lock-Box, and any other payments received by
such Borrower from Account Debtors, shall be deposited on the date of such
Borrower's receipt thereof.
SECTION 4A.05. LOCK-BOX. Following the occurrence of an Event of
Default and notice from Lender that a Lock-Box shall be required, each Borrower
shall maintain a Lock-Box administered by Lender in accordance with Lender's
standard Lock-Box service and shall direct each Account Debtor to make payments
on Accounts to the Lock-Box address.
SECTION 4A.06 ADDITIONAL COLLATERAL. If any Borrower proposes to
acquire additional Property which would constitute Collateral, and if the
security interest of Lender would not be a first priority perfected security
interest upon acquisition of such Property, then except with respect to
Permitted Liens, as to which this Section shall not apply, such Borrower shall,
before acquiring such Property, take whatever actions Lender may require in
order that, upon the acquisition of such Property, Lender will have a first
priority perfected security interest therein.
SECTION 4A.07 FURTHER ASSURANCES OF COLLATERAL. Each Borrower shall
execute such further agreements, documents, financing statements and other
instruments as may reasonably be requested by Lender in order to perfect the
security interests granted herein. To the extent that possession of the
Collateral may be necessary or advisable to perfect the collateral assignment
and security interests granted hereby, each Borrower shall deliver such
Collateral to Lender upon the request of Lender; PROVIDED THAT before the
occurrence of an Event of Default, Lender shall
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not require physical possession of Collateral if such possession would
materially impair Borrowers' ability to transact business in a commercially
reasonably manner. Without limiting the generality of the foregoing, each
Borrower hereby covenants and agrees that all Liens granted to Lender under this
Agreement and/or any other Credit Documents, are, and shall at all times be,
first priority Liens, subject only to Permitted Liens, and that no Property of
any Borrower shall be subject to any Lien (regardless of priority) except for
Permitted Liens.
ARTICLE V
NEGATIVE COVENANTS
Each Borrower covenants and agrees that from the date hereof and until
the later of the Credit Termination Date or payment in full of all Obligations
owed by any Borrower or Guarantor to Lender, unless Lender shall otherwise
consent in writing:
SECTION 5.01. RESTRICTED PAYMENTS. No Obligor shall make any payment of
any incentive bonus or other incentive compensation (including the reasonable
value of non-cash compensation) at any time that a monetary Default or
non-monetary Event of Default exists under any of the Credit Documents or if
such bonus or other incentive compensation would cause the Borrower Group to
breach any of the Financial Covenants.
SECTION 5.02. INVESTMENTS. No Obligor shall make, acquire or hold any
Investments other than Permitted Investments.
SECTION 5.03. INDEBTEDNESS. No Obligor shall incur, create, assume or
suffer to exist any Indebtedness other than Permitted Indebtedness.
SECTION 5.04. MAINTENANCE OF PERMITTED INDEBTEDNESS. No Obligor shall
prepay any Permitted Indebtedness, excepting any prepayments of the Obligations.
No Obligor shall modify any agreement relating to any Permitted Indebtedness. No
Obligor shall make any payment on the Seller Subordinated Obligations except as
expressly permitted in the Seller Subordination Agreement.
SECTION 5.05. JUDGMENTS. No Obligor shall permit any judgment that is
not covered by insurance entered against such Obligor to remain unsatisfied for
a period of more than thirty (30) days after the judgment has become final.
SECTION 5.06. TRANSACTIONS WITH AFFILIATES AND SELLING SHAREHOLDERS.
Obligors may engage in transactions with Affiliates so long as such transactions
(a) are on terms and conditions comparable to third-party arms length
transactions; or (b) are employment or other compensation and benefit
arrangements, including bonuses, incentive compensation, and stock option plans,
which arrangements are entered into by such Obligor reasonably and in the
ordinary course of such Obligor's business; or (c) are between such Obligor and
an Obligor which is directly or indirectly wholly-owned by another Obligor.
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SECTION 5.07. LINE OF BUSINESS; NAME; STRUCTURE. No Obligor shall
engage in any business other than the business engaged in by such Obligor on the
Effective Date and described on Schedule 3.22. No Obligor shall refuse, or
divert or refer to any other Person any business or business opportunity that
such Obligor could profit from in the ordinary course of such Obligor's
business. No shareholder, officer, director or employee of any Obligor shall
divert from such Obligor, or refer to any person other than a Obligor, any
business or business opportunity that could be served by a Obligor in the
ordinary course of such Obligor's business. Except for the name change of US
Corporation to Environ International Corporation, no Obligor shall change its
name or organizational structure without the prior written consent of Lender.
SECTION 5.08. STOCK. Except for EHI which may issue additional shares
of capital stock subject to the Shareholders' Agreement, no Obligor shall issue
any additional shares of capital stock or other Equity Rights or Equity
Interests except for securities (a) in respect of which it has no absolute and
unqualified obligation to redeem or to pay cash distributions or dividends, and
(b) the issuance of which does not result in an Event of Default.
SECTION 5.09. DIVIDENDS; DISTRIBUTIONS; REPURCHASES. No Obligor shall
declare or pay any dividend on, or make any other distribution of assets on
account of, or redeem, purchase or otherwise acquire for value (other than
redemptions in accordance with the Shareholders Agreement as in effect on the
date hereof), any shares of any class of its capital stock, or any equity
interest in it held by any Person (other than one Obligor to another Obligor),
or any equity rights in it held by any Person if there is an existing Default or
if any of the foregoing would result in a violation of any of the Financial
Covenants or of any of the financial covenants set forth in the Seller Note or
credit agreement executed by Borrower in connection with the Seller Note.
SECTION 5.10. SUBSIDIARIES. Except as may be expressly permitted in
Section 3.06 on the Effective Date, no Obligor shall (a) be or become a
Subsidiary of any Person or (b) form or acquire or cause or permit any Person to
be, a Subsidiary of any Obligor. Notwithstanding the foregoing, Borrowers may
create new wholly owned Subsidiaries without the prior written consent of Lender
so long as (a) such Subsidiaries are in the same business as Borrowers, (b) each
such Subsidiary enters into a guaranty of the Loans on terms and conditions
reasonably satisfactory to Bank, and (c) such Subsidiary secures its guaranty
obligations by granting Lender a security interest in all of such Subsidiary's
assets.
SECTION 5.11. CONTROL. No Change of Control of any Obligor shall occur.
SECTION 5.12. CONSOLIDATIONS; MERGERS; DISPOSITIONS; ACQUISITIONS.
Except for Permitted Investments, no Obligor shall (i) enter into any
transaction of merger or consolidation, or reorganization, or liquidate, wind up
or dissolve itself, or suffer any liquidation or dissolution, or (ii) convey,
sell, lease, license, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business, Property or tangible or
intangible assets, whether now owned or hereafter acquired, or (iii) sell,
assign, convey, lease, license, abandon, transfer or otherwise dispose of, any
of its Property or assets except in the ordinary course of business, or
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(iv) acquire by purchase or otherwise any of the outstanding capital stock of,
or all or substantially all of the business, Property or assets of, any Person.
No Obligor shall sell, assign, convey, lease, license, abandon, transfer or
otherwise dispose of, any Collateral, except that any Obligor may make (i) sales
of Inventory in the ordinary course of such Obligor's business, (ii) sales for
fair consideration of Equipment that is obsolete or no longer useful in such
Obligor's business, and (iii) Permitted Licenses of Intellectual Property.
SECTION 5.13. LIENS; BAILMENTS; CERTAIN SALES. No Obligor shall (a)
create, incur, assume or suffer to exist any Lien or Lien Notice upon any
Property of any Obligor other than Permitted Liens (including any Lien Notices
that are Permitted Liens), or (b) license any Property of any Obligor to any
other Person unless such license is a Permitted License, or (c) directly or
indirectly, sell with or without recourse, or discount or factor, any Obligor's
Accounts, Chattel Paper, Instruments, General Intangibles, or Documents.
SECTION 5.14. RISK MANAGEMENT AGREEMENTS. No Obligor shall be a party
to any Risk Management Agreement, other than with an entity approved by Lender
except as listed on Schedule 3.35 or as may be expressly required by a provision
of this Agreement.
ARTICLE VI
EVENTS OF DEFAULT; CERTAIN REMEDIES UPON DEFAULT
SECTION 6.01. EVENTS OF DEFAULT. Subject to Section 6.01(s), each of
the following events shall constitute an Event of Default attributable to all
Obligors:
(a) Any Obligor's failure to pay within ten (10) days after
the Payment Date any amount of principal or interest of any Loan due on such
Payment Date; or
(b) Any Obligor's failure to pay any late charges, Loan
related expenses or fees of Lender, or any other sums (other than principal and
interest) due under any of the Credit Documents within ten (10) days after
Lender's demand for such payments; or
(c) If any representation or warranty made by any Obligor in
any Credit Document is not true, accurate and complete in all material respects
when made; or
(d) If any Obligor shall fail to fulfill the requirements of
any insurance provisions of the Credit Documents; or
(e) Any Borrower's failure to notify Lender of any
Notification Event as required in accordance with the requirements of Section
4.02; or
(f) The Borrower Group's failure to satisfy any of the
Financial Covenants; or
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(g) The failure by Obligor to fulfill a covenant of this
Agreement or any other Credit Documents.
(h) If any statement, report, appraisal, certificate, opinion,
or other information furnished to Lender by any Person in connection with the
Borrowers' application for the Loans was not true, accurate and complete in all
material respects when so furnished to Lender and on the Effective Date; or
(i) If any statement, report, certificate, opinion, or other
information furnished to Lender with or in accordance with the terms of this
Agreement (including all annexes, schedules, and exhibits to the Credit
Documents and all materials delivered to Lender to satisfy any condition of this
Agreement) is not true, accurate and complete in all material respects when so
furnished to Lender; or
(j) The determination in good faith by Lender that a material
adverse change has occurred on a consolidated basis in the financial or
operating condition or business prospects of any Obligor from the condition set
forth in the most recent financial statement of such Obligor furnished to Lender
in connection with the Loans, or from the financial or operating condition or
business prospects of such Obligor as heretofore most recently disclosed to
Lender in writing by such Obligor, or the occurrence of any other fact, event or
circumstance which Lender reasonably believes is likely to have a Material
Adverse Effect on the Obligors on a consolidated basis; or
(k) If one or more judgments or decrees shall be entered
against any Obligor involving a liability of Two Hundred Fifty Thousand Dollars
($250,000) or more in the aggregate, or any judgment or decree entered against
any Obligor shall not have been satisfied, vacated, discharged or stayed or
bonded pending appeal within thirty (30) days from the entry thereof and which
is not covered by insurance; or
(l) The occurrence of a Change of Control of any Obligor; or
(m) If any Obligor shall default in any payment of any
Indebtedness to any Person, including any affiliate of Lender, (other than the
Obligations), or shall breach any other terms, representations, warranties,
covenants, conditions, or other provisions applicable to any such Indebtedness
if the occurrence of any such default or breach would entitle the holder of such
Indebtedness to accelerate such Indebtedness or exercise any other remedies (and
the acceleration thereof would have a Material Adverse Effect on Borrower Group,
and, if there is a cure period applicable to any such breach or default, such
breach or default shall not have been cured within the cure period applicable
thereto; or
(n) If any Obligor shall (i) apply for or consent to the
appointment of a receiver, trustee or liquidator of itself or any of its
property, (ii) admit in writing its inability to pay its debts as they mature,
(iii) make a general assignment for the benefit of creditors, (iv) be
adjudicated bankrupt or insolvent, (v) file a voluntary petition in Lenderruptcy
or a petition or an
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answer seeking reorganization or an arrangement with creditors or to take
advantage of any Lenderruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting the material
allegations of a petition filed against it in any proceeding under any such law
or if corporate or other action shall be taken by such Obligor for the purposes
of effecting any of the foregoing, or (vi) consent to, approve of or
acquiescence in any such proceeding or the appointment of any receiver of or
trustee for any of its property, or suffer any such receivership, trusteeship or
proceeding to continue undischarged for a period of sixty (60) days; or
(o) Omitted.
(p) the net loss through death, disability or voluntary or
involuntary termination of employment within a fiscal year of Principals (after
taking into account the hiring of new Principals and the promotion to Principal
of existing employees) who are responsible for clients with average annual gross
revenues over the most recent two complete fiscal years equal to or greater than
twenty percent (20%) of the gross revenues of the US Corporation in the most
recent complete fiscal year; or
(q) Borrower shall default in any swap agreement (as defined
in 11 U.S.C. ss.101) with Lender or any Affiliate of Lender; or
(r) If (a) with respect to any Plan, there shall occur any of
the following which could reasonably be expected to have a Material Adverse
Effect: (i) the violation of any of the provisions of ERISA; (ii) the loss by a
Plan intended to be a Qualified Plan of its qualification under Section 401(a)
of the Code; (iii) the incurrence of liability under Title IV of ERISA; (iv) a
failure to make full payment when due of all amounts which, under the provisions
of any Plan or applicable law, any Borrower or any ERISA Affiliate is required
to make; (v) the filing of a notice of intent to terminate a Plan under Sections
4041 or 4041A of ERISA; (vi) a complete or partial withdrawal of Borrower or an
ERISA Affiliate from any Plan; (vii) the receipt of a notice by the plan
administrator of a Plan that the PBGC has instituted proceedings to terminate
such Plan or appoint a trustee to administer such Plan; (viii) a commencement or
increase of contributions to, or the adoption of or the amendment of, a Plan;
and (ix) the assessment against any Borrower or any ERISA Affiliate of a tax
under Section 4980B of the Code; or (b) the Unfunded Benefit Liability of all of
the Plans of Borrower, and each ERISA Affiliate shall, in the aggregate, exceed
an amount that could reasonably be expected to have a Material Adverse Effect on
Borrower Group.
(s) The provisions described in Section 6.01(c), (d) and (f)
through (j) shall not constitute Events of Default hereunder unless the events
described in such actions are not cured within thirty (30) days after notice
from Lender; provided that if Borrower commences a cure within the initial
thirty (30) day cure period and diligently pursues to cure the Default
thereafter, Borrower shall have up to sixty (60) days to cure such Default if it
is not capable of cure within thirty (30) days.
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SECTION 6.02. ACCELERATION. Upon the occurrence of an Event of Default,
and at any time thereafter unless and until such Event of Default has been
waived by Lender in writing or cured to the satisfaction of Lender as expressly
acknowledged by Lender in writing, Lender may take any or all of the following
actions against any or all Obligors: (a) declare the Credit Termination Date
accelerated (without the necessity of any notice) on any Loan; and/or (b)
declare the unpaid principal of, and all accrued and unpaid interest on, the
Loan and any and all other outstanding and unpaid Obligations to be due,
whereupon the same shall be immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
each Borrower and each other Obligor; and/or (c) enforce any and all rights and
interests created and existing under the Credit Documents and all rights of
set-off; provided, however, without limiting the generality of the foregoing,
upon the occurrence of an Event of Default described in Section 6.01(n) above,
(i) the Credit Termination Date shall be immediately accelerated (without the
necessity of any notice), and (ii) the unpaid principal of, and all accrued and
unpaid interest on, the Loan and any and all other outstanding and unpaid
Obligations shall be immediately due and payable to Lender without any action on
the part of Lender, and without presentment, demand, protest, or other notice of
any kind, all of which are hereby waived.
SECTION 6.03. OTHER REMEDIES. In addition to the foregoing, upon the
occurrence of an Event of Default, Lender may do any of the following:
(a) Collect and enforce payment of all of each Borrower's
Deposit Accounts, Accounts, General Intangibles, Chattel Paper, Instruments and
Documents and rights and remedies with respect to such Property as would
otherwise be exercised by any Borrower, including: the power to take possession
of and endorse in the name of such Borrower, any Items of Payment of any kind
and any other documents received; the power to extend the time of payment of,
the time to xxx for, and the time to give acquittances for, monies due; and the
power to withdraw proceeds deposited in the name of the applicable Borrower in
any Lender or savings institution.
(b) Sell or otherwise dispose of the Collateral, or any part
thereof, at public or private sale (or at any broker's board or on any
securities exchange) or otherwise, for cash, upon credit or for future delivery
as Lender shall deem appropriate. Each such purchaser at any such sale shall
hold the property sold absolutely, free from any claim or right on the part of
any Borrower, and each Borrower hereby waives (to the extent permitted by law)
all rights of redemption, stay and appraisal which any Borrower now has or may
at any time in the future have under any rule of law or statute now existing or
hereafter enacted. Lender shall give each Borrower at least ten (10) days'
written notice (which each Borrower agrees is reasonable notice within the
meaning of Section 9-504(3) of the UCC) of Lender's intention to make any sale
of Collateral owned by any Borrower. Such notice, in the case of a public sale,
shall state the time and place for such sale and, in the case of a sale at a
broker's board or on a securities exchange, shall state the board or exchange at
which such sale is to be made and the day on which the Collateral, or portion
thereof, will first be offered for sale at such board or exchange. Any such
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public sale shall be held at such time or times within ordinary business hours
and at such place or places as Lender may fix and state in the notice of such
sale, and at any such sale, the Collateral, or portion thereof, to be sold may
be sold in one lot as an entirety or in separate parcels, as Lender may (in its
discretion) determine, and Lender shall not be obligated to make any sale of any
Collateral if Lender shall determine not to do so, regardless of the fact that
notice of sale of such Collateral shall have been given, and Lender may, without
notice or publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, to any Borrower or anyone else,
be made at the time and place to which the same was so adjourned. In case any
sale of all or any part of the Collateral is made on credit or for future
delivery, the Collateral so sold may be retained by Lender until the sale price
is paid by the purchaser or purchasers thereof, but Lender shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for Collateral so sold and, in case of any such failure, such of the Collateral
may be sold again upon notice to Borrower as set forth in this Section. At any
public sale made pursuant to this Section, Lender may bid for or purchase, free
(to the extent permitted by law) from any right of redemption, stay or appraisal
on the part of Borrower (all said rights being also hereby waived and released
to the extent permitted by law), the Collateral or any part thereof offered for
sale and may make payment on account thereof by using any claim then due and
payable to Lender from Borrower as a credit against the purchase price, and
Lender may, upon compliance with the terms of sale, hold, retain and dispose of
such property without further accountability to any Borrower therefor. For
purposes hereof, a written agreement to purchase the Collateral or any portion
thereof shall be treated as a sale thereof; Lender shall be free to carry out
such sale pursuant to such agreement, and Borrower shall not be entitled to the
return of the Collateral or any portion thereof subject thereto, notwithstanding
the fact that after Lender shall have entered into such an agreement, all Events
of Default shall have been remedied and the Obligations paid in full. As an
alternative to exercising the power of sale herein conferred upon Lender, Lender
may proceed by a suit or suits at law or in equity to foreclose this Agreement
and to sell the Collateral or any portion thereof pursuant to a judgment or
decree of a court or courts having competent jurisdiction or pursuant to a
proceeding by a court-appointed Receiver. Upon any sale of Collateral by Lender
(including a sale pursuant to a power of sale granted by statute or under a
judicial proceeding), the receipt of Lender or of the officer making the sale
shall be a sufficient discharge to the purchaser or purchasers of the Collateral
being sold, and such purchaser or purchasers shall not be obligated to see to
the application of any part of the purchase money paid over to Lender or such
officer or be answerable in any way for the misapplication thereof. Borrower
agrees that in selling or otherwise disposing of the Collateral and in
exercising Lender's rights and remedies to the Collateral, Lender and/or any
Receiver and/or any designee of Lender and/or any Receiver shall have the
unrestricted and irrevocable right (so long as not violative of law) to
advertise, sell, lease, license or otherwise dispose of the Collateral under and
together with, and shall otherwise have the unrestricted and irrevocable right
to use, without limitation, in connection therewith, any and all of Borrower's
advertisements in any medium (and other marketing and promotional materials in
any medium), brochures, signs, stationery, business forms, packaging and
shipping materials, programs, software, licenses, permits, consents, approvals,
and Intellectual Property relating to such Collateral and/or Borrower's
business, and
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all agreements with employees and former employees relating to any of the
foregoing, and each Borrower shall indemnify and hold harmless Lender and any
Receiver, and their designees, shareholders, directors, officers, employees,
agents, attorneys, accountants, and other advisors, from and against any and all
claims (including claims for royalties and/or money damages and/or claims for
injunctive relief), liabilities, damages, royalties, and penalties of any
Person, and Lender's and any Receiver's costs and expenses (including attorney's
fees) and those of their designees, shareholders, directors, officers,
employees, agents, attorneys, accountants, and other advisors, incurred to
defend against any thereof.
(c) With regard to all Collateral so collected, sold or
otherwise disposed of, to the extent permitted by applicable law, Lender shall
have absolute discretion as to the time of application of any such proceeds,
moneys or balances in accordance with this Agreement, first, to the settlement
of all Liens on the Collateral prior to Lender's Lien; second, to the payment of
all Collection Costs; and third, to the payment of all Obligations, and, in case
of any deficiency, Lender may collect such deficiency from any Borrower
(provided however, nothing in this provision shall be construed in derogation or
limitation of any guaranty of payment or used to construe any guaranty of
payment as being merely a guaranty of collection).
(d) Notwithstanding anything in this Agreement or any other
Credit Document to the contrary, Lender's declaration of default and exercise of
remedies with respect to any swap agreement (as defined in 11 U.S.C. ss.101)
between an Obligor and Lender shall not be governed by this Agreement or any
other Credit Documents, but rather by the applicable swap agreement (as defined
in 11 U.S.C. ss.101).
SECTION 6.04. RECEIVER. If an Event of Default shall occur and be
continuing, Lender shall be entitled as a matter of right and to the extent
permitted by law, without notice to any Obligor, and without regard to the
adequacy of security, to the immediate ex parte appointment of a Receiver by a
court having jurisdiction in order to carry out all rights and remedies
available to Lender upon such Event of Default, and to manage, protect and
preserve the Collateral, and any other Property of any Borrower and continue to
operate or liquidate any Borrower's business and to collect all revenues and
profits thereof and apply the same to the payment of all expenses and other
charges of such receivership, custodianship or similar appointment, including
compensation of the Receiver and to the payment of the Obligations, and to the
payment of such other claims and expenses as may appear appropriate. If Lender
shall apply for the appointment of, or the taking of possession by, a Receiver,
to hold, operate or liquidate all or any substantial part of the properties or
assets of any Borrower, such Borrower hereby consents to any such appointment
and taking of possession. Each Borrower shall deliver to any Receiver so
appointed upon Lender's request all original Records, and any other records,
books, and other information regarding the Collateral, and any other Property of
such Borrower and the operations of the business of such Borrower.
SECTION 6.05. WAIVERS. Each Borrower waives presentment, demand, notice
of dishonor, and protest, and all demands and notices of any action taken by
Lender under this Agreement, except as otherwise provided herein, are hereby
waived, and any indulgence of
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Lender, substitution for, exchange of or release of collateral, or addition or
release of any person liable on the collateral is hereby assented and consented
to and shall not operate or be claimed to operate to release or exonerate any
other collateral or person or any claim of Lender.
SECTION 6.06. ARBITRATION.
(a) Upon demand of any party hereto, whether made before or
after institution of any judicial proceeding, any claim or controversy arising
out of, or relating to this letter or the Credit Documents between the parties
hereto (a "DISPUTE") shall be resolved by binding arbitration conducted under
and governed by the Commercial Financial Disputes Arbitration Rules (the
"ARBITRATION RULES") of the American Arbitration Association (the "AAA") and the
Federal Arbitration Act. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to arbitration, claims
brought as class actions, or claims arising from documents executed in the
future. A judgment upon the award may be entered in any court having
jurisdiction. Notwithstanding the foregoing, this arbitration provision does not
apply to disputes under or related to swap agreements.
(b) Special Rules. All arbitration hearings shall be conducted
in the city in which the office of Lender first stated above is located. A
hearing shall begin within 90 days of demand for arbitration and all hearings
shall be concluded within 120 days of demand for arbitration. These time
limitations may not be extended unless a party shows cause for extension and
then for no more than a total of 60 days. The expedited procedures set forth in
Rule 51 ET SEQ. of the Arbitration Rules shall be applicable to claims of less
than $1,000,000. Arbitrators shall be licensed attorneys selected from the
Commercial Financial Dispute Arbitration Panel of the AAA. The parties do not
waive applicable Federal or state substantive law except as provided herein.
(c) Preservation and Limitation of Remedies. Notwithstanding
the preceding binding arbitration provisions, the parties agree to preserve,
without diminution, certain remedies that any party may exercise before or after
an arbitration proceeding is brought. The parties shall have the right to
proceed in any court of proper jurisdiction or by self-help to exercise or
prosecute the following remedies, as applicable: (i) all rights to foreclose
against any real or personal property or other security by exercising a power of
sale or under applicable law by judicial foreclosure including a proceeding to
confirm the sale; (ii) all rights of self-help including peaceful occupation of
real property and collection of rents, set-off, and peaceful possession of
personal property; and (iii) obtaining provisional or ancillary remedies
including injunctive relief, sequestration, garnishment, attachment, appointment
of receiver and filing an involuntary Lenderruptcy proceeding. Any claim or
controversy with regard to any party's entitlement to such remedies is a
Dispute. Each party agrees that it shall not have a remedy of punitive or
exemplary damages against the other in any Dispute and hereby waive any right or
claim to punitive or exemplary damages they have now or which may arise in the
future in connection with any Dispute, whether the Dispute is resolved by
arbitration or judicially. The parties acknowledge that by agreeing to binding
arbitration they have irrevocably waived any right they may have to a jury trial
with regard to a Dispute.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.01. FURTHER ASSURANCES. Each Borrower shall execute and
deliver to Lender such further assurances of this Agreement and the matters
contemplated by this Agreement and the other Credit Documents, including any
Lien Notices in favor of Lender, promptly from time to time upon Lender's
written request.
SECTION 7.02. SUCCESSORS AND ASSIGNS. This Agreement and the other
Credit Documents shall be binding upon and inure to the benefit of Lender and
its successors and assigns and any holders of the Notes. No Borrower shall,
without Lender's prior written consent, which consent may be withheld in
Lender's discretion, assign any of such Borrower's rights under this Agreement
or any of the other Credit Documents to any Person, and any attempt of such an
assignment by any Borrower without Lender's prior written consent shall be void.
Lender may sell or assign to any financial institution or institutions, and such
financial institution or institutions may further sell or assign a participation
interest (undivided or divided) in, Lender's rights and benefits under this
Agreement and the other Credit Documents, and to the extent of that assignment
such assignee or assignees shall have the same rights and benefits against each
Borrower under this Agreement and the other Credit Documents as it or they would
have had if such assignee or assignees were Lender making the Loans. Each
Borrower shall promptly upon Lender's request furnish confirmation in writing to
any such assignees such information as Lender or any such assignee may request
regarding any matters, or the status thereof, relating to the Loans, the Notes,
this Agreement, the other Credit Documents, or any Obligor Information. Lender
may from time to time in its discretion appoint agents for the purpose of
servicing and administering this Agreement and the transactions contemplated
hereby and enforcing or exercising any rights or remedies of Lender provided
under this Agreement and under the other Credit Documents or otherwise. In
furtherance of such agency, Lender may from time to time direct that each
Borrower and any other Obligor provide notices, certificates, reports, and other
Obligor Information contemplated by this Agreement (or duplicates thereof) to
such agent. Each Obligor consents to the appointment of any such agent and
agrees to provide all such notices, certificates, reports, and other Obligor
Information to such agent and to otherwise deal with such agent acting on behalf
of Lender in the same manner as would be required if dealing with Lender itself
and Lender agrees to give each Borrower notice of the appointment of any such
agent.
SECTION 7.03. SEVERABILITY. Any provision of this Agreement prohibited
by the laws of any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition, or modified to conform with such laws,
without invalidating the remaining provisions of this Agreement, and any such
prohibition in any jurisdiction shall not invalidate such provisions in any
other jurisdiction.
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SECTION 7.04. GOVERNING LAW. This Agreement and the other Credit
Documents and the rights and obligations of the parties hereunder and thereunder
shall be governed by and construed and interpreted in accordance with the laws
of the Commonwealth of Virginia (excluding Virginia conflict of laws rules),
including all matters of construction, validity and performance, regardless of
the location of the parties or any Property, excepting, however, that the UCC
(or decisional law) of a jurisdiction other than Virginia may provide the method
of perfection of liens and security interests created under this Agreement and
the other Credit Documents.
SECTION 7.05. JURISDICTION; VENUE; SERVICE. Each Borrower irrevocably
consents to the non-exclusive personal jurisdiction of the courts of the
Commonwealth of Virginia and, if a basis for federal jurisdiction exists, the
non-exclusive jurisdiction of the United States District Court for the District
of Virginia. Each Borrower agrees that venue shall be proper in any circuit
court of the Commonwealth of Virginia selected by Lender or, if a basis for
federal jurisdiction exists, in any Division of the United States District Court
for the District of Virginia. Each Borrower waives any right to object to the
maintenance of any suit or claim in any of the state or federal courts of the
Commonwealth of Virginia on the basis of improper venue or of inconvenience of
forum. Any suit or claim brought by any Borrower against Lender that is based,
in whole or in part, directly or indirectly, on this Agreement or any matters
relating to this Agreement or the other Credit Documents, shall be brought in a
court only in the Commonwealth of Virginia. No Borrower shall file any
counterclaim against Lender in any suit or claim brought by Lender against such
Borrower in a jurisdiction outside of the Commonwealth of Virginia unless under
the rules of the court in which Lender brought such suit or claim the
counterclaim is mandatory, and not permissive, and would be considered waived
unless filed as a counterclaim in the claim or suit instituted by Lender against
such Borrower. Each Borrower agrees that any forum outside the Commonwealth of
Virginia is an inconvenient forum and that a suit brought by such Borrower
against Lender in any court outside the Commonwealth of Virginia should be
dismissed or transferred to a court located in the Commonwealth of Virginia.
Each of the parties hereto further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to it at the address set out for notices in this Agreement, such
service to become effective thirty (30) days after such mailing. Nothing herein
shall affect the right of Lender to serve process in any other manner permitted
by law or to commence legal proceedings or to otherwise proceed against any
Borrower or any other Person in any other jurisdiction.
SECTION 7.06. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart.
SECTION 7.07. SURVIVAL. All representations and warranties and
indemnities made by any Borrower herein shall survive delivery of the Notes and
the making of the Loan.
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SECTION 7.08. NOTICES. Any notice required or permitted by or in
connection with this Agreement shall be in writing and shall be made by
telecopy, or by hand delivery, or by overnight delivery service, or by certified
mail, return receipt requested, postage prepaid, addressed to the parties at the
appropriate address set forth below or to such other address as may be hereafter
specified by written notice by the parties to each other. Notice shall be
considered given as of the earlier of the date of actual receipt, or the date of
the telecopy or hand delivery, one (1) calendar day after delivery to an
overnight delivery service, or three (3) calendar days after the date of
mailing, independent of the date of actual delivery or whether delivery is ever
in fact made, as the case may be, provided the giver of notice can establish
that notice was given as provided herein. Notwithstanding the aforesaid
procedures, any notice or demand upon any Obligor, in fact received by such
Obligor, shall be sufficient notice or demand. Each undersigned Obligor (other
than Borrower) hereby appoints Borrower as his, her or its agent for purposes of
receiving notices under this Agreement and the other Credit Documents, so that
notices given to Borrower shall be fully effective notice to Borrower and to
each such other undersigned Obligor (other than Borrower).
If to Lender: APPLIED BIOSCIENCE INTERNATIONAL INC.
0000 Xxxxxxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
If to Obligors: Environ Holdings, Inc.
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxx
Telecopy No. (000) 000-0000
SECTION 7.09. LENDER APPOINTED ATTORNEY-IN-FACT. Each Borrower hereby
appoints Lender as such Borrower's attorney-in-fact, with power of substitution,
which appointment is coupled with an interest and irrevocable but which
appointment shall not be exercised except during the continuance of any Event of
Default hereunder, to do each of the following in the name of such Borrower or
in the name of Lender or otherwise, for the use and benefit of Lender, but at
the cost and expense of such Borrower, and with or without notice to such
Borrower: (a) notify the Account Debtors to make payments directly to Lender,
and to take control of the cash and non-cash proceeds of any Collateral; (b)
compromise, extend, or renew any of the Collateral or deal with the same as it
may deem advisable; (c) release, make exchanges, substitutions, or surrender of
all or any part of the Collateral; (d) remove from such Borrower's place of
business all Records relating to or evidencing any of the Collateral or without
cost or expense to Lender, make such use of such Borrower's places of business
as may be reasonably necessary to administer, control and collect the
Collateral; (e) repair, alter or supply goods, if any, necessary to fulfill in
whole or in part the purchase order or similar order of any Account Debtor; (f)
demand, collect, receipt for and give renewals, extensions, discharges and
releases of any of the
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Collateral; (g) institute and prosecute legal and equitable proceedings to
enforce collection of, or realize upon, any of the Collateral; (h) settle,
renew, extend compromise, compound, exchange or adjust claims with respect to
any of the Collateral or any legal proceedings brought with respect thereto; (i)
endorse the name of such Borrower upon any Items of Payment relating to the
Collateral or upon any proof of claim in Lenderruptcy against an Account Debtor;
(j) institute and prosecute legal and equitable proceedings to reclaim any of
the goods sold to any Account Debtor obligated on an Account at a time when such
Account Debtor was insolvent; and (k) receive and open all mail addressed to
such Borrower and notify the postal authorities to change the address for the
delivery of mail to such Borrower to such address as Lender may designate.
SECTION 7.10. REMEDIES CUMULATIVE. No failure or delay on the part of
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between any Obligor and Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies provided herein
are cumulative and not exclusive of any rights or remedies which Lender would
otherwise have. No notice to or demand on any Borrower in any case shall entitle
such Borrower or any Obligor to any other or further notice or demand in similar
or other circumstances or constitute a waiver of the rights of Lender to any
other or further action in any circumstances without notice or demand.
SECTION 7.11. AMENDMENTS, WAIVERS AND CONSENTS. Neither this Agreement
nor any other Credit Document nor any of the terms hereof or thereof may be
amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing signed by Lender.
SECTION 7.12. WAIVERS OF CLAIMS; CONSEQUENTIAL AND PUNITIVE DAMAGES.
Each Borrower and Lender hereby waive to the fullest extent permitted by law all
claims to consequential and punitive damages in any lawsuit or other legal
action brought by either of them against the other of them in respect of any
claim between them arising under this Agreement, the other Credit Documents, or
any other agreement or agreements between them at any time, including any such
agreements, whether written or oral, made or alleged to have been made at any
time prior to the date hereof, and all agreements made hereafter or otherwise,
and any and all claims arising under common law or under any statute of any
state or the United States of America, whether any such claims be now existing
or hereafter arising, now known or unknown. In making this waiver Lender and
each Borrower acknowledge and agree that there shall be no claims for
consequential or punitive damages made by Lender against any Borrower and there
shall be no claims for consequential or punitive damages made against Lender by
any Borrower. Lender and each Borrower acknowledge and agree that this waiver of
claims for consequential damages and punitive damages is a material element of
the consideration for this Agreement.
SECTION 7.13. NO THIRD PARTY BENEFICIARIES. There shall be no third
party beneficiaries of this Agreement.
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SECTION 7.14. ENTIRE AGREEMENT. Each Borrower agrees that the Credit
Documents are a complete and exclusive expression of all the terms of the Loans
and agrees that all prior agreements, statements, and representations, whether
written or oral, which relate in any way to the Loans are hereby superseded and
shall be given no force and effect, and that no promise, inducement, or
representation has been made to any Obligor which relates in any way to the
Loans, other than what is expressly stated in the Credit Documents. Each
Borrower has executed the Credit Documents in full, understands the terms
therein, and is executing this Agreement after the opportunity to have full
consultation with counsel of such Borrower's choice.
SECTION 7.16. WAIVER OF JURY TRIAL. EACH BORROWER AND LENDER HEREBY
WAIVE ALL RIGHT TO TRIAL BY JURY OF ANY AND ALL CLAIMS BETWEEN THEM OF ANY TYPE,
INCLUDING CLAIMS ARISING UNDER AND/OR RELATING IN ANY WAY TO THIS AGREEMENT
AND/OR THE OTHER CREDIT DOCUMENTS AND/OR THE TRANSACTIONS CONTEMPLATED BY THE
CREDIT DOCUMENTS. EACH BORROWER AND LENDER ACKNOWLEDGES THAT THIS IS A WAIVER OF
A LEGAL RIGHT AND THAT THIS WAIVER IS MADE KNOWINGLY AND VOLUNTARILY AFTER
CONSULTATION WITH COUNSEL OF ITS CHOICE. ALL CLAIMS ARISING UNDER THIS AGREEMENT
AND/OR THE OTHER CREDIT DOCUMENTS AND/OR THE TRANSACTIONS CONTEMPLATED BY THE
CREDIT DOCUMENTS SHALL BE TRIED BEFORE A JUDGE OF A COURT HAVING JURISDICTION,
WITHOUT A JURY.
SECTION 7.17. JUDGMENT CURRENCY. (a) If, for the purposes of obtaining
judgment in any court, it is necessary to convert a sum due hereunder or under
the Notes or any other Credit Document from a currency ("ORIGINAL CURRENCY") to
another currency ("OTHER CURRENCY"), the parties hereto agree to the fullest
extent they may effectively do so, that the rate of exchange used shall be that
at which Lender could in accordance with normal banking procedures purchase the
Original Currency with the Other Currency on the second Business Day preceding
that on which such final judgment is given.
(b) The obligation of any Borrower in respect of any sum due
in the Original Currency from any Borrower to Lender hereunder or under the
Notes shall, notwithstanding any judgment in any Other Currency, be discharged
only if and to the extent that on the Business Day following receipt by Lender
of any sum adjudged to be so due in such Other Currency, Lender may in
accordance with normal Banking procedures purchase such amount of the Original
Currency with such Other Currency which it could have purchased on the second
Business Day preceding that on which the final judgment referred to in clause
(a) above is given. If the amount of the Original Currency so purchased is less
than the amount of the Original Currency that Lender could have purchased on the
second Business Day preceding that on which such final judgment is given, each
Borrower agrees, as a new and separate obligation and notwithstanding any such
judgment, to indemnify Lender against, and pay Lender on demand, such
difference, and if the amount of the Original Currency so purchased exceeds the
amount of the Original Currency which Lender could have purchased on the second
Business Day
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preceding that on which such final judgment is given, Lender agrees to remit to
such Borrower such excess.
SECTION 7.18. WAIVER OF IMMUNITY. Each Borrower hereby represents,
warrants and agrees that to the extent that any Borrower or any of such
Borrower's property and assets may have or hereafter acquire any right of
sovereign or other immunity from suit, court jurisdiction, attachment in aid of
execution of judgment, set-off, execution or other legal process, such Borrower
hereby irrevocably waives, to the fullest extent permitted by law, such right of
immunity with respect to such Borrower's obligations hereunder and with respect
to legal proceedings to enforce the same and to enforce any judgment rendered in
such proceedings.
SECTION 7.19. PUBLICITY. Lender may, in Lender's discretion and at
Lender's expense, publicize or otherwise advertise by so-called "tombstone"
advertising or otherwise Lender's financing transactions with Borrowers and
Guarantors. Lender may include references to Borrowers and Guarantors (and may
use any logo or other distinctive symbol associated with Borrowers or
Guarantors), and the transactions contemplated by this Agreement, in connection
with any advertising, promotion, or marketing undertaken by Lender.
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IN WITNESS WHEREOF, Lender and each Borrower, intending to be legally
bound hereby, have caused this Agreement to be duly executed and delivered under
seal as of the date first above written.
WITNESS: LENDER:
APPLIED BIOSCIENCE INTERNATIONAL INC.
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxx X. Xxxxxxxxx, Xx.(SEAL)
Name: Xxxx X. Xxxxxxxxx, Xx.
Title: Vice President
BORROWERS:
ENVIRON HOLDINGS, INC.
a Delaware corporation
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxxxx X. Xxxxx(SEAL)
Name: Xxxxxxxx X. Xxxxx
Title: President
APBI ENVIRONMENTAL SCIENCES GROUP, INC.
a Virginia corporation
/s/ Xxxxx X. Xxxxxxxx By: /s/ Xxxxxx Highland(SEAL)
Name: Xxxxxx Highland
Title: Chairman
