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REVOLVING CREDIT AGREEMENT (UNGUARANTEED)
Dated as of January 8, 1999
among
APPNET SYSTEMS, INC.
BANKBOSTON, N.A. and the other lending institutions
set forth on Schedule 1 hereto,
BANKBOSTON, N.A., as Agent
and
ANTARES CAPITAL CORPORATION, as Co-Agent
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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.................................................19
2.3. Reduction of Total Commitment..................................19
2.4. The Revolving Credit Notes.....................................20
2.5. Interest on Revolving Credit Loans.............................20
2.6. Requests for Revolving Credit Loans............................20
2.7. Conversion Options.............................................21
2.7.1. Conversion to Different Type of Revolving Credit
Loan...............................................21
2.7.2. Continuation of Type of Revolving Credit Loan.........21
2.7.3. LIBOR Rate Loans......................................21
2.8. Funds for Revolving Credit Loans...............................22
2.8.1. Funding Procedures....................................22
2.8.2. Advances by Agent.....................................22
3. REPAYMENT OF THE REVOLVING CREDIT LOANS..................................22
3.1. Maturity.......................................................22
3.2. Mandatory Repayments of Revolving Credit Loans.................23
3.3. Optional Repayments of Revolving Credit Loans..................23
4. LETTERS OF CREDIT........................................................23
4.1. Letter of Credit Commitments...................................23
4.1.1. Commitment to Issue Letters of Credit.................23
4.1.2. Letter of Credit Applications.........................24
4.1.3. Terms of Letters of Credit............................24
4.1.4. Reimbursement Obligations of Banks....................24
4.1.5. Participations of Banks...............................25
4.2. Reimbursement Obligation of the Borrower.......................25
4.3. Letter of Credit Payments......................................25
4.4. Obligations Absolute...........................................26
4.5. Reliance by Issuer.............................................26
4.6. Letter of Credit Fee...........................................27
5. CERTAIN GENERAL PROVISIONS...............................................27
5.1. Closing Fee; Agent's Fee.......................................27
5.2. Funds for Payments.............................................27
5.2.1. Payments to Agent.....................................27
5.2.2. No Offset, etc........................................28
5.3. Computations...................................................28
5.4. Inability to Determine LIBOR Rate..............................28
5.5. Illegality.....................................................29
5.6. Additional Costs, etc..........................................29
5.7. Capital Adequacy...............................................30
5.8. Certificate....................................................31
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5.9. Indemnity......................................................31
5.10. Interest After Default.........................................31
5.10.1. Overdue Amounts......................................31
5.10.2. Amounts Not Overdue..................................31
6. SECURITY AND GUARANTIES..................................................32
6.1. Security of Borrower...........................................32
6.2. Guaranties and Security of Subsidiaries........................32
7. REPRESENTATIONS AND WARRANTIES...........................................32
7.1. Corporate Authority............................................32
7.1.1. Incorporation; Good Standing..........................32
7.1.2. Authorization.........................................32
7.1.3. Enforceability........................................32
7.2. Governmental Approvals.........................................33
7.3. Title to Properties; Leases....................................33
7.4. Financial Statements and Projections...........................33
7.4.1. Fiscal Year...........................................33
7.4.2. Financial Statements..................................33
7.4.3. Projections...........................................33
7.5. No Material Changes, etc.; Solvency............................34
7.5.1. No Changes............................................34
7.5.2. Solvency..............................................34
7.6. Franchises, Patents, Copyrights, etc...........................34
7.7. Litigation.....................................................34
7.8. No Materially Adverse Contracts, etc...........................35
7.9. Compliance With Other Instruments, Laws, etc...................35
7.10. Tax Status.....................................................35
7.11. No Event of Default............................................35
7.12. Holding Company and Investment Company Acts....................35
7.13. Absence of Financing Statements, etc...........................35
7.14. Perfection of Security Interest................................36
7.15. Certain Transactions...........................................36
7.16. Employee Benefit Plans.........................................36
7.16.1. In General...........................................36
7.16.2. Terminability of Welfare Plans.......................36
7.16.3. Guaranteed Pension Plans.............................37
7.16.4. Multiemployer Plans..................................37
7.17. Use of Proceeds................................................37
7.17.1. General..............................................37
7.17.2. Regulations U and X..................................37
7.17.3. Ineligible Securities................................38
7.18. Environmental Compliance.......................................38
7.19. Subsidiaries, etc..............................................39
7.20. Bank Accounts..................................................39
7.21. Year 2000 Problem..............................................40
7.22. Disclosure.....................................................40
7.23. Chief Executive Offices........................................40
7.24. Insurance......................................................40
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8. AFFIRMATIVE COVENANTS OF THE BORROWER....................................40
8.1. Punctual Payment...............................................40
8.2. Maintenance of Office..........................................40
8.3. Records and Accounts...........................................41
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 Claims Against Collateral.............43
8.5.4. Notice of Litigation and Judgments....................43
8.6. Corporate Existence; Maintenance of Properties.................43
8.7. Insurance......................................................44
8.8. Taxes..........................................................44
8.9. Inspection of Properties and Books, etc........................44
8.9.1. General...............................................44
8.9.2. Collateral Audit......................................44
8.9.3. Communication with Accountants........................45
8.10. Compliance with Laws, Contracts, Licenses, and Permits.........45
8.11. Employee Benefit Plans.........................................45
8.12. Use of Proceeds................................................45
8.13. Bank Accounts..................................................45
8.14. New Guarantors.................................................46
8.15. Landlord Consents..............................................46
8.16. Bank Agency Agreements.........................................46
8.17. Further Assurances.............................................46
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER...............................46
9.1. Restrictions on Indebtedness...................................47
9.2. Restrictions on Liens..........................................47
9.3. Restrictions on Investments....................................49
9.4. Restricted Payments; Distributions.............................50
9.5. Merger, Consolidation..........................................50
9.5.1. Mergers and Acquisitions..............................50
9.5.2. Disposition of Assets.................................51
9.6. Sale and Leaseback.............................................51
9.7. Compliance with Environmental Laws.............................51
9.8. Fiscal Year....................................................51
9.9. Employee Benefit Plans.........................................52
9.10. Business Activities............................................52
9.11. Transactions with Affiliates...................................52
9.12. Bank Accounts..................................................52
9.13. Change in Terms of Capital Stock...............................53
9.14. Upstream Limitations...........................................53
9.15. Inconsistent Agreements........................................53
9.16. Charter Amendments.............................................53
9.17. Amendments to Employment Agreements............................53
9.18. Seller Subordinated Debt.......................................53
10. FINANCIAL COVENANTS OF THE BORROWER.....................................54
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10.1. Leverage Ratio.................................................54
10.2. Minimum EBITDA.................................................54
10.3. Consolidated Operating Cash Flow to Total Debt Service.........54
10.4. Consolidated Operating Cash Flow to Senior Debt Service........54
10.5. Quick Ratio....................................................55
10.6. No Quarterly Net Loss..........................................55
10.7. Capital Expenditures...........................................55
11. CLOSING CONDITIONS......................................................55
11.1. Loan Documents etc.............................................55
11.2. Certified Copies of Charter Documents..........................55
11.3. Corporate Action...............................................55
11.4. Incumbency Certificate.........................................55
11.5. Validity of Liens..............................................56
11.6. Perfection Certificates and UCC Search Results.................56
11.7. Certificates of Insurance......................................56
11.8. Statement of Financial Position................................56
11.9. Opinions of Counsel............................................56
11.10. Payment of Fees................................................56
11.11. Payoff Letters.................................................56
11.12. Disbursement Instructions......................................56
11.13. Completion of Successful Financial Inquiry and Due Diligence...57
11.14. Consents and Approvals.........................................57
11.15. Negative Pledge Letters........................................57
12. CONDITIONS TO ALL BORROWINGS............................................57
12.1. Representations True; No Event of Default......................57
12.2. No Legal Impediment............................................57
12.3. Governmental Regulation........................................57
12.4. Proceedings and Documents......................................58
12.5. Pro Forma Compliance...........................................58
12.6. Guaranteed Credit Agreement Outstandings.......................58
13. EVENTS OF DEFAULT; ACCELERATION; ETC....................................58
13.1. Events of Default and Acceleration.............................58
13.2. Termination of Commitments.....................................61
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...................................................64
15.4. No Representations.............................................65
15.4.1. General..............................................65
15.4.2. Closing Documentation, etc...........................65
15.5. Payments.......................................................65
15.5.1. Payments to Agent....................................65
15.5.2. Distribution by Agent................................66
15.5.3. Delinquent Banks.....................................66
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15.6. Holders of Notes...............................................66
15.7. Indemnity......................................................66
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................................................68
16.3. Survival.......................................................69
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION...........................69
17.1. Sharing of Information with Section 20 Subsidiary..............69
17.2. Confidentiality................................................69
17.3. Prior Notification.............................................70
17.4. Other..........................................................70
18. SURVIVAL OF COVENANTS, ETC..............................................70
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.......................................................72
19.4. New Revolving Credit 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
EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Loan Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
SCHEDULES
Schedule 1 Banks
Schedule 7.3 Title to Properties; Leases
Schedule 7.7 Litigation
Schedule 7.15 Certain Transactions
Schedule 7.19 Subsidiaries, etc.
Schedule 7.20 Bank Accounts
Schedule 9.1 Restrictions on Indebtedness
Schedule 9.2 Restrictions on Liens
Schedule 9.3 Restrictions on Investments
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of January 8, 1999, by and
among APPNET SYSTEMS, INC. (the "Borrower"), a Delaware corporation having its
principal place of business at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxxx,
Xxxxxxxx 00000, and BANKBOSTON, N.A., a national banking association and the
other lending institutions listed on Schedule 1, BANKBOSTON, N.A. as agent for
itself and such other lending institutions and ANTARES CAPITAL CORPORATION as
co-agent (the "Co-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 ss.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 ss.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.
Agency Account Agreement. See ss.8.16.
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
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
fiscal period
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ending on the fiscal quarter ended immediately preceding the applicable Rate
Adjustment Period.
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Tier Leverage Ratio Base Rate Loans LIBOR Rate Loans
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1 Less than 1.50:1.00 0.25% 2.25%
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2 Greater than or equal 0.75% 2.75%
to 1.50:1.00 but less
than or equal to
2.00:1.00
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3 Greater than 2.00:1.00 1.25% 3.25%
but less than or equal
to 2.25:1.00
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4 Greater than 2.25:1.00 1.50% 3.50%
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Notwithstanding the foregoing, (a) for Revolving Credit Loans outstanding
during the period commencing on the Closing Date through the date immediately
preceding the first Adjustment Date to occur after the fiscal quarter ending
June 30, 1999, the Applicable Margin will be as set forth in the Closing Date
Compliance Certificate, but in no event lower than Tier 3 above, and (b) if the
Borrower fails to deliver any Compliance Certificate pursuant to ss.8.4(d)
hereof then, for the period commencing on the 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.
Assignment and Acceptance. See ss.19.1.
Balance Sheet Date. June 30, 1998.
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 ss.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 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 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.
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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 referred to in clause (f) of the definition of the term "Indebtedness" to
the extent that such assets would have been Capital Assets had the synthetic
lease been treated for accounting purposes as a Capitalized Lease.
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 ss.7.18(a).
Closing Date. The first date on which the conditions set forth in ss.11
have been satisfied and any Revolving Credit Loans are to be made or any Letter
of Credit is to be issued hereunder.
Co-Agent. As defined in the preamble hereto.
Code. The Internal Revenue Code of 1986.
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 Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may be reduced from time to
time; or if such commitment is terminated pursuant to the provisions hereof,
zero.
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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 ss.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 Liabilities. All liabilities 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; provided, however,
the outstanding Revolving Credit Loans, the outstanding "Guaranteed Revolving
Credit Loan" (as such term is defined in the Guaranteed Credit Agreement) and
the outstanding amount of all Seller Subordinated Debt shall not be included as
a Consolidated Current Liability.
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 or expense provided, however, for purposes of
calculating compliance with the financial covenants set forth in ss.10 hereof,
Consolidated Net Income shall not include (a) any non-cash writedowns of (i)
goodwill, (ii) purchased research and development and/or (iii) intangible assets
arising from the consummation of a Permitted Acquisition and the Borrower's
allocation of gross intangibles to a variety of intangible assets such as
contracts, employee base, copyrights, trademarks and other intellectual
property; and/or (b) compensation expenses or additional goodwill amortization
relating to the granting by the Borrower of stock options and restricted stock
or arising out of earn-out arrangements in connection with Permitted
Acquisitions which would otherwise be considered a compensation charge in
accordance with generally accepted accounting principles.
Consolidated Operating Cash Flow. For any period, an amount equal to (a)
EBITDA for such period, plus (b) to the extent deducted from EBITDA, expenses
incurred by Persons which are acquired in a Permitted Acquisition and which the
Majority Banks reasonably determine are likely to be eliminated in connection
with such Person's consolidation with the Borrower, less (c) the sum of (i) cash
payments for all taxes (excluding any taxes included in the calculation of
EBITDA) paid during such period, plus (ii) to the extent not already deducted in
the determination of EBITDA, Capital Expenditures made during such period to the
extent permitted by ss.10, other than Capital Expenditures which the Majority
Banks reasonably determine are made for nonrecurring one-time infrastructure
purchases or leases by the Borrower, plus (iii) the portion of the costs of
software development required to be capitalized pursuant to FASB Statement No.
86.
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Consolidated Quick Assets. All cash and Accounts Receivables (including,
without duplication, the unbilled portion of Accounts Receivable for services
rendered in the ordinary course of business) 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
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 Accounts Receivable, only if payable and outstanding
not more than ninety (90) days after the date of the invoices for services
rendered 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 pertaining thereto determined to be sufficient in accordance with
generally accepted accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate amount
of interest required to be paid or accrued (excluding accrued interest the
payment of which is deferred beyond one year from the date such amount is being
determined) 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 referred to in clause
(f) of the definition of the term "Indebtedness," and including commitment fees,
agency fees, facility fees, balance deficiency fees and similar fees or expenses
in connection with the borrowing of money, provided, however, when calculating
Consolidated Total Interest Expense for any period in which a Permitted
Acquisition has occurred, the calculation of Consolidated Total Interest Expense
shall be made on a Pro Forma Basis.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in accordance
with ss.2.7.
Credit Agreement. This Revolving Credit Agreement, including the Schedules
and Exhibits hereto.
Davidson. Collectively, Xxxxxx X. Xxxxxxxx and/or Davidson Capital Group.
Default. See ss.13.
Delinquent Bank. See ss.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, provided, however, that the retirements or
issuances of capital stock in connection with the conversion of the
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Borrower's preferred stock into common stock shall not constitute
"Distributions" hereunder.
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.
Drawdown Date. The date on which any Revolving Credit Loan is made or is
to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with ss.2.7.
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) income tax expense for such period; (b) Consolidated Total
Interest Expense paid or accrued (excluding accrued interest the payment of
which is deferred beyond one year from the date such amount is being determined)
during such period; (c) depreciation and amortization for such period; and (d)
the amount of any earn-out or noncompete for such period to the extent such
amount was capitalized and treated as debt (including without limitation any
earn-out such as that which was part of the consideration in the acquisition of
New Media Publishing, Inc., which earn-out was accounted for as compensation and
noncompete and capitalized as an intangible asset and amortized), and minus, to
the extent added in computing Consolidated Net Income and without duplication,
all noncash gains (including income tax benefits) for such period and minus the
aggregate amount of all Capital Expenditures made in the last twelve consecutive
calendar months from the date of determination, other than Capital Expenditures
which the Majority Banks reasonably determine are made for nonrecurring one-time
infrastructure purchases or leases by the Borrower and minus (i) 25% of the
aggregate value of Accounts Receivable, net of reserves, which are outstanding
for more than ninety (90) days past the invoice date thereof (the "Past 90 Days
AR") and (ii) to the extent the aggregate amount of the Past 90 Days AR is in
excess of $500,000, an additional 25% of the aggregate value of Past 90 Days AR
which exceed $500,000, 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 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
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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, an
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
ss.3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See ss.7.18(a).
EPA. See ss.7.18(b).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.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 ss.13.
Fairfax. Collectively, Fairfax Partners, Fairfax Management Company II,
L.L.C. and/or Fairfax Consulting Company.
Fee Letters. Collectively, (a) the fee letter dated or to be dated on or
prior to the Closing Date between the Borrower and the Agent, in form and
substance satisfactory to the Agent and (b) the fee letter dated or to be dated
on or prior to the Closing Date between the Borrower and the Co-Agent, in form
and substance satisfactory to the Co-Agent.
generally accepted accounting principles. (a) When used in ss.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 quarter ended on the Balance Sheet Date, and (ii) to the
extent consistent with such
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principles, the accounting practice of the Borrower reflected in its financial
statements for the quarter 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. No "Accounting Changes" (as hereinafter defined) shall effect
financial covenants, standards or terms in this Credit Agreement; provided, that
the Borrower shall prepare footnotes to each Compliance Certificate and the
financial statements required to be delivered hereunder that show the
differences between the financial statements delivered hereunder (which reflect
such Accounting Changes) and the basis for calculating financial covenant
compliance and the Leverage Ratio set forth in computing the Applicable Margin
(in each case without reflecting such Accounting Changes). Accounting Changes
shall mean (a) changes in accounting principles required by generally accepted
accounting principles and implemented by the Borrower; (b) changes in accounting
principles recommended by the Borrower's certified public accountants and
implemented by the Borrower; and (c) changes in carrying value of the Borrower's
or any of its Subsidiaries' assets, liabilities or equity accounts resulting
from any adjustments that were applicable to, but not included in, any pro forma
calculations delivered to the Agent on or prior to the Closing Date. All such
adjustments resulting from expenditures made subsequent to the Closing Date
shall be treated as expenses in the period the expenditures are made.
GTCR. GTCR Fund VI, L.P., a Delaware limited partnership.
Guaranteed Credit Agreement. That certain Revolving Credit Agreement dated
as of the date hereof by and among the Borrower, BankBoston, N.A. and the other
lenders party thereto (collectively, the "Guaranteed Banks"), BankBoston, N.A.,
as agent for the Guaranteed Banks (the "Guaranteed Agent") and Antares Capital
Corporation as co-agent for the Guaranteed Banks.
Guaranteed Credit Agreement Outstandings. As of any date of determination,
the sum of the outstanding amount of all "Guaranteed Revolving Credit Loans" (as
such term is defined in the Guaranteed Credit Agreement) plus the "Maximum
Drawing Amount" and all "Unpaid Reimbursement Obligations" (as each such term is
defined in the Guaranteed Credit Agreement) plus any and all other outstanding
"Obligations" (as such term is defined in the Guaranteed Credit Agreement)
thereunder.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.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.
Guaranty. The Guaranty dated as of the date hereof made by each Subsidiary
of the Borrower in favor of the Banks and the Agent pursuant to which each
Subsidiary of the Borrower guaranties to the Banks and the Agent the payment and
performance of the Obligations and in form and substance satisfactory to the
Banks and the Agent.
Hazardous Substances. See ss.7.18(b).
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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, other
than notes issued in connection with any Permitted Acquisition
representing earn-out arrangements with the seller so long as such note
would not be required to be treated as a liability or debt pursuant to
generally accepted accounting principles,
(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,
(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 treated as an
operating lease under generally accepted accounting principles and as a
loan or financing for U.S. income tax purposes(a "synthetic lease");
provided, however, for purposes of this Credit Agreement, synthetic leases
shall not include any lease arrangement entered into by the Borrower for
the lease of computer equipment so long as such arrangements are for
substantially the same purpose as those computer lease arrangements
existing on the Closing Date,
(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, provided, however, those items
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which are covered in the provision to the defined term "Restricted
Payment" shall not constitute Indebtedness for purposes of this paragraph
(h),
(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,
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.
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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. ss.24, Seventh), as amended.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of the
calendar quarter with respect to interest accrued during such calendar quarter,
including, without limitation, the calendar quarter 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) three (3) months or less, the last day of such
Interest Period and (ii) more than three (3) months, the date that is three (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, (a)
initially, the period commencing on the Drawdown Date of such Revolving Credit
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 quarter; and (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 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 ss.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
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(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date shall end on the Revolving Credit Loan
Maturity Date.
International Standby Practices. With respect to any standby Letter of
Credit, International Standby Practices (ISP98) as promulgated by the Institute
of International Banking Law & Practice, Inc., or any successor code of standby
letter of credit practices among banks adopted by the Agent in the ordinary
course of business as a standby letter of credit issuer and in effect at the
time of issuance of such Letter of Credit.
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 not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Investors. GTCR, Xxx X. Xxxxx and Smart Technology, LLC.
Letter of Credit. See ss.4.1.1.
Letter of Credit Application. See ss.4.1.1.
Letter of Credit Fee. See ss.4.6.
Letter of Credit Participation. See ss.4.1.4.
Leverage Ratio. As at any date of determination, the ratio of (a) Total
Funded Indebtedness of the Borrower and its Subsidiaries outstanding on such
date to (b) EBITDA of the Borrower and its Subsidiaries for the Reference Period
ending as of the most recent quarter ended for which a Compliance Certificate
has been delivered to the Agent by the Borrower, provided, however, when
calculating the Leverage Ratio for any period in which a Permitted Acquisition
has occurred, the calculation of the Leverage Ratio shall be made on a Pro Forma
Basis.
LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other
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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 bearing interest calculated by
reference to the LIBOR Rate.
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters of Credit, the Fee Letters, the
Subordination Agreements and the Security Documents.
Loan Request. See ss.2.6.
Majority Banks. If there are less than three (3) Banks, all Banks; if
there are three (3) Banks or more, as of any date, the Banks holding at least
fifty one percent (51%) of the outstanding principal amount of the Revolving
Credit Notes on such date; and if no such principal is outstanding, the Banks
whose aggregate Commitments constitute at least fifty one percent (51%) of the
Total Commitment.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Multiemployer Plan. Any multiemployer plan within the meaning of ss.3(37)
of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
Obligations. All indebtedness, obligations and liabilities of any of GTCR,
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 Revolving Credit Loans made or Reimbursement Obligations
incurred or any of the Revolving Credit Notes, Letter of Credit Applications,
Letters of Credit or other instruments at any time evidencing any thereof.
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outstanding. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of ERISA
and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificates as defined in the
Security Agreements.
Permitted Acquisition. See ss.9.5.1(d).
Permitted Liens. Liens, security interests and other encumbrances
permitted by ss.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.
Pro Forma Basis. Following a Permitted Acquisition, the interest component
of Total Funded Indebtedness (or, in the case of Consolidated Total Interest
Expense, all Indebtedness) and EBITDA for the fiscal quarter in which such
Permitted Acquisition occurred and each of the three fiscal quarters immediately
following such Permitted Acquisition being calculated with reference to the
audited historical financial results of the Person so acquired (or, to the
extent such financial results are unaudited, such unaudited results shall have
been prepared in a manner which is acceptable to the Majority Banks) and the
Borrower and its Subsidiaries for the applicable Test Period after giving effect
on a pro forma basis to such Permitted Acquisition and assuming that such
Permitted Acquisition had been consummated at the beginning of such Test Period
in the manner described in (i), (ii) and (iii) below:
(i) all Indebtedness (whether under this Credit Agreement or
otherwise) and any other balance sheet adjustments incurred or made in
connection with the Permitted Acquisition shall be deemed to have been
incurred or made on the first day of the Test Period, and all Indebtedness
of the Person acquired or to be acquired in such Permitted Acquisition
which was or will have been repaid in connection with the consummation of
the Permitted Acquisition shall be deemed to have been repaid concurrently
with the incurrence of the Indebtedness incurred in connection with the
Permitted Acquisition;
(ii) all Indebtedness assumed to have been incurred pursuant to the
preceding clause (i) shall be deemed to have borne interest at the sum of
(a) the arithmetic mean of (x) the LIBOR Rate for LIBOR Rate Loans having
an Interest Period of one month in effect on the first day of the Test
Period and (y) the LIBOR Rate for LIBOR Rate Loans having an Interest
Period of one month in effect on the last day of the Test Period plus (b)
the Applicable Margin for LIBOR Rate Loans then in effect (after giving
effect to the Permitted Acquisition on a Pro Forma Basis); and
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(iii) other reasonable cost savings, expenses and other income
statement or operating statement adjustments which are acceptable to the
Majority Banks and which are attributable to the change in ownership
and/or management resulting from such Permitted Acquisition shall be
deemed to have been realized on the first day of the Test Period.
Rate Adjustment Period. See the definition of Applicable Margin.
RCRA. See ss.7.18(a).
Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Revolving Credit Note, or the continuation
of such grid, or any other similar record, including computer records,
maintained by any Bank with respect to any Revolving Credit Loan referred to in
such Revolving Credit Note.
Reference Period. The period of four (4) consecutive fiscal quarters of
the Borrower ending on the relevant date.
Register. See ss.19.3.
Reimbursement Obligation. The Borrower's obligation to reimburse the Agent
and the Banks on account of any drawing under any Letter of Credit as provided
in ss.4.2.
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 of
its Subsidiaries or the Investors; provided, however, the term "Restricted
Payment" shall not include (i) so long as no Default or Event of Default has
occurred and is continuing or would exist a result thereof, any redemption of
such preferred stock in contemplation of an initial public offering of the
Borrower's common stock in accordance with the terms of the Borrower's Articles
of Incorporation (as in effect on the Closing Date); (ii) the repurchase of
capital stock of the Borrower from employees upon the termination of employment
or otherwise pursuant to any executive management or employment agreements
between the Borrower and such employees; and (iii) retirements or cancellations
of capital stock in connection with the conversion of the Borrower's preferred
stock into common stock.
Revolving Credit Loan Maturity Date. August 24, 2001.
Revolving Credit Loans. Revolving credit loans made or to be made by the
Banks to the Borrower pursuant to ss.2.
Revolving Credit Notes. See ss.2.4.
XXXX. See ss.7.18(a).
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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.
Security Agreements. The several Security Agreements dated or to be dated
on or prior to the Closing Date between the Borrower and its Subsidiaries and
the Agent and in form and substance satisfactory to the Banks and the Agent.
Security Documents. The Guaranty, the Security Agreements, the Trademark
Assignments, the Stock Pledge 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.
Seller Subordinated Debt. Collectively, (a) those notes set forth on
Schedule 1.2 hereto and (b) any Indebtedness of the Borrower to any seller in
connection with a Permitted Acquisition evidenced or incurred by a subordinated
note and in form and substance satisfactory to the Majority Banks.
Senior Debt Service. For any period, Total Debt Service minus the
aggregate amount of debt service attributable to Seller Subordinated Debt
outstanding for such period.
Stock Pledge Agreement. The Stock Pledge Agreement dated or to be dated on
or prior to the date hereof between the Borrower and the Agent and in form and
substance satisfactory to the Banks and the Agent.
Subordination Agreements. Collectively, those Subordination Agreements
dated or to be dated on or after the Closing Date, by and among the Agent, the
Borrower and the holders of certain of the Seller Subordinated Debt, with such
Subordination Agreements to be in form and substance acceptable to the Majority
Banks.
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.
Test Period. The period of all fiscal quarters (and any portion of a
fiscal quarter) being tested in any covenant calculation period prior to the
date of such Permitted Acquisition as set forth in the definition of Pro Forma
Basis.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time.
Total Debt Service. For any period, all scheduled mandatory payments of
principal of Indebtedness of the Borrower and its Subsidiaries made or required
to be made in such period plus the Consolidated Total Interest Expense of the
Borrower and its Subsidiaries for that period.
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Total Funded Indebtedness. All Indebtedness of the Borrower and its
Subsidiaries for borrowed money (including without limitation, all guarantees by
such Person of Indebtedness of others for borrowed money), purchase money
Indebtedness and with respect to Capitalized Leases and synthetic leases (as
defined in clause (f) of the definition of "Indebtedness"), determined on a
consolidated basis in accordance with generally accepted accounting principles,
provided, however, for purposes of calculating the Leverage Ratio, Total Funded
Indebtedness shall not include (a) the Seller Subordinated Debt and (b) all
"Obligations" (as such term is defined in the Guaranteed Credit Agreement) of
the Borrower and its Subsidiaries to the Guaranteed Banks and the Guaranteed
Agent under the Guaranteed Credit Agreement so long as the payment and
performance of all of such Obligations are guaranteed by GTCR to the
satisfaction of the Agent and the Banks.
Trademark Assignments. The several Trademark Assignments dated or to be
dated on or prior to the Closing Date made by the Borrower and its Subsidiaries
in favor of the Agent and in form and substance satisfactory to the Banks and
the Agent.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
LIBOR Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letters of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, ss.4.2.
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.
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(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 "ss." 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.
(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 measurement 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
results 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 ss.2.6, such
sums as are requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all
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amounts requested) at any one time equal to such Bank's Commitment minus such
Bank's Commitment Percentage of the sum of the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations, provided that the sum of the outstanding
amount of the Revolving Credit Loans (after giving effect to all amounts
requested) plus the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not at any time exceed the Total Commitment and, provided
further, that the sum of the outstanding amount of the Revolving Credit Loans
(after giving effect to all amounts requested) plus the Maximum Drawing Amount
and all Unpaid Reimbursement Obligations shall not at any time exceed the
Guaranteed Credit Agreement Outstandings. 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 ss.11 and ss.12, in
the case of the initial Revolving Credit Loans to be made on the Closing Date,
and ss.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 rate of one-half of one percent (1/2%) per
annum 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 minus the sum of the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the outstanding amount of Revolving Credit
Loans during such calendar quarter. The commitment fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding 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.
2.3. Reduction of Total Commitment. The Borrower shall have the right at
any time and from time to time upon five (5) Business Days prior written notice
to the Agent to reduce by $100,000 or an integral multiple 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. In
addition, to the extent the "Total Commitment" (as such term is defined in the
Guaranteed Credit Agreement) is ever reduced to an amount which is less than the
Total Commitment hereunder, then the Total Commitment hereunder shall
automatically be reduced to an amount equal to the "Total Commitment" under the
Guaranteed Credit Agreement. Promptly after receiving any notice of the Borrower
delivered pursuant to this ss.2.3, or any evidence which would require a
mandatory reduction in the Total Commitment, 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.
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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 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 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 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
ss.5.10,
(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.
(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 later than (a) 11:00 a.m. (Boston
time) on the day of 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
$100,000 or an integral multiple thereof.
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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 two (2) Business
Days prior written notice of such election; (b) 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; (c) 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
and (d) no Revolving Credit 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 $100,000 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 Loans of any Type may be continued as such upon the expiration of
an Interest Period with respect thereto by compliance by the Borrower with
the notice provisions contained in ss.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
the 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 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 ss.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 $100,000
or a whole multiple of $100,000 in excess thereof.
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2.8. Funds for Revolving Credit Loans.
2.8.1. Funding Procedures. Not later than 1:00 p.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 ss.ss.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 (1) the average computed for the
period referred to in clause (c) below, of the weighted 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,
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together with any and all accrued and unpaid interest thereon and all other
Obligations outstanding on such date.
3.2. Mandatory Repayments of Revolving Credit Loans. If at any time either
(a) the sum of the outstanding amount of the Revolving Credit Loans, the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations exceeds the Total
Commitment or (b) the sum of the outstanding amount of the Revolving Credit
Loans, the Maximum Drawing Amount and all Unpaid Reimbursement Obligations
exceeds the Guaranteed Credit Agreement Outstandings, then the Borrower shall
immediately pay the amount of such excess to the Agent for the respective
accounts of the Banks for application: first, to any Unpaid Reimbursement
Obligations; second, to the Revolving Credit Loans, and third, to provide the
Agent cash collateral for Reimbursement Obligations as contemplated by ss.4.2(b)
and (c). Each payment of any Unpaid Reimbursement Obligations or prepayment of
Revolving Credit Loans shall be allocated among the Banks, in proportion, as
nearly as practicable, to each Reimbursement Obligation or (as the case may be)
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, provided that any full or partial prepayment of the outstanding amount
of any LIBOR Rate Loans pursuant to this ss.3.3 may be made only on the last day
of the Interest Period relating thereto. The Borrower shall give the Agent prior
written notice, no later than 11:00 a.m. (Boston time), on the day of any
proposed prepayment pursuant to this ss.3.3 of Base Rate Loans, and three (3)
LIBOR Business Days notice of any proposed prepayment pursuant to this ss.3.3 of
LIBOR Rate Loans, in each case, specifying the proposed date of payment 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, 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.
4. LETTERS OF CREDIT.
4.1. Letter of Credit Commitments.
4.1.1. Commitment to Issue Letters of Credit. Subject to the terms
and conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance
upon the agreement of the Banks set forth in ss.4.1.4 and upon the
representations and
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warranties of the Borrower contained herein, agrees, in its individual
capacity, to issue, extend and renew for the account of the Borrower one
or more standby or documentary letters of credit (individually, a "Letter
of Credit"), in such form as may be requested from time to time by the
Borrower and agreed to by the Agent; provided, however, that, after giving
effect to such request, (a) the sum of the aggregate Maximum Drawing
Amount and all Unpaid Reimbursement Obligations shall not exceed $500,000
at any one time and (b) the sum of (i) the Maximum Drawing Amount on all
Letters of Credit, (ii) all Unpaid Reimbursement Obligations, and (iii)
the amount of all Revolving Credit Loans outstanding shall not exceed
either the Total Commitment or the Guaranteed Credit Agreement
Outstandings. Notwithstanding the foregoing, the Agent shall have no
obligation to issue any Letter of Credit to support or secure any
Indebtedness of the Borrower or any of its Subsidiaries to the extent that
such Indebtedness was incurred prior to the proposed issuance date of such
Letter of Credit, unless in any such case the Borrower demonstrates to the
satisfaction of the Agent that (x) such prior incurred Indebtedness were
then fully secured by a prior perfected and unavoidable security interest
in collateral provided by the Borrower or such Subsidiary to the proposed
beneficiary of such Letter of Credit or (y) such prior incurred
Indebtedness were then secured or supported by a letter of credit issued
for the account of the Borrower or such Subsidiary and the reimbursement
obligation with respect to such letter of credit was fully secured by a
prior perfected and unavoidable security interest in collateral provided
to the issuer of such letter of credit by the Borrower or such Subsidiary.
4.1.2. Letter of Credit Applications. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (a) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (b) have an expiry date no later than the date
which is fourteen (14) days (or, if the Letter of Credit is confirmed by a
confirmer or otherwise provides for one or more nominated persons,
forty-five (45) days) prior to the Revolving Credit Loan Maturity Date.
Each Letter of Credit so issued, extended or renewed shall be subject to
the Uniform Customs or, in the case of a standby Letter of Credit issued
on or after January 1, 1999, either the Uniform Customs or the
International Standby Practices.
4.1.4. Reimbursement Obligations of Banks. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment Percentage,
to reimburse the Agent on demand for the amount of each draft paid by the
Agent under each Letter of
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Credit issued pursuant to the terms of this Credit Agreement to the extent
that such amount is not reimbursed by the Borrower pursuant to ss.4.2
(such agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank).
4.1.5. Participations of Banks. Each such payment made by a Bank
shall be treated as the purchase by such Bank of a participating interest
in the Borrower's Reimbursement Obligation under ss.4.2 in an amount equal
to such payment. Each Bank shall share in accordance with its
participating interest in any interest which accrues pursuant to ss.4.2.
4.2. Reimbursement Obligation of the Borrower. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in ss.4.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored
by the Agent, or the Agent otherwise makes a payment with respect thereto,
(i) the amount paid by the Agent under or with respect to such Letter of
Credit, and (ii) the amount of any taxes, fees, charges or other costs and
expenses whatsoever incurred by the Agent or any Bank in connection with
any payment made by the Agent or any Bank under, or with respect to, such
Letter of Credit,
(b) upon the reduction (but not termination) of the Total Commitment
to an amount less than the Maximum Drawing Amount, an amount equal to such
difference, which amount shall be held by the Agent for the benefit of the
Banks and the Agent as cash collateral for all Reimbursement Obligations,
and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all Letters
of Credit in accordance with ss.13, an amount equal to the then Maximum
Drawing Amount on all Letters of Credit, which amount shall be held by the
Agent for the benefit of the Banks and the Agent as cash collateral for
all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this ss.4.2 at any time from the date such amounts become due
and payable (whether as stated in this ss.4.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in ss.5.10 for overdue principal on the
Revolving Credit Loans.
4.3. Letter of Credit Payments. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrower of the date and amount of the draft presented or demand for
payment and of
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the date and time when it expects to pay such draft or honor such demand for
payment. If the Borrower fails to reimburse the Agent as provided in ss.4.2 on
or before the date that such draft is paid or other payment is made by the
Agent, the Agent may at any time thereafter notify the Banks of the amount of
any such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston time)
on the Business Day next following the receipt of such notice, each Bank shall
make available to the Agent, at the Agent's Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, together with an amount equal to the product of (a) the average,
computed for the period referred to in clause (c) below, of the weighted 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 equal to such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation, times (c) a
fraction, the numerator of which is the number of days that elapse from and
including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the Agent,
and the denominator of which is 360. The responsibility of the Agent to the
Borrower and the Banks shall be only to determine that the documents (including
each draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit.
4.4. Obligations Absolute. The Borrower's obligations under this ss.4
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under ss.4.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted by
the Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon the
Borrower and shall not result in any liability on the part of the Agent or any
Bank to the Borrower.
4.5. Reliance by Issuer. To the extent not inconsistent with ss.4.4, the
Agent shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the
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proper Person or Persons and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action under this Credit
Agreement unless it shall first have received such advice or concurrence of the
Majority Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Credit Agreement
in accordance with a request of the Majority Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the Banks
and all future holders of the Revolving Credit Notes or of a Letter of Credit
Participation.
4.6. Letter of Credit Fee. The Borrower shall, on the date of issuance or
any extension or renewal of any Letter of Credit pay a fee (in each case, a
"Letter of Credit Fee") to the Agent (a) in respect of each standby Letter of
Credit an amount equal to two and one-eighth percent (2 1/8%) per annum of the
face amount of such standby Letter of Credit, of which an amount equal to 1/8
percent (1/8%) per annum of the face amount of such standby Letter of Credit
shall be for the account of the Agent, as a fronting fee, and the balance of
which Letter of Credit Fee shall be for the accounts of the Banks in accordance
with their respective Commitment Percentages and (b) in respect of each
documentary Letter of Credit an amount equal to one and one-eighth percent (1
1/8%) per annum on the face amount of such documentary Letter of Credit, of
which an amount equal to 1/8 percent (1/8%) per annum of the face amount of such
documentary Letter of Credit shall be for the account of the Agent, as a
fronting fee, and the balance of which Letter of Credit Fee shall be for the
accounts of the Banks in accordance with their respective Commitment
Percentages. In respect of each Letter of Credit, the Borrower shall also pay to
the Agent for the Agent's own account, at such other time or times as such
charges are customarily made by the Agent, the Agent's customary issuance,
amendment, negotiation or document examination and other administrative fees as
in effect from time to time.
5. CERTAIN GENERAL PROVISIONS.
5.1. Closing Fee; Agent's Fee. The Borrower agrees to pay to the Agent and
the Co-Agent for the Agent's and the Co-Agent's own account on the Closing Date
a closing fee in the amount set forth in the Fee Letters. In addition, the
Borrower shall pay to the Agent for the Agent's own account an Agent's fee in
the amount and at the times set forth in the Fee Letter between the Borrower and
the Agent.
5.2. Funds for Payments.
5.2.1. Payments to Agent. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and any
other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent in Dollars, for the respective accounts of the Banks
and the Agent, at the Agent's Head Office or at such other place that the
Agent may from
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time to time designate, in each case at or about 11:00 a.m. (Boston time,
or the local time in the place of payment) and in immediately available
funds.
5.2.2. No Offset, etc. All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without recoupment,
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 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.
5.3. Computations. All computations of interest on the Revolving Credit
Loans consisting of Base Rate Loans shall be based on a 365-day year and paid
for the actual number of days elapsed. All computations of interest on the
Revolving Credit Loans consisting of LIBOR Rate Loans and of commitment fees,
Letter of Credit Fees or other fees shall be based on a 360-day year and paid
for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to LIBOR Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents becomes
due on a day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue during
such extension. The outstanding amount of the Revolving Credit Loans as
reflected on the 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.
5.4. 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
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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.
5.5. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful for any Bank to make or maintain
LIBOR Rate Loans, such Bank shall forthwith give 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 Revolving Credit 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 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 ss.5.5, 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.
5.6. 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, any Letters of Credit, such
Bank's Commitment or the Revolving Credit 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 Revolving Credit 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
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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, any Letters of Credit, the Revolving Credit Loans, such Bank's
Commitment, or any class of loans, letters of credit or commitments of
which any of the Revolving Credit 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 Revolving
Credit Loans or such Bank's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank or the
Agent hereunder on account of such Bank's Commitment, any Letter of
Credit or any of the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any payment or
to forego any interest or Reimbursement Obligation or other sum
payable hereunder, the amount of which payment or foregone interest
or Reimbursement Obligation or other sum is calculated by reference
to the gross amount of any sum receivable or deemed received by such
Bank or the Agent from the Borrower hereunder,
then, and in each such case, 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 Reimbursement
Obligation or other sum.
5.7. 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
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Revolving Credit 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 may 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
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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.
5.8. Certificate. A certificate setting forth any additional amounts
payable pursuant to ss.5.6 or 5.7 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.
5.9. Indemnity. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense 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 or a Conversion Request relating thereto in accordance with ss.2.6 or
ss.2.7 or (c) the making of any payment of a LIBOR Rate Loan or the making of
any conversion of any such Revolving Credit 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 Revolving Credit Loans.
5.10. Interest After Default.
5.10.1. Overdue Amounts. Overdue principal and (to the extent
permitted by applicable law) interest on the Revolving Credit Loans and
all other overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest compounded monthly and payable on demand at
a rate per annum equal to two percent (2%) above the rate of interest
otherwise applicable to such Revolving Credit Loans pursuant to ss.2.5
until such amount shall be paid in full (after as well as before
judgment).
5.10.2. Amounts Not Overdue. During the continuance of a Default or
an Event of Default the principal of the Revolving Credit Loans not
overdue shall, until such Default or Event of Default has been cured or
remedied or such Default or Event of Default has been waived by the
Majority Banks pursuant to ss.26, bear interest at a rate per annum equal
the rate of interest applicable to overdue principal pursuant to
ss.5.10.1.
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6. 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. The Obligations shall also
be guaranteed pursuant to the terms of the Guaranty. The obligations of the
Borrower's Subsidiaries under the 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
Subsidiary, whether now owned or hereafter acquired, pursuant to the terms of
the Security Documents to which such Subsidiary is a party.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as
follows:
7.1. Corporate Authority.
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 as presently contemplated, and (c) is in good standing
as a foreign corporation and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure
to be so qualified would not have a materially adverse effect on the
business, assets or financial condition of the Borrower or its
Subsidiaries.
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 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
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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.
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 consolidated statement of income of the
Borrower and its Subsidiaries for the fiscal quarter then ended. In
addition there has been furnished to each of the Banks a consolidated
balance sheet of The Kodiak Group, Inc. and I33 Communication Corp., and
consolidated statements of income of The Kodiak Group, Inc. and I33
Communication Corp. for the fiscal year then ended, certified by such
Person's certified public accountants. Such balance sheets and statement
of income have been prepared in accordance with generally accepted
accounting principles and fairly present the financial condition of the
Borrower and its Subsidiaries 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 projections of the annual operating budgets
of the Borrower and its Subsidiaries on a consolidated basis, balance
sheets and cash flow statements for the 1999 to 2002 fiscal years, copies
of which will be delivered to each Bank within thirty (30) days of the
Closing Date, will disclose
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all assumptions made with respect to general economic, financial and
market conditions used in formulating such projections. To the knowledge
of the Borrower or any of its Subsidiaries, no facts exist as of the date
of delivery that (individually or in the aggregate) would result in any
material change in any of such projections. The projections will be based
upon reasonable estimates and assumptions, will be prepared on the basis
of the assumptions stated therein and will reflect the reasonable
estimates of the Borrower and its Subsidiaries of the results of
operations and other information projected therein.
7.5. No Material Changes, etc.; Solvency
7.5.1. No Changes. Since the Balance Sheet Date there has occurred
no materially adverse change in the financial condition or business of the
Borrower and its Subsidiaries 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 any materially adverse effect either individually or in the aggregate
on the business or financial condition of the Borrower or its
Subsidiaries. Since the Balance Sheet Date, the Borrower has not made any
Distributions.
7.5.2. Solvency. The Borrower and its Subsidiaries, on a
going-concern basis and 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 absolute and matured,
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.
7.6. Franchises, Patents, Copyrights, etc. Each of the Borrower and its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
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 on 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, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of the Borrower and its Subsidiaries 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
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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 materially adverse effect on the business of the Borrower or any of
its Subsidiaries.
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
materially and adversely affect the financial condition, properties or business
of the Borrower or any of its Subsidiaries.
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.
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
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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 party to one of the Security Agreements 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 otherwise provided on Schedule 7.15
and 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 Affiliates, Investors, 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 Affiliate, Investor, 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 each 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 ss.412 of
ERISA. The 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
ss.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 ss.3(1) or
ss.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.
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7.16.3. Guaranteed Pension Plans. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid
the incurrence of an accumulated funding deficiency, the notice or lien
provisions of ss.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 ss.307 of ERISA or ss.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 ss.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. Neither the Borrower nor any ERISA
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under ss.4201 of ERISA or as a
result of a sale of assets described in ss.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
ss.4241 or ss.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 ss.4041A of ERISA.
7.17. Use of Proceeds.
7.17.1. General. The proceeds of the Revolving Credit Loans shall be
used to refinance existing Indebtedness of the Borrower and for working
capital and general corporate purposes. The Borrower will obtain Letters
of Credit solely for working capital and general corporate purposes,
including any Permitted Acquisitions.
7.17.2. Regulations U and X. No portion of any Revolving Credit Loan
is to be used, and no portion of any Letter of Credit is to be obtained,
for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
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7.17.3. Ineligible Securities. No portion of the proceeds of any
Revolving Credit Loans is to be used, and no portion of any Letter of
Credit is to be obtained, 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, consistent with its
status as lessee of commercial real estate, taken all necessary steps to
investigate the past and present condition and usage of the Real Estate and the
operations conducted thereon and, based upon such diligent investigation and to
the Borrower's knowledge, has determined that:
(a) none of the Borrower, its Subsidiaries or any operator of the
Real Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("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 on the environment or the
business, assets or financial condition of the Borrower or any of its
Subsidiaries;
(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. ss.6903(5), any hazardous
substances as defined by 42 U.S.C. ss.9601(14), any pollutant or
contaminant as defined by 42 U.S.C. ss.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
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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) (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 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, its Subsidiaries or operators of its
properties, no Hazardous Substances have been generated or are being used
on the Real Estate except in accordance with applicable Environmental
Laws; (iii) there have been no releases (i.e. any past or present
releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping) or threatened
releases of Hazardous Substances on, upon, into or from the properties of
the 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
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 of the other
Real Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a condition
to the effectiveness of any other transactions contemplated hereby.
7.19. Subsidiaries, etc. Schedule 7.19(a) sets forth each Subsidiary of
the Borrower, and each Subsidiary of any Subsidiary. 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.
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7.20. Bank Accounts. Schedule 7.20 sets forth the account numbers and
location 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 any materially
adverse effect on the business or financial condition of the Borrower or any of
its Subsidiaries.
7.22. Disclosure. None of this Credit Agreement or any of the other Loan
Documents contains any untrue statement of a material fact or omits 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.
There is no fact known to the Borrower or any of its Subsidiaries which
materially adversely affects, or which is reasonably likely in the future to
materially adversely affect, the business, assets, financial condition or
prospects 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. Chief Executive Offices. As of the date hereof, the Borrower's
principal place of business is at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 0000,
Xxxxxxxx, Xxxxxxxx 00000, at which location its books and records are kept.
7.24. Insurance. The Borrower and each of its Subsidiaries maintain with
financially sound and reputable insurers insurance with respect to their
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices.
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
8.1. Punctual Payment. The Borrower will duly and punctually pay or cause
to be paid the principal and interest on the Revolving Credit Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the Agent's fee and the
commitment fees 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 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000, or at
such
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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 Xxxxxx Xxxxxxxx
LLP or other independent certified public accountants 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 with respect to such consolidated statements, certified
without qualification by Xxxxxx Xxxxxxxx LLP or by other independent
certified public accountants 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
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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 (exclusive 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 position of the
Borrower and its Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) as soon as practicable, but in any event within thirty (30) days
after the end of each month other than those months ending at the end of
any fiscal quarter 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 (exclusive 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 (subject to year-end adjustments);
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a), (b) and, for purposes of calculating the
Leverage Ratio, (c) above, a statement certified by the principal
financial or accounting officer of the Borrower in substantially the form
of Exhibit C hereto (the "Compliance Certificate") and setting forth in
reasonable detail computations evidencing compliance with the covenants
contained in ss.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 or any Bank,
projections of the Borrower and its Subsidiaries updating those
projections delivered to the Banks and referred to in ss.7.4.3 or, if
applicable, updating any later such projections delivered in response to a
request pursuant to this ss.8.4(f); and
(g) 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) under this Credit
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Agreement or any other note, evidence of indebtedness, indenture or other
obligation to which or with respect to which the Borrower or any of its
Subsidiaries is a party or obligor, whether as principal, guarantor or
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 Claims 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 materially
adverse effect on the Borrower or any of its Subsidiaries 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 $500,000.
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 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 and supplied with all necessary equipment,
(b) will cause to be made all necessary repairs, renewals, replacements,
betterments and
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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 ss.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. The Borrower will, and will cause each of its Subsidiaries
to, maintain with financially sound and reputable insurers insurance with
respect to its properties and business against such casualties and contingencies
as shall be in accordance with the general practices of businesses engaged in
similar activities in similar geographic areas and in amounts, containing such
terms, in such forms and for such periods as may be reasonable and prudent and
in accordance with the terms of the Security Agreements.
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, all at such
reasonable times and intervals as the Agent or any Bank may reasonably
request.
8.9.2. Collateral Audit. No more frequently than once each calendar
year, or more frequently as determined by the Agent or the Majority Banks
if an Event of Default shall have occurred and be continuing, upon the
request of the Agent or the Majority Banks, the Borrower shall permit the
Banks, the Agent or any of the Banks' other designated representatives, to
conduct a collateral audit
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and inspection. All such audits and inspections shall be made at the
expense of the Borrower.
8.9.3. Communication 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. The Borrower shall have the right to be present at all
such communications. 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 ss.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 under
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, furnish to
the Agent a copy of the most recent actuarial statement required to be submitted
under ss.103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (ii) 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 ss.ss.302, 4041, 4042,
4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan,
under ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.
8.12. Use of Proceeds. The Borrower will use the proceeds of the Revolving
Credit Loans solely to refinance existing Indebtedness of the Borrower and for
working capital and general corporate purposes including any Permitted
Acquisitions. The Borrower will obtain Letters of Credit solely for working
capital and general corporate purposes.
8.13. Bank Accounts. The Borrower will, and will cause each of its
Subsidiaries to, together with the employees, agents and other Persons acting on
behalf of the Borrower or such Subsidiary, receive and hold in trust for the
Agent and the Banks all payments constituting proceeds of Accounts Receivable or
other Collateral which come
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into their possession or under their control and, immediately upon receipt
thereof, deposit such payments in the form received, with any appropriate
endorsements, in one of the accounts designated as a central depository account
on Schedule 7.20.
8.14. New Guarantors. In the event any Subsidiary is formed or acquired
after the date hereof, such Subsidiary shall, on the date of its formation or
acquisition, guarantee the Obligations and shall execute and deliver to the
Agent a joinder to the Guaranty in form and substance satisfactory to the Agent.
In addition, such new Subsidiary shall also be bound by the security provisions
of ss.6 hereof and shall execute and deliver to the Agent a Security Agreement
and any other necessary Security Documents, each to be in form and substance
acceptable to the Agent and the Banks, to the Agent.
8.15. Landlord Consents. The Borrower and its Subsidiaries shall deliver
to the Agent within sixty (60) days of the Closing Date a landlord consent in
form and substance satisfactory to the Agent as to each of its leaseholds of
real property; provided, however, it shall not be an Event of Default hereunder
if the Borrower, or such Subsidiary after using reasonable efforts, is unable to
execute and deliver any such consent (other than the consent in respect of the
lease in Bethesda, Maryland of the chief executive office of the Borrower).
8.16. Bank Agency Agreements. Within sixty (60) days of the Closing Date,
the Agent shall have received an agreement (each, an "Agency Account
Agreement"), in form and substance satisfactory to the Agent, from each bank at
which the Borrower or any of its Subsidiaries maintains depository accounts
(including bank agency or lock box agreements) concerning the Agent's interest
for the benefit of the Banks and the Agent in such accounts.
8.17. Subordination Agreements. Within thirty (30) days of the Closing
Date, the Agent shall have received a Subordination Agreement, duly executed and
delivered by the Borrower, the Agent and each holder of the Seller Subordinated
Debt existing on the Closing Date other than (a) the holders of existing Seller
Subordinated Debt to Smart Technology, LLC, LOGEX and Fairfax Management Company
II, LLC and (b) those holders which have executed and delivered a Subordination
Agreement to the Agent on the Closing Date.
8.18. 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 Majority 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.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is
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outstanding or any Bank has any obligation to make any Revolving Credit Loans or
the Agent has any obligations to issue, extend or renew any Letters of Credit:
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 or the Guaranteed Credit Agreement;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(c) 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 $1,000,000 at any one time;
(d) Indebtedness existing on the date of this Credit Agreement and
listed and described on Schedule 9.1 hereto;
(e) Indebtedness of a Subsidiary of the Borrower to the Borrower so
long as such Subsidiary has guaranteed all the Obligations hereunder
pursuant to the Guaranty;
(f) Indebtedness of the Borrower in respect of Seller Subordinated
Debt; and
(g) other unsecured Indebtedness not otherwise expressly permitted
pursuant to this ss.9.1 in an aggregate amount not to exceed $500,000.
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
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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 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:
(a) 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;
(b) 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;
(c) 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;
(d) 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 proceeding for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(e) 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;
(f) 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 the 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;
(g) liens existing on the date hereof and listed on Schedule 9.2
hereto;
(h) 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 ss.9.1(c),
incurred in connection with the acquisition of such property, which
security interests or mortgages cover only the real or personal property
so acquired; and
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(i) liens in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents.
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 Services, Inc., and not less than "A 1" if rated by Standard and
Poor's Rating Group;
(d) Investments existing on the date hereof and listed on Schedule
9.3 hereto;
(e) Investments with respect to Indebtedness permitted by ss.9.1(e)
so long as such entities remain Subsidiaries of the Borrower and such
Subsidiary is a party to the Guaranty;
(f) Investments consisting of the Guaranty or Investments by the
Borrower in Subsidiaries of the Borrower which are party to the Guaranty;
(g) Investments consisting of promissory notes received as proceeds
of asset dispositions permitted by ss.9.5.2;
(h) Investments consisting of notes receivables from officers and
key employees of the Borrower accepted by the Borrower as full or partial
payment in respect of capital stock of the Borrower purchased by such
employee; and
(i) Investments by the Borrower consisting of loans or advances to
employees of the Borrower, provided, that such Investments do not exceed
in the aggregate $200,000 outstanding at any one time.
provided, however, that, with the exception of demand deposits referred to in
ss.9.3(b), such Investments will be considered Investments permitted by this
ss.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.
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9.4. Restricted Payments; Distributions. The Borrower and its Subsidiaries
will not make any Restricted Payments; provided, however, the Subsidiaries of
the Borrower shall be permitted to make Distributions to the Borrower or to any
other Subsidiary of the Borrower which is party to the Guaranty and, so long as
no Default or Event of Default has occurred and is continuing or would exist as
a result thereof, the Borrower shall be permitted (a) to make a payment to GTCR
consisting of annual management fee payments in an aggregate annual amount not
to exceed $200,000 per fiscal year which are due and payable in such fiscal year
pursuant to a management agreement between GTCR and the Borrower, provided such
payments shall not be made until a date which is not more than fifteen (15) days
prior to the date such payments are due and payable pursuant to the terms of
such agreement and (b) to make customary and reasonable payments in respect of
management or consulting fees to Fairfax and Davidson in accordance with the
terms of the Borrower's agreements with such persons as they exist on the
Closing Date.
9.5. Merger, Consolidation.
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 except (a) the merger or consolidation of one or more of the
Subsidiaries of the Borrower with and into the Borrower; (b) or the merger
or consolidation of two or more Subsidiaries of the Borrower; and (c)
other asset or stock acquisitions of Persons in the same or a similar line
of business as the Borrower (a "Permitted Acquisition") where (i) the
Borrower has provided the Agent with five (5) Business Days prior written
notice of such Permitted Acquisition, which notice shall include a
reasonably detailed description of such Permitted Acquisition, and the
Majority Banks have consented in writing, in advance, to the Borrower or
the Subsidiary, as the case may be, consummating such acquisition; (ii)
the Borrower has provided the Agent with all documents, instruments and
agreements to be entered into in connection with the Permitted
Acquisition, which documents, instruments and agreements shall be in form
and substance satisfactory to the Agent; (iii) the business to be acquired
would not subject the Agent or any of the Banks to regulatory or third
party approvals in connection with the exercise of its rights and remedies
under this Credit Agreement and the other Loan Documents; (iv) the
business and assets so acquired in such Permitted Acquisition shall be
acquired by the Borrower free and clear of all liens (other than Permitted
Liens) and all Indebtedness (other than Indebtedness expressly permitted
pursuant to ss.9.1 hereof); (v) the Borrower has taken or caused to be
taken all necessary actions to grant to the Agent a first priority
perfected lien in all assets and stock to be acquired in connection with
such Permitted Acquisition; (vi) the Borrower has demonstrated to the
satisfaction of the Agent, based on a pro forma Compliance Certificate,
compliance with ss.10 hereof on a Pro Forma Basis both immediately prior
to and after giving effect to such Permitted Acquisition; (vii) the
Borrower is the survivor of any such Permitted Acquisition; (viii) no more
than seventy five percent (75%) of the total consideration for any
Permitted Acquisition shall be financed with
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Indebtedness; and (ix) the Borrower has delivered to the Agent a
certificate of the chief financial officer of the Borrower to the effect
that (1) the Borrower will be solvent on a going concern basis upon the
consummation of the Permitted Acquisition; (2) the pro forma Compliance
Certificate fairly presents the financial condition of the Borrower and
its Subsidiaries as of the date thereof and after giving effect to such
Permitted Acquisition and (3) no Default or Event of Default then exists
or would result after giving effect to the Permitted Acquisition.
In the event any new Subsidiary is formed or acquired as a result of
or in connection with any acquisition, the Loan Documents shall be amended
and/or supplemented as necessary to make the terms and conditions of the
Loan Documents applicable to such Subsidiary.
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 the licensing of intellectual
property and the disposition of obsolete assets, in each case in the
ordinary course of business, consistent with past practices.
9.6. Sale and Leaseback. 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 any manner that would violate any Environmental Law or bring such Real
Estate in violation of any Environmental Law.
9.8. Fiscal Year. The Borrower will not, and will not permit any of its
Subsidiaries to, change the date of the end of their respective fiscal years
from that set forth in ss.7.4.1.
9.9. Employee Benefit Plans. Neither the Borrower nor any ERISA Affiliate
will:
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(a) engage in any "prohibited transaction" within the meaning of
ss.406 of ERISA or ss.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 ss.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 ss.302(f) or ss.4068 of
ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to ss.307 of ERISA or ss.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 ss.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. 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 Borrower, any corporation, partnership, trust or other entity
in which any such Affiliate has a 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.
9.12. Bank Accounts. The Borrower will not, and will not permit any of its
Subsidiaries to, (a) establish any bank accounts other than those accounts, all
listed on Schedule 7.20, without the Agent's and the Majority Banks' prior
written consent, (b) violate directly or indirectly any bank agency or lock box
agreement in favor of the Agent for the benefit of the Banks and the Agent with
respect to such account, or (c) 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.
9.13. Change in Terms of Capital Stock. The Borrower will not, and will
not permit any of its Subsidiaries to effect or permit any change in or
amendment to any document or instrument pertaining to the terms of such Person's
capital stock unless
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such change or amendment would not have a material adverse effect on the Agent
or any Banks in respect of the Obligations hereunder.
9.14. Upstream Limitations. The Borrowers will not, and will not 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 (other than as
permitted by ss.9.2 hereof) to the Borrower or any of its Subsidiaries.
9.15. Inconsistent Agreements. The Borrower will not, and will not permit
any of its Subsidiaries to, enter into any agreement containing any provision
which would be violated or breached by the performance by the Borrower or any of
its Subsidiaries of their respective obligations hereunder or under any of the
Loan Documents.
9.16. Charter Amendments. The Borrower will not, nor will it permit any of
its Subsidiaries to, amend its certificate of incorporation or bylaws, or
similar organizational documents, except if such change would not have a
material adverse effect on the Agent or any Banks in respect of the Obligations
hereunder.
9.17. Amendments to Employment Agreements. The Borrower will not, nor will
it permit any of its Subsidiaries to, amend, supplement or modify, or consent to
any such amendment, supplement or modification to, any provisions of any
employment agreement pertaining to (a) any repurchase options by the Borrower;
(b) any rights of first refusal upon transfers of the capital stock of the
Borrower; (c) non competition and non solicitation requirements; (d)
confidentiality requirements by the employee; (e) ownership of inventions,
patents, developments and similar or related information; and (f) the
assignability by the Borrower of such agreements without the prior written
consent of the Agent, unless such amendment, supplement or modification would
not have a material adverse effect on the assets, business or financial
condition of the Borrower or such Subsidiary.
9.18. Seller Subordinated Debt. The Borrower will not, and will not permit
any of its Subsidiaries to amend, supplement or otherwise modify the terms of
the Seller Subordinated Debt except for changes which are immaterial and
ministerial in nature and would not have a material adverse effect on the
Agent's, the Co-Agent's or any Bank's rights under the Loan Documents or the
Borrower's or any of its Subsidiaries' obligations under the Loan Documents or
prepay, redeem or repurchase any of the Seller Subordinated Debt.
10. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
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10.1. Leverage Ratio. The Borrower will not permit the Leverage Ratio (a)
at any time when the Borrower's EBITDA (calculated on a Pro Forma Basis) for the
immediately preceding twelve month period from the date of determination is less
than $10,000,000 to exceed 2.50:1.00; (b) at any time when the Borrower's EBITDA
(calculated on a Pro Forma Basis) for the immediately preceding twelve month
period from the date of determination is greater than or equal to $10,000,000
but less than $15,000,000 to exceed 2.75:1.00; and (c) at any time when the
Borrower's EBITDA (calculated on a Pro Forma Basis) for the immediately
preceding twelve month period from the date of determination is equal to or
greater than $15,000,000 to exceed 3.00:1.00.
10.2. Minimum EBITDA. The Borrower will not, as of the end of any fiscal
quarter ending during any period described in the table set forth below, permit
EBITDA of the Borrower and its Subsidiaries for the fiscal quarter ending on
such date, to be less than the amount set forth opposite such period in such
table:
-------------------------------------------------------------
Fiscal Quarter Ending Minimum EBITDA
-------------------------------------------------------------
March 31, 1999 $720,000
-------------------------------------------------------------
June 30, 1999 $1,980,000
-------------------------------------------------------------
September 30, 1999 $2,520,000
-------------------------------------------------------------
December 31, 1999 and each $3,847,817
fiscal quarter ending thereafter
-------------------------------------------------------------
10.3. Consolidated Operating Cash Flow to Total Debt Service. The Borrower
will not permit the ratio of Consolidated Operating Cash Flow to Total Debt
Service for any fiscal quarter ending on or after June 30, 1999 to be less than
1.50:1.00 for such fiscal quarter; provided, however, for purposes of this
ss.10.3, solely for the fiscal quarters ending June 30, 1999 and September 30,
1999, Total Debt Service shall not include any mandatory payments of principal
on the Guaranteed Revolving Credit Loans or required Consolidated Total Interest
Expense on such Guaranteed Revolving Credit Loans, and, provided, further,
solely for the fiscal quarter ending December 31, 1999, Total Debt Service shall
not include any mandatory payments of principal on the Seller Subordinated Debt
consisting of the convertible promissory note issued by Century Computing,
Incorporated in the original principal amount of $2,000,000.
10.4. Consolidated Operating Cash Flow to Senior Debt Service. The
Borrower will not permit the ratio of Consolidated Operating Cash Flow to Senior
Debt Service for any fiscal quarter ending on or after December 31, 1998 to be
less than 2.00:1.00 for such fiscal quarter; provided, however, for purposes of
this ss.10.4, solely for the fiscal quarters ending June 30, 1999 and September
30, 1999, Total Debt Service shall not include any mandatory payments of
principal on the Guaranteed Revolving Credit Loans or required Consolidated
Total Interest Expense on such Guaranteed Revolving Credit Loans.
10.5. Quick Ratio. The Borrower will not permit the ratio of Consolidated
Quick Assets to Consolidated Current Liabilities to be less than 1.75:1.00 at
any time.
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10.6. No Quarterly Net Loss. The Borrower will not permit Consolidated Net
Income for the fiscal quarter ending March 31, 1999 to be less than ($1,000,000)
and will not permit Consolidated Net Income for any fiscal quarter ending
thereafter to be less than $1.00.
10.7. Capital Expenditures. The Borrower will not make, or permit any
Subsidiary of the Borrower to make, Capital Expenditures, other than Capital
Expenditures which the Majority Banks reasonably determine are made for
nonrecurring one-time infrastructure purchases or leases by the Borrower, in any
fiscal year that exceed, in the aggregate, $3,000,000 for such fiscal year.
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
and of the Agent to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent on or prior to January 8,
1999:
11.1. Loan Documents etc. 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.
11.2. 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 GTCR, 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
GTCR, the Borrower and each of its Subsidiaries an incumbency certificate, dated
as of the Closing Date, signed by a duly authorized officer of GTCR, the
Borrower or such 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 GTCR, the Borrower of such Subsidiary, each of the Loan
Documents to which GTCR, 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
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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) 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 and (b) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
11.8. Statement of Financial Position The Agent shall have received from
GTCR a copy of its most recent statement of financial position.
11.9. Opinions of Counsel. Each of the Banks and the Agent shall have
received a favorable 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 Xxxxx & 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 closing fees and the Agent's fee pursuant to ss.5.1.
11.11. Payoff Letters. The Agent shall have received payoff letters from
each of BankBoston, N.A. and Xxxxxx Bank & Trust Company, indicating the amount
of the loan obligations of the Borrower to each such Person to be discharged on
the Closing Date.
11.12. Disbursement Instructions. The Agent shall have received
disbursement instructions from the Borrower, indicating that a portion of the
proceeds of the Revolving Credit Loan are paid to each of BankBoston, N.A. and
Xxxxxx Bank & Trust Company.
11.13. Completion of Successful Financial Inquiry and Due Diligence. The
Agent shall be reasonably satisfied (a) that all financial statements of the
Borrower and its Subsidiaries provided to the Agent prior to the Closing Date
accurately set forth the financial condition of the Borrower and its
Subsidiaries for the period covered thereby; (b) with the results of its due
diligence conducted in connection with this transaction; (c) with the results of
a commercial financial audit by its field examiners or other agents; and (d)
with the results of the most recent management letter delivered to the Agent.
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11.14. Consents and Approvals. The Agent shall have received evidence that
all consents and approvals necessary to complete the transactions contemplated
hereby have been obtained.
11.15. Negative Pledge Letters. The Agent shall have received from GTCR a
negative pledge letter agreement, to be in form and substance satisfactory to
the Agent.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Revolving Credit Loan and of the
Agent to issue, extend or renew any Letter of Credit, in each case whether on or
after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:
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
at and as of the time of the making of such Revolving Credit Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate 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 Revolving Credit
Loan or to participate in the issuance, extension or renewal of such Letter of
Credit or in the reasonable opinion of the Agent would make it illegal for the
Agent to issue, extend or renew such Letter of Credit.
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 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.
12.5. Pro Forma Compliance. The Agent shall have received a pro forma
Compliance Certificate demonstrating compliance with the Leverage Ratio covenant
set
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forth in ss.10.1 hereof on a pro forma basis both before and after giving effect
to the making of the Revolving Credit Loan or the issuance, extension or renewal
of a Letter of Credit being requested by the Borrower.
12.6. Guaranteed Credit Agreement Outstandings. The Agent shall have
received evidence satisfactory to the Agent that (a) the "Total Commitment" as
defined in the Guaranteed Credit Agreement is not less than the Total Commitment
hereunder and (b) the sum of the outstanding amount of the Revolving Credit
Loans (after giving effect to all amounts requested) plus the Maximum Drawing
Amount (including the Maximum Drawing Amount of all Letters of Credit being
requested) and all Unpaid Reimbursement Obligations does not exceed the
Guaranteed Credit Agreement Outstandings.
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 Revolving
Credit Loans or any Reimbursement Obligation 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 Revolving
Credit Loans, the commitment fee, any Letter of Credit Fee, the Agent's
fee or other sums due hereunder or under any of the other Loan Documents
within two (2) days after 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;
(c) the Borrower shall fail to comply with any of its covenants
contained in ss.ss.8.1, 8.4, 8.5.1, 8.9, 8.14, 8.16, 8.17, 9 or 10;
(d) GTCR, 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
ss.13.1) for thirty (30) days after written notice of such failure has
been given to the Borrower by the Agent or any Bank;
(e) any representation or warranty of GTCR, 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;
(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
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credit received or in respect of any Capitalized Leases, 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 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, or any such holder or
holders shall rescind or shall have a right to rescind the purchase of any
such obligations;
(g) GTCR, 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 or apply for the appointment of a trustee or other
custodian, liquidator or receiver of GTCR, the Borrower or any of its
Subsidiaries or of any substantial part of the assets of GTCR, the
Borrower or any of its Subsidiaries or shall commence any case or other
proceeding relating to GTCR, 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 GTCR, the Borrower or any of its Subsidiaries and GTCR,
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 GTCR, 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 GTCR, 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 $500,000;
(j) 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 GTCR, the Borrower or any of its Subsidiaries
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party thereto or any of their respective stockholders, or any court or any
other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment, order,
decree or ruling to the effect that, any one or more of the Loan Documents
is illegal, invalid or unenforceable in accordance with the terms thereof;
(k) 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 ss.302(f)(1)
of ERISA), provided that the Agent or the Majority Banks determines in its
or their 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;
(l) 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;
(m) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public enemy,
or other casualty, which in any such case causes, for more than fifteen
(15) consecutive days, the cessation or substantial curtailment of revenue
producing activities at any facility of the Borrower or any of its
Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a material adverse effect on the
business or financial condition of the Borrower or such Subsidiary;
(n) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
the Borrower or any of its Subsidiaries if such loss, suspension,
revocation or failure to renew would have a material adverse effect on the
business or financial condition of the Borrower or such Subsidiary;
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(o) the Borrower or any of its Subsidiaries shall be indicted for a
state or federal crime, or any civil or criminal action shall otherwise
have been brought or threatened 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 $500,000;
(p) the Borrower shall at any time, legally or beneficially own less
than 100% of the capital stock of each Subsidiary (other than AppNet
Commerce Services, Inc.), or the Investors shall at any time, legally or
beneficially own less than 51% of the capital stock of the Borrower; or,
during any period of twelve consecutive calendar months, individuals who
were directors of the Borrower on the first day of such period shall cease
to constitute a majority of the board of directors of the Borrower; or
(q) an "Event of Default" (as such term is defined in the Guaranteed
Credit Agreement) has occurred under the Guaranteed Credit Agreement;
then, and in any such event, so long as the same may be continuing, the Agent,
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
Revolving Credit Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; provided that in the
event of any Event of Default specified in ss.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 ss.13.1(g) or ss.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 Revolving Credit 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 or other date for
issuing, extending or renewing any Letter of Credit the conditions precedent to
the making of the Revolving Credit Loans to be made on such Drawdown Date or (as
the case may be) to issuing, extending or renewing such Letter of Credit on such
other 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 Revolving Credit Loans and the Agent
shall be relieved of all further obligations to issue, extend or renew Letters
of Credit. No termination of the credit hereunder shall relieve the Borrower or
any of its Subsidiaries of any of the Obligations or any of its existing
obligations to any of the Banks arising under other agreements or instruments.
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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 Revolving Credit Loans pursuant to ss.13.1, each
Bank, if owed any amount with respect to the Revolving Credit Loans or the
Reimbursement Obligations, 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 or purchaser of any Letter of Credit
participation 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 Default or Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement 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 such Obligations in such order or
preference as the Majority Banks may determine; provided, however, that
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 provided, further, that the Agent may in its discretion make
proper allowance to take into account any Obligations not then due and
payable;
(c) Third, to the "Obligations" under the Guaranteed Credit
Agreement, to be applied in such order or preference as the Majority Banks
(as defined in the Guaranteed Credit Agreement) may determine;
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(d) Fourth, 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 ss.9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(e) Fifth, 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 Revolving Credit Notes held by such Bank or constituting Reimbursement
Obligations owed to such Bank, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Revolving
Credit Notes held by such Bank or constituting Reimbursement Obligations owed to
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 Revolving Credit Notes held by, or
constituting Reimbursement Obligations owed to, 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 Revolving Credit Note or
Revolving Credit Notes held by, or Reimbursement Obligations owed to, such Bank
any amount in excess of its ratable portion of the payments received by all of
the Banks with respect to the Revolving Credit Notes held by, and Reimbursement
Obligations owed to, 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 Revolving Credit Notes held by
it or Reimbursement Obligations owed to 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
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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.
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
Revolving Credit 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 Revolving Credit Notes, or for the
value of any such collateral security or for the validity,
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enforceability or collectability of any such amounts owing with respect to
the Revolving Credit 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
Revolving Credit 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 ss.11, each Bank that has
executed this Credit Agreement shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document and matter
either sent, or made available, by the Agent or any of its affiliates to
such Bank for consent, approval, acceptance or satisfaction, or required
thereunder to be consented to or approved by or acceptable or satisfactory
to such Bank, unless an officer of the Agent or any of its affiliates
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 or
any of its affiliates 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 Revolving Credit 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
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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 Revolving Credit Loan or to purchase any Letter of Credit
Participation or (b) to comply with the provisions of ss.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 Revolving Credit Loans, Unpaid Reimbursement
Obligations, interest, fees or otherwise, to the remaining nondelinquent
Banks for application to, and reduction of, their respective pro rata
shares of all outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. The Delinquent Bank hereby authorizes the Agent to distribute
such payments to the nondelinquent Banks in proportion to their respective
pro rata shares of all outstanding Revolving Credit Loans and Unpaid
Reimbursement Obligations. 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 Revolving Credit Loans and Unpaid
Reimbursement Obligations of the nondelinquent Banks, the Banks'
respective pro rata shares of all outstanding Revolving Credit Loans and
Unpaid Reimbursement Obligations 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
Revolving Credit Note or the purchaser of any Letter of Credit Participation 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 ss.16), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Revolving Credit 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.
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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 Revolving Credit Loans made by it, and as the holder of any
of the Revolving Credit Notes and as the purchaser of any Letter of Credit
Participations, 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; provided,
however, notwithstanding the foregoing, BKB agrees that so long as its
Commitment Percentage is 51% or greater, it will not resign as the Agent
hereunder without the Borrower's prior written consent. 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.
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 ss.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.
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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, the
Co-Agent or any of the Banks (other than taxes based upon the Agent's, the
Co-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, the Co-Agent and each Bank with respect thereto), (c) the reasonable
fees, expenses and disbursements of the Agent's Special Counsel, the Co-Agent's
counsel or any local counsel to the Agent or the Co-Agent incurred in connection
with the preparation, syndication, 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 and the
Co-Agent or any of its affiliates incurred by the Agent and the Co-Agent or such
affiliate in connection with the preparation, syndication, 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 of any Bank, the Agent or the Co-Agent, and reasonable consulting,
accounting, appraisal, investment banking and similar professional fees and
charges) incurred by any Bank, the Agent or the Co-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, the Co-Agent'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 or UCC
filings.
16.2. Indemnification. The Borrower agrees to indemnify and hold harmless
the Agent, the Co-Agent, their respective 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 Revolving Credit 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
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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. In litigation, or the preparation therefor, the
Banks, the Co-Agent 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 ss.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 ss.16 shall survive
payment or satisfaction in full of all other Obligations.
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
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violation of this ss.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 in respect of such regulatory
matters, (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 ss.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 ss.17.6.
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
ss.17 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
Revolving Credit Loans or Reimbursement Obligations from any Bank.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
the Revolving Credit Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto 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
Revolving Credit Loans and the issuance, extension or renewal of any Letters of
Credit as herein contemplated, and shall continue in full force and effect so
long as any Letter of Credit or any amount due under this Credit Agreement or
the Revolving Credits or any of the other Loan Documents remains outstanding or
any Bank has any obligation to make any Revolving Credit Loans or the Agent has
any obligation to issue, extend or renew any Letter of Credit, and for such
further time as may be otherwise expressly specified in this Credit Agreement.
All statements contained in any certificate or other paper delivered to 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.
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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 Revolving Credit Loans at the time owing to it, the Revolving Credit Notes
held by it and its participating interest in the risk relating to any Letters of
Credit); 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 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 a minimum amount of $1,000,000 or a
whole multiple of $500,000 in excess thereof, (d) any assignor making an
assignment hereunder shall, simultaneously with making any assignment hereunder,
also assign to the Eligible Assignee a pro rata portion of such assignor's
interests, rights and obligations under the Guaranteed Credit Agreement and (e)
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 D hereto (an "Assignment and
Acceptance"), together with any Revolving Credit 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 ss.19.3, be released from its obligations under this Credit Agreement.
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
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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 ss.7.4 and ss.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;
(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;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with
the assigning Bank satisfactory to such assignee with respect to its pro
rata share of Letter of Credit Fees in respect of outstanding Letters of
Credit.
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 and
Letter of Credit Participations purchased by, 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 $2,500.
19.4. New Revolving Credit Notes. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each
Revolving
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Credit 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 Revolving
Credit Note, a new Revolving Credit 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 Revolving Credit Note to the order
of the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Revolving Credit Notes shall provide that they are replacements for the
surrendered Revolving Credit Notes, shall be in an aggregate principal amount
equal to the aggregate principal amount of the surrendered Revolving Credit
Notes, shall be dated the effective date of such in Assignment and Acceptance
and shall otherwise be substantially the form of the assigned Revolving Credit
Notes. Within five (5) days of issuance of any new Revolving Credit Notes
pursuant to this ss.19.4, the Borrower shall deliver an opinion of counsel,
addressed to the Banks and the Agent, relating to the due authorization,
execution and delivery of such new Revolving Credit Notes and the legality,
validity and binding effect thereof, in form and substance satisfactory to the
Banks. The surrendered Revolving Credit 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 Revolving Credit 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 or Letter of Credit Fees
to which such 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. For purposes of this ss.19.6 an
assignee or participant or potential assignee or participant may include a
counterparty with whom such Bank has entered into or potentially might enter
into a
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derivative contract referenced to credit or other risks or events arising under
this Credit Agreement or any other Loan Document.
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 ss.13.1 or ss.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 Revolving Credit Loans or Reimbursement
Obligations. If any Bank sells a participating interest in any of the Revolving
Credit Loans or Reimbursement Obligations 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 ss.13.1 or ss.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 Revolving Credit
Loans or Reimbursement Obligations to the extent of such participation. The
provisions of this ss.19.7 shall not apply to an assignee Bank or participant
which is also a Bank on the Closing Date or to an assignee Bank or participant
which has disclosed to the other Banks that it is an Affiliate of the Borrower
and which, following such disclosure, has been excepted from the provisions of
this ss.19.7 in a writing signed by the Majority Banks determined without regard
to the interest of such assignee Bank or transferor Bank, to the extent of such
participation, in Revolving Credit Loans or Reimbursement Obligations.
19.8. Miscellaneous Assignment Provisions. Any assigning Bank shall retain
its rights to be indemnified pursuant to ss.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. Anything contained in
this ss.19 to the contrary notwithstanding, any Bank may at any time pledge all
or any portion of its interest and rights under this Credit Agreement (including
all or any portion of its Revolving Credit Notes) to any of the twelve Federal
Reserve Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.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.
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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 Revolving Credit Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
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 AppNet Systems, Inc., Attention:
President, or at such other address for notice as the Borrower shall last
have furnished in writing to the Person giving the notice;
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, XXX, Attention: Xxx X. Massimo, Director, 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 (a) 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
(b) if sent by registered or certified first-class mail, postage prepaid, on the
third Business Day following the mailing thereof.
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 ss.19.
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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
ss.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 Revolving Credit 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 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
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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 Revolving Credit Notes (other than interest accruing pursuant
to ss.5.10 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 or Letter of Credit Fees
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 may not be postponed without the written consent of each Bank
affected thereby; this ss.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 or any Letter of Credit Fees payable for the Agent's account and
ss.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.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
APPNET SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxx X. Xxxxxxxxx
Senior Vice President
BANKBOSTON, N.A., individually and as
Agent
By: /s/ Xxx X. Massimo
-----------------------------------
Xxx X. Massimo, Director
ANTARES CAPITAL CORPORATION,
individually and as Co-Agent
By: /s/
-----------------------------------
Title:
Schedule 1
Banks; Commitments
--------------------------------------------------------------------------------
Bank Commitment Amount Commitment Percentage
--------------------------------------------------------------------------------
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
LIBOR Lending Office: Same $ 7,500,000 50%
--------------------------------------------------------------------------------
Antares Capital Corporation
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
LIBOR Lending Office: Same $ 7,500,000 50%
--------------------------------------------------------------------------------
Total Commitment $15,000,000 100%
--------------------------------------------------------------------------------
