Exhibit 10.14
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REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
dated as of June 4, 1998
among
STRIDE & ASSOCIATES, INC.
BANKBOSTON, N.A. and the other lending institutions
set forth on SCHEDULE 1 attached hereto
and
BANKBOSTON, N.A.
as Agent
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TABLE OF CONTENTS
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION.........................................................1
1.1. DEFINITIONS..........................................................................1
1.2. RULES OF INTERPRETATION..............................................................17
2. THE REVOLVING CREDIT FACILITY...................................................................18
2.1. COMMITMENT TO LEND...................................................................18
2.2. COMMITMENT FEE.......................................................................18
2.3. REDUCTION OF TOTAL COMMITMENT........................................................19
2.4. THE REVOLVING CREDIT NOTES...........................................................19
2.5. INTEREST ON REVOLVING CREDIT LOANS...................................................19
2.6. REQUESTS FOR REVOLVING CREDIT LOANS..................................................20
2.7. CONVERSION OPTIONS...................................................................20
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.....................20
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN.............................20
2.7.3. LIBOR RATE LOANS..........................................................21
2.8. FUNDS FOR REVOLVING CREDIT LOAN......................................................21
2.8.1. FUNDING PROCEDURES........................................................21
2.8.2. ADVANCES BY AGENT.........................................................21
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.........................................................22
3.1. MATURITY.............................................................................22
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS.......................................22
3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS........................................23
4. THE TERM LOAN...................................................................................23
4.1. COMMITMENT TO LEND...................................................................23
4.2. THE TERM NOTES.......................................................................23
4.3. MANDATORY PAYMENTS OF PRINCIPAL ON TERM LOAN.........................................24
4.3.1. SCHEDULED AMORTIZATION....................................................24
4.3.2. ANNUAL EXCESS CASH FLOW RECAPTURE.........................................24
4.3.3. PROCEEDS OF ASSET DISPOSITIONS AND EQUITY ISSUANCES.......................25
4.4. OPTIONAL PREPAYMENT OF TERM LOAN.....................................................25
4.5. INTEREST ON TERM LOAN................................................................26
4.5.1. INTEREST RATES............................................................26
4.5.2. NOTIFICATION BY BORROWER..................................................26
4.5.3. AMOUNTS, ETC..............................................................26
5. CERTAIN GENERAL PROVISIONS......................................................................26
5.1. CLOSING FEE..........................................................................26
5.2. AGENT'S FEE..........................................................................26
5.3. FUNDS FOR PAYMENTS...................................................................26
5.3.1. PAYMENTS TO AGENT.........................................................26
5.3.2. NO OFFSET, ETC............................................................26
5.4. COMPUTATIONS.........................................................................27
5.5. INABILITY TO DETERMINE LIBOR RATE....................................................27
5.6. ILLEGALITY...........................................................................27
5.7. ADDITIONAL COSTS, ETC................................................................28
5.8. CAPITAL ADEQUACY.....................................................................29
5.9. CERTIFICATE..........................................................................30
5.10. INDEMNITY...........................................................................30
5.11. INTEREST AFTER DEFAULT..............................................................30
5.11.1. OVERDUE AMOUNTS..........................................................30
5.11.2. AMOUNTS NOT OVERDUE......................................................30
6. COLLATERAL SECURITY AND GUARANTIES..............................................................31
6.1. SECURITY OF BORROWER.................................................................31
6.2. GUARANTIES AND SECURITY OF SUBSIDIARIES..............................................31
7. REPRESENTATIONS AND WARRANTIES..................................................................31
7.1. CORPORATE AUTHORITY..................................................................31
7.1.1. INCORPORATION; GOOD STANDING..............................................32
7.1.2. AUTHORIZATION.............................................................32
7.1.3. ENFORCEABILITY............................................................32
7.2. GOVERNMENTAL APPROVALS...............................................................32
7.3. TITLE TO PROPERTIES; LEASES..........................................................32
7.4. FINANCIAL STATEMENTS AND PROJECTIONS.................................................33
7.4.1. FISCAL YEAR...............................................................33
7.4.2. FINANCIAL STATEMENTS......................................................33
7.4.3. PROJECTIONS...............................................................33
7.4.4. SOLVENCY..................................................................33
7.5. NO MATERIAL CHANGES, ETC.............................................................33
7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC.................................................33
7.7. LITIGATION...........................................................................34
7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC.................................................34
7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC.........................................34
7.10. TAX STATUS..........................................................................34
7.11. NO EVENT OF DEFAULT.................................................................34
7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS.........................................35
7.13. ABSENCE OF FINANCING STATEMENTS, ETC................................................35
7.14. PERFECTION OF SECURITY INTEREST.....................................................35
7.15. CERTAIN TRANSACTIONS................................................................35
7.16. EMPLOYEE BENEFIT PLANS..............................................................35
7.16.1. IN GENERAL...............................................................35
7.16.2. TERMINABILITY OF WELFARE PLANS...........................................36
7.16.3. GUARANTEED PENSION PLANS.................................................36
7.16.4. MULTIEMPLOYER PLANS......................................................36
7.17. USE OF PROCEEDS.....................................................................37
7.17.1. GENERAL..................................................................37
7.17.2. REGULATIONS U AND X......................................................37
7.17.3. INELIGIBLE SECURITIES....................................................37
7.18. ENVIRONMENTAL COMPLIANCE............................................................37
7.19. SUBSIDIARIES, ETC...................................................................39
7.20. BANK ACCOUNTS.......................................................................39
7.21. YEAR 2000 PROBLEM...................................................................39
7.22. DISCLOSURE..........................................................................39
7.23. CAPITALIZATION DOCUMENTS AND SUBORDINATION DOCUMENTS................................39
7.24. CHIEF EXECUTIVE OFFICE..............................................................40
7.25. INSURANCE...........................................................................40
8. AFFIRMATIVE COVENANTS OF THE BORROWER...........................................................40
8.1. PUNCTUAL PAYMENT.....................................................................40
8.2. MAINTENANCE OF OFFICE................................................................40
8.3. RECORDS AND ACCOUNTS.................................................................40
8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION...................................41
8.5. NOTICES..............................................................................42
8.5.1. DEFAULTS..................................................................42
8.5.2. ENVIRONMENTAL EVENTS......................................................43
8.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL..................................43
8.5.4. NOTICE OF LITIGATION AND JUDGMENTS........................................43
8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES.......................................43
8.7. INSURANCE............................................................................45
8.8. TAXES................................................................................45
8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC..............................................45
8.9.1. GENERAL...................................................................45
8.9.2. APPRAISALS................................................................45
8.9.3. COMMUNICATIONS WITH ACCOUNTANTS...........................................46
8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS..............................46
8.11. EMPLOYEE BENEFIT PLANS..............................................................46
8.12. USE OF PROCEEDS.....................................................................47
8.13. FAIR LABOR STANDARDS ACT............................................................47
8.14. GUARANTORS..........................................................................47
8.15. ADDITIONAL SUBSIDIARIES.............................................................47
8.16. INTEREST RATE PROTECTION ARRANGEMENTS...............................................47
8.17. FURTHER ASSURANCES..................................................................47
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER......................................................47
9.1. RESTRICTIONS ON INDEBTEDNESS.........................................................48
9.2. RESTRICTIONS ON LIENS................................................................49
9.3. RESTRICTIONS ON INVESTMENTS..........................................................51
9.4. RESTRICTED PAYMENTS..................................................................52
9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS......................................52
9.5.1. MERGERS AND ACQUISITIONS..................................................52
9.5.2. DISPOSITION OF ASSETS.....................................................52
9.6. SALE AND LEASEBACK...................................................................53
9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS...................................................53
9.8. SUBORDINATED DEBT....................................................................53
9.9. EMPLOYEE BENEFIT PLANS...............................................................54
9.10. BUSINESS ACTIVITIES.................................................................54
9.11. FISCAL YEAR.........................................................................54
9.12. TRANSACTIONS WITH AFFILIATES........................................................54
9.13. BANK ACCOUNTS.......................................................................55
9.14. MODIFICATION OF DOCUMENTS AND CHARTER...............................................55
9.15. UPSTREAM LIMITATIONS................................................................55
9.16. INCONSISTENT AGREEMENTS.............................................................55
10. FINANCIAL COVENANTS OF THE BORROWER............................................................55
10.1. LEVERAGE RATIO......................................................................55
10.2. DEBT SERVICE COVERAGE RATIO.........................................................56
10.3. CURRENT RATIO.......................................................................56
11. CLOSING CONDITIONS.............................................................................56
11.1. LOAN DOCUMENTS ETC..................................................................56
11.1.1. LOAN DOCUMENTS...........................................................56
11.1.2. SUBORDINATION AND CAPITALIZATION DOCUMENTS...............................56
11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS...............................................56
11.3. CORPORATE ACTION....................................................................56
11.4. INCUMBENCY CERTIFICATE..............................................................56
11.5. VALIDITY OF LIENS...................................................................57
11.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS......................................57
11.7. CERTIFICATES OF INSURANCE...........................................................57
11.8. SOLVENCY CERTIFICATE................................................................57
11.9. OPINION OF COUNSEL..................................................................57
11.10. PAYMENT OF FEES....................................................................57
11.11. PAYOFF LETTER......................................................................57
11.12. DISBURSEMENT INSTRUCTIONS..........................................................57
11.13. CONSENTS AND APPROVALS.............................................................58
12. CONDITIONS TO ALL BORROWINGS...................................................................58
12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT...........................................58
12.2. NO LEGAL IMPEDIMENT.................................................................58
12.3. GOVERNMENTAL REGULATION.............................................................58
12.4. PROCEEDINGS AND DOCUMENTS...........................................................58
13. EVENTS OF DEFAULT; ACCELERATION; ETC...........................................................58
13.1. EVENTS OF DEFAULT AND ACCELERATION..................................................58
13.2. TERMINATION OF COMMITMENTS..........................................................62
13.3. REMEDIES............................................................................62
13.4. DISTRIBUTION OF COLLATERAL PROCEEDS.................................................62
14. SETOFF.........................................................................................63
15. THE AGENT......................................................................................64
15.1. AUTHORIZATION.......................................................................64
15.2. EMPLOYEES AND AGENTS................................................................64
15.3. NO LIABILITY........................................................................65
15.4. NO REPRESENTATIONS..................................................................65
15.4.1. GENERAL..................................................................65
15.4.2. CLOSING DOCUMENTATION, ETC...............................................65
15.5. PAYMENTS............................................................................66
15.5.1. PAYMENTS TO AGENT........................................................66
15.5.2. DISTRIBUTION BY AGENT....................................................66
15.5.3. DELINQUENT BANKS.........................................................66
15.6. HOLDERS OF NOTES....................................................................67
15.7. INDEMNITY...........................................................................67
15.8. AGENT AS BANK.......................................................................67
15.9. RESIGNATION.........................................................................67
15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT.....................................67
15.11. DUTIES IN THE CASE OF ENFORCEMENT..................................................67
16. EXPENSES AND INDEMNIFICATION...................................................................68
16.1. EXPENSES............................................................................68
16.2. INDEMNIFICATION.....................................................................69
16.3. SURVIVAL............................................................................69
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION..................................................69
17.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY...................................69
17.2. CONFIDENTIALITY.....................................................................70
17.3. PRIOR NOTIFICATION..................................................................70
17.4. OTHER...............................................................................70
18. SURVIVAL OF COVENANTS, ETC.....................................................................71
19. ASSIGNMENT AND PARTICIPATION...................................................................71
19.1. CONDITIONS TO ASSIGNMENT BY BANKS...................................................71
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS......................71
19.3. REGISTER............................................................................73
19.4. NEW NOTES...........................................................................73
19.5. PARTICIPATIONS......................................................................73
19.6. DISCLOSURE..........................................................................73
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER................................74
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS.................................................74
19.9. ASSIGNMENT BY BORROWER..............................................................75
20. NOTICES, ETC...................................................................................75
21. GOVERNING LAW..................................................................................75
22. HEADINGS.......................................................................................76
23. COUNTERPARTS...................................................................................76
24. ENTIRE AGREEMENT, ETC..........................................................................76
25. WAIVER OF JURY TRIAL...........................................................................76
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.............................................................77
27. SEVERABILITY...................................................................................77
REVOLVING CREDIT
AND
TERM LOAN AGREEMENT
This REVOLVING CREDIT AND TERM LOAN AGREEMENT is made as of June 4, 1998,
by and among (a) STRIDE & ASSOCIATES, INC. (the "Borrower"), a Delaware
corporation having its principal place of business at 000 Xxxxxxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxxxxxxxxxx 00000; (b) BANKBOSTON, N.A., a national banking
association and the other lending institutions listed on SCHEDULE 1; and (c)
BANKBOSTON, N.A. as agent for itself and such other lending institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth in
this Section 1 or elsewhere in the provisions of this Credit Agreement referred
to below:
ACCOUNTS RECEIVABLE. All rights of the Borrower or any of its Subsidiaries
to payment for goods sold, leased or otherwise marketed in the ordinary course
of business and all rights of the Borrower or any of its Subsidiaries to payment
for services rendered in the ordinary course of business and all sums of money
or other proceeds due thereon pursuant to transactions with account debtors,
except for that portion of the sum of money or other proceeds due thereon that
relate to sales, use or property taxes in conjunction with such transactions,
recorded on books of account in accordance with generally accepted accounting
principles.
ADJUSTMENT DATE. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to Section 8.4(d).
AFFILIATE. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
AGENT'S HEAD OFFICE. The Agent's head office located at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
AGENT. BankBoston, N.A. acting as agent for the Banks.
AGENT'S SPECIAL COUNSEL. Xxxxxxx Xxxx LLP or such other counsel as may
be approved by the Agent.
APPLICABLE MARGIN. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
2
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Leverage Ratio as determined for the
period ending on the fiscal quarter ended immediately preceding the applicable
Rate Adjustment Period.
BASE LIBOR
RATE RATE COMMITMENT
LEVEL LEVERAGE RATIO LOANS LOANS FEE RATE
---------------------------------------------------------------
3 Greater than or 1.00% 2.25% 0.375%
equal to 3.00:1.00
---------------------------------------------------------------
2 Less than 0.50% 1.75% 0.375%
3.00:1.00 but
greater than or
equal to 2.00:1.00
---------------------------------------------------------------
1 Less than 2.00:1.00 0.25% 1.50% 0.375%
---------------------------------------------------------------
Notwithstanding the foregoing, (a) for Loans outstanding and the
commitment fees payable during the period commencing on the Closing Date through
the date immediately preceding the first Adjustment Date to occur after June 30,
1998, the Applicable Margin shall be at Level 3 set forth above; and (b) if the
Borrower fails to deliver any Compliance Certificate pursuant to Section 8.4(d)
hereof then, for the period commencing on the next Adjustment Date to occur
subsequent to such failure through the date immediately following the date on
which such Compliance Certificate is delivered, the Applicable Margin shall be
the highest Applicable Margin set forth above.
ASSET SALE. Any one or series of related transactions in which any
applicable Person conveys, sells, transfers or otherwise disposes of, directly
or indirectly, any of its properties, business or assets (including the sale or
issuance of capital stock of a Subsidiary), whether owned on the Closing Date or
thereafter acquired.
ASSIGNMENT AND ACCEPTANCE. See Section 19.1.
BALANCE SHEET DATE. December 31, 1997.
BANKS. BKB and the other lending institutions listed on SCHEDULE 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to Section 19.
BASE RATE. The higher of (a) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that
is a Business Day, the average of the
3
quotations for such day on such transactions received by the Agent from three
funds brokers of recognized standing selected by the Agent.
BASE RATE LOANS. Revolving Credit Loans and all or any portion of the
Term Loan bearing interest calculated by reference to the Base Rate.
BKB. BankBoston, N.A. (f/k/a The First National Bank of Boston), a
national banking association, in its individual capacity.
BORROWER. As defined in the preamble hereto.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of LIBOR Rate Loans, also a day which is a LIBOR Business Day.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
CAPITAL EXPENDITURES. Amounts paid or Indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with (a) the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or (b) the lease of any
assets by the Borrower or any of its Subsidiaries as lessee under any Synthetic
Lease to the extent that such assets would have been Capital Assets had the
Synthetic Lease been treated for accounting purposes as a Capitalized Lease.
CAPITALIZATION DOCUMENTS. Collectively, the Securities Purchase and
Redemption Agreement, the Shareholders' Agreement (including the agreements,
instruments and documents that are exhibits thereto) and the articles of
incorporation and by-laws of the Borrower and its Subsidiaries.
CAPITALIZED LEASES. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See Section 7.18(a).
CLOSING DATE. The first date on which the conditions set forth in Section
11 have been satisfied and any Revolving Credit Loans and the Term Loan are to
be made hereunder.
CODE. The Internal Revenue Code of 1986.
4
COLLATERAL. All of the property, rights and interests of the Borrower
and its Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
COMMITMENT. With respect to each Bank, the amount set forth on Schedule 1
hereto as the amount of such Bank's commitment to make Loans to the Borrower, as
the same may be reduced from time to time; or if such commitment is terminated
pursuant to the provisions hereof, zero.
COMMITMENT FEE RATE. As referred to as such in the table contained in
the definition of Applicable Margin.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth on SCHEDULE 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
COMPLIANCE CERTIFICATE. See Section 8.4(d) hereof.
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
CONSOLIDATED CURRENT ASSETS. All assets of the Borrower and its
Subsidiaries on a consolidated basis that, in accordance with generally accepted
accounting principles, are properly classified as current assets, PROVIDED that
(a) notes and accounts receivable shall be included only if good and collectible
as determined by the Borrower in accordance with established practice
consistently applied and, with respect to such notes, only if payable on demand
or within one (1) year from the date as of which Consolidated Current Assets are
to be determined and if not directly or indirectly renewable or extendible at
the option of the debtors, by their terms, or by the terms of any instrument or
agreement relating thereto, beyond such year, and, with respect to such accounts
receivable, only if payable and outstanding not more than ninety (90) days after
the date of the shipment of goods or other transaction out of which any such
account receivable arose; and such notes and accounts receivable shall be taken
at their face value less reserves determined to be sufficient in accordance with
generally accepted accounting principles; and (b) inventory shall be included
only if and to the extent that the same shall consist of saleable finished goods
ready and available for shipment to purchasers thereof.
CONSOLIDATED CURRENT LIABILITIES. All liabilities and other Indebtedness
of the Borrower and its Subsidiaries on a consolidated basis maturing on demand
or within one (1) year from the date as of which Consolidated Current
Liabilities are to be determined, and such other liabilities as may properly be
classified as current liabilities in accordance with generally accepted
accounting principles.
CONSOLIDATED EXCESS CASH FLOW. With respect to the Borrower and its
Subsidiaries and any particular fiscal period, an amount equal to (a)
Consolidated
5
Excess Operating Cash Flow for such period LESS (b) the sum of (i) Consolidated
Total Interest Expense for such period, PLUS (ii) any mandatory repayments
(whether scheduled or otherwise) of principal on any Indebtedness of the
Borrower or any of its Subsidiaries paid or due and payable during such period
(other than payments made in respect of the prior fiscal year's Consolidated
Excess Cash Flow).
CONSOLIDATED EXCESS OPERATING CASH FLOW. For any period, an amount equal
to (a) the sum of (i) EBITDA for such period, PLUS (ii) if applicable, in-flows
resulting from Net Working Capital Changes for such period, LESS (b) the sum of
(i) cash payments for all taxes paid during such period, PLUS (ii) to the extent
not already deducted in the determination of EBITDA, Capital Expenditures made
during such period, PLUS (iii) if applicable, out-flows resulting from Net
Working Capital Changes for such period.
CONSOLIDATED NET INCOME (OR DEFICIT). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income.
CONSOLIDATED OPERATING CASH FLOW. For any period, an amount equal to (a)
EBITDA for such period, less (b) the sum of (i) cash payments for all taxes paid
during such period, PLUS (ii) to the extent not already deducted in the
determination of EBITDA, Capital Expenditures made during such period.
CONSOLIDATED TOTAL DEBT SERVICE. For any fiscal period with respect to the
Borrower and its Subsidiaries, the sum of (a) Consolidated Total Interest
Expense for such period, PLUS (b) any and all mandatory or required payments of
principal in respect of Indebtedness of the Borrower and its Subsidiaries made
or required to be made in such period.
CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate amount
of interest required to be paid or accrued by the Borrower and its Subsidiaries
during such period on all Indebtedness of the Borrower and its Subsidiaries
outstanding during all or any part of such period, whether such interest was or
is required to be reflected as an item of expense or capitalized, including
payments consisting of interest in respect of any Capitalized Lease or any
Synthetic Lease, and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money.
CONVERSION REQUEST. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Loan in accordance with Section
2.7.
CREDIT AGREEMENT. This Revolving Credit and Term Loan Agreement,
including the Schedules and Exhibits hereto.
6
DEBT SERVICE COVERAGE RATIO. As at any date of determination, the ratio of
(a) Consolidated Operating Cash Flow of the Borrower and its Subsidiaries for
the Reference Period most recently ended to (b) Consolidated Total Debt Service
of the Borrower and its Subsidiaries for the Reference Period most recently
ended.
DEFAULT. See Section 13.1.
DELINQUENT BANK. See Section 15.5.3.
DISTRIBUTION. The declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
DOLLARS or $. Dollars in lawful currency of the United States of America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
DOMESTIC SUBSIDIARY. A Subsidiary which is not a Foreign Subsidiary.
DRAWDOWN DATE. The date on which any Revolving Credit Loan or the Term
Loan is made or is to be made, and the date on which any Revolving Credit Loan
is converted or continued in accordance with Section 2.7 or all or any portion
of the Term Loan is converted or continued in accordance with Section 4.5.2.
EBITDA. With respect to the Borrower and its Subsidiaries for any fiscal
period, an amount equal to Consolidated Net Income for such period, PLUS, to the
extent deducted in the calculation of Consolidated Net Income and without
duplication, (a) depreciation and amortization for such period, (b) other
noncash charges for such period, (c) income tax expense for such period, (d)
Consolidated Total Interest Expense for such period, and MINUS, to the extent
added in computing Consolidated Net Income and without duplication, all noncash
gains (including income tax benefits) for such period, all as determined in
accordance with generally accepted accounting principles.
ELIGIBLE ASSIGNEE. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting
7
principles; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, PROVIDED that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (d) the central bank of any country
which is a member of the OECD; and (e) if, but only if, any Event of Default has
occurred and is continuing, any other bank, insurance company, commercial
finance company or other financial institution or other Person approved by the
Agent, such approval not to be unreasonably withheld.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
ENVIRONMENTAL LAWS. See Section 7.18(a).
EPA. See Section 7.18(b).
EQUITY ISSUANCE. The sale or issuance by the Borrower or any of its
Subsidiaries of any of its capital stock or equity interests or any warrants,
rights or options to acquire its capital stock or equity interests.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with the
Borrower under Section 414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder.
EUROCURRENCY RESERVE RATE. For any day with respect to a LIBOR Rate Loan,
the maximum rate (expressed as a decimal) at which any lender subject thereto
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency Liabilities" (as
that term is used in Regulation D), if such liabilities were outstanding. The
Eurocurrency Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Rate.
EVENT OF DEFAULT. See Section 13.1.
FEE LETTER. The fee letter dated on or prior to the Closing Date
between the Borrower and the Agent, as the same may be amended, modified or
supplemented from time to time.
8
FOREIGN SUBSIDIARY. Any Subsidiary which conducts substantially all of its
business in countries other than the United States of America and that is
organized under the laws of a jurisdiction other than the United States of
America and the States (or the District of Columbia) thereof.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in Section 10,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
GUARANTOR. Each Domestic Subsidiary of the Borrower which is required
to be or become a guarantor from time to time pursuant to Section 8.14 hereof.
HAZARDOUS SUBSTANCES. See Section 7.18(b).
INDEBTEDNESS. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses,
(c) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
9
(d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(e) every obligation of such Person under any Capitalized Lease,
(f) every obligation of such Person under any lease (a "Synthetic
Lease") treated as an operating lease under generally accepted accounting
principles and as a loan or financing for U.S. income tax purposes,
(g) all sales by such Person of (i) accounts or general intangibles
for money due or to become due, (ii) chattel paper, instruments or
documents creating or evidencing a right to payment of money or (iii)
other receivables (collectively "receivables"), whether pursuant to a
purchase facility or otherwise, other than in connection with the
disposition of the business operations of such Person relating thereto or
a disposition of defaulted receivables for collection and not as a
financing arrangement, and together with any obligation of such Person to
pay any discount, interest, fees, indemnities, penalties, recourse,
expenses or other amounts in connection therewith,
(h) every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value
any shares of capital stock of any class issued by such Person, any
warrants, options or other rights to acquire any such shares, or any
rights measured by the value of such shares, warrants, options or other
rights,
(i) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices (a "derivative contract"),
(j) every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to
the extent that such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity,
except to the extent that the terms of such Indebtedness provide that such
Person is not liable therefor and such terms are enforceable under
applicable law,
(k) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of clauses
(a) through (j) (the "primary obligation") of another Person (the "primary
obligor"), in any manner, whether directly or indirectly, and including,
10
without limitation, any obligation of such Person (i) to purchase or pay
(or advance or supply funds for the purchase of) any security for the
payment of such primary obligation, (ii) to purchase property, securities
or services for the purpose of assuring the payment of such primary
obligation, or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (x) any Synthetic Lease shall be the
stipulated loss value, termination value or other equivalent amount, (y) any
derivative contract shall be the maximum amount of any termination or loss
payment required to be paid by such Person if such derivative contract were, at
the time of determination, to be terminated by reason of any event of default or
early termination event thereunder, whether or not such event of default or
early termination event has in fact occurred and (z) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.
INELIGIBLE SECURITIES. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1993 (12 U.S.C. Section 24, Seventh), as amended.
INITIAL PUBLIC OFFERING. The initial underwritten public offering of
the common stock of the Borrower registered under the Securities Act of 1933.
INSTRUMENT OF ADHERENCE. See Section 9.5.1.
INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the last day of the
calendar month with respect to interest accrued during such calendar month,
including, without limitation, the calendar month which includes the Drawdown
Date of such Base Rate Loan; and (b) as to any LIBOR Rate Loan in respect of
which the Interest Period is (i) 3 months or less, the last day of such Interest
Period and (ii) more than 3 months, the date that is 3 months from the first day
of such Interest Period and, in addition, the last day of such Interest Period.
INTEREST PERIOD. With respect to each Revolving Credit Loan or all or any
relevant portion of the Term Loan, (a) initially, the period commencing on the
11
Drawdown Date of such Loan and ending on the last day of one of the periods set
forth below, as selected by the Borrower in a Loan Request or as otherwise
required by the terms of this Credit Agreement (i) for any Base Rate Loan, the
last day of the calendar month; (ii) for any LIBOR Rate Loan, 1, 2, 3 or 6
months; and (b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Revolving Credit Loan or all or
such portion of the Term Loan and ending on the last day of one of the periods
set forth above, as selected by the Borrower in a Conversion Request; PROVIDED
that all of the foregoing provisions relating to Interest Periods are subject to
the following:
(a) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest
Period shall be extended to the next succeeding LIBOR Business Day unless
the result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on
the immediately preceding LIBOR Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day, that Interest Period shall end on
the next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in Section
2.7, the Borrower shall be deemed to have requested a conversion of the
affected LIBOR Rate Loan to a Base Rate Loan and the continuance of all
Base Rate Loans as Base Rate Loans on the last day of the then current
Interest Period with respect thereto;
(d) any Interest Period relating to any LIBOR Rate Loan that begins
on the last LIBOR Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last LIBOR Business Day of a
calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date (if comprising a Revolving Credit
Loan) or the Term Loan Maturity Date (if comprising the Term Loan or a
portion thereof) shall end on the Revolving Credit Loan Maturity Date or
(as the case may be) the Term Loan Maturity Date.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at the principal amount of
the obligations guaranteed and still outstanding, together with any interest
accrued thereon; (b) there shall be included as an Investment all
12
interest accrued with respect to Indebtedness constituting an Investment unless
and until such interest is paid; (c) there shall be deducted in respect of each
such Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
INVESTORS. Collectively, Summit Partners, Summit Ventures V, L.P.,
Summit V Advisors Fund, L.P., Summit V Advisors Fund (QP), L.P. and Summit
Subordinated Debt Fund II, L.P.
LEVERAGE RATIO. As of any date of determination, the ratio of (a) Senior
Funded Indebtedness of the Borrower and its Subsidiaries outstanding on such
date to (b) the EBITDA of the Borrower and its Subsidiaries for the Reference
Period ended on such date; PROVIDED, HOWEVER, for purposes of determining the
Leverage Ratio for purposes of calculating the Applicable Margin and compliance
with Section 10.1 hereof for the period from the Closing Date through December
31, 1998, EBITDA for the quarter ending (i) June 30, 1997 shall be $2,147,200;
(ii) September 30, 1997 shall be $2,557,500; (iii) December 31, 1997 shall be
$1,382,000; and (iv) March 31, 1998 shall be $2,068,300.
LIBOR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
LIBOR LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining LIBOR Rate Loans.
LIBOR RATE. For any Interest Period with respect to a LIBOR Rate Loan, the
rate of interest equal to (a) the rate determined by the Agent at which Dollar
deposits for such Interest Period are offered based on information presented on
Telerate Page 3750 as of 11:00 a.m. London time on the second LIBOR Business Day
prior to the first day of such Interest Period, divided by (b) a number equal to
1.00 minus the Eurocurrency Reserve Rate, if applicable.
LIBOR RATE LOANS. Revolving Credit Loans and all or any portion of any
Term Loan bearing interest calculated by reference to the LIBOR Rate.
LOAN DOCUMENTS. This Credit Agreement, the Notes, the Subordination
and Intercreditor Agreement, the Fee Letter and the Security Documents.
LOAN REQUEST. See Section 2.6.
13
LOANS. The Revolving Credit Loans and the Term Loan.
MAJORITY BANKS. As of any date, (a) if there are less than three (3) Banks
on such date, all Banks and (b) if there are three (3) Banks or more on such
date, the Banks holding at least fifty one percent (51%) of the outstanding
principal amount of the Notes on such date PLUS the unused portion of the
Commitments; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitutes at least fifty one percent (51%) of the Total
Commitment.
MATERIAL ADVERSE EFFECT. A material adverse effect on (a) the business,
condition (financial or otherwise), operations, performance or properties of the
Borrower and its Subsidiaries taken as a whole, or the Collateral, (b) the
rights and remedies of the Agent or any Bank under any Loan Document or (c) the
ability of the Borrower or any of its Subsidiaries to perform their Obligations
under the Loan Document.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
NET CASH PROCEEDS. With respect to any Equity Issuance, the excess of the
gross cash proceeds received by such Person from such Equity Issuance after
deduction of reasonable and customary transaction expenses (including without
limitation, underwriting discounts and commissions) actually incurred in
connection with the Equity Issuance.
NET CASH SALE PROCEEDS. The net cash proceeds received by the Borrower and
any of its Subsidiaries in respect of any Asset Sale, less the sum of (a) all
reasonable out-of-pocket fees, commissions and other expenses incurred in
connection with such Asset Sale, including the amount (estimated in good faith
by such Person) of income, franchise, sales and other applicable taxes required
to be paid by such Person in connection with such Asset Sale and (b) the
aggregate amount of cash so received by such Person which is used to retire (in
whole or in part) any Indebtedness (other than under the Loan Documents) of such
Person permitted by this Credit Agreement that was secured by a lien or security
interest (if any) permitted by this Credit Agreement having priority over the
liens and security interests (if any) of the Agent, for the benefit of the
Banks, with respect to such assets transferred, and which is required to be
repaid in whole or in part (which repayment, in the case of any other revolving
credit arrangements or multiple advance arrangements, reduces the commitment
thereunder) in connection with such Asset Sale.
NET WORKING CAPITAL CHANGES. For any fiscal period, the net change from
the immediately preceding like fiscal period in (a) both billed and unbilled
Accounts Receivable, (b) current accounts payable of the Borrower and its
Subsidiaries, (c) current accruals and accretions (exclusive of interest
accruals and accretions) of the Borrower and its Subsidiaries and (d) inventory
of the Borrower and its Subsidiaries.
14
NOTES. The Term Notes and the Revolving Credit Notes.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of the
Borrower and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Loans made or any of the Notes, or arising or incurred in connection with any
interest rate protection arrangements contemplated by Section 8.16 or any
documents, agreements or instruments executed in connection therewith, or other
instruments at any time evidencing any thereof.
OUTSTANDING. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERFECTION CERTIFICATE. The Perfection Certificate as defined in the
Security Agreement.
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by Section 9.2.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
RATE ADJUSTMENT PERIOD. See definition of "Applicable Margin".
RCRA. See Section 7.18(a).
REAL ESTATE. All real property at any time owned or currently leased (as
lessee or sublessee) by the Borrower or any of its Subsidiaries.
RECORD. The grid attached to a Note, or the continuation of such grid, or
any other similar record, including computer records, maintained by any Bank
with respect to any Loan referred to in such Note.
REDEEMABLE PREFERRED STOCK. The Series B Redeemable Preferred Stock of
the Borrower, par value $.01 per share.
REFERENCE PERIOD. The period of four (4) consecutive fiscal quarters
of the Borrower ending on the relevant date.
REGISTER. See Section 19.3.
15
RESTRICTED PAYMENT. In relation to the Borrower and its Subsidiaries, any
(a) Distribution or (b) payment or prepayment by the Borrower or its
Subsidiaries to the Investors or to any other Affiliate of the Borrower, any
Subsidiary or the Investors.
REVOLVING CREDIT LOAN MATURITY DATE. June 4, 2003.
REVOLVING CREDIT LOANS. Revolving credit loans made or to be made by the
Banks to the Borrower pursuant to Section 2.
REVOLVING CREDIT NOTE RECORD. A Record with respect to a Revolving Credit
Note.
REVOLVING CREDIT NOTES. See Section 2.4.
XXXXXXXXX EMPLOYMENT AGREEMENT. That certain Employment Agreement dated as
of June 4, 1998 by and between the Borrower and Xxxxxxx Xxxxxxxxx, and in
substantially the form delivered to the Agent on or prior to the Closing Date.
XXXX. See Section 7.18(a).
SECTION 20 SUBSIDIARY. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
SECURITIES PURCHASE AND REDEMPTION AGREEMENT. The Securities Purchase and
Redemption Agreement dated as of a date on or prior to the Closing Date, and in
form and substance acceptable to the Agent and the Banks.
SECURITY AGREEMENT. The Security Agreements, dated or to be dated on
or prior to the Closing Date, between the Borrower and the Agent and in form
and substance satisfactory to the Banks and the Agent.
SECURITY DOCUMENTS. The Security Agreement and all other instruments and
documents, including without limitation Uniform Commercial Code financing
statements, required to be executed or delivered pursuant to any Security
Document.
SENIOR FUNDED INDEBTEDNESS. With respect to the Borrower and its
Subsidiaries on a consolidated basis as at any date of determination, an amount
(without duplication) equal to the aggregate amount of all Indebtedness (other
than Subordinated Debt) of the Borrower and its Subsidiaries on a consolidated
basis at such time (including, without limitation, the aggregate amount of all
commitments to fund such Indebtedness) pursuant to any agreement or instrument
to which the Borrower or any of its Subsidiaries is a party relating to the
borrowing of money or the obtaining of credit or in respect of Capitalized
Leases or Synthetic Leases.
16
STOCKHOLDER'S AGREEMENT. The Shareholders' Agreement dated June 4, 1998
among the Borrower, the Investors and the certain shareholders of the Borrower
named therein, and in the form delivered to the Agent on or prior to the Closing
Date.
STOCK OPTION PLAN. The Borrower's employee stock option plan as in effect
on the Closing Date, a copy of which has been delivered to the Agent on or prior
to the Closing Date.
SUBORDINATED DEBT. Unsecured Indebtedness of the Borrower or any of its
Subsidiaries that is expressly subordinated and made junior to the payment and
performance in full of the Obligations, and evidenced as such by the
Subordination Documents or by another written agreement containing subordination
provisions in form and substance approved by the Banks in writing.
SUBORDINATED NOTES. The 12% Subordinated Notes due August 4, 2003, in the
initial aggregate principal amount of $10,000,000 issued pursuant to the
Securities Purchase and Redemption Agreement.
SUBORDINATION AND INTERCREDITOR AGREEMENT. The Subordination and
Intercreditor Agreement, dated or to be dated on or prior to the Closing Date
among the Agent, the Investors and the Borrower and in form and substance
satisfactory to the Banks and the Agent.
SUBORDINATION DOCUMENTS. The Securities Purchase and Redemption Agreement,
the Subordinated Notes and the Subordination and Intercreditor Agreement.
SUBSIDIARY. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
SUMMIT PARTNERS. Collectively, Summit Investors III, L.P. and Summit
Ventures IV, L.P..
SYNTHETIC LEASE. As defined in paragraph (f) of the definition of
"Indebtedness".
TERM LOAN. The term loan made or to be made by the Banks to the Borrower
on the Closing Date in the aggregate principal amount of $4,000,000 pursuant to
Section 4.1.
TERM LOAN MATURITY DATE. June 4, 2003.
TERM NOTES. See Section 4.2.
TERM NOTE RECORD. A Record with respect to a Term Note.
17
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time.
TYPE. As to any Revolving Credit Loan or all or any portion of the Term
Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.
VOTING STOCK. Stock or similar interests, of any class or classes (however
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section " refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
18
(j) Unless otherwise expressly indicated, in the computation of
periods of time from a specified date to a later specified date, the word
"from" means "from and including," the words "to" and "until" each mean
"to but excluding," and the word "through" means "to and including."
(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the same
or similar matters. All such limitations, tests and measurements are,
however, cumulative and are to be performed in accordance with the terms
thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to, among
others, the Agent and the Borrower and are the product of discussions and
negotiations among all parties. Accordingly, this Credit Agreement and the
other Loan Documents are not intended to be construed against the Agent or
any of the Banks merely on account of the Agent's or any Bank's
involvement in the preparation of such documents.
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Revolving Credit Loan Maturity Date
upon notice by the Borrower to the Agent given in accordance with Section 2.6,
such sums as are requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at any one time equal
to such Bank's Commitment, PROVIDED that the sum of the outstanding amount of
the Revolving Credit Loans (after giving effect to all amounts requested) shall
not at any time exceed the Total Commitment. The Revolving Credit Loans shall be
made PRO RATA in accordance with each Bank's Commitment Percentage. Each request
for a Revolving Credit Loan hereunder shall constitute a representation and
warranty by the Borrower that the conditions set forth in Section 11 and Section
12, in the case of the initial Revolving Credit Loans to be made on the Closing
Date, and Section 12, in the case of all other Revolving Credit Loans, have been
satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the applicable Commitment Fee Rate on the average
daily amount during each calendar quarter or portion thereof from the date
hereof to the Revolving Credit Loan Maturity Date by which the Total Commitment
exceeds the outstanding amount of Revolving Credit Loans during such calendar
quarter. The commitment fee shall be payable quarterly in arrears on the last
day of each calendar quarter for such calendar quarter commencing on the first
such date following the date hereof, with a final payment on the Revolving
Credit Maturity Date or any earlier date on which the Commitments shall
terminate.
19
2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right at
any time and from time to time upon one (1) Business Day prior written notice to
the Agent to reduce by $500,000 or an integral multiple of $250,000 in excess
thereof or terminate entirely the Total Commitment, whereupon the Commitments of
the Banks shall be reduced PRO RATA in accordance with their respective
Commitment Percentages of the amount specified in such notice or, as the case
may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this Section 2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of EXHIBIT A hereto (each a "Revolving Credit Note"), dated as of the Closing
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Revolving Credit Note Record reflecting the
making of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on such
Bank's Revolving Credit Note Record shall be PRIMA FACIE evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank's Revolving
Credit Note Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided
in Section 5.11,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the Base Rate PLUS the Applicable Margin.
(b) Each LIBOR Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the LIBOR Rate determined for such Interest Period PLUS the Applicable
Margin.
20
(c) The Borrower promises to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect thereto.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to the
Agent written notice in the form of EXHIBIT B hereto (or telephonic notice
confirmed in a writing in the form of EXHIBIT B hereto) of each Revolving Credit
Loan requested hereunder (a "Loan Request") no less than (a) one (1) Business
Day prior to the proposed Drawdown Date of any Base Rate Loan and (b) three (3)
LIBOR Business Days prior to the proposed Drawdown Date of any LIBOR Rate Loan.
Each such notice shall specify (i) the principal amount of the Revolving Credit
Loan requested, (ii) the proposed Drawdown Date of such Revolving Credit Loan,
(iii) the Interest Period for such Revolving Credit Loan and (iv) the Type of
such Revolving Credit Loan. Promptly upon receipt of any such notice, the Agent
shall notify each of the Banks thereof. Each Loan Request shall be irrevocable
and binding on the Borrower and shall obligate the Borrower to accept the
Revolving Credit Loan requested from the Banks on the proposed Drawdown Date.
Each Loan Request shall be in a minimum aggregate amount of $250,000 or an
integral multiple thereof.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT Loan. The
Borrower may elect from time to time to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type, PROVIDED that (a)
with respect to any such conversion of a Revolving Credit Loan to a Base
Rate Loan, the Borrower shall give the Agent at least one (1) Business Day
prior written notice of such election; (b) with respect to any such
conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrower shall
give the Agent at least three (3) LIBOR Business Days prior written notice
of such election; (c) with respect to any such conversion of a LIBOR Rate
Loan into a Revolving Credit Loan of another Type, such conversion shall
only be made on the last day of the Interest Period with respect thereto
and (d) no Loan may be converted into a LIBOR Rate Loan when any Default
or Event of Default has occurred and is continuing. On the date on which
such conversion is being made each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Revolving Credit
Loans to its Domestic Lending Office or its LIBOR Lending Office, as the
case may be. All or any part of outstanding Revolving Credit Loans of any
Type may be converted into a Revolving Credit Loan of another Type as
provided herein, PROVIDED that any partial conversion shall be in an
aggregate principal amount of $250,000 or a whole multiple thereof. Each
Conversion Request relating to the conversion of a Revolving Credit Loan
to a LIBOR Rate Loan shall be irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any Revolving
Credit Loan of any Type may be continued as a Revolving Credit Loan of the
same Type upon the expiration of an Interest Period with respect thereto
by compliance by the Borrower with the notice provisions contained
21
in Section 2.7.1; provided that no LIBOR Rate Loan may be continued as
such when any Default or Event of Default has occurred and is continuing,
but shall be automatically converted to a Base Rate Loan on the last day
of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the
Agent active upon the Borrower's account have actual knowledge. In the
event that the Borrower fails to provide any such notice with respect to
the continuation of any LIBOR Rate Loan or as such, then such LIBOR Rate
Loan shall be automatically converted to a Base Rate Loan on the last day
of the first Interest Period relating thereto. The Agent shall notify the
Banks promptly when any such automatic conversion contemplated by this
Section 2.7 is scheduled to occur.
2.7.3. LIBOR RATE LOANS. Any conversion to or from LIBOR Rate Loans
shall be in such amounts and be made pursuant to such elections so that,
after giving effect thereto, the aggregate principal amount of all LIBOR
Rate Loans having the same Interest Period shall not be less than $500,000
or a whole multiple of $100,000 in excess thereof.
2.8. FUNDS FOR REVOLVING CREDIT LOAN.
2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Boston time)
on the proposed Drawdown Date of any Revolving Credit Loans, each of the
Banks will make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Revolving Credit Loans. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by Sections 11 and 12 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Agent will
make available to the Borrower the aggregate amount of such Revolving
Credit Loans made available to the Agent by the Banks. The failure or
refusal of any Bank to make available to the Agent at the aforesaid time
and place on any Drawdown Date the amount of its Commitment Percentage of
the requested Revolving Credit Loans shall not relieve any other Bank from
its several obligation hereunder to make available to the Agent the amount
of such other Bank's Commitment Percentage of any requested Revolving
Credit Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to the
contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such
Bank's Commitment Percentage of the Revolving Credit Loans to be made on
such Drawdown Date, and the Agent may (but it shall not be required to),
in reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such amount
on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (a) the average computed for the
period referred to in clause (c) below, of the weighted
22
average interest rate paid by the Agent for federal funds acquired by the
Agent during each day included in such period, TIMES (b) the amount of
such Bank's Commitment Percentage of such Revolving Credit Loans, TIMES
(c) a fraction, the numerator of which is the number of days that elapse
from and including such Drawdown Date to the date on which the amount of
such Bank's Commitment Percentage of such Revolving Credit Loans shall
become immediately available to the Agent, and the denominator of which is
365. A statement of the Agent submitted to such Bank with respect to any
amounts owing under this paragraph shall be PRIMA FACIE evidence of the
amount due and owing to the Agent by such Bank. If the amount of such
Bank's Commitment Percentage of such Revolving Credit Loans is not made
available to the Agent by such Bank within three (3) Business Days
following such Drawdown Date, the Agent shall be entitled to recover such
amount from the Borrower on demand, with interest thereon at the rate per
annum applicable to the Revolving Credit Loans made on such Drawdown Date.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. MATURITY. The Borrower promises to pay on the Revolving Credit Loan
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the
sum of the outstanding amount of the Revolving Credit Loans exceeds the Total
Commitment, then the Borrower shall immediately pay the amount of such excess to
the Agent for the respective accounts of the Banks for application to the
Revolving Credit Loans. Each payment of any Revolving Credit Loans shall be
allocated among the Banks, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium (but subject to Section 5.10). The Borrower shall give the Agent, no
later than 10:00 a.m., Boston time, at least one (1) Business Day prior written
notice of any proposed prepayment pursuant to this Section 3.3 of Base Rate
Loans, and three (3) LIBOR Business Days notice of any proposed prepayment
pursuant to this Section 3.3 of LIBOR Rate Loans, in each case specifying the
proposed date of prepayment of Revolving Credit Loans and the principal amount
to be prepaid. Each such partial prepayment of the Revolving Credit Loans shall
be in an integral multiple of $100,000, shall be accompanied by the payment of
accrued interest on the principal prepaid to the date of prepayment and shall be
applied, in the absence of instruction by the Borrower, first to the principal
of Base Rate Loans and then to the principal of LIBOR Rate Loans. Each partial
prepayment shall be allocated among the Banks, in proportion,
23
as nearly as practicable, to the respective unpaid principal amount of each
Bank's Revolving Credit Note, with adjustments to the extent practicable to
equalize any prior repayments not exactly in proportion. Any amount so prepaid
may be reborrowed by the Borrower as provided in, and subject to the conditions
of, Section 2.1 hereof.
4. THE TERM LOAN.
4.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth in
this Credit Agreement, each Bank agrees to lend to the Borrower on the Closing
Date the amount of its Commitment Percentage of the principal amount of
$26,000,000.
4.2. THE TERM NOTES. The Term Loan shall be evidenced by separate
promissory notes of the Borrower in substantially the form of EXHIBIT C hereto
(each a "Term Note"), dated the Closing Date and completed with appropriate
insertions. One Term Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Commitment Percentage of the Term Loan and
representing the obligation of the Borrower to pay to such Bank such principal
amount or, if less, the outstanding amount of such Bank's Commitment Percentage
of the Term Loan, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made a notation
on such Bank's Term Note Record reflecting the original principal amount of such
Bank's Commitment Percentage of the Term Loan and, at or about the time of such
Bank's receipt of any principal payment on such Bank's Term Note, an appropriate
notation on such Bank's Term Note Record reflecting such payment. The aggregate
unpaid amount set forth on such Bank's Term Note Record shall be PRIMA FACIE
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Term Note Record shall not affect the obligations of the Borrower hereunder or
under any Term Note to make payments of principal of and interest on any Term
Note when due.
4.3. MANDATORY PAYMENTS OF PRINCIPAL ON TERM LOAN.
4.3.1. SCHEDULED AMORTIZATION. The Borrower promises to pay to the
Agent for the account of the Banks the principal amount of the Term Loan
in twenty (20) consecutive quarterly payments, payable on the last day of
each calendar quarter ending within any period set forth below in the
amount set forth opposite such period, commencing on September 30, 1998
with a final payment on the Term Loan Maturity Date in an amount equal to
the unpaid balance of the Term Loan.
24
----------------------------------------------------------------
Amount of
Quarter Ending: Each Payment
----------------------------------------------------------------
September 30, 1998 - December 31, 1998 $ 400,000
----------------------------------------------------------------
March 30, 1999 - December 31, 1999 $ 700,000
----------------------------------------------------------------
March 30, 2000 - December 31, 2000 $ 1,125,000
----------------------------------------------------------------
March 30, 2001 - December 31, 2001 $ 1,575,000
----------------------------------------------------------------
March 30, 2002 - December 31, 2002 $ 1,825,000
----------------------------------------------------------------
March 30, 2003 $ 2,150,000
----------------------------------------------------------------
Term Loan Maturity Date Remaining unpaid
balance of the Term
Loan
----------------------------------------------------------------
4.3.2. ANNUAL EXCESS CASH FLOW RECAPTURE. For each fiscal year of
the Borrower ending on or after December 31, 1998 in which the Leverage
Ratio for the period of two consecutive fiscal quarters ending December 31
of such year is equal to or less than 1.50:1.00, the Borrower shall make a
prepayment of principal on the Term Loan in an amount equal to fifty
percent (50%) of Consolidated Excess Cash Flow for such fiscal year, such
mandatory prepayment to be due one hundred twenty (120) days after the end
of each applicable fiscal year and to be applied to the Term Loan based on
the then outstanding amount of the Term Loan and applied against the
scheduled installments of principal due on the Term Loan on a pro rata
basis.
4.3.3. PROCEEDS OF ASSET DISPOSITIONS AND EQUITY ISSUANCES. In the
event the Borrower or any of its Subsidiaries receives any (a) Net Cash
Sale Proceeds from any Asset Sales permitted by Section 9.5.2 (except for
any Net Cash Sale Proceeds received by the Borrower from the sale or other
disposition of obsolete assets as permitted by Section 9.5.2 so long as
the Borrower uses such Net Cash Sale Proceeds to purchase replacement
assets within twelve (12) months from the date of such sale or other
disposition); or (b) Net Cash Proceeds from any Equity Issuances by the
Borrower and its Subsidiaries after the Closing Date (except for Net Cash
Proceeds received by the Borrower from Equity Issuances of the Borrower
(i) made in connection with its Stock Option Plan or to members of the
Company's management (other than in connection with the sale of Equity
Issuances to such members of management in the Initial Public Offering);
or (ii) to Investors of the Borrower existing on the Closing Date so long
as no Event of Default has occurred and is continuing and provided such
Net Cash Proceeds are not received in connection with the sale of Equity
Issuances to the Investors in the Initial Public Offering), the Borrower
shall make a prepayment of principal on the Term Loan in an amount equal
to 100% of such Net Cash Sale Proceeds or Net Cash Proceeds, as the case
may be, with such prepayment to be applied to the Term Loan based on the
then outstanding amount of the Term Loan and applied against the scheduled
installments of principal due on the Term Loan on a pro rata basis;
PROVIDED, HOWEVER, that
25
notwithstanding the foregoing, the Borrower shall be permitted to use all
or any portion of the proceeds of an Equity Issuance to redeem the
Redeemable Preferred Stock outstanding on such date and/or the
Subordinated Notes PROVIDED (a) the Leverage Ratio is less than or equal
to 1.00:1.00 on a pro forma basis immediately after giving effect to any
prepayments; (b) no Default or Event of Default has occurred and is
continuing or would exist as a result thereof; and (c) the Summit
Investors at all times prior to and after giving effect to such a
redemption are the legal and beneficial owners of not less than
twenty-five percent (25%) of the capital stock of the Borrower.
4.4. OPTIONAL PREPAYMENT OF TERM LOAN. The Borrower shall have the right
at any time to prepay the Term Note on or before the Term Loan Maturity Date, as
a whole, or in part, subject to Section 5.10, upon not less than one (1)
Business Days prior written notice to the Agent, without premium or penalty,
PROVIDED that (a) each partial prepayment shall be in the principal amount of
$500,000 or an integral multiple of $100,000 in excess thereof, and (b) each
partial prepayment shall be allocated among the Banks, in proportion, as nearly
as practicable, to the respective outstanding amount of each Bank's Term Note,
with adjustments to the extent practicable to equalize any prior prepayments not
exactly in proportion. Any prepayment of principal of the Term Loan shall
include all interest accrued to the date of prepayment and shall be applied
against the scheduled installments of principal due on the Term Loan on a pro
rata basis. No amount repaid with respect to the Term Loan may be reborrowed.
4.5. INTEREST ON TERM LOAN.
4.5.1. INTEREST RATES. Except as otherwise provided in Section 5.11,
the Term Loan shall bear interest during each Interest Period relating to
all or any portion of the Term Loan at the following rates:
(a) To the extent that all or any portion of the Term Loan
bears interest during such Interest Period at the Base Rate, the
Term Loan or such portion shall bear interest during such Interest
Period at the rate per annum equal to the Base Rate PLUS the
Applicable Margin.
(b) To the extent that all or any portion of the Term Loan
bears interest during such Interest Period at the LIBOR Rate, the
Term Loan or such portion shall bear interest during such Interest
Period at the rate per annum equal to the LIBOR Rate plus the
Applicable Margin.
The Borrower promises to pay interest on the Term Loan or any
portion thereof outstanding during each Interest Period in arrears on each
Interest Payment Date applicable to such Interest Period.
4.5.2. NOTIFICATION BY BORROWER. The Borrower shall notify the
Agent, such notice to be irrevocable, at least three (3) LIBOR Business
Days prior to the Drawdown Date of the Term Loan if all or any portion of
the
26
Term Loan is to bear interest at the LIBOR Rate. After the Term Loan has
been made, the provisions of Section 2.7 shall apply mutatis mutandis with
respect to all or any portion of the Term Loan so that the Borrower may
have the same interest rate options with respect to all or any portion of
the Term Loan as it would be entitled to with respect to the Revolving
Credit Loans.
4.5.3. AMOUNTS, ETC. That portion of the Term Loan bearing interest
at the LIBOR Rate relating to any Interest Period shall be in the amount
of $500,000 or an integral multiple of $100,000 in excess thereof. No
Interest Period relating to the Term Loan or any portion thereof bearing
interest at the LIBOR Rate shall extend beyond the date on which a
regularly scheduled installment payment of the principal of the Term Loan
is to be made unless a portion of the Term Loan at least equal to such
installment payment has an Interest Period ending on such date or is then
bearing interest at the Base Rate.
5. CERTAIN GENERAL PROVISIONS.
5.1. CLOSING FEE. The Borrower agrees to pay to the Agent on the Closing
Date the closing fees as set forth in the Fee Letter.
5.2. AGENT'S FEE. The Borrower shall pay to the Agent an Agent's fee (the
"Agent's Fee") at the times and in the amounts set forth in the Fee Letter.
5.3. FUNDS FOR PAYMENTS.
5.3.1. PAYMENTS TO AGENT. All payments of principal, interest,
commitment fees and any other amounts due hereunder or under any of the
other Loan Documents shall be made to the Agent, for the respective
accounts of the Banks and the Agent, at the Agent's Head Office or at such
other location in the Boston, Massachusetts, area that the Agent may from
time to time designate, in each case in immediately available funds.
5.3.2. NO OFFSET, ETC. All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the
Borrower is compelled by law to make such deduction or withholding. If any
such obligation is imposed upon the Borrower with respect to any amount
payable by it hereunder or under any of the other Loan Documents, the
Borrower will pay to the Agent, for the account of the Banks or (as the
case may be) the Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional
amount in Dollars as shall be necessary to enable the Banks or the Agent
to receive the same net amount which the Banks or
27
the Agent would have received on such due date had no such obligation been
imposed upon the Borrower. The Borrower will deliver promptly to the Agent
certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrower
hereunder or under such other Loan Document.
5.4. COMPUTATIONS. All computations of interest on the Base Rate Loans and
of commitment fees or other fees shall, unless otherwise expressly provided
herein, be based on a 365-day year and paid for the actual number of days
elapsed, and all computations on interest on LIBOR Rate Loans shall be based on
a 360-day year and paid for the actual number of days elaped. Except as
otherwise provided in the definition of the term "Interest Period" with respect
to LIBOR Loans, whenever a payment hereunder or under any of the other Loan
Documents becomes due on a day that is not a Business Day, the due date for such
payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Revolving Credit Note Records and the Term Note Records from
time to time shall be considered correct and binding on the Borrower unless
within five (5) Business Days after receipt of any notice by the Agent or any of
the Banks of such outstanding amount, the Agent or such Bank shall notify the
Borrower to the contrary.
5.5. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent
shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the LIBOR Rate that would
otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan
during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to LIBOR Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR Rate
Loan will automatically, on the last day of the then current Interest Period
relating thereto, become a Base Rate Loan, and (c) the obligations of the Banks
to make LIBOR Rate Loans shall be suspended until the Agent or the Majority
Banks determine that the circumstances giving rise to such suspension no longer
exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrower and the Banks.
5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or change in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain LIBOR Rate Loans, such Bank shall forthwith give prompt notice
of such circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make LIBOR Rate Loans or convert Loans of another
Type to LIBOR Rate Loans shall forthwith be suspended and (b) such Bank's
Revolving Credit Loans then outstanding as LIBOR Rate Loans, if any, shall be
converted automatically to Base
28
Rate Loans on the last day of each Interest Period applicable to such LIBOR Rate
Loans or within such earlier period as may be required by law. The Borrower
hereby agrees promptly to pay the Agent for the account of such Bank, upon
demand by such Bank, any additional amounts necessary to compensate such Bank
for any costs incurred by such Bank in making any conversion in accordance with
this Section 6.6, including any interest or fees payable by such Bank to lenders
of funds obtained by it in order to make or maintain its LIBOR Rate Loans
hereunder.
5.7. ADDITIONAL COSTS, ETC. If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank or
the Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, such Bank's Commitment or the
Loans (other than taxes based upon or measured by the income or profits of
such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Loans or any other amounts payable to any Bank or the
Agent under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or other
similar requirements (whether or not having the force of law) against
assets held by, or deposits in or for the account of, or loans by, or
letters of credit issued by, or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, the Loans, such Bank's Commitment, or any class of loans,
letters of credit or commitments of which any of the Loans or such Bank's
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans or such
Bank's Commitment, or
29
(ii) to reduce the amount of principal, interest, or other
amount payable to such Bank or the Agent hereunder on account of
such Bank's Commitment, or any of the Loans, or
(iii) to require such Bank or the Agent to make any payment or
to forego any interest or other sum payable hereunder, the amount of
which payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed
received by such Bank or the Agent from the Borrower hereunder,
then, and in each such case, the Agent or such Bank shall give prompt notice
thereof to the Borrower, and the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum.
5.8. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
net effect (taking into account any other such changes after the date hereof) of
reducing the return on such Bank's or the Agent's commitment with respect to any
Loans to a level below that which such Bank or the Agent could have achieved but
for such adoption, change or compliance (taking into consideration such Bank's
or the Agent's then existing policies with respect to capital adequacy and
assuming full utilization of such entity's capital) by any amount deemed by such
Bank or (as the case may be) the Agent to be material, then such Bank or the
Agent shall notify the Borrower of such fact. To the extent that the amount of
such reduction in the return on capital is not reflected in the Base Rate, the
Borrower and such Bank shall thereafter attempt to negotiate in good faith,
within thirty (30) days of the day on which the Borrower receives such notice,
an adjustment payable hereunder that will adequately compensate such Bank in
light of these circumstances. If the Borrower and such Bank are unable to agree
to such adjustment within thirty (30) days of the date on which the Borrower
receives such notice, then commencing on the date of such notice (but not
earlier than the effective date of any such increased capital requirement), the
fees payable hereunder shall increase by an amount that will, in such Bank's
reasonable determination, provide adequate compensation. Each Bank shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
30
5.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 5.7 or 5.8 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
5.10. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (excluding loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any LIBOR Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its LIBOR Rate Loans, (b) default by the
Borrower in making a borrowing or conversion after the Borrower has given (or is
deemed to have given) a Loan Request, notice (in the case of all or any portion
of the Term Loans pursuant to Section 4.5.2) or a Conversion Request relating
thereto in accordance with Section 2.6 or Section 2.7 or Section 4.5 or (c) the
making of any payment of a LIBOR Rate Loan or the making of any conversion of
any such Loan to a Base Rate Loan on a day that is not the last day of the
applicable Interest Period with respect thereto, including interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain any
such Loans.
5.11. INTEREST AFTER DEFAULT.
5.11.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans shall bear interest
compounded monthly and payable on demand at a rate per annum equal to two
percent (2%) above the Base Rate until such amount shall be paid in full
(after as well as before judgment).
5.11.2. AMOUNTS NOT OVERDUE. During the continuance of an Event of
Default under Sections 13.1(a), (b) or (c) as it relates to Section 10,
the principal of the Loans not overdue shall, until such Event of Default
has been cured or remedied or such Event of Default has been waived by the
Majority Banks pursuant to Section 26, bear interest at a rate per annum
equal to the greater of (a) two percent (2%) above the rate of interest
otherwise applicable to such Revolving Credit Loans pursuant to Section
2.5 and the Term Loan pursuant to Section 4.5 and (b) the rate of interest
applicable to overdue principal pursuant to Section 5.11.1.
5.12. REPLACEMENT OF BANKS. Within thirty (30) days after (a) any Bank had
demanded compensation from the Borrower pursuant to Sections 5.7 or 5.8 hereof,
or (b) there shall have occurred a change in law with respect to any Bank as a
consequence of which it shall have become unlawful for such Bank to make a LIBOR
Rate Loan on any Drawdown Date, as described in Section 5.6 hereof (any such
Bank described in the foregoing clauses (a) or (b) is hereinafter referred to as
an "Affected Bank"), the Borrower may request that the other Banks
(collectively, the "Non-Affected Banks") acquire all, but not less than all, of
the Affected Bank's Commitment or may
31
designate a replacement bank or banks, which must be an Eligible Assignee and
which also must be reasonably acceptable to the Agent, to acquire and assume all
or any portion of the outstanding Loans and Commitment of the Affected Bank (the
"Replacement Bank"). If the Borrower so requests the Non-Affected Banks to
acquire all or a portion of the Affected Bank's Commitment, the Non-Affected
Banks may elect to acquire all or any portion of the Affected Banks outstanding
Loans and to assume all or any portion of the Affected Bank's Commitment. If the
Non-Affected Banks do not elect to acquire and assume all or any portion of the
Affected Bank's outstanding Loans and Commitment, the Replacement Bank may
acquire and assume that portion of the outstanding Loans and Commitments of the
Affected Bank not otherwise acquired or assumed by the Non-Affected Banks. The
provisions of Section 19 hereof shall apply to all reallocations pursuant to
this Section 5.12, and the Affected Bank and any Non-Affected Banks and/or
replacement banks which are to acquire the Loans and Commitment of the Affected
Bank shall execute and deliver to the Agent, in accordance with the provisions
of Section 19 hereof, such Assignments and Acceptances and other instruments,
including, without limitation, the Notes, as are required pursuant to Section 19
hereof to give effect to such reallocations. On the effective date of the
applicable Assignment and Acceptance, the Borrower shall pay to the Affected
Bank all interest accrued on its Loans up to but excluding such date, along with
any fees payable to such Affected Bank hereunder up to but excluding such date.
6. COLLATERAL SECURITY AND GUARANTIES.
6.1. SECURITY OF BORROWER. The Obligations shall be secured by a perfected
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in all of the assets of the Borrower, whether now
owned or hereafter acquired, pursuant to the terms of the Security Documents to
which the Borrower is a party.
6.2. GUARANTIES AND SECURITY OF SUBSIDIARIES. To the extent the Borrower
forms or otherwise acquires any Subsidiaries after the Closing Date, from the
date of such formation or acquisition, as the case may be, the Obligations shall
also be guaranteed pursuant to the terms of the guaranty in form and substance
reasonably acceptable to the Agent. The obligations of the Guarantors under such
guaranty shall be in turn secured by a perfected first priority security
interest (subject only to Permitted Liens entitled to priority under applicable
law) in all of the assets of each such Guarantor, whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to which such
Guarantor is a party.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as
follows:
7.1. CORPORATE AUTHORITY.
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7.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and its
Subsidiaries (a) is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation, (b) has all
requisite corporate power to own its property and conduct its business as
now conducted, and (c) is in good standing as a foreign corporation and is
duly authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so qualified would
not have a Material Adverse Effect.
7.1.2. AUTHORIZATION. The execution, delivery and performance of
this Credit Agreement and the other Loan Documents to which the Borrower
or any of its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (a) are within the corporate authority of
such Person, (b) have been duly authorized by all necessary corporate
proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to
which the Borrower or any of its Subsidiaries is subject or any judgment,
order, writ, injunction, license or permit applicable to the Borrower or
any of its Subsidiaries and (d) do not conflict with any provision of the
corporate charter or bylaws of, or, except where it would have a Material
Adverse Effect, any agreement or other instrument binding upon, the
Borrower or any of its Subsidiaries.
7.1.3. ENFORCEABILITY. The execution and delivery of this Credit
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding
therefor may be brought.
7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any of its Subsidiaries of this Credit Agreement and the other
Loan Documents to which the Borrower or any of its Subsidiaries is or is to
become a party and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained.
7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 7.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
33
7.4. FINANCIAL STATEMENTS AND PROJECTIONS.
7.4.1. FISCAL YEAR. The Borrower and each of its Subsidiaries has a
fiscal year which is the twelve months ending on December 31 of each
calendar year.
7.4.2. FINANCIAL STATEMENTS. There has been furnished to each of the
Banks a consolidated balance sheet of the Borrower and its Subsidiaries as
at the Balance Sheet Date, and a consolidated statement of income of the
Borrower and its Subsidiaries for the fiscal year then ended, certified by
Deloitte & Touche LLC. Such balance sheet and statement of income have
been prepared in accordance with generally accepted accounting principles
and fairly present the financial condition of the Borrower as at the close
of business on the date thereof and the results of operations for the
fiscal year then ended. There are no contingent liabilities of the
Borrower or any of its Subsidiaries as of such date involving material
amounts, known to the officers of the Borrower, which were not disclosed
in such balance sheet and the notes related thereto.
7.4.3. PROJECTIONS. The Borrower has delivered to the Agent copies
of the projections of the annual operating budgets of the Borrower,
balance sheets and cash flow statements for the 1998 to 2003 fiscal years.
To the knowledge of the Borrower, no facts exist that (individually or in
the aggregate) would result in any material adverse change in any such
projections.
7.4.4. SOLVENCY. The Borrower and its Subsidiaries, on a
consolidated and consolidating basis, both before and after giving effect
to the transactions contemplated by this Credit Agreement and the other
Loan Documents (a) are solvent; (b) have assets having a fair value in
excess of their liabilities; (c) have assets having a fair value in excess
of the amount required to pay their liabilities on existing debts as such
debts become due and payable, and (d) have, and expect to continue to
have, access to adequate capital for the conduct of their business and the
ability to pay their debts from time to time incurred in connection with
the operation of their business as such debts mature.
7.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no Material Adverse Change as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the consolidated statement of income for the fiscal year then ended, other
than changes in the ordinary course of business that have not had Material
Adverse Effect. Except as set forth on SCHEDULE 7.5, since the Balance Sheet
Date, the Borrower has not made any Distributions.
7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and its
Subsidiaries possesses all material franchises, patents, copyrights, trademarks,
trade
34
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
7.7. LITIGATION. Except as set forth in SCHEDULE 7.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against the Borrower or any of its Subsidiaries before any court, tribunal or
administrative agency or board that, if adversely determined, could, either in
any case or in the aggregate, have a Material Adverse Effect or materially
impair the right of the Borrower and its Subsidiaries, considered as a whole, to
carry on business substantially as now conducted by them, or result in any
substantial liability not adequately covered by insurance, or for which adequate
reserves are not maintained on the consolidated balance sheet of the Borrower
and its Subsidiaries, or which question the validity of this Credit Agreement or
any of the other Loan Documents, or any action taken or to be taken pursuant
hereto or thereto.
7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower nor any of
its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower or any of its Subsidiaries.
Neither the Borrower nor any of its Subsidiaries is a party to any contract or
agreement that has or is expected, in the judgment of the Borrower's officers,
to have any Material Adverse Effect.
7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower
nor any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could result in the imposition of substantial penalties or have a
Material Adverse Effect.
7.10. TAX STATUS. The Borrower and its Subsidiaries (a) have made or filed
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which any of them is subject, (b) have paid all
taxes and other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and by appropriate proceedings and (c) have set aside on their books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Borrower know of no basis
for any such claim.
7.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred and
is continuing.
35
7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
7.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.
7.14. PERFECTION OF SECURITY INTEREST. All filings, assignments, pledges
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary or advisable, under applicable law, to
establish and perfect the Agent's security interest in the Collateral. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses. The Borrower or a
Subsidiary of the Borrower is the owner of the Collateral free from any lien,
security interest, encumbrance and any other claim or demand, except for
Permitted Liens.
7.15. CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE 7.15 and
except for arm's length transactions pursuant to which the Borrower or any of
its Subsidiaries makes payments in the ordinary course of business upon terms no
less favorable than the Borrower or such Subsidiary could obtain from third
parties, none of the officers, directors, or employees of the Borrower or any of
its Subsidiaries is presently a party to any transaction with the Borrower or
any of its Subsidiaries (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
7.16. EMPLOYEE BENEFIT PLANS.
7.16.1. IN GENERAL. Each Employee Benefit Plan and, to the extent
the Borrower currently has or in the future has each Guaranteed Pension
Plans, such Guaranteed Pension Plan has been maintained and operated in
compliance in all material respects with the provisions of ERISA and, to
the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions and the bonding
of fiduciaries and other persons handling plan funds as required by
Section 412 of ERISA. The
36
Borrower has heretofore delivered to the Agent the most recently completed
annual report, Form 5500, with all required attachments, and actuarial
statement required to be submitted under Section 103(d) of ERISA, with
respect to each Guaranteed Pension Plan.
7.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan,
which is an employee welfare benefit plan within the meaning of Section
3(1) or Section 3(2)(B) of ERISA, provides benefit coverage subsequent to
termination of employment, except as required by Title I, Part 6 of ERISA
or the applicable state insurance laws. The Borrower may terminate each
such Plan at any time (or at any time subsequent to the expiration of any
applicable bargaining agreement) in the discretion of the Borrower without
liability to any Person other than for claims arising prior to
termination.
7.16.3. GUARANTEED PENSION PLANS. As of the Closing Date, the
Borrower does not have any Guaranteed Pension Plans. Should the Borrower
thereafter maintain any such Guaranteed Pension Plans, from such time,
each contribution required to be made to a Guaranteed Pension Plan,
whether required to be made to avoid the incurrence of an accumulated
funding deficiency, the notice or lien provisions of Section 302(f) of
ERISA, or otherwise, has been timely made. No waiver of an accumulated
funding deficiency or extension of amortization periods has been received
with respect to any Guaranteed Pension Plan, and neither the Borrower nor
any ERISA Affiliate is obligated to or has posted security in connection
with an amendment to a Guaranteed Pension Plan pursuant to Section 307 of
ERISA or Section 401(a)(29) of the Code. No liability to the PBGC (other
than required insurance premiums, all of which have been paid) has been
incurred by the Borrower or any ERISA Affiliate with respect to any
Guaranteed Pension Plan and there has not been any ERISA Reportable Event
(other than an ERISA Reportable Event as to which the requirement of 30
days notice has been waived), or any other event or condition which
presents a material risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed for
that valuation, the aggregate benefit liabilities of all such Guaranteed
Pension Plans within the meaning of Section 4001 of ERISA did not exceed
the aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
7.16.4. MULTIEMPLOYER PLANS. As of the Closing Date, the Borrower
does not have any Multiemployer Plans. Should the Borrower thereafter
maintain any such Multiemployer Plans, from such time, neither the
Borrower nor any ERISA Affiliate has incurred any material liability
(including secondary liability) to any Multiemployer Plan as a result of a
37
complete or partial withdrawal from such Multiemployer Plan under Section
4201 of ERISA or as a result of a sale of assets described in Section 4204
of ERISA. Neither the Borrower nor any ERISA Affiliate has been notified
that any Multiemployer Plan is in reorganization or insolvent under and
within the meaning of Section 4241 or Section 4245 of ERISA or is at risk
of entering reorganization or becoming insolvent, or that any
Multiemployer Plan intends to terminate or has been terminated under
Section 4041A of ERISA.
7.17. USE OF PROCEEDS.
7.17.1. GENERAL. The proceeds of the Term Loan shall be used to
repurchase a portion of the Borrower's capital stock from existing
shareholders pursuant to the terms of the Securities Purchase and
Redemption Agreement and the proceeds of the Revolving Credit Loans shall
be used for working capital and general corporate purposes.
7.17.2. REGULATIONS U AND X. No portion of any Loan is to be used
for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
7.17.3. INELIGIBLE SECURITIES. No portion of the proceeds of any
Loans is to be used for the purpose of (a) knowingly purchasing, or
providing credit support for the purchase of, Ineligible Securities from a
Section 20 Subsidiary during any period in which such Section 20
Subsidiary makes a market in such Ineligible Securities, (b) knowingly
purchasing, or providing credit support for the purchase of, during the
underwriting or placement period, any Ineligible Securities being
underwritten or privately placed by a Section 20 Subsidiary, or (c)
making, or providing credit support for the making of, payments of
principal or interest on Ineligible Securities underwritten or privately
placed by a Section 20 Subsidiary and issued by or for the benefit of the
Borrower or any Subsidiary or other Affiliate of the Borrower.
7.18. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all necessary steps
to investigate the past and present condition and usage of the owned Real Estate
and the present condition and usage of the leased Real Estate and the operations
conducted thereon and, based upon such diligent investigation, has determined
that:
(a) none of the Borrower or its Subsidiaries or, to the knowledge of
the Borrower, any operator of the Real Estate or any operations thereon is
in violation, or alleged violation, of any judgment, decree, order, law,
license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments
38
and Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state or
local statute, regulation, ordinance, order or decree relating to health,
safety or the environment (hereinafter "Environmental Laws"), which
violation would have a Material Adverse Effect;
(b) neither the Borrower nor any of its Subsidiaries has received
notice from any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party under CERCLA with respect to a site listed
on the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X; (ii) that
any hazardous waste, as defined by 42 U.S.C. Section 6903(5), any
hazardous substances as defined by 42 U.S.C. Section 9601(14), any
pollutant or contaminant as defined by 42 U.S.C. Section 9601(33) and any
toxic substances, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws ("Hazardous Substances")
which any one of them has generated, transported or disposed of has been
found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that any Borrower or any of its
Subsidiaries conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law; or (iii) that it is or shall be
a named party to any claim, action, cause of action, complaint, or legal
or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses or
damages of any kind whatsoever in connection with the release of Hazardous
Substances;
(c) except as set forth on SCHEDULE 7.18 attached hereto: (i) no
portion of the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with
applicable Environmental Laws; and to the knowledge of the Borrower, no
underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate; (ii) in the
course of any activities conducted by the Borrower or its Subsidiaries, no
Hazardous Substances have been generated or are being used on the Real
Estate except in accordance with applicable Environmental Laws; (iii)
there have been no releases (i.e. any past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, disposing or dumping) or threatened releases of Hazardous
Substances on, upon, into or from the properties of the Borrower or its
Subsidiaries, which releases would have a material adverse effect on the
value of any of the Real Estate or adjacent properties or the environment;
(iv) to the best of the Borrower's knowledge, there have been no releases
on, upon, from or into any real property in the vicinity of any of the
Real Estate which, through soil or groundwater contamination, may have
come to be located on, and which would have a material adverse effect on
the value of, the Real Estate; and (v) in addition, any Hazardous
Substances that have been generated on any of
39
the Real Estate have been transported offsite only by carriers having an
identification number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required
under applicable Environmental Laws, which transporters and facilities
have been and are, to the best of the Borrower's knowledge, operating in
compliance with such permits and applicable Environmental Laws; and
(d) None of the Borrower and its Subsidiaries or any Real Estate is
subject to any applicable environmental law requiring the performance of
Hazardous Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any governmental agency
or the recording or delivery to other Persons of an environmental
disclosure document or statement by virtue of the transactions set forth
herein and contemplated hereby.
7.19. SUBSIDIARIES, ETC. SCHEDULE 7.19(A) sets forth the Subsidiaries of
the Borrower. Except as set forth on SCHEDULE 7.19(B) hereto, neither the
Borrower nor any Subsidiary of the Borrower is engaged in any joint venture or
partnership with any other Person.
7.20. BANK ACCOUNTS. SCHEDULE 7.20 sets forth the account numbers of all
bank accounts of the Borrower or any of its Subsidiaries.
7.21. YEAR 2000 PROBLEM. The Borrower and its Subsidiaries have reviewed
the areas within their businesses and operations which could be adversely
affected by, and have developed or are developing a program to address on a
timely basis, the "Year 2000 Problem" (i.e. the risk that computer applications
used by the Borrower or any of its Subsidiaries may be unable to recognize and
perform properly date-sensitive functions involving certain dates prior to and
any date after December 31, 1999). Based upon such review, the Borrower
reasonably believes that the "Year 2000 Problem" will not have a Material
Adverse Effect.
7.22. DISCLOSURE. This Credit Agreement and the other Loan Documents,
taken together, do not contain any untrue statement of a material fact or omit
to state a material fact (known to the Borrower or any of its Subsidiaries in
the case of any document or information not furnished by it or any of its
Subsidiaries) necessary in order to make the statements herein or therein not
misleading. As of the Closing Date, there is no fact known to the Borrower or
any of its Subsidiaries which materially adversely affects the business, assets
or financial condition of the Borrower or any of its Subsidiaries, exclusive of
effects resulting from changes in general economic conditions, legal standards
or regulatory conditions.
7.23. CAPITALIZATION DOCUMENTS AND SUBORDINATION DOCUMENTS. The Borrower
has delivered to the Agent true and complete copies of all of the Capitalization
Documents and Subordination Documents, and the Borrower has not amended any of
such documents in any material respect. Each of the representations and
warranties made by the Borrower and its Subsidiaries in any of
40
the Capitalization Documents and Subordination Documents was true and correct in
all material respects when made and continue to remain true and correct in all
material respects on the Closing Date, except to the extent that any of such
representations and warranties relate, by the express terms thereof, solely to a
date falling prior to the Closing Date, and except to the extent that any of
such representations and warranties may have been affected by the consummation
of the transactions contemplated and permitted or required by the Loan
Documents.
7.24. CHIEF EXECUTIVE OFFICE. The Borrower's chief executive office is at
000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000, at which location
its principal books and records are kept. Each Guarantor's chief executive
office is as set forth in the Security Agreement to which it is a party.
7.25. INSURANCE. The Borrower and each of its Subsidiaries maintains with
insurers which are to the Borrower's knowledge financially sound and reputable,
insurance with respect to its properties and businesses against such casualties
and contingencies as are in accordance with sound business practices and with
the details of such coverage being more fully described on SCHEDULE 7.25 hereto.
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans:
8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Loans, the commitment fees, the
Agent's fee and all other amounts provided for in this Credit Agreement and the
other Loan Documents to which the Borrower or any of its Subsidiaries is a
party, all in accordance with the terms of this Credit Agreement and such other
Loan Documents.
8.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief executive
office in 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000, or at
such other place in the United States of America as the Borrower shall designate
upon written notice to the Agent, where notices, presentations and demands to or
upon the Borrower in respect of the Loan Documents to which the Borrower is a
party may be given or made.
8.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each of
its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles, (b) maintain adequate accounts and reserves for
all taxes (including income taxes), depreciation, depletion, obsolescence and
amortization of its properties and the properties of its Subsidiaries,
contingencies, and other reserves, and (c) at all times engage Deloitte & Touche
LLC. or any other nationally-recognized independent certified public accounting
firm that is currently known as a "Big Six" accounting firm or any other
independent certified public accountants
41
reasonably satisfactory to the Agent as the independent certified public
accountants of the Borrower and its Subsidiaries and will not permit more than
thirty (30) days to elapse between the cessation of such firm's (or any
successor firm's) engagement as the independent certified public accountants of
the Borrower and its Subsidiaries and the appointment in such capacity of a
successor firm as shall be satisfactory to the Agent.
8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its Subsidiaries, each as
at the end of such year, and the related consolidated statement of income
and consolidated statement of cash flow and consolidating statement of
income and consolidating statement of cash flow for such year, each
setting forth in comparative form the figures for the previous fiscal year
and all such consolidated and consolidating statements to be in reasonable
detail, prepared in accordance with generally accepted accounting
principles, and, except in the case of such consolidating statements,
certified without qualification by Deloitte & Touche LLC or any other
nationally-recognized independent certified public accounting firm that is
currently known as a "Big Six" accounting firm or any other independent
certified public accountants reasonably satisfactory to the Agent,
together with a written statement from such accountants to the effect that
they have read a copy of this Credit Agreement, and that, in making the
examination necessary to said certification, they have obtained no
knowledge of any Default or Event of Default, or, if such accountants
shall have obtained knowledge of any then existing Default or Event of
Default they shall disclose in such statement any such Default or Event of
Default; PROVIDED that such accountants shall not be liable to the Banks
for failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of the
Borrower, copies of the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries and the unaudited consolidating balance
sheet of the Borrower and its Subsidiaries, each as at the end of such
quarter, and the related consolidated statement of income and consolidated
statement of cash flow and consolidating statement of income and
consolidating statement of cash flow for the portion of the Borrower's
fiscal year then elapsed, all in reasonable detail and prepared in
accordance with generally accepted accounting principles thereof (subject
to year-end adjustments and the absence of footnotes), together with a
certification by the principal financial or accounting officer of the
Borrower that the information contained in such
42
financial statements fairly presents the financial position of the
Borrower and its Subsidiaries on the date;
(c) as soon as practicable, but in any event within thirty (30) days
after the end of each month in each fiscal year of the Borrower, unaudited
monthly consolidated financial statements of the Borrower and its
Subsidiaries for such month and unaudited monthly consolidating financial
statements of the Borrower and its Subsidiaries for such month, each
prepared in accordance with generally accepted accounting principles
(subject to year-end adjustments and the absence of footnotes), together
with a certification by the principal financial or accounting officer of
the Borrower that the information contained in such financial statements
fairly presents the financial condition of the Borrower and its
Subsidiaries on the date thereof;
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Borrower in substantially
the form of EXHIBIT D hereto (the "Compliance Certificate") and setting
forth in reasonable detail computations evidencing compliance with the
covenants contained in Section 10 and (if applicable) reconciliations to
reflect changes in generally accepted accounting principles since the
Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrower;
(f) from time to time upon request of the Agent, copies of the
budget approved by the Borrower's board of directors;
(g) within fifteen (15) days after Borrower's management shall have
prepared its draft balance sheet as of the end of any fiscal year of the
Borrower, but in any event no later than sixty (60) days after the end of
such fiscal year, a statement certified by the principal financial or
accounting officer of the Borrower setting forth in reasonable detail the
computation of the Consolidated Excess Cash Flow for such fiscal year; and
(h) from time to time such other financial data and information
(including accountants, management letters) as the Agent or any Bank may
reasonably request.
8.5. NOTICES.
8.5.1. DEFAULTS. The Borrower will promptly notify the Agent and
each of the Banks in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of
Default)
43
under this Credit Agreement or any other note, evidence of indebtedness,
indenture or other obligation involving amounts in excess of $100,000 in
the aggregate to which or with respect to which the Borrower or any of its
Subsidiaries is a party or obligor, whether as principal, guarantor,
surety or otherwise, the Borrower shall forthwith give written notice
thereof to the Agent and each of the Banks, describing the notice or
action and the nature of the claimed default.
8.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give notice
to the Agent and each of the Banks (a) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports in
writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal,
state or local environmental agency and (b) upon becoming aware thereof,
of any inquiry, proceeding, investigation, or other action, including a
notice from any agency of potential environmental liability, of any
federal, state or local environmental agency or board, that has the
potential to materially affect the assets, liabilities, financial
conditions or operations of the Borrower or any of its Subsidiaries, or
the Agent's security interests pursuant to the Security Documents.
8.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrower will,
immediately upon becoming aware thereof, notify the Agent and each of the
Banks in writing of any setoff, claims (including, with respect to the
Real Estate, environmental claims), withholdings or other defenses to
which any of the Collateral, or the Agent's rights with respect to the
Collateral, are subject.
8.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will, and
will cause each of its Subsidiaries to, give notice to the Agent and each
of the Banks in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Borrower or any of its Subsidiaries or to
which the Borrower or any of its Subsidiaries is or becomes a party
involving an uninsured claim against the Borrower or any of its
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect and stating the nature and status of such litigation or
proceedings. The Borrower will, and will cause each of its Subsidiaries
to, give notice to the Agent and each of the Banks, in writing, in form
and detail satisfactory to the Agent, within ten (10) days of any judgment
not covered by insurance, final or otherwise, against the Borrower or any
of its Subsidiaries in an amount in excess of $250,000.
8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will do
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, rights and franchises and those of its
Subsidiaries and will not, and will not cause or permit any of its Subsidiaries
to, convert to a limited liability company. It (a) will cause all of its
properties and those of its Subsidiaries
44
used or useful in the conduct of its business or the business of its
Subsidiaries to be maintained and kept in good condition, repair and working
order, normal wear and tear excepted, and supplied with all necessary equipment,
(b) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) will, and will cause
each of its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; PROVIDED that nothing in this
Section 8.6 shall prevent the Borrower from discontinuing the operation and
maintenance of any of its properties or any of those of its Subsidiaries if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its or their business and that do not in the aggregate materially adversely
affect the business of the Borrower and its Subsidiaries on a consolidated
basis.
8.7. INSURANCE.
8.7.1. MAINTENANCE OF INSURANCE. The Borrower will, and will cause
each of its Subsidiaries to, maintain with insurers which are, to the
Borrower's knowledge, financially sound and reputable, insurance with
respect to its properties and business against such casualties and
contingencies as shall be in accordance with general practices of
businesses engaged in similar activities in similar geographic areas. Such
insurance shall be in such minimum amounts that the Borrower will not be
deemed a co-insurer under applicable insurance laws, regulations and
policies and otherwise shall be in such amounts, contain such terms, be in
such forms and be for such periods as may be reasonably satisfactory to
the Agent. In addition, all such insurance shall be payable to the Agent
as loss payee under a "standard" or "New York" loss payee clause for the
benefit of the Banks and the Agent. Without limiting the foregoing, the
Borrower will (a) keep all of its physical property insured with casualty
or physical hazard insurance on an "all risk" basis, with electronic data
processing coverage, with a full replacement cost endorsement and an
"agreed amount" clause in an amount equal to 100% of the full replacement
cost of such property, (b) maintain all such workers' compensation or
similar insurance as may be required by law and (c) maintain, in amounts
and with deductibles equal to those generally maintained by businesses
engaged in similar activities in similar geographic areas, general public
liability insurance against claims of bodily injury, death or property
damage occurring on, in or about the properties of the Borrower; business
interruption insurance; and product liability insurance.
8.7.2. INSURANCE PROCEEDS. The proceeds of any casualty insurance in
respect of any casualty loss of any of the Collateral shall, subject to
the rights, if any, of other parties with a prior interest in the property
covered thereby, (a) so long as no Event of Default has occurred and is
continuing, and to the extent that the amount of such proceeds is less
than $25,000, be disbursed to
45
the Borrower for direct application by the Borrower solely to the repair
or replacement of the Borrower's property so damaged or destroyed and (b)
in all other circumstances, be held by the Agent as cash collateral for
the Obligations. The Agent may, at its sole option, disburse from time to
time all or any part of such proceeds so held as cash collateral, upon
such terms and conditions as the Agent may reasonably prescribe, for
direct application by the Company solely to the repair or replacement of
the Borrower's property so damaged or destroyed, or the Agent may apply
all or any part of such proceeds to the Obligations with the Total
Commitment (if not then terminated) being reduced by the amount so applied
to the Obligations.
8.7.3. NOTICE OF CANCELLATION, ETC.. All policies of insurance shall
provide for at least thirty (30) days prior written cancellation notice to
the Agent. In the event of failure by the Borrower to provide and maintain
insurance as herein provided, the Agent may, at its option, provide such
insurance and charge the amount thereof to the Borrower. The Borrower
shall furnish the Agent with certificates of insurance and policies
evidencing compliance with the foregoing insurance provision.
8.8. TAXES. The Borrower will, and will cause each of its Subsidiaries to,
duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; PROVIDED that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and PROVIDED FURTHER that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
8.9.1. GENERAL. The Borrower shall permit the Banks, through the
Agent or any of the Banks' other designated representatives, to visit and
inspect any of the properties of the Borrower or any of its Subsidiaries,
to examine the books of account of the Borrower and its Subsidiaries (and
to make copies thereof and extracts therefrom), and to discuss the
affairs, finances and accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, its and their officers, and so long
as no Event of Default has occurred and is continuing, all upon reasonable
notice and at such reasonable times, during normal hours, and intervals as
the Agent or any Bank may reasonably request. The Agent may, at the
Borrower's expense, participate in or observe any physical count of
inventory included in the Collateral.
46
8.9.2. APPRAISALS. No more frequently than once each calendar year,
or more frequently as determined by the Agent if an Event of Default shall
have occurred and be continuing, upon the request of the Agent, the
Borrower will obtain and deliver to the Agent appraisal reports in form
and substance and from appraisers satisfactory to the Agent, stating (a)
the then current fair market, orderly liquidation and forced liquidation
values of all or any portion of the equipment or real estate owned by the
Borrower or any of its Subsidiaries and (b) the then current business
value of each of the Borrower and its Subsidiaries. All such appraisals
shall be conducted and made at the expense of the Borrower.
8.9.3. COMMUNICATIONS WITH ACCOUNTANTS. The Borrower authorizes the
Agent and, if accompanied by the Agent, the Banks to communicate directly
with the Borrower's independent certified public accountants and
authorizes such accountants to disclose to the Agent and the Banks any and
all financial statements and other supporting financial documents and
schedules including copies of any management letter with respect to the
business, financial condition and other affairs of the Borrower or any of
its Subsidiaries; PROVIDED, so long as no Event of Default has occurred
and is continuing, the Borrower shall have the right to elect to attend
any such meeting or conference. At the request of the Agent, the Borrower
shall deliver a letter addressed to such accountants instructing them to
comply with the provisions of this Section 8.9.3.
8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The Borrower
will, and will cause each of its Subsidiaries to, comply with (a) the applicable
laws and regulations wherever its business is conducted, including all
Environmental Laws, (b) the provisions of its charter documents and by-laws, (c)
all agreements and instruments by which it or any of its properties may be
bound, and (d) all applicable decrees, orders, and judgments. If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower or any of its Subsidiaries may fulfill any of its obligations
hereunder or any of the other Loan Documents to which the Borrower or such
Subsidiary is a party, the Borrower will, or (as the case may be) will cause
such Subsidiary to, immediately take or cause to be taken all reasonable steps
within the power of the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
8.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon filing
the same with the Department of Labor or Internal Revenue Service upon request
of the Agent, furnish to the Agent a copy of the most recent actuarial statement
required to be submitted under Section 103(d) of ERISA and Annual Report, Form
5500, with all required attachments, in respect of each Guaranteed Pension Plan
and (b) promptly upon receipt or dispatch, furnish to the Agent any notice,
report or demand sent or received in respect of a Guaranteed Pension Plan under
Sections 302, 4041,
47
4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer
Plan, under Sections 4041A, 4202, 4219, 4242, or 4245 of ERISA.
8.12. USE OF PROCEEDS. The Borrower will use the proceeds of the Term Loan
solely to repurchase a portion of the Borrower's capital stock pursuant to the
terms of the Securities Purchase and Redemption Agreement and the proceeds of
the Revolving Credit Loans solely for working capital and general corporate
purposes.
8.13. FAIR LABOR STANDARDS ACT. The Borrower shall, and shall require each
Subsidiary to, at all times operate its business in compliance with all material
applicable provisions of the Fair Labor Standards Act of 1938, as amended.
8.14. GUARANTORS. The Borrower will, and will cause each Domestic
Subsidiary created, acquired or existing on or after the Closing Date to become
a Guarantor immediately and shall cause such Domestic Subsidiary to execute and
deliver to the Agent for the benefit of the Agent and the Banks (a) a guaranty
in form and substance reasonably acceptable to the Agent (or an Instrument of
Adherence to any guaranty executed after the Closing Date by any other
Subsidiary of the Borrower), and (b) further Security Documents or other
instruments and documents as the Agent may reasonably require in order to grant
to the Agent a first priority perfected security interest in such Subsidiary's
assets, together with legal opinions in form and substance satisfactory to the
Agent and the Banks to be delivered to the Agent and the Banks opining as to the
authorization, validity and enforceability of such guaranty or Instrument of
Adherence and Security Documents and (as to the applicable Security Documents)
the perfection of such security interests.
8.15. ADDITIONAL SUBSIDIARIES. If, after the Closing Date, the Borrowers
or any of their Subsidiaries creates or acquires, either directly or indirectly,
any Subsidiary, it will immediately notify the Agent of such creation or
acquisition, as the case may be, and provide the Agent with an updated SCHEDULE
7.19(A) hereof and take all other actions required by Section 8.14 and Section
9.5.1 hereof.
8.16. INTEREST RATE PROTECTION ARRANGEMENTS. The Borrower will, not later
than ninety (90) days after the Closing Date, purchase an interest rate cap or
swap or effect other interest rate protection arrangements for a minimum period
of two (2) years applicable to not less than fifty percent (50%) of the Loans,
on terms and conditions satisfactory to the Agent and the Banks.
8.17. FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
48
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans:
9.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any of
the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(c) Subordinated Debt;
(d) Indebtedness incurred in connection with the acquisition after
the date hereof of any real or personal property by the Borrower or such
Subsidiary or under any Capitalized Lease, PROVIDED that the aggregate
principal amount of such Indebtedness of the Borrower and its Subsidiaries
shall not exceed the aggregate amount of $100,000 at any one time;
(e) Indebtedness existing on the date hereof and listed and
described on SCHEDULE 9.1 hereto;
(f) Indebtedness of a Guarantor to the Borrower or another
Guarantor and Indebtedness of the Borrower to any Guarantor;
(g) Indebtedness of the Borrower in respect of interest rate
protection arrangements required to be maintained by Section 8.16 or in
respect of currency swap arrangements so long as such arrangements are in
the ordinary course of business and are not for speculative purposes;
(h) Indebtedness of the Borrower in respect of the Borrower's
Convertible Preferred Stock and Redeemable Preferred Stock issued under
the Securities Purchase and Redemption Agreement;
(i) Indebtedness in respect of redemptions or repurchases of the
Borrower's capital stock under the Stock Option Plan and other similar
employee stock option programs approved by the Board of Directors and the
Agent;
(j) unsecured Indebtedness of the Borrower not otherwise permitted
by this Section 9.1 in an aggregate amount outstanding at any time not to
exceed $250,000; and
49
(k) Indebtedness of the Borrower existing as a result of a
refinancing of Indebtedness permitted by this Section 9.1, provided that
the terms of any such refinancing Indebtedness, and any agreement or
instrument relating thereto, are otherwise permitted by the Loan Documents
and further provided that the principal amount of such Indebtedness shall
not be increased above the amount of such Indebtedness outstanding on the
date of such refinancing and the direct (and any contingent) obligors
therefor and any collateral security in respect thereof shall not be
changed (or increased), as a result of or in connection with such
refinancing;
PROVIDED, HOWEVER, notwithstanding the foregoing provisions of this Section 9.1,
all such Indebtedness must in any event qualify at all times as Indebtedness
permitted to be incurred pursuant to Section 4.9 of the Securities Purchase and
Redemption Agreement.
9.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit any
of its Subsidiaries to, (a) create or incur or suffer to be created or incurred
or to exist any lien, encumbrance, mortgage, pledge, charge, restriction or
other security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (b) transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; (e) sell, assign, pledge or otherwise transfer any "receivables" as
defined in clause (g) of the definition of the term "Indebtedness," with or
without recourse; or (f) enter into or permit to exist any arrangement or
agreement, enforceable under applicable law, which directly or indirectly
prohibits the Borrower or any of its Subsidiaries from creating or incurring any
lien, encumbrance, mortgage, pledge, charge, restriction or other security
interest other than in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents and other than customary anti-assignment
provisions in leases and licensing agreements entered into by the Borrower or
such Subsidiary in the ordinary course of its business, PROVIDED that the
Borrower or any of its Subsidiaries may create or incur or suffer to be created
or incurred or to exist:
(i) liens in favor of the Borrower on all or part of the assets
of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
(ii) liens to secure taxes, assessments and other government charges
in respect of obligations not overdue or liens on properties to secure
claims for labor, material or supplies in respect of obligations not
overdue;
50
(iii) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(iv) liens on properties in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder or in respect of which the
Borrower or such Subsidiary shall at the time in good faith be prosecuting
an appeal or proceedings for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(v) liens of carriers, warehousemen, mechanics and materialmen, and
other like liens on properties in existence less than 120 days from the
date of creation thereof in respect of obligations not overdue;
(vi) encumbrances on Real Estate consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Borrower or a Subsidiary of the Borrower
is a party, and other minor liens or encumbrances none of which in the
opinion of the Borrower interferes materially with the use of the property
affected in the ordinary conduct of business of the Borrower and its
Subsidiaries, which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Borrower individually or
of the Borrower and its Subsidiaries on a consolidated basis;
(vii) liens existing on the date hereof and listed on
SCHEDULE 9.2 hereto;
(viii) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof to
secure purchase money Indebtedness of the type and amount permitted by
Section 9.1(d), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired and liens in favor of lessors under
Capitalized Leases on assets subject to Capitalized Leases permitted by
Section 9.1(d) hereof; and liens existing in accordance with the
provisions of Section 9.1(k) securing refinancings of the Indebtedness
provided for therein;
(ix) liens on security deposits with respect to leases of office
space of the Borrower or any Subsidiary and other liens arising under
leases or rental agreements made by the Borrower or any Subsidiary, in
each case in the ordinary course of business consistent with past
practices, which liens cover only the real property so rented;
(ix) liens in favor of the Agent for the benefit of the Banks
and the Agent under the Loan Documents; and
51
(x) UCC-1 financing statements filed solely for notice or
precautionary purposes under operating leases which do not secure
Indebtedness and which are limited to the items of equipment leased by the
Borrower or any Subsidiary pursuant to the lease in questions.
9.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States
of America that mature within one (1) year from the date of purchase by
the Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess of
$1,000,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated
and the ratings for which are not less than "P 1" if rated by Xxxxx'x
Investors Service, Inc., and not less than "A 1" if rated by Standard and
Poor's Rating Group;
(d) Investments by the Borrower in repurchase agreements secured
by any one or more of the foregoing;
(e) Investments existing on the date hereof and listed on
SCHEDULE 9.3 hereto;
(f) Investments with respect to Indebtedness permitted by Section
9.1(f) so long as such entities are Guarantors hereunder and remain
Subsidiaries of the Borrower;
(g) Investments consisting of the Guaranty or Investments by the
Borrower in Guarantors so long as such Guarantor is a Subsidiary of the
Borrower;
(h) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by Section 9.5.2;
(i) Investments in respect of interest rate protection arrangements
entered into by the Borrower in the ordinary course of business consistent
with past practices and which are not for speculative purposes;
(j) Investments consisting of loans and advances by the Borrower to
employees for moving, entertainment, travel or other similar expenses in
the
52
ordinary course of business not to exceed $10,000 in the aggregate at any
time outstanding, and Investments consisting of loans or advances to
officers, directors, employees and consultants to fund the purchase or
exercise price of stock grants or options issued under the Stock Option
Plan or in connection with any other employee benefit plan of the Borrower
which has been approved by the Borrower's Board of Directors and the
Agent; and
(k) so long as no Default or Event of Default has occurred and is
continuing or would exist as a result thereof, Investments by the Borrower
not otherwise included in this Section 9.3 in the aggregate amount not to
exceed $250,000 outstanding at any time;
PROVIDED, HOWEVER, that, with the exception of demand deposits referred to in
Section 9.3(b), such Investments will be considered Investments permitted by
this Section 9.3 only if all actions have been taken to the satisfaction of the
Agent to provide to the Agent, for the benefit of the Banks and the Agent, a
first priority perfected security interest in all of such Investments free of
all encumbrances other than Permitted Liens and PROVIDED, FURTHER,
notwithstanding anything to the contrary contained herein, all Investments made
pursuant to this Section 9.3 must be permitted to be made pursuant to the
Subordinated Debenture.
9.4. RESTRICTED PAYMENTS. Neither the Borrower nor any of its Subsidiaries
will make any Restricted Payments; PROVIDED, HOWEVER, so long as no Event of
Default has occurred or is continuing or would exist as a result thereof, (a)
any Subsidiary of the Borrower shall be permitted to make a Restricted Payment
to the Borrower; (b) the Borrower shall be permitted to make a Restricted
Payment to the extent permitted by Section 4.3.; (c) the Borrower shall be
permitted to make a Restricted Payment to Xxxxxxx Xxxxxxxxx pursuant to the
terms of the Xxxxxxxxx Employment Agreement and (d) the Borrower shall be
permitted to repurchase its capital stock from former employees pursuant to the
Stock Option Plan or otherwise upon the termination of such employees employment
so long as the aggregate amount of all such repurchases does not exceed $100,000
in any fiscal year.
9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
9.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock
acquisition (other than the acquisition of assets in the ordinary course
of business consistent with past practices) except the merger or
consolidation of one or more of the Subsidiaries of the Borrower with and
into the Borrower, or the merger or consolidation of two or more
Subsidiaries of the Borrower.
9.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to or agree to or effect
any disposition of assets, other than (a) the sale of inventory, the
licensing of intellectual property and the disposition of obsolete assets,
in each case in the
53
ordinary course of business consistent with past practices and (b) an
Asset Sale for fair and reasonable value, provided that with respect to
this clause (b) (i) no Default or Event of Default shall have occurred and
be continuing at the time of such sale, and no Default or Event of Default
will exist after giving effect to such Asset Sale; (ii) at least 80% of
the purchase price for such assets is received in cash, and 100% of the
Net Cash Sale Proceeds are applied in the manner required by Section 4.3.3
hereof; (iii) the Borrower or the applicable Subsidiary has delivered any
promissory note or other instrument received by such Borrower or such
Subsidiary in connection with such Asset Sale to the Agent to be held in
pledge for the benefit of itself and the Banks in accordance with the
terms of the Loan Documents; and (iv) the aggregate Net Cash Sale Proceeds
from all such Asset Sales does not exceed $100,000 in any fiscal year.
Notwithstanding anything to the contrary contained in this Section
9.5, (a) the Borrower and its Subsidiaries shall not be permitted to
dispose of any assets or take (or omit to take) any action in connection
with an Asset Sale or other asset disposition or engage in any transaction
which action (or omission) would require or result in any repayment,
repurchase or redemption (or any mandatory offer to repay, repurchase or
redeem) by the Borrower or any of its Subsidiaries of the Subordinated
Debt pursuant to any of the Subordination Documents or would violate the
provisions of the Subordination Documents; and (b) the Borrower shall not
directly or indirectly sell or otherwise dispose of all or substantially
all of its assets.
9.6. SALE AND LEASEBACK. Except for Asset Sales permitted by Section 9.5.2
hereof, the Borrower will not, and will not permit any of its Subsidiaries to,
enter into any arrangement, directly or indirectly, whereby the Borrower or any
Subsidiary of the Borrower shall sell or transfer any property owned by it in
order then or thereafter to lease such property or lease other property that the
Borrower or any Subsidiary of the Borrower intends to use for substantially the
same purpose as the property being sold or transferred.
9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and will
not permit any of its Subsidiaries to, (a) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances, (b) cause or permit to be located on any of the Real Estate any
underground tank or other underground storage receptacle for Hazardous
Substances, (c) generate any Hazardous Substances on any of the Real Estate, (d)
conduct any activity at any Real Estate or use any Real Estate in any manner so
as to cause a release (i.e. releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping) or threatened release of Hazardous Substances on, upon or into the Real
Estate or (e) otherwise conduct any activity at any Real Estate or use any Real
Estate, in each case in any manner that would violate any Environmental Law in
any material respect or bring such Real Estate in violation of any Environmental
Law in any material respect.
54
9.8. SUBORDINATED DEBT. The Borrower will not, and will not permit any of
its Subsidiaries to, amend, supplement or otherwise modify the terms of any of
the Subordinated Documents or prepay, redeem or repurchase (or offer to prepay,
redeem or repurchase) any of the Subordinated Debt.
9.9. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code which could result in a
material liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in Section 302 of ERISA,
whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Borrower or any of its Subsidiaries pursuant to Section 302(f) or Section
4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to Section 307 of ERISA or Section 401(a)(29)
of the Code; or
(e) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities.
9.10. BUSINESS ACTIVITIES. The Borrower will not, and will not permit any
of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in related businesses.
9.11. FISCAL YEAR. The Borrower will not, and will not permit any of its
Subsidiaries to, change the date of the end of its fiscal year from that set
forth in Section 7.4.1.
9.12. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit any of its Subsidiaries to, engage in any transaction with any Affiliate
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any such Affiliate or, to the
knowledge of the Borrowers, any corporation, partnership, trust or other entity
in which any such Affiliate has a
55
substantial interest or is an officer, director, trustee or partner, on terms
more favorable to such Person than would have been obtainable on an arm's-length
basis in the ordinary course of business.
9.13. BANK ACCOUNTS. The Borrower will not, and will not permit any of its
Subsidiaries to, (a) establish any bank accounts other than those accounts
listed on SCHEDULE 7.20, without the Agent's prior written consent or (b)
deposit into any of the payroll accounts listed on SCHEDULE 7.20 any amounts in
excess of amounts necessary to pay current payroll obligations from such
accounts.
9.14. MODIFICATION OF DOCUMENTS AND CHARTER. Neither the Borrower nor any
of its Subsidiaries will consent to or agree to any amendment, supplement or
other modification to the Capitalization Documents without the prior written
consent of the Agent unless such amendment, supplement or modification is
immaterial and ministerial in nature and would not have any material adverse
effect on the Agent's or the Banks' rights under the Loan Documents or the
Borrower's or any of its Subsidiaries' obligations under the Loan Documents.
9.15. UPSTREAM LIMITATIONS. Neither the Borrower nor any of its
Subsidiaries will enter into, or permit any of its Subsidiaries to enter into,
any agreement, contract or arrangement (other than the Credit Agreement and the
other Loan Documents) restricting the ability of any Subsidiary to pay or make
dividends or distributions in cash or kind, to make loans, advances or other
payments of whatsoever nature or to make transfers or distributions of all or
any part of its assets to the Borrower or any Guarantor.
9.16. INCONSISTENT AGREEMENTS. Neither the Borrower nor any of its
Subsidiaries will, nor will they permit their Subsidiaries to, enter into any
agreement containing any provision which would be violated or breached by the
performance by the Borrowers or such Subsidiary of its obligations hereunder or
under any of the Loan Documents.
10. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans:
10.1. LEVERAGE RATIO. The Borrower will not at any time during any period
described in the table set forth below, permit the Leverage Ratio to exceed the
ratio set forth opposite such period in such table:
-------------------------------------------------------------
PERIOD RATIO
-------------------------------------------------------------
Closing Date - September 30, 1998 3.50:1.00
-------------------------------------------------------------
October 1, 1998 - December 31, 1998 3.25:1.00
-------------------------------------------------------------
January 1, 1999 - December 31, 1999 2.50:1.00
-------------------------------------------------------------
any time thereafter 2.00:1.00
-------------------------------------------------------------
56
10.2. DEBT SERVICE COVERAGE RATIO. The Borrower will not permit the Debt
Service Coverage Ratio at the end of any fiscal quarter to be less than
1.25:1.00.
10.3. CURRENT RATIO. The Borrower will not permit the ratio of
Consolidated Current Assets to Consolidated Current Liabilities to be less than
1.00:1.00 at any time.
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
and the Term Loan shall be subject to the satisfaction of the following
conditions precedent on or prior to June 4, 1998:
11.1. LOAN DOCUMENTS ETC.
11.1.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in
full force and effect and shall be in form and substance satisfactory to
each of the Banks. Each Bank shall have received a fully executed copy of
each such document.
11.1.2. SUBORDINATION AND CAPITALIZATION DOCUMENTS. Each of the
Subordination Documents and Capitalization Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each
of the Banks. Each Bank shall have received a fully executed copy of each
such document.
11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall have
received from the Borrower and each of its Subsidiaries a copy, certified by a
duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (a) its charter or other incorporation documents as in effect
on such date of certification, and (b) its by-laws as in effect on such date.
11.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
11.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received from
the Borrower and each of its Subsidiaries an incumbency certificate, dated as of
the Closing Date, signed by a duly authorized officer of the Borrower or such
57
Subsidiary, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to sign, in the name and on behalf of
each of the Borrower of such Subsidiary, each of the Loan Documents and
Subordination Documents to which the Borrower or such Subsidiary is or is to
become a party; (b) in the case of the Borrower, to make Loan Requests and
Conversion Requests and to apply for Letters of Credit; and (c) to give notices
and to take other action on its behalf under the Loan Documents.
11.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
and lien upon the Collateral. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the Agent to protect
and preserve such security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance satisfactory to the
Agent.
11.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Agent shall have
received from each of the Borrower and its Subsidiaries a completed and fully
executed Perfection Certificate and the results of UCC searches with respect to
the Collateral, indicating no liens other than Permitted Liens and otherwise in
form and substance satisfactory to the Agent.
11.7. CERTIFICATES OF INSURANCE. The Agent shall have received a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreements.
11.8. SOLVENCY CERTIFICATE. Each of the Banks shall have received an
officer's certificate of the Borrower dated as of the Closing Date as to the
solvency of the Borrower and its Subsidiaries following the consummation of the
transactions contemplated herein and in form and substance satisfactory to the
Banks.
11.9. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from Xxxxxxx, Procter & Xxxx, LLP and Xxxxxxxx, Xxxxxxx & Xxxxxxx,
counsel to the Borrower and its Subsidiaries.
11.10. PAYMENT OF FEES. The Borrower shall have paid to the Banks or the
Agent, as appropriate, the fees required to be paid pursuant to the Fee Letter.
11.11. PAYOFF LETTER. The Agent shall have received for filing all
termination statements and take such other actions as may be necessary to
discharge all mortgages, deeds of trust and security interests granted by the
Borrower or any of its Subsidiaries in favor of from Xxxxxxx Xxxxx Business
Financial Services Inc..
58
11.12. DISBURSEMENT INSTRUCTIONS. The Agent shall have received
disbursement instructions from the Borrower.
11.13. CONSENTS AND APPROVALS. The Agent shall have received evidence that
all consents and approvals necessary to complete the transactions contemplated
hereby have been obtained.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, including the Revolving
Credit Loan and the Term Loan, whether on or after the Closing Date, shall also
be subject to the satisfaction of the following conditions precedent:
12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
in all material respects at and as of the time of the making of such, with the
same effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and to the
extent that such representations and warranties relate expressly to an earlier
date) and no Default or Event of Default shall have occurred and be continuing.
12.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Loan.
12.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
12.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be reasonably satisfactory in
substance and in form to the Banks and to the Agent and the Agent's Special
Counsel, and the Banks, the Agent and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as the Agent may reasonably request.
59
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans when
the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed
for payment;
(b) the Borrower shall fail to pay any interest on the Loans, the
commitment fee, the Agent's fee, or other sums due hereunder or under any
of the other Loan Documents, when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity
or at any other date fixed for payment and such failure shall continue for
three (3) Business Days;
(c) the Borrower shall fail to comply with any of its covenants
contained in Sections 8.1 - 8.2, 8.4, 8.5.1., 8.7. 8.9.1, 8.12, 8.14,
8.15, 8.16, 9 or 10;
(d) the Borrower or any of its Subsidiaries shall fail to perform
any term, covenant or agreement contained herein or in any of the other
Loan Documents (other than those specified elsewhere in this Section 13.1)
for thirty (30) days after written notice of such failure has been given
to the Borrower by the Agent;
(e) any representation or warranty of the Borrower or any of its
Subsidiaries in this Credit Agreement or any of the other Loan Documents
or in any other document or instrument delivered pursuant to or in
connection with this Credit Agreement shall prove to have been false in
any material respect upon the date when made or deemed to have been made
or repeated and the result thereof has a Material Adverse Effect;
(f) the Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, any obligation for
borrowed money or credit received or in respect of any Capitalized Leases
in an amount in excess of $100,000, or any Subordinated Debt, or fail to
observe or perform any material term, covenant or agreement contained in
any agreement by which it is bound, evidencing or securing borrowed money
or credit received or in respect of any Capitalized Leases, in an amount
in excess of $250,000, or any Subordinated Debt, for such period of time
as would permit (assuming the giving of appropriate notice if required)
the holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof;
(g) the Borrower or any of its Subsidiaries shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall
petition
60
or apply for the appointment of a trustee or other custodian, liquidator
or receiver of the Borrower or any of its Subsidiaries or of any
substantial part of the assets of the Borrower or any of its Subsidiaries
or shall commence any case or other proceeding relating to the Borrower or
any of its Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar
law of any jurisdiction, now or hereafter in effect, or shall take any
action to authorize or in furtherance of any of the foregoing, or if any
such petition or application shall be filed or any such case or other
proceeding shall be commenced against the Borrower or any of its
Subsidiaries and the Borrower or any of its Subsidiaries shall indicate
its approval thereof, consent thereto or acquiescence therein or such
petition or application shall not have been dismissed within forty-five
(45) days following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of
its Subsidiaries bankrupt or insolvent, or approving a petition in any
such case or other proceeding, or a decree or order for relief is entered
in respect of the Borrower or any Subsidiary of the Borrower in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against the Borrower or any of its Subsidiaries that, with other
outstanding final judgments, undischarged, against the Borrower or any of
its Subsidiaries exceeds in the aggregate $250,000;
(j) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt or the
Subordinated Debt shall be (or shall be required at such time to be)
prepaid, redeemed or repurchased in whole or in part; or the Borrower or
any of its Subsidiaries shall be or become required under the
Subordination Documents to prepay, redeem or repurchase (or shall be or
become required thereunder to offer to prepay, redeem or repurchase) all
or any part of the Subordinated Debt;
(k) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or liens
in a substantial portion of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security Documents,
in each case otherwise than in accordance with the terms thereof or with
the express prior written agreement, consent or approval of the Banks, or
any action at law, suit or in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on
behalf of the Borrower or any of its Subsidiaries party thereto or any of
their respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment,
61
order, decree or ruling to the effect that, any one or more of the Loan
Documents is illegal, invalid or unenforceable in accordance with the
terms thereof;
(l) the Borrower or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
aggregate amount exceeding $500,000, or the Borrower or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of ERISA
by a Multiemployer Plan requiring aggregate annual payments exceeding
$500,000, or any of the following occurs with respect to a Guaranteed
Pension Plan: (i) an ERISA Reportable Event, or a failure to make a
required installment or other payment (within the meaning of Section
302(f)(1) of ERISA), provided that the Agent determines in its reasonable
discretion that such event (A) could be expected to result in liability of
the Borrower or any of its Subsidiaries to the PBGC or such Guaranteed
Pension Plan in an aggregate amount exceeding $500,000 and (B) could
constitute grounds for the termination of such Guaranteed Pension Plan by
the PBGC, for the appointment by the appropriate United States District
Court of a trustee to administer such Guaranteed Pension Plan or for the
imposition of a lien in favor of such Guaranteed Pension Plan; or (ii) the
appointment by a United States District Court of a trustee to administer
such Guaranteed Pension Plan; or (iii) the institution by the PBGC of
proceedings to terminate such Guaranteed Pension Plan;
(m) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part of
its business and such order shall continue in effect for more than thirty
(30) days;
(n) the Borrower or any of its Subsidiaries shall be indicted for a
state or federal crime, or any criminal action shall otherwise have been
brought against the Borrower or any of its Subsidiaries, a punishment for
which in any such case could include the forfeiture of any assets of the
Borrower or such Subsidiary having a fair market value in excess of
$250,000;
(0) Summit Partners shall at any time, legally or beneficially own
less than twenty-five percent (25%) of the capital stock of the Borrower,
as adjusted pursuant to any stock split, stock dividend or
recapitalization or reclassification of the capital of the Borrower, or
any other Person or group of Persons shall at any time, legally or
beneficially own more of the capital stock of the Borrower than the Summit
Partners, as adjusted pursuant to any stock split, stock dividend or
recapitalization or reclassification of the capital of the Borrower, or
the Borrower shall at any time, legally or beneficially own less than 100%
of the capital stock of any Guarantor; or
62
(r) any Liquidity Event (as defined in the Subordination
Documents) other than the occurrence of the IPO shall have occurred;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Notes and the other Loan Documents to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrower; PROVIDED that in the event of any Event of Default specified in
Sections 13.1(g) or 13.1(h), all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the Agent or
any Bank.
13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in Section 13.1(g) or Section 13.1(h) shall occur, any unused
portion of the credit hereunder shall forthwith terminate and each of the Banks
shall be relieved of all further obligations to make Loans to the Borrower and
the Agent shall be relieved of all further obligations to issue, extend or renew
Letters of Credit. If any other Event of Default shall have occurred and be
continuing, or if on any Drawdown Date the conditions precedent to the making of
the Loans to be made on such Drawdown Date are not satisfied, the Agent may and,
upon the request of the Majority Banks, shall, by notice to the Borrower,
terminate the unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate immediately
and each of the Banks shall be relieved of all further obligations to make
Loans. No termination of the credit hereunder shall relieve the Borrower or any
of its Subsidiaries of any of the Obligations.
13.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to Section 13.1, each Bank, if
owed any amount with respect to the Loans, may, with the consent of the Majority
Banks but not otherwise, proceed to protect and enforce its rights by suit in
equity, action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Credit Agreement and
the other Loan Documents or any instrument pursuant to which the Obligations to
such Bank are evidenced, including as permitted by applicable law the obtaining
of the EX PARTE appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of such Bank. No remedy herein conferred upon any
Bank or the Agent or the holder of any Note is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.
13.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that, following
the occurrence or during the continuance of any Event of Default, the Agent or
any Bank, as the case may be, receives any monies in connection with the
enforcement
63
of any the Security Documents, or otherwise with respect to the realization upon
any of the Collateral, such monies shall be distributed for application as
follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the Agent under
this Credit Agreement or any of the other Loan Documents or in respect of
the Collateral or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have,
priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Banks may determine; PROVIDED, HOWEVER, that (i)
distributions shall be made (A) PARI PASSU among Obligations with respect
to the Agent's fee payable pursuant to Section 5.2 and all other
Obligations and (B) with respect to each type of Obligation owing to the
Banks, such as interest, principal, fees and expenses, among the Banks PRO
RATA, and (ii) the Agent may in its discretion make proper allowance to
take into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid
pursuant to Section 9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower or
to such other Persons as are entitled thereto.
14. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower and any securities or other property of the Borrower
in the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by all such Notes held by such
Bank, and (b) if such Bank shall receive from the Borrower, whether by voluntary
payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by
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such Bank by proceedings against the Borrower at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of the Note
or Notes held by such Bank any amount in excess of its ratable portion of the
payments received by all of the Banks with respect to the Notes held by all of
the Banks, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, PRO TANTO
assignment of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Notes held by it, its proportionate payment as
contemplated by this Credit Agreement; PROVIDED that if all or any part of such
excess payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
15. THE AGENT.
15.1. AUTHORIZATION.
(a) The Agent is authorized to take such action on behalf of each of
the Banks and to exercise all such powers as are hereunder and under any
of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto,
PROVIDED that no duties or responsibilities not expressly assumed herein
or therein shall be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that
of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder
and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the
Banks and the Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation
of the Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or
otherwise, relating to the attachment, perfection, priority or enforcement
of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.
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15.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and execute
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Credit Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
15.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
15.4. NO REPRESENTATIONS.
15.4.1. GENERAL. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Notes, the Letters of Credit, any of the other Loan Documents or any
instrument at any time constituting, or intended to constitute, collateral
security for the Notes, or for the value of any such collateral security
or for the validity, enforceability or collectability of any such amounts
owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan
Documents or in any certificate or instrument hereafter furnished to it by
or on behalf of the Borrower or any of its Subsidiaries, or be bound to
ascertain or inquire as to the performance or observance of any of the
terms, conditions, covenants or agreements herein or in any instrument at
any time constituting, or intended to constitute, collateral security for
the Notes or to inspect any of the properties, books or records of the
Borrower or any of its Subsidiaries. The Agent shall not be bound to
ascertain whether any notice, consent, waiver or request delivered to it
by the Borrower or any holder of any of the Notes shall have been duly
authorized or is true, accurate and complete. The Agent has not made nor
does it now make any representations or warranties, express or implied,
nor does it assume any liability to the Banks, with respect to the credit
worthiness or financial conditions of the Borrower or any of its
Subsidiaries. Each Bank acknowledges that it has, independently and
without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own
credit analysis and decision to enter into this Credit Agreement.
15.4.2. CLOSING DOCUMENTATION, ETC. For purposes of determining
compliance with the conditions set forth in Section 11, each Bank that has
executed this Credit Agreement shall be deemed to have consented to,
approved or
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accepted, or to be satisfied with, each document and matter either sent,
or made available, by the Agent to such Bank for consent, approval,
acceptance or satisfaction, or required thereunder to be to be consent to
or approved by or acceptable or satisfactory to such Bank, unless an
officer of the Agent active upon the Borrower's account shall have
received notice from such Bank prior to the Closing Date specifying such
Bank's objection thereto and such objection shall not have been withdrawn
by notice to the Agent to such effect on or prior to the Closing Date.
15.5. PAYMENTS.
15.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the Agent
hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's PRO RATA share of payments received by
the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
15.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder,
under the Notes or under any of the other Loan Documents might involve it
in liability, it may refrain from making distribution until its right to
make distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any
amount received and distributed by the Agent is to be repaid, each Person
to whom any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be repaid
or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
15.5.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails (a) to make available to the Agent its PRO RATA share of
any Loan or (b) to comply with the provisions of Section 14 with respect
to making dispositions and arrangements with the other Banks, where such
Bank's share of any payment received, whether by setoff or otherwise, is
in excess of its PRO RATA share of such payments due and payable to all of
the Banks, in each case as, when and to the full extent required by the
provisions of this Credit Agreement, shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent Bank until such time
as such delinquency is satisfied. A Delinquent Bank shall be deemed to
have assigned any and all payments due to it from the Borrower, whether on
account of outstanding Loans, interest, fees or otherwise, to the
remaining nondelinquent Banks for application to, and reduction of, their
respective PRO RATA shares of all outstanding Loans. The Delinquent Bank
hereby authorizes the Agent to
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distribute such payments to the nondelinquent Banks in proportion to their
respective PRO RATA shares of all outstanding Loans. A Delinquent Bank
shall be deemed to have satisfied in full a delinquency when and if, as a
result of application of the assigned payments to all outstanding Loans of
the nondelinquent Banks, the Banks' respective PRO RATA shares of all
outstanding Loans have returned to those in effect immediately prior to
such delinquency and without giving effect to the nonpayment causing such
delinquency.
15.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any Note
as the absolute owner or purchaser thereof for all purposes hereof until it
shall have been furnished in writing with a different name by such payee or by a
subsequent holder, assignee or transferee.
15.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower as required by Section 16), and liabilities of
every nature and character arising out of or related to this Credit Agreement,
the Notes, or any of the other Loan Documents or the transactions contemplated
or evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence.
15.8. AGENT AS BANK. In its individual capacity, BKB shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes, as
it would have were it not also the Agent.
15.9. RESIGNATION. The Agent may resign at any time by giving sixty (60)
days prior written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
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15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this Section 15.10 it shall promptly notify the
other Banks of the existence of such Default or Event of Default.
15.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, PROVIDED that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
16. EXPENSES AND INDEMNIFICATION.
16.1. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, each closing hereunder, any amendments,
modifications, approvals, consents or waivers hereto or hereunder, or the
cancellation of any Loan Document upon payment in full in cash of all of the
Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation, (d) the fees, expenses and disbursements of the Agent or any
of its affiliates incurred by the Agent or such affiliate in connection with the
preparation, administration or interpretation of the Loan Documents and other
instruments mentioned herein, (e) any fees, costs, expenses and bank charges,
including bank charges for returned checks, incurred by the Agent in
establishing, maintaining or handling agency accounts, lock box accounts and
other accounts for the collection of any of the Collateral; (f) all reasonable
out-of-pocket expenses (including without limitation reasonable attorneys' fees
and costs, which attorneys may be employees
69
of any Bank or the Agent, and reasonable consulting, accounting, appraisal,
investment banking and similar professional fees and charges) incurred by any
Bank or the Agent in connection with (i) the enforcement of or preservation of
rights under any of the Loan Documents against the Borrower or any of its
Subsidiaries or the administration thereof after the occurrence of a Default or
Event of Default and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to any Bank's or the Agent's
relationship with the Borrower or any of its Subsidiaries and (g) all reasonable
fees, expenses and disbursements of any Bank or the Agent incurred in connection
with UCC searches, UCC filings or mortgage recordings.
16.2. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
the Agent, its affiliates and the Banks from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (a) any actual
or proposed use by the Borrower or any of its Subsidiaries of the proceeds of
any of the Loans or Letters of Credit, (b) the reversal or withdrawal of any
provisional credits granted by the Agent upon the transfer of funds from lock
box, bank agency or concentration accounts or in connection with the provisional
honoring of checks or other items, (c) any actual or alleged infringement of any
patent, copyright, trademark, service xxxx or similar right of the Borrower or
any of its Subsidiaries comprised in the Collateral, (d) the Borrower or any of
its Subsidiaries entering into or performing this Credit Agreement or any of the
other Loan Documents or (e) with respect to the Borrower and its Subsidiaries
and their respective properties and assets, the violation of any Environmental
Law, the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding, except to the extent that any of
the foregoing are caused by the gross negligence or willful misconduct of the
otherwise indemnified party. In litigation, or the preparation therefor, the
Banks and the Agent and its affiliates shall be entitled to select their own
counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. If, and to the extent
that the obligations of the Borrower under this Section 16.2 are unenforceable
for any reason, the Borrower hereby agrees to make the maximum contribution to
the payment in satisfaction of such obligations which is permissible under
applicable law.
16.3. SURVIVAL. The covenants contained in this Section 16 shall survive
payment or satisfaction in full of all other Obligations.
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17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
17.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The Borrower
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Subsidiaries, in connection with this Credit Agreement or otherwise, by a
Section 20 Subsidiary. The Borrower, for itself and each of its Subsidiaries,
hereby authorizes (a) such Section 20 Subsidiary to share with the Agent and
each Bank any information delivered to such Section 20 Subsidiary by the
Borrower or any of its Subsidiaries, and (b) the Agent and each Bank to share
with such Section 20 Subsidiary any information delivered to the Agent or such
Bank by the Borrower or any of its Subsidiaries pursuant to this Credit
Agreement, or in connection with the decision of such Bank to enter into this
Credit Agreement; it being understood, in each case, that any such Section 20
Subsidiary receiving such information shall be bound by the confidentiality
provisions of this Credit Agreement. Such authorization shall survive the
payment and satisfaction in full of all of Obligations.
17.2. CONFIDENTIALITY. Each of the Banks and the Agent agrees, on behalf
of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Credit Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
PROVIDED that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this Section 17, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel for any of the Banks or the
Agent, (d) to bank examiners or any other regulatory authority having
jurisdiction over any Bank or the Agent, or to auditors or accountants, (e) to
the Agent, any Bank or any Section 20 Subsidiary, (f) in connection with any
litigation to which any one or more of the Banks, the Agent or any Section 20
Subsidiary is a party, or in connection with the enforcement of rights or
remedies hereunder or under any other Loan Document, (g) to a Subsidiary or
affiliate of such Bank as provided in Section 17.1 or (h) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant agrees to be bound by the provisions of Section 19.6.
17.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable law
or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
17.4. OTHER. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Section 20 Subsidiary by
the Borrower or any of its Subsidiaries. The obligations of each Bank under this
Section 17
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shall supersede and replace the obligations of such Bank under any
confidentiality letter in respect of this financing signed and delivered by such
Bank to the Borrower prior to the date hereof and shall be binding upon any
assignee of, or purchaser of any participation in, any interest in any of the
Loans from any Bank.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents shall be deemed to have been
relied upon by the Banks and the Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Banks of any of the Loans and the issuance, extension or renewal of any Letters
of Credit, as herein contemplated, and shall continue in full force and effect
so long as any amount due under this Credit Agreement or the Notes or any of the
other Loan Documents remains outstanding or any Bank has any obligation to make
any Loans, and for such further time as may be otherwise expressly specified in
this Credit Agreement. All statements contained in any certificate or other
paper delivered to any Bank or the Agent at any time by or on behalf of the
Borrower or any of its Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Borrower or such Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein, each
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it); PROVIDED that (a) each
of the Agent and, unless a Default or Event of Default shall have occurred and
be continuing, the Borrower shall have given its prior written consent to such
assignment, which consent, in the case of the Borrower, will not be unreasonably
withheld, (b) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and obligations under this Credit
Agreement, (c) each assignment shall be in an amount that is a whole multiple of
$2,500,000 (or such smaller amount if representing the entire Commitment being
assigned) and (d) the parties to such assignment shall execute and deliver to
the Agent, for recording in the Register (as hereinafter defined), an Assignment
and Acceptance, substantially in the form of EXHIBIT E hereto (an "Assignment
and Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (ii) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in Section 20.3,
be released from its obligations under this Credit Agreement.
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19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; Covenants. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection
with this Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or the attachment, perfection or priority of any
security interest or mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower and its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance or
observance by the Borrower and its Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations of
any of their obligations under this Credit Agreement or any of the other
Loan Documents or any other instrument or document furnished pursuant
hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in Section 7.4 and Section 8.4 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this Credit
Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Credit Agreement and the other Loan Documents as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto;
73
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Bank; and
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
19.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to the
Banks from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and from time to
time upon reasonable prior notice. Upon each such recordation, the assigning
Bank agrees to pay to the Agent a registration fee in the sum of $3,500.
19.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance executed
by the parties to such assignment, together with each Note subject to such
assignment, the Agent shall (a) record the information contained therein in the
Register, and (b) give prompt notice thereof to the Borrower and the Banks
(other than the assigning Bank). Within five (5) Business Days after receipt of
such notice, the Borrower, at its own expense, shall execute and deliver to the
Agent, in exchange for each surrendered Note, a new Note to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. The surrendered Notes shall be cancelled and returned to
the Borrower.
19.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$1,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees to which such
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participant is entitled or extend any regularly scheduled payment date for
principal or interest.
19.6. DISCLOSURE. The Borrower agrees that in addition to disclosures made
in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
PROVIDED that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to Section 13.1 or Section
13.2, and the determination of the Majority Banks shall for all purposes of this
Credit Agreement and the other Loan Documents be made without regard to such
assignee Bank's interest in any of the Loans. If any Bank sells a participating
interest in any of the Loans to a participant, and such participant is the
Borrower or an Affiliate of the Borrower, then such transferor Bank shall
promptly notify the Agent of the sale of such participation. A transferor Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to Section 13.1 or Section
13.2 to the extent that such participation is beneficially owned by the Borrower
or any Affiliate of the Borrower, and the determination of the Majority Banks
shall for all purposes of this Credit Agreement and the other Loan Documents be
made without regard to the interest of such transferor Bank in the Loans to the
extent of such participation.
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall retain
its rights to be indemnified pursuant to Section 16 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. If any Reference Bank
transfers all of its interest, rights and obligations under this Credit
Agreement, the Agent shall, in consultation with the Borrower and with the
consent of the Borrower and the Majority Banks, appoint another Bank to act as a
Reference Bank hereunder. Anything contained in this Section 19 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion
75
of its interest and rights under this Credit Agreement (including all or any
portion of its Notes) to any of the twelve Federal Reserve Banks organized under
Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or
the enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
19.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes shall be in writing and shall be delivered in
hand, mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by telegraph, telecopy, facsimile or
telex and confirmed by delivery via courier or postal service, addressed as
follows:
(a) if to the Borrower, at Stride & Associates, Inc, 000 Xxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Chief
Executive Officer or at such other address for notice as the Borrower
shall last have furnished in writing to the Person giving the notice, with
a copy of all notices to Mr. Xxxxxxx Xxxxx, Stride & Associates, Inc., 00
Xxxx 00xx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 and to Xxxxxxxx,
Xxxxxxx & Xxxxxxx, 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
Attention: Xxxxx Xxxxxx, Esq., and Summit Partners, 000 Xxxxxxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx;
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, Xxxx Xxxxxxxxxx
Division, Xxxxxx, Xxxxxxxxxxxxx 00000, XXX, Attention: Xxxx X. Xxxxxxx,
Vice President, or such other address for notice as the Agent shall
last have furnished in writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on SCHEDULE 1
hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
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21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN Section 20. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
Section 26.
25. WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect to any
action or claim arising out of any dispute in connection with this Credit
Agreement, the Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which rights and
obligations. Except as
77
prohibited by law, the Borrower hereby waives any right it may have to claim or
recover in any litigation referred to in the preceding sentence any special,
exemplary, punitive or consequential damages or any damages other than, or in
addition to, actual damages. The Borrower (a) certifies that no representative,
agent or attorney of any Bank or the Agent has represented, expressly or
otherwise, that such Bank or the Agent would not, in the event of litigation,
seek to enforce the foregoing waivers and (b) acknowledges that the Agent and
the Banks have been induced to enter into this Credit Agreement, the other Loan
Documents to which it is a party by, among other things, the waivers and
certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement to
be given by the Banks may be given, and any term of this Credit Agreement, the
other Loan Documents or any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Borrower and
the written consent of the Majority Banks. Notwithstanding the foregoing, the
rate of interest on the Notes (other than interest accruing pursuant to Section
5.11.2 following the effective date of any waiver by the Majority Banks of the
Default or Event of Default relating thereto), the amount of the Commitments of
the Banks, and the amount of commitment fee hereunder may not be changed without
the written consent of the Borrower and the written consent of each Bank
affected thereby; the Revolving Credit Loan Maturity Date and the Term Loan
Maturity Date may not be postponed without the written consent of each Bank
affected thereby; this Section 26 and the definition of Majority Banks may not
be amended, without the written consent of all of the Banks; and the amount of
the Agent's Fee payable for the Agent's account and Section 15 may not be
amended without the written consent of the Agent. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Agent or
any Bank in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in similar or other
circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
STRIDE & ASSOCIATES, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
BANKBOSTON, N.A., individually and as
Agent
By: /s/ Xxxx X. Xxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxx
Title: Vice President
