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Exhibit 4.1
LOAN AGREEMENT
AMERICAN NATIONAL BANK
AND TRUST COMPANY OF CHICAGO
CREDIT FACILITY FOR
SPSS, Inc.
May 29, 1998
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TABLE OF CONTENTS
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1. DEFINITIONS AND TERMS...........................................1
1.1 Definitions...........................................................1
1.2 GAAP.................................................................11
1.3 Borrower.............................................................11
1.4 Rules of Construction................................................11
2. LOANS - GENERAL TERMS..........................................12
2.1 Revolving Loan.......................................................12
2.2 Maximum Principal Amount.............................................12
2.3 Maturity Date; Termination of Loans..................................12
2.4 Authorized Disbursement of Proceeds..................................13
2.5 Borrowing Procedure..................................................13
2.6 Interest Rate........................................................13
2.7 Change of Laws.......................................................14
2.8 Regulatory Changes...................................................14
2.9 Advances Prior to LIBOR Rate Determination...........................15
2.10 Eurodollar Advances and Conversion...................................15
2.11 Interest Period Election.............................................15
2.12 Libor Brokerage Fee..................................................16
2.13 Usury................................................................16
3. PAYMENT TERMS..................................................16
3.1 Loan Account; Method of Making Payments..............................16
3.2 Interest Payments....................................................17
3.3 Principal Payments...................................................17
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3.4 Place of Payment.....................................................17
3.5 Payment on Maturity and Prepayment...................................17
3.6 Advances to Constitute One Loan......................................17
3.7 Application of Payments and Collections..............................18
3.8 Monthly Statements...................................................18
4. LETTERS OF CREDIT..............................................20
4.1 Mechanics of Issuance................................................20
4.2 Letter of Credit Fees................................................20
4.3 Drawings and Reimbursement of Amounts Drawn Under Letters of Credit..21
4.4 Interest on Amounts Drawn Under Letters of Credit....................21
4.5 Obligations Absolute.................................................21
4.6 Indemnification; Nature of Bank's Dutie..............................22
4.7 Increased Costs and Taxes Relating to Letters of Credit..............23
4.8 Standard Letter of Credit Application................................24
5. GENERAL WARRANTIES, REPRESENTATIONS AND COVENANTS..............24
5.1 General Representations and Warranties...............................25
5.2 Reaffirmation of Warranties and Representations......................30
5.3 Survival of Warranties and Representations...........................31
6. COVENANTS AND CONTINUING AGREEMENTS............................31
6.1 Financial Covenants..................................................31
6.2 Affirmative Covenants................................................31
6.3 Negative Covenants...................................................35
6.4 Required Notices.....................................................36
6.5 Payment of Claims....................................................37
6.6 Year 2000 Compliance.................................................38
7. DEFAULT........................................................38
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7.1 Events of Default....................................................38
7.2 Remedies Cumulative..................................................40
7.3 Acceleration.........................................................40
7.4 Remedies.............................................................40
7.5 Injunctive Relief....................................................40
7.6 Advances During Unmatured Default....................................41
8. CONDITIONS PRECEDENT TO DISBURSEMENT...........................41
8. Checklist Items......................................................41
8.2 Necessary Actions....................................................41
8.3 Conditions Precedent.................................................41
9. GENERAL........................................................41
9.1 Compliance with ERISA................................................41
9.2 Costs................................................................42
9.3 Statement............................................................43
9.4 Notices..............................................................43
9.5 Amendments and Waivers...............................................44
9.6 No Implied Waiver; Remedies Cumulative...............................45
9.7 Severability.........................................................45
9.8 Incorporation of Other Agreements....................................45
9.9 Acceptance...........................................................46
9.10 Knowledge............................................................46
9.11 Waiver by Borrower...................................................46
9.12 Governing Law........................................................47
9.13 Waiver of Marshaling.................................................47
9.14 Limitation by Law....................................................47
9.15 Survival of Representations and Warranties...........................48
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9.16 Service of Process...................................................48
9.17 Representation by Counsel............................................48
9.18 Release of Bank......................................................48
9.19 Invalidated Payments.................................................48
9.20 Designated Person....................................................48
9.21 Headings.............................................................49
9.22 Counterparts.........................................................49
9.23 Fax Execution........................................................49
9.24 No Third Party Beneficiaries.........................................49
9.25 Domicile of Loans....................................................50
9.26 Entire Agreement.....................................................50
9.27 Construction.........................................................50
9.28 Successors and Assigns...............................................50
9.29 Waiver of Trial by Jury..............................................50
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LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement"), dated for reference purposes only
as of May 29, 1998 by and between American National Bank and Trust Company of
Chicago, ("Bank"), a national banking association with its principal place of
business at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, XX 00000, and SPSS, Inc., a
Delaware corporation ("Borrower"), with its principal place of business at 000
Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxx, XX 00000.
RECITALS:
A. Borrower has requested and Bank has agreed to provide Borrower
with a revolving credit facility in an amount not to exceed Ten Million Dollars
($10,000,000) (the "Loans").
B. Borrower intends to use the proceeds of the Loans for working
capital and general corporate purposes.
C. The parties deem it to be in their best interest to set forth
their mutual agreements herein.
NOW THEREFORE, in consideration of any loan, advance, extension of credit
and/or other financial accommodation at any time made by Bank to or for the
benefit of Borrower, and of the promises set forth herein, the parties hereto
agree as follows:
1. DEFINITIONS AND TERMS.
1.1 Definitions. The following words, terms and/or phrases
shall have the meanings set forth thereafter and such meanings shall
be applicable to the singular and plural form thereof, giving effect
to the numerical difference.
(a) "Advance": any loan of monies made by Bank to Borrower pursuant
to the terms of Section 2.1.
(b) "Advance Date": with respect to each Advance, the Business Day
upon which the proceeds of such Advance are to made available to Borrower.
(c) "Affiliate": any Person (i) in which Borrower, one or more
equity interest holders owning twenty-five percent (25%) or more of the
total equity interest of Borrower, any Subsidiary, and/or any Parent,
individually, jointly and/or severally, now or at any time or times
hereafter, has or have an equity or other ownership interest equal to or in
excess of twenty-five percent (25%) of the total equity of or other
ownership interest in such Person; and/or (ii) which directly or indirectly
through one or more intermediaries controls or is controlled by, or is
under common control with Borrower; and/or (iii) any officer or director of
Borrower or any Subsidiary. For purposes of this definition,
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"control" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of Stock, by contract or otherwise,
and in any case shall include direct or indirect ownership (beneficially or
of record) of, or direct or indirect power to vote, 25% or more of the
outstanding shares of any class of capital stock of such Person (or in the
case of a Person that is not a corporation, 25% or more of any class of
equity interest).
(d) "Agreement": this Loan Agreement, together with all amendments,
modifications, extensions, supplements, restatements replacements and
extensions hereto or hereof.
(e) "and/or": one or the other or both, or any one or more or all,
of the things or Persons in connection with which the conjunction is used.
(f) "Assets": any and all real, personal and intangible property of
a Person, including, without limitation, accounts, chattel paper, contract
rights, letters of credit, instruments and documents, equipment, general
intangibles, inventory, leases, options, licenses, and real property,
whether now existing or hereafter acquired or arising.
(g) "Bank": American National Bank and Trust Company of Chicago, a
national banking association, and its successors and assigns.
(h) "Borrower": SPSS, Inc., a Delaware corporation, and its
permitted successors and assigns.
(i) "Borrower's Liabilities": all obligations and liabilities of
Borrower to Bank under the terms of this Agreement and the other Loan
Documents, and all extensions and renewals or refinancing thereof, whether
such obligation or liability is direct or indirect, secured or unsecured,
joint or several, absolute or contingent, due or to become due, whether for
payment or performance, whether heretofore arising, now existing or
hereafter arising, however evidenced, created, incurred, acquired or owing
and whether now contemplated or hereafter arising. Without limitation of
the foregoing, such liability and obligations include the principal amount
of Loans, interest, fees, indemnities or expenses under this Agreement and
all other Loan Documents, and all extensions, renewals and refinancing
thereof, whether or not such Loans were made in compliance with the terms
and conditions of this Agreement or in excess of the obligation of Bank to
lend. Borrower's Liabilities shall remain Borrower's Liabilities,
notwithstanding any assignment or transfer or any subsequent assignment or
transfer of any of the Borrower's Liabilities or any interest therein.
(j) "Borrower's Obligations": all terms, conditions, warranties,
representations, agreements, undertakings, covenants and provisions (other
than Borrower's Liabilities) to be performed, discharged, kept, observed or
complied with by Borrower to or for the benefit of Bank, under the terms of
this Agreement and all other Loan Documents, and all extensions and
renewals or refinancing thereof, whether such obligation is direct or
indirect, secured or unsecured, joint or several, absolute or
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contingent, due or to become due, whether heretofore arising, now
existing or hereafter arising, however evidenced, created, incurred,
acquired or owing and whether now contemplated or hereafter arising.
Borrower's Obligations shall remain Borrower's Obligations, notwithstanding
any assignment or transfer or any subsequent assignment or transfer of any
of the Borrower's Obligations or any interest therein.
(k) "Borrowing Request": a request for an Advance setting forth the
information required pursuant to Section 2.5(a).
(l) "Business Day": (i) For all purposes other than as covered by
clause (ii) hereof, any day, other than a Saturday, Sunday, a day that is a
legal holiday under the laws of the State of Illinois, or any other day on
which banking institutions located in the State of Illinois are authorized
or required by law or other governmental action to close; and (ii) with
respect to determinations in connection with, and payments of principal and
interest in Eurodollar Advances, any day which is a Business Day described
in clause (i) and which is also a day for trading by and between banks in
U.S. dollar deposits in the London Interbank Eurodollar Market.
(m) "Capitalized Lease" at any time any lease which is, or is
required under GAAP to be, capitalized on the balance sheet of the lessee
at such time, and "Capitalized Lease Obligation" of any Person at any time
shall mean the aggregate amount which is, or is required under GAAP to be,
reported as a liability on the balance sheet of such Person at such time as
lessee under a Capitalized Lease.
(n) "Charges": all national, Federal, state, county, city, municipal
and/or other governmental (or any instrumentality, division, agency, body
or department thereof, including without limitation the Pension Benefit
Guaranty Corporation) taxes, levies, assessments, charges, liens, claims or
encumbrances upon and/or relating to the Borrower's Assets, Liabilities,
Borrower's business, Borrower's ownership and/or use of any of its Assets,
Borrower's income and/or gross receipts and/or Borrower's ownership and/or
use of any of its material Assets.
(o) "Consolidated Group": Borrower and any Affiliates of Borrower
required to file consolidated tax returns pursuant to Section 1502 of the
Code.
(p) "Costs": any and all reasonable costs and expenses (including,
without limitation, the reasonable fees and expenses of any counsel,
accountants, appraisers or other professionals) incurred by Bank at any
time, in connection with: (i) the preparation, negotiation, execution and
administration of this Agreement and all other Loan Documents; (ii) the
preparation, negotiation and execution of any amendment or modification of
this Agreement or the other Loan Documents; (iii) the custody,
preservation, use or operation of, or the sale of, collection from or other
realization upon Assets of Borrower; (iv) the exercise or enforcement of
any of the rights of Bank hereunder; (v) any failure by Borrower to perform
or observe any of the provisions hereunder; (vi) any litigation, contest,
dispute, suit, proceeding or action (whether instituted by Bank, Borrower
or any other Person) in any way relating to this Agreement,
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the other Loan Documents, Borrower's Liabilities, Borrower's affairs
or any Affiliate's affairs in connection with which, if Bank is the
plaintiff it makes a recovery or obtains any final order in favor of Bank,
or if Bank is the defendant it is not found by a court of competent
jurisdiction to be liable; (vii) any attempt to enforce any rights of Bank
against Borrower or any other Person which may be obligated to Bank by
virtue of this Agreement or the other Loan Documents in connection with
which Bank makes a recovery or obtains a final order in Bank's favor; and
(viii) performing any of the obligations relating to or payment of any of
Borrower's Obligations hereunder in accordance with the terms hereof.
(q) "Default Rate": interest at the rate of two percent (2%) per
annum plus the Prime Interest Rate.
(r) "Designated Person": any Person identified as a "Designated
Person" on Borrower's Secretary's Certificate dated of even date herewith,
as amended or superseded from time to time.
(s) "Dollars" and "$": the lawful currency of the United States of
America.
(t) "Environmental Laws": any Federal, state or local law, rule,
regulation, ordinance, order, code or statute applicable to Borrower or its
property, in each case as amended (whether now existing or hereafter
enacted or promulgated), controlling, governing or relating to the
pollution or contamination of the air, water or land or concerning
hazardous, special or toxic materials, wastes or substances, or any
judicial or administrative interpretation of such laws, rules or
regulations, including, without limitation, the Water Pollution Control Act
(33 U.S.C. ss. 1251 et seq.), Resource Conservation and Recovery Act (42
U.S.C. ss. 6901 et seq.), Safe Drinking Water Act (42 U.S.C. ss. 3000(f) et
seq.), Toxic Substances Control Act (15 U.S.C. ss. 2601 et seq.), Clean Air
Act (42 U.S.C. ss. 7401 et seq.), and Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. ss. 9601 et seq.).
(u) "Equipment Leases": all leases or similar agreements pursuant to
which Borrower leases equipment.
(v) "Eurodollar Advance": any portion of the Loan for which the
interest rate is based on the Eurodollar Rate, whether or not Bank obtains
Eurodollars equal to all or any portion of such Eurodollar Advance
(w) "Eurodollar Rate": with respect to each Eurodollar Advance made
at a time when Borrower's Liabilities are equal to or less than Two Million
Five Hundred Thousand Dollars ($2,500,000), the rate equal to one and fifty
one hundredths percent (1.50%) per annum plus the LIBOR Rate and with
respect to each Eurodollar Advance made at a time when Borrower's
Liabilities are more than Two Million Five Hundred Thousand Dollars
($2,500,000), the rate equal to one and seventy-five one hundredths percent
(1.75%) per annum plus the LIBOR Rate.
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(x) "Event of Default": the definition ascribed to this term in
Section 7.1.
(y) "Exchange Rate": means, on any date when an amount expressed in a
currency other than Dollars is to be determined with respect to any Letter
of Credit, the nominal rate of exchange of Bank in the New York foreign
exchange market for the purchase by Bank (by cable transfer) of such
currency in exchange for Dollars at 12:00 noon (Chicago time) one Business
Day prior to such date (or otherwise in accordance with the normal practice
of Bank), expressed as a number of units of such currency per one Dollar.
(z) "Financials": those financial statements of Borrower, heretofore,
concurrently herewith or hereafter delivered by or on behalf of Borrower to
Bank, including but not limited to those financial statements and reports
delivered by Borrower to Bank pursuant to Section 6.2(c).
(aa) "GAAP": generally accepted accounting principles applied in the
preparation of the financial statements of a Person with such changes
thereto as: (i) shall be consistent with the then-effective principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors and successors, and (ii) shall be concurred in by the
independent certified public accountants of recognized standing acceptable
to Bank reviewing such financial statements of such Person.
(bb) "Governmental Authority": any government or political
subdivision or any agency, authority, bureau, central bank, commission,
department or instrumentality of either, or any court, tribunal. grand jury
or arbitrator, in each case whether foreign or domestic.
(cc) "Guaranty Equivalent": any agreement, document or instrument
pursuant to which a Person directly or indirectly guarantees, becomes
surety for, endorses, assumes, agrees to indemnify the obligee of any other
Person against, or otherwise agrees, becomes or remains liable
(contingently or otherwise) for, such obligation, other than by
endorsements of instruments in the ordinary course of business. Without
limitation, a Guaranty Equivalent shall be deemed to exist if a Person
agrees, becomes or remains liable (contingently or otherwise), directly or
indirectly: (i) to purchase or assume, or to supply funds for the payment,
purchase or satisfaction of, an obligation; (ii) to make any loan, advance,
capital contribution or other investment in, or a purchase or lease of any
property or services from, a
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Person; (iii) to maintain the solvency of such Person; (iv) to enable
such Person to meet any other financial condition; (v) to enable such
Person to satisfy any obligation or to make any payment; (vi) to assure the
holder of an obligation against loss; (vii) to purchase or lease property
or services from such Person regardless of the non-delivery of or failure
to furnish of such property or services; or (viii) in respect of any other
transaction the effect of which is to assure the payment or performance (or
payment of damages or other remedy in the event of nonpayment or
nonperformance) of any obligation.
(dd) "Indebtedness": with respect to any Person, at a particular
time (without duplication): (i) all obligations on account of money
borrowed by, or credit extended to or on behalf of, or for or on account of
deposits with or advances to, such Person; (ii) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments; (iii)
all obligations of such Person for the deferred purchase price of property
or services other than trade payables incurred in the ordinary course of
business and on terms customary in the trade; (iv) all obligations secured
by a Lien on property owned by such Person (whether or not assumed); and
all obligations of such Person under Capitalized Leases (without regard to
any limitation of the rights and remedies of the holder of such Lien or the
lessor under such Capitalized Lease to repossession or sale of such
property); (v) the face amount of all letters of credit issued for the
account of such Person and, without duplication, the unreimbursed amount of
all drafts drawn thereunder, and all other obligations of such Person
associated with such letters of credit or draws thereon; (vi) all
obligations of such Person in respect of acceptances or similar obligations
issued for the account of such Person; (vii) all obligations of such Person
under a product financing or similar arrangement; (viii) all obligations of
such Person under any interest rate or currency protection agreement,
interest rate or currency future, interest rate or currency option,
interest rate or currency swap or cap or other interest rate or currency
hedge agreement; and (ix) all obligations and liabilities with respect to
unfunded vested benefits under any "employee benefit plan" or with respect
to withdrawal liabilities incurred under ERISA by Borrower or any ERISA
Affiliate to a "multiemployer plan", as such terms are defined under the
Employee Retirement Income Security Act of 1974.
(ee) "Indebtedness Instrument": any note, mortgage, indenture,
chattel mortgage, deed of trust, loan agreement, hypothecation agreement,
pledge agreement, security agreement, financing statement or other
document, instrument or agreement evidencing or securing the payment of or
otherwise relating to the borrowing of monies. Indebtedness Instruments
shall include, but not be limited to the Loan Documents.
(ff) "Interest Period": with respect to any Eurodollar Advance, the
period commencing on the date such Eurodollar Advance is made or continued
as a Eurodollar Advance, as the case may be, or the date on which a Prime
Rate Advance is converted into such Eurodollar Advance as applicable, and
ending one, two, three, six or twelve months thereafter, as Borrower may
elect in the applicable Borrowing Request (or as Borrower shall be deemed
to have elected, as applicable); provided that any Interest Period which
would otherwise end on a day which is not a Business Day shall be extended
to the next succeeding Business Day unless such Business Day falls in
another calendar
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month, in which case such Interest Period shall end on the next
preceding Business Day. No Interest Period shall terminate after the end
of the Maturity Date.
(gg) "Interest Rate": the Prime Interest Rate or the Eurodollar
Rate, as determined in accordance with the provisions of Article 2.
(hh) "Letter of Credit" or "Letters of Credit": any standby letters
of credit issued or to be issued by Bank for the account of Borrower
pursuant to Section 2.1(b) and Article 4.
(ii) "Letter of Credit Usage": as at any date of determination, the
sum of (i) the maximum aggregate undrawn amount which is or at any time
thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under
Letters of Credit honored by Bank and not theretofore reimbursed by
Borrower (whether such reimbursement is out of the proceeds of Loans
pursuant to Section 2.1(a) or otherwise). For purposes of this definition,
any amount described in clause (i) or (ii) of the preceding sentence which
is denominated in a currency other than Dollars shall be valued based on
the applicable Exchange Rate for such currency as of the applicable date of
determination .
(jj) "LIBOR Breakage Fee": a fee equal to all losses (excluding loss
of anticipated profits) costs, or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by Bank to
fund or maintain the requested Eurodollar Advance, when, as a result of
such failure on the part of Borrower or prepayment by Borrower (including,
without limitation, any mandatory prepayment of principal and any
prepayment resulting from the liabilities being declared due and payable in
accordance with their terms hereof), interest on such Eurodollar Advance is
not based on the applicable Eurodollar Rate for the requested Interest
Period.
(kk) "LIBOR Rate": for each Interest Period, a rate of interest, per
annum, equal to: (i) the rate of interest determined by the Bank at which
deposits in U.S. Dollars for the relevant Interest Period are offered based
on information presented on the Telerate Screen as of 11:00 A.M. (London
time) on the applicable Interest Rate Determination Date; provided that if
more than one (1) offered rate appears on the Telerate Screen in respect of
such Interest Period, the arithmetic mean of all such rates (as determined
by the Bank) will be the rate used; provided further that if Telerate
ceases to provide LIBOR quotations, such rate shall be the average rate of
interest determined by the Bank at which deposits in U.S. Dollars are
offered for the relevant Interest Period by banks or other financial
institutions selected by Bank to banks in London interbank markets as of
11:00 A.M. (London time) on the applicable Interest Rate Determination
Date, multiplied by (ii) the LIBOR Rate Reserve Percentage. The LIBOR Rate
shall be adjusted automatically as of the effective date of each change in
the LIBOR Rate Reserve Percentage. The LIBOR Rate shall be calculated in
accordance with the foregoing whether or not Bank is actually required to
hold reserves in connection with its eurocurrency funding or, if required
to hold such reserves, is required to hold reserves at the LIBOR Rate
Reserve Percentage.
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(ll) "LIBOR Rate Reserve Percentage": for any day shall mean the
percentage (expressed as a decimal, rounded upward to the nearest 1/100 of
1%), as determined in good faith by Bank (which determination shall be
conclusive), which is in effect on such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) representing the
maximum reserve requirement (including, without limitation, supplemental,
marginal and emergency reserve requirements) with respect to eurocurrency
funding (currently referred to as "Eurocurrency liabilities") of a member
bank in such system.
(mm) "Lien": any mortgage, deed of trust, pledge, lien,
hypothecation, security interest, charge or other encumbrance or security
arrangement of any nature whatsoever, including but not limited to any
conditional sale or title retention arrangement, and any assignment,
deposit arrangement or lease intended as, or having the effect of,
security.
(nn) "Loan": any and all loans, advances, extensions of credit
and/or other financial accommodations of any kind or nature made by Bank at
any time to, for the benefit or at the request of Borrower pursuant to this
Agreement and/or any of the other Loan Documents.
(oo) "Loan Documents": this Agreement and the Other Agreements.
(pp) "Loan Party": Borrower and every other Person who is a party to
any one or more of the Loan Documents.
(qq) "Maturity Date": May 29, 2001, or such earlier date as all of
Borrower's Obligations shall be due and payable by acceleration or
otherwise.
(rr) "Maximum Principal Amount": the meaning set forth in Section
2.1(a).
(ss) "Note": that certain revolving promissory note dated even date
herewith, in the original principal amount of Ten Million Dollars
($10,000,000) made by Borrower payable to the order of Bank, as said note
may hereafter be amended, restated, modified, supplemented, extended or
replaced.
(tt) "Notice of Issuance of Letter of Credit": means notice
delivered by Borrower to Bank, in form and substance acceptable to Bank,
together with any application for letter of credit that Bank requires in
accordance with its customary practice for the issuance of letters of
credit pursuant to Section 2.1(b) and Article 4 with respect to the
proposed issuance of a Letter of Credit of the type requested
(uu) "Organic Documents": with respect to any Person, its articles
or certificate of incorporation, by-laws, shareholder's agreement,
certificate of partnership, certificate of limited partnership, partnership
agreement, articles of organization, operating agreement, or similar
documents or agreements governing its management and the rights and
privileges of its equity owners.
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(vv) "Other Agreements": the Note, together with all other
agreements, instruments and documents evidencing or securing the Loans or
the transactions contemplated herein, including, without limitation, bond
agreements, loan agreements, security agreements, guaranties, mortgages,
deeds of trust, notes, applications and agreements for letters of credit,
letters of credit, advances of credit, bankers acceptances, pledges, powers
of attorney, consents, assignments, collateral assignments, contracts,
notices, leases, financing statements and all other written matter
heretofore, now and/or from time to time hereafter executed by and/or on
behalf of Borrower, any other Loan Party and delivered to Bank, or issued
by Bank upon the application and/or other request of, and on behalf of,
Borrower.
(ww) "Parent": any Person, now or at any time or times hereafter,
owning or controlling (alone or with Borrower, any Subsidiary and/or any
other Person) at least a majority of the issued and outstanding Stock or
other ownership interest of Borrower or any Subsidiary (hereinafter
defined). For purposes of this definition, "control" shall have the same
meaning ascribed to this term in Section 1.1(c).
(xx) "Permitted Liens": (i) any liens created in favor of Bank; (ii)
liens for Charges which are not yet due and payable or which are expressly
permitted pursuant to the terms hereof, or claims and unfunded liabilities
under ERISA not yet due and payable or which are being contested in good
faith; (iii) liens arising in connection with worker's compensation,
unemployment insurance, old age pensions and social security benefits which
are not overdue or are being contested in good faith by appropriate
proceedings diligently pursued, provided that in the case of any such
contest any proceedings commenced for the enforcement of such lien shall
have been duly suspended and such provision for the payment of such lien
has been made on the books of Borrower (or the applicable Affiliate) as may
be required by GAAP; (iv) liens incurred in the ordinary course of business
to secure the performance of statutory obligations arising in connection
with progress payments or advance payments due under contracts with the
United States Government or any agency thereof entered into in the ordinary
course of business; (v) any liens securing indebtedness of Borrower to any
Persons in an aggregate amount less than $1,000,000; (vi) purchase money
liens in connection with the acquisition of Assets, (vii) Liens granted
solely upon Assets of Subsidiaries; and (viii) those liens disclosed on
Schedule 5.1(g).
(yy) "Person": any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated
organization, association, corporation, institution, entity, party or
government (whether national, Federal, state, county, city, municipal or
otherwise, including without limitation any instrumentality, division,
agency, body or department thereof).
(zz) "Prime Interest Rate": the prime or base rate of interest quoted
from time to time by the American National Bank and Trust Company of
Chicago as its base rate on corporate loans at large U.S. money center
commercial banks on such day; provided that in the event the American
National Bank and Trust Company of Chicago
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ceases quoting a prime or base rate, then Prime Rate shall mean the
per annum rate of interest quoted as the Bank Prime Loan Rate for the most
recent weekday for which such rate is quoted in Statistical Release H.15
(519) published from time to time by the Board of Governors of the Federal
Reserve System; provided further that in the event that both of the
aforesaid indices cease to be published or to quote rates of the aforesaid
types, the Prime Rate shall be determined from a comparable index chosen by
Bank in good faith. The Prime Rate shall change effective on the date of
the publication of any change in the applicable index by which the Prime
Rate is determined.
(aaa) "Prime Rate Advance": all or any portion of the Loan which is
not a Eurodollar Advance.
(bbb) "Records": all books, records, computer records, computer
software, ledger cards, programs and other computer materials, customer and
supplier lists, invoices, orders and other property and general intangibles
at any time evidencing or relating to the Assets.
(ccc) "SEC": the Securities and Exchange Commission.
(ddd) "Securities": shall have the meaning ascribed to that term in
the Securities Act of 1934.
(eee) "Securities Laws": all applicable Federal and state securities
laws and regulations promulgated pursuant thereto.
(fff) "Stock": all shares, interests, participations or other
equivalents (however designated) of or in a corporation, whether voting or
non-voting, including, but not limited to, common stock, warrants,
preferred stock, convertible debentures and all agreements, instruments and
documents convertible, in whole or in part, into any one or more or all of
the foregoing.
(ggg) "Subsidiary": any Person at least a majority of whose issued
and outstanding Stock or other ownership interests now or at any time
hereafter is owned by Borrower.
(hhh) "Tangible Net Worth": as determined at any time, the total of
shareholders' equity (including capital stock, additional paid-in capital
and retained earnings after deducting treasury stock and subordinated
indebtedness approved in writing by Bank) of a Person, less the sum of the
total amount of any intangible assets, which, for purposes of this
definition, shall include, without limitation, general intangibles,
noncompetition agreements, consulting agreements, capitalized software
costs, unamortized deferred charges and goodwill, all as determined in
accordance with GAAP.
(iii) "Unmatured Default": any event or condition which, with the
passage of time or the giving of notice or both, would constitute an Event
of Default hereunder.
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1.2 GAAP. Except as otherwise defined in this Agreement or the
other Loan Documents, all accounting terms used herein shall have the
meaning ascribed to that term in accordance with GAAP.
1.3 Borrower. Whenever the context so requires, the use of "it"
in reference to Borrower shall mean Borrower as defined above.
1.4 Rules of Construction. In this Agreement, unless a clear
contrary intention appears:
(a) the singular number includes the plural number and vice versa;
reference to any gender includes each other gender;
(b) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(c) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually;
provided that nothing in this clause is intended to authorize any
assignment not otherwise permitted by this Agreement;
(d) reference to any agreement, document or instrument means such
agreement, document or instrument as amended, supplemented or modified and
in effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof, and reference to any note includes any note
issued pursuant to any Loan Document in extension or renewal thereof and in
substitution or replacement therefor;
(e) unless the context indicates otherwise, reference to any Article,
Section, Schedule or Exhibit means such Article or Section hereof or such
Schedule or Exhibit hereto:
(f) the words "including" (and with correlative meaning "include")
means including, without limiting the generality of any description
preceding such term:
(g) with respect to the determination of any period of time, the word
"from" means "from and including" and the word "to" means "to but
excluding;" and
(h) reference to any law means such as amended, modified, codified or
reenacted, in whole or in part, and in effect from time to time.
(i) The Article and Section headings herein are for convenience only
and shall not affect the construction hereof.
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2. LOANS - GENERAL TERMS
2.1 Revolving Loan/Letters of Credit.
(a) Revolving Loan. Subject to the terms and conditions hereof, Bank
shall make available to Borrower revolving Loans from time to time in an
aggregate principal amount not to exceed at any time outstanding Ten
Million Dollars ($10,000,000) (the "Maximum Principal Amount"). The Loans
shall be further evidenced by the Note. The Loans shall be funded and
interest shall accrue and be paid thereon in accordance with this Article
2. The entire unpaid principal balance plus accrued but unpaid interest on
the Loans is due and payable on the Maturity Date.
(b) Letters of Credit. In addition to the Loan made pursuant to this
Section 2.1, Borrower may request, in accordance with the provisions of
Article 4, from time to time and at any time prior to the Maturity Date,
that Bank issue Letters of Credit for the account of and on behalf of
Borrower for Borrower's working capital and general corporate purposes.
Subject to the terms and conditions of this Agreement and in reliance upon
the representations and warranties of Borrower herein set forth, Bank shall
issue such Letters of Credit in accordance with the provisions of Section
4; provided that Borrower shall not request that Bank issue (and Bank shall
not issue): (i) any Letter of Credit if, after giving effect to such
issuance, the outstanding principal balance of the Loan plus the Letter of
Credit Usage would exceed Ten Million Dollars ($10,000,000); and (ii) any
Letter of Credit having an expiration date later than November 30, 2001,
provided that Bank may agree that a Letter of Credit will automatically be
extended for one or more successive periods.
2.2 Maximum Principal Amount. In the event that the outstanding
principal balance of the Loan plus the Letter of Credit Usage exceeds
the Maximum Principal Amount at any time, Borrower shall pay the
amount of such excess to Bank, without notice or demand, and any
amount not so paid shall bear interest at the Default Rate until paid.
Borrower's obligation to pay principal pursuant to this Section 2.2
shall include (but not be limited to) an obligation to pay principal
in an amount required to reduce the outstanding principal balance of
the Loan plus the Letter of Credit Usage to an amount equal to or less
than Ten Million Dollars ($10,000,000) at all times. This is an
absolute obligation to pay to Bank the amount of the unpaid principal
balance of the Loan plus the Letter of Credit Usage in excess of said
Maximum Principal Amount, regardless of the cause of such excess.
2.3 Maturity Date; Termination of Loans. Bank's obligation to
make any Advance to Borrower pursuant to the provisions hereof shall
be in effect until the Maturity Date, unless sooner terminated ( a) by
Bank upon the occurrence of an Event of Default, an Unmatured Default,
or pursuant to the terms hereof or (b) by Borrower at any time upon no
less than three (3) Business days' prior written notice, accompanied
by payment in full all Borrower's
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Liabilities then outstanding, including without limitation all
principal and interest outstanding under Loans, together with all
Costs.
2.4 Authorized Disbursement of Proceeds. Borrower
hereby authorizes and directs Bank to disburse, for and on behalf of
Borrower and for Borrower's account, the proceeds of any Loan to such
Person as Borrower or any Designated Person shall direct. In addition
to Advances of Loan proceeds made pursuant to a Borrowing Request made
by Borrower from time to time, Borrower hereby irrevocably authorizes
Bank to disburse proceeds of the Loan to pay: (a) interest which is
accrued but unpaid and which is due and payable pursuant to the terms
hereof and of the Note until the Loan is paid in full; and (b) for any
and all Costs. The execution of this Agreement by Borrower shall, and
hereby does, constitute an irrevocable direction and authorization to
Bank so to disburse such funds described in this Section and to treat
such Advances as money loaned pursuant to this Agreement and as
indebtedness evidenced by the Note. No further direction or
authorization from Borrower shall be necessary for Bank to make such
Advances, and all such Advances shall satisfy, to the extent so
disbursed, the obligations of Borrower hereunder and shall be
evidenced by the Note. Notwithstanding anything to the contrary
contained herein, Bank is under no duty or obligation to make such
Advances and failure to make such Advances shall not be deemed to be a
default by Bank or impair any of Bank's rights or remedies hereunder.
2.5 Borrowing Procedure.
(a) In order to request an Advance, Borrower shall hand
deliver or telecopy to Bank a duly completed Borrowing Request not
later than 11:00 a.m. Chicago time: (i) at least two (2) Business Days
before a proposed Eurodollar Advance and (ii) on the day of a proposed
Prime Rate Advance. Each Borrowing Request shall be irrevocable and
shall specify: (w) the number and location of the account to which
funds are to be disbursed; (x) the date such Advance is to be made
(which shall be a Business Day); (y) the amount of such Advance; and
(z) if applicable, the information required to elect that such Advance
be a Eurodollar Advance, in compliance with the provisions of Sections
2.10 and 2.11.
(b) If Borrower in respect of an outstanding
Eurodollar Advance shall not have delivered a Borrowing Request in
accordance with Section 2.5(a) at least three (3) Business Days prior
to the end of the Interest Period then in effect for such Eurodollar
Advance and requesting that such Eurodollar Advance be refinanced,
then Borrower shall (unless Borrower has notified the Bank not fewer
than three (3) Business Days prior to the end of such Interest Period,
that such Eurodollar Advance is to be repaid at the end of such
Interest Period) be deemed to have delivered a Borrowing Request
requesting that such Advance be refinanced with a new Advance of
equivalent amount, and such new Advance shall bear interest at the
Prime Interest Rate.
2.6 Interest Rate. The principal on the Note
shall bear interest at the Prime Interest Rate or, to the extent
Borrower has fully and timely complied with
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the provisions of Sections 2.10 and 2.11, at the Eurodollar Rate.
Unless Borrower has designated any Advance as a Eurodollar Advance in
strict accordance with the terms hereof, Borrower's Liabilities shall
bear interest at the Prime Interest Rate. Interest on all Prime Rate
Advances and on all Eurodollar Advances shall be computed on a 360 day
year for the actual number of days elapsed. After the occurrence of an
Event of Default and during the continuation thereof, all Loans shall
bear interest at the Default Rate. The unpaid principal balance of
each Advance shall bear interest at the Interest Rate applicable
thereto, determined by Bank in accordance with the provisions hereof,
which determination shall be binding upon Borrower, absent manifest
error.
2.7 Change of Laws. If Bank shall determine at any time after
the date hereof that the adoption of any law, rule or regulation
regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by Bank with
any request or directive regarding capital adequacy (whether or not
having the force of law) from any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate
of return on Bank's capital as a consequence of its obligations
hereunder to a level below that which Bank could have achieved but for
such adoption, change or compliance (taking into consideration Bank's
policies with respect to capital adequacy) by an amount deemed by Bank
to be material, then Borrower shall pay to Bank upon demand such
amount or amounts, in addition to the amounts payable under any other
provision of this Agreement or the Other Agreements, as will
compensate Bank for such reduction. Determinations by Bank for
purposes of this Section of the additional amount or amounts required
to compensate Bank with respect to the foregoing shall be conclusive
in the absence of manifest error. In determining such amount or
amounts, Bank may use any reasonable averaging or attribution methods.
Notwithstanding the foregoing, no amounts shall be payable by Borrower
to Bank under the terms of this Section 2.7 if Liabilities are paid in
full on or before ten (10) days after the date on which Bank shall
have notified Borrower that amounts will be due under this Section
2.7. In the event of a prepayment pursuant to this Section 2.7, any
LIBOR Breakage Fee otherwise payable pursuant to the terms of this
Article 2 shall be waived by Bank and shall not be due or payable.
2.8 Regulatory Changes. Notwithstanding any other provision
herein contained to the contrary, in the event that any regulatory
change shall, in the reasonable determination of Bank, make it
unlawful for Bank to make or to maintain any Eurodollar Advance or
impose additional restrictions on Eurodollar Advances by Bank, then,
the obligation of Bank to make or maintain any such Eurodollar Advance
shall be terminated and all outstanding Eurodollar Advances shall
automatically be converted to Prime Rate Advances. Bank shall, as
promptly as practicable following any such determination, give
Borrower a notice thereof that sets forth the basis for any such
determination. After such
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determination and while such determination is in effect,
Bank shall not be required to make further Eurodollar Advances.
2.9 Advances Prior to LIBOR Rate Determination. Anything herein
to the contrary notwithstanding, after notice but prior to making any
requested Eurodollar Advance if, for any reason whatsoever, LIBOR
Rates are not then being quoted for the requested Interest Period and
in an amount approximating the amount of such Eurodollar Advance, Bank
shall give Borrower prompt notice thereof and such Eurodollar Advance
(if not yet made) shall be a Prime Rate Advance and no conversions
into Eurodollar Advances shall be permitted and no new Eurodollar
Advances shall be made so long as such condition exists.
2.10 Eurodollar Advances and Conversion. Provided no Event of
Default or Unmatured Default has occurred and is continuing, Borrower
shall have the option, subject to the other provisions of this
Agreement, to: (i) request that any Advance or any portion of an
Advance in a minimum amount of $500,000 and in multiples of $100,000,
shall be deemed to be a Eurodollar Advance by giving telephonic notice
to Bank at least two (2) Business Days prior to the day any Eurodollar
Advance is to be made hereunder specifying the applicable Interest
Period; provided that Borrower gives Bank written confirmation by
facsimile of its telephonic notice on the same Business Day as such
telephone notice is given with respect to such Eurodollar Advance, and
(ii) convert on any Business Day, all or any portion of the
outstanding principal amount of any Advance or any portion of an
Advance, in a minimum amount of $500,000 and in multiples of $100,000,
from one type of interest rate advance to another type of interest
rate advance by giving at least two (2) Business Days prior telephonic
notice to Bank thereof; provided that Borrower gives Bank written
confirmation of its telephonic notice by facsimile on the same
Business Day that such telephonic notice is given with respect to such
conversion hereunder. Notwithstanding the foregoing: (y) no Eurodollar
Advance may be converted into a Prime Rate Advance pursuant to this
Section 2.10, except effective on the last day of the Interest Period
applicable thereto, and (z) Borrower shall have no more than five (5)
Eurodollar Advances with different interest periods at any one time.
2.11 Interest Period Election. Borrower may, by prior telephonic
notice to Bank, elect the Interest Period(s) to be applicable to all
or any portion of any Eurodollar Advance upon the expiration of the
Interest Period then applicable to such Eurodollar Advance; provided
that such notice is given to Bank at least two (2) Business Days prior
to the expiration of the then Interest Period and that Borrower gives
written confirmation by facsimile of its telephonic notice on the same
Business Day that such telephonic notice is given. In the event
Borrower does not make such an election with respect to all or any
portion of a Eurodollar Advance for which the Interest Period is
expiring, then, upon the expiration of such Interest Period, the
portion of such Eurodollar Advance for which no such election has been
made shall automatically convert to a Prime Rate Advance.
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2.12 Libor Brokerage Fee. In the event of any prepayment of an
Advance prior to the end of the then applicable Interest Period (by
acceleration or otherwise) or in the event any Advance is not made
after delivery of a Borrowing Request in accordance with the terms
hereof, for any reason whatsoever, Borrower shall pay to Bank an
amount equal to the LIBOR Breakage Fee. Any fee payable under this
Sections 2.12 not paid when due shall bear interest at the Default
Rate.
2.13 Usury. The provisions of this Section shall govern and
control over any irreconcilably inconsistent provision contained in
this Agreement or in any other document evidencing or securing the
Loan. Bank shall never be entitled to receive, collect, or apply as
interest hereon (for purposes of this Section, the word "interest"
shall be deemed to include any sums treated as interest under
applicable law governing matters of usury and unlawful interest), any
amount in excess of the Highest Lawful Rate (hereinafter defined) and,
in the event Bank ever receives, collects, or applies as interest any
such excess, such amount which would be excessive interest shall be
deemed a partial prepayment of principal and shall be treated
hereunder as such; and, if the principal of this Agreement is paid in
full, any remaining excess shall forthwith be paid to Borrower. In
determining whether or not the interest paid or payable, under any
specific contingency, exceeds the Highest Lawful Rate, Borrower and
Bank shall, to the maximum extent permitted under applicable law, (i)
characterize any non-principal payment as an expense, fee or premium
rather than as interest, (ii) exclude voluntary prepayments and the
effects thereof, and (iii) spread the total amount of interest
throughout the entire contemplated term of this Agreement, provided,
that if this Agreement is paid and performed in full prior to the end
of the full contemplated term hereof, and if the interest received for
the actual period of existence hereof exceeds the Highest Lawful Rate,
Bank shall refund to Borrower the amount of such excess and, in such
event, Bank shall not be subject to any penalties provided by any laws
for contracting for, charging or receiving interest in excess of the
Highest Lawful Rate. "Highest Lawful Rate" shall mean the maximum rate
of interest which Bank is allowed to contract for, charge, take,
reserve or receive under applicable law after taking into account, to
the extent required by applicable law, any and all relevant payments
or charges hereunder.
3. PAYMENT TERMS
3.1 Loan Account; Method of Making Payments. Bank shall
maintain a Loan Account on its books in which shall be recorded: (i)
all Loans made by Bank to Borrower pursuant to this Agreement; (ii)
all payments made by Borrower on all Loans; and (iii) all other
appropriate debits and credits as provided in this Agreement,
including, without limitation, all fees, charges, expenses and
interest. All entries in the Loan Account shall be made in accordance
with Bank's customary accounting practices, in effect from time to
time. The failure of Bank to record any of the foregoing shall not in
any way limit Borrower's obligations under this Agreement.
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3.2 Interest Payments.
(a) Accrued interest on all Prime Rate Advances shall be payable
monthly, in arrears, on the last Business Day of each month during the term
hereof, without notice or demand.
(b) Accrued interest on any Eurodollar Advance shall not be due and
payable monthly, but, instead, shall be payable in arrears on the last day,
of the Interest Period applicable thereto.
3.3 Principal Payments. The unpaid principal balance, plus all
accrued but unpaid interest shall be due and payable in full on the
Maturity Date, without notice or demand.
3.4 Place of Payment. All payments to Bank hereunder and under
the Other Agreements shall be payable in immediately available funds
on or before 3:00 p.m. Chicago time at the principal place business of
Bank, or such place or places as Bank may designate in writing to
Borrower. All of such payments to Persons other than Bank shall be
payable at such place or places as Bank may designate in writing to
Borrower. Borrower's Liabilities will be payable as set forth in the
Note, this Agreement, and the Other Agreements.
3.5 Payment on Maturity and Prepayment. On the Maturity Date,
whether by acceleration or otherwise, Borrower shall pay to Bank, in
full, in cash or other immediately available funds, the outstanding
amount of the Loan. Each Prime Rate Advance may be repaid at any time,
without premium or penalty by Borrower giving telephonic notice to
Bank of such prepayment no later than 3:00 p.m. Chicago time on the
date of such prepayment, confirmed in writing by facsimile of its
telephonic notice on the same day. Each Eurodollar Advance may be
prepaid on the last day of the Interest Period applicable thereto, but
only by Borrower giving telephonic notice to Bank of such prepayment
at least two (2) Business Days prior to the day of such prepayment,
such notice confirmed in writing by facsimile on the day of the
telephonic notice. Prepayment of any Eurodollar Advance during an
Interest Period is expressly prohibited. In the event of an attempted
prepayment of any Eurodollar Advance during any Interest Period, Bank,
at Borrower's option, shall either: (i) hold such funds in a
non-interest bearing cash collateral account to secure Borrower's
Liabilities and to apply such funds to Borrower's Liabilities on the
last day of the Interest Period, or (ii) apply such funds to
Borrower's Liabilities, in which event Borrower shall pay to Bank a
LIBOR Breakage Fee immediately upon demand therefor, and any amount
not so paid shall bear interest at the Default Rate.
3.6 Advances to Constitute One Loan. All Advances, loans and
any other financial accommodations provided pursuant to the terms
hereof by Bank to Borrower shall constitute one loan and all
indebtedness and obligations of
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Borrower to Bank under this Agreement, the Other Agreements or
otherwise shall constitute one general obligation.
3.7 Application of Payments and Collections.
(a) Application of Payments. Bank shall have the right unilaterally
(and without notice to or the consent of any Person) to allocate any and
all payments which may be received by or tendered to Bank made by Borrower
or any other Person at any time or from time to time and which relate in
any way to the Loan or any other of Borrower's Liabilities then due and
payable in any order of priority as Bank in its reasonable discretion shall
elect, as follows: (i) to the payment of any Costs; (ii) to accrued but
unpaid interest, penalties and late payment fees; and (iii) to principal;
provided that Bank shall not allocate payments in a manner which would
create a LIBOR Breakage Fee or other fee or penalty payable by Borrower
which would not otherwise be imposed. Borrower (y) irrevocably waives the
right to direct the application of payments and collections received by
Bank from or on behalf of Borrower, and (z) agrees that Bank shall have the
continuing exclusive right to apply and reapply any and all such payments
and collections against the Loan or any other Borrower's Liabilities or
Liabilities then due and payable in such manner as Bank may deem
appropriate, notwithstanding any entry by Bank upon any of its books and
records.
(b) Reapplication of Payments. To the extent that Bank receives any
payment on account of Borrower's Liabilities, and any such payment(s)
and/or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside, subordinated and/or required
to be repaid to a trustee, receiver or any other Person under any
bankruptcy act, state or federal law, common law or equitable cause, then,
to the extent of such payment(s) or proceeds received, Borrower's
Liabilities or part thereof intended to be satisfied shall be revived and
continue in full force and effect, as if such payment(s) and/or proceeds
had not been received by Bank and applied on account of the Borrower's
Liabilities.
3.8 Monthly Statements. All Advances to Borrower and all other
debits and credits provided for in this Agreement shall be evidenced
by entries made by Bank in its internal data control systems showing
the date, amount and reason for each such debit or credit. Until such
time as Bank shall have rendered to Borrower written statements of
account as provided herein, the balance in the Loan Account, as set
forth on Bank's most recent statement, shall be rebuttably presumptive
evidence of the amounts due and owing to Bank by Borrower. At Bank's
option, Bank may render a monthly statement to Borrower setting forth
the balance of the Loan Account, including principal, interest, costs,
penalties, charges and other fees. Each such statement shall be
subject to subsequent adjustment by Bank and Bank's right to reapply
payments in accordance with Section 3.7(b), but shall, as to
statements of principal and interest then due or having been paid,
absent manifest errors or omissions, be presumed correct and binding
upon Borrower and shall constitute an account stated unless, within
thirty (30) days after receipt of any statement from Bank, Borrower
shall deliver
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to Bank written objection thereto, specifying the error or errors, if
any, contained in such statement.
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4. LETTERS OF CREDIT
4.1 Mechanics of Issuance.
(a) Notice of Issuance. Whenever Borrower desires the issuance of a
Letter of Credit, it shall deliver to Bank a Notice of Issuance of Letter
of Credit no later than 10:00 A.M. (Chicago time) at least three (3)
Business Days in advance of the proposed date of issuance. The Notice of
Issuance of Letter of Credit shall specify (i) the proposed date of
issuance (which shall be a Business Day), (ii) the face amount of the
Letter of Credit, in Dollars (which amount, in the case of a drawing under
a Letter of Credit which is denominated in a currency other than Dollars,
shall be calculated by reference to the applicable Exchange Rate) as quoted
by Bank to Borrower in connection with such Letter of Credit, (iii) the
expiration date of the Letter of Credit, (iv) the name and address of the
beneficiary, and (v) the verbatim text of the proposed Letter of Credit or
the proposed terms and conditions thereof, including a precise description
of any documents and the verbatim text of any certificates to be presented
by the beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require Bank to make payment
under the Letter of Credit; provided that, anything to the contrary in this
Agreement notwithstanding, Borrower may, with Bank's consent, deliver a
Notice of Issuance of Letter of Credit electronically to Bank, in which
such event Borrower shall be deemed for all purposes hereunder and the
other Loan Documents to have delivered a written Notice of Issuance of
Letter of Credit hereunder. Borrower shall notify Bank prior to the
issuance of any Letter of Credit in the event that any of the matters to
which Borrower is required to certify in the applicable Notice of Issuance
of Letter of Credit is no longer true and correct as of the proposed date
of issuance of such Letter of Credit, and upon the issuance of any Letter
of Credit, Borrower shall be deemed to have re-certified, as of the date of
such issuance, as to the matters to which Borrower is required to certify
in the applicable Notice of Issuance of Letter of Credit.
(b) Issuance of Letter of Credit. Upon satisfaction or waiver of the
conditions set forth herein, Bank shall issue the requested Letter of
Credit in accordance with Bank's standard operating procedures; provided
that the Bank, in its sole and absolute discretion, may require changes in
the text of the proposed Letter of Credit or any such documents or
certificates, and that no Letter of Credit shall require payment against a
conforming draft to be made thereunder on the same Business Day that such
draft is presented if such presentation is made after 10:00 A.M. (Chicago
time) on such Business Day; provided further that Bank shall not be
obligated to issue any Letter of Credit denominated in a foreign currency
which in the judgment of Bank is not readily and freely available.
4.2 Letter of Credit Fees. Borrower agrees to pay the following
amounts to Bank with respect to Letters of Credit issued by Bank (a)
an issuance fee equal to 1.5% of the aggregate maximum amount
available to be drawn under such Letter of Credit for each 12 month
period or portion thereof during which such Letter of Credit is
outstanding and (b) all issuing costs of Bank.
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4.3 Drawings and Reimbursement of Amounts Drawn Under Letters of
Credit.
(a) Responsibility of Bank With Respect to Requests For Drawings. In
determining whether to honor any request for drawing under any Letter of
Credit by the beneficiary thereof, Bank shall be responsible only to
determine that the documents and certificates required to be delivered
under such Letter of Credit have been delivered and that they comply on
their face with the requirements of such Letter of Credit.
(b) Reimbursement by Borrower of Amounts Drawn Under Letters of
Credit. In the event Bank has determined to honor a request for drawing
under a Letter of Credit issued by it, Bank shall immediately notify
Borrower, and Borrower shall reimburse Bank on or before the Business Day
immediately following the date on which such drawing is honored (the
"Reimbursement Date") in an amount in Dollars (which amount, in the case of
a drawing under a Letter of Credit which is denominated in a currency other
than Dollars, shall be calculated by reference to the applicable Exchange
Rate on the date of such drawing) in same day funds equal to the amount of
such drawing; provided that, anything contained in this Agreement to the
contrary notwithstanding, (i) unless Borrower shall have notified Bank
prior to 10:00 A.M. (Chicago time) on the date of such drawing that
Borrower intends to reimburse Bank for the amount of such drawing with
funds other than the proceeds of Loans made pursuant to Section 2.1(a),
Borrower shall be deemed to have authorized Bank to make a Loan on the
Reimbursement Date in an amount equal to the amount of such drawing, and
(ii) subject to satisfaction or waiver of all conditions to the making of
Loans, Bank shall, on the Reimbursement Date, make a Loan in the amount of
such drawing, the proceeds of which shall be applied directly by Bank to
reimburse Bank for the amount of such drawing. If for any reason proceeds
of a Loan are not available to Borrower in accordance with Section 2.1(a)
in amount of such drawing, Borrower shall reimburse Bank, on demand, an
amount in same day funds equal to the excess of the amount of such drawing
over the aggregate amount of such Loans, if any, which are so received.
4.4 Interest on Amounts Drawn Under Letters of Credit. Borrower
agrees to pay to Bank, with respect to drawings made under any Letters
of Credit issued by it, interest on the amount paid by Bank in respect
of each such drawing from the date of such drawing to but excluding
the date such amount is reimbursed by Borrower (including any such
reimbursement out of the proceeds of Loans pursuant to Sections 2.1(a)
and 4.3 at the Prime Interest Rate.
4.5 Obligations Absolute. The obligation of Borrower to
reimburse Bank for drawings made under the Letters of Credit issued by
it and to repay any Loans made by Bank or other obligations of
Borrower pursuant to Sections 4.3 and 4.4 above shall be unconditional
and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including, without
limitation, the following circumstances:
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(a) any lack of validity or enforceability of any Letter of Credit;
(b) the existence of any claim, set-off, defense or other right which
any Person may have at any time against a beneficiary or any transferee of
any Letter of Credit (or any Persons for whom any such transferee may be
acting), or whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between any Person and the beneficiary for which any Letter of
Credit was procured);
(c) any draft, demand, certificate or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
accurate in any respect;
(d) payment by Bank under any Letter of Credit against presentation
of a demand, draft or certificate or other document which does not comply
with the terms of such Letter of Credit;
(e) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of any Person;
(f) any breach of this Agreement or any other Loan Document by any
party thereto;
(g) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(h) the fact that an Event of Default or an Unmatured Default shall
have occurred and be continuing;
provided, in each case, that payment by Bank under the applicable
Letter of Credit shall not have constituted willful misconduct of Bank
or its officers, employees or agents under the circumstances in
question (as determined by a final judgment of a court of competent
jurisdiction).
4.6 Indemnification; Nature of Bank's Duties.
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(a) Indemnification. In addition to amounts payable as provided in
any other provision of this Section 4, Borrower hereby agrees to protect,
indemnify, pay and save harmless Bank and its officers, employees or agents
from and against any and all claims, demands, liabilities, damages, losses,
and reasonable costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel) which Bank may incur or be subject
to as a consequence, direct or indirect, of (i) the issuance of any Letter
of Credit by Bank, other than as a result of the willful misconduct of Bank
or its officers, employees or agents as determined by a final judgment of a
court of competent jurisdiction or, subject to the following clause (ii),
the wrongful dishonor by Bank of a proper demand for payment made under any
Letter of Credit issued by it, or (iii) the failure of Bank to honor a
drawing under any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions herein
called "Governmental Acts").
(b) Nature of Bank's Duties. As between Borrower and Bank, Borrower
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit issued by Bank by, the respective beneficiaries of such Letters of
Credit. In furtherance and not in limitation of the foregoing, Bank shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any such Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) the validity
or sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any such Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) failure of the beneficiary of
any such Letter of Credit to comply fully with any conditions required in
order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (v) errors in interpretation of technical terms; (vi) any loss or
delay in the transmission or otherwise of any document required in order to
make a drawing under any such Letter of Credit or of the proceeds thereof;
(vii) the misapplication by the beneficiary of any such Letter of Credit of
the proceeds of any drawing under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of Bank, including
without limitation any Governmental Acts, and none of the above shall
affect or impair, or prevent the vesting of, any of Bank's rights or powers
hereunder.
(c) Limitation of Bank's Liability. In furtherance and extension and
not in limitation of the specific provisions set forth in the first
paragraph of this Section 4.6, any action taken or omitted by Bank under or
in connection with the Letters of Credit issued by it or any documents and
certificates delivered thereunder, if taken or omitted in good faith, shall
not put Bank under any resulting liability to Borrower.
4.7 Increased Costs and Taxes Relating to Letters of Credit.
Without limiting the other provision of Article 4, in the event that
Bank shall determine
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(which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto) that any change after
the date hereof in any law, treaty or governmental rule, regulation or
order, or any change therein or in the interpretation, administration
or application thereof (including the introduction of any new law,
treaty or governmental rule, regulation or order), or any
determination of a court or governmental authority, in each case that
becomes effective after the date hereof, or compliance by Bank with
any guideline, request or directive issued or made after the date
hereof by any central bank or other governmental or
quasi-govern-mental authority (whether or not having the force of
law):
(a) subjects Bank (or its applicable lending or letter of credit
office) to any additional tax (other than any tax on the overall net income
of Bank) with respect to the issuing or maintaining of any Letters of
Credit or the purchasing or maintaining of any participations therein or
any other obligations under this Section 4, whether directly or by such
being imposed on or suffered by Bank;
(b) imposes, modifies or holds applicable any reserve (including
without limitation any marginal, emergency, supplemental, special or other
reserve), special deposit, compulsory loan, FDIC insurance or similar
requirement in respect of any Letters of Credit issued by Bank; or
(c) imposes any other condition on or affecting Bank (or its
applicable lending or letter of credit office) regarding this Article 4 or
any Letter of Credit or any participation therein;
and the result of any of the foregoing is to increase the cost to Bank of
agreeing to issue, issuing or maintaining any Letter of Credit or agreeing to
purchase, purchasing or maintaining any participation therein or to reduce any
mount received or receivable by Bank (or its applicable lending or letter of
credit office) with respect thereto; then, in any case, Borrower shall promptly
pay to Bank, upon receipt if the statement referred to in the next sentence,
such additional amount or amounts as may be necessary to compensate Bank for any
such increased cost or reduction in amounts received or receivable hereunder.
Bank shall deliver to Borrower a written statement, setting forth in reasonable
detail the basis for calculating the additional amounts owed to Bank under this
Section 4.7, which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
4.8 Standard Letter of Credit Application.
Notwithstanding Section 9.8 below, if any provision contained in this
Agreement is in conflict, or inconsistent with any provision of a
Letter of Credit Application executed by Borrower and delivered to and
accepted by Bank in connection with this Agreement, then the
provision(s) of such Letter of Credit Application shall control.
5. GENERAL WARRANTIES, REPRESENTATIONS AND COVENANTS
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5.1 General Representations, Warranties and Covenants. Except as
disclosed in writing to Bank concurrently herewith, Borrower warrants
and represents to and covenants with Bank that:
(a) Organization. Borrower is and at all times hereafter shall be
a corporation, duly organized and existing and in good standing under the
laws of the State of Delaware and qualified or licensed to do business and
in good standing in all states in which the laws thereof require Borrower
to be so qualified and/or licensed and in which the failure to so qualify
could have a material adverse effect on the business, Assets or condition
(financial or otherwise) of Borrower or its ability to perform its
obligations under the Loan Documents, including without limitation the
States of Illinois and Delaware.
(b) Entity Power. Borrower has corporate power and authority to own
its property and to transact the business in which it is engaged or
presently proposes to engage. Borrower has the corporate right, power and
capacity and is duly authorized and empowered to enter into, execute,
deliver and perform this Agreement and the other Loan Documents to which it
is a party, and all such action has been duly and validly authorized by all
necessary corporate proceedings on its part. Without limitation of the
foregoing, Borrower has the corporate power and authority to borrow
pursuant to the Loan Documents to the fullest extent permitted hereby and
thereby from time to time, and has taken all necessary corporate action to
authorize such borrowings.
(c) Violation of Organic Documents and Agreements. Neither the
execution and delivery of this Agreement or any other Loan Document, nor
consummation of the transactions herein or therein contemplated, nor
performance of or compliance with the terms and conditions hereof or
thereof, does or will (i) violate or conflict with any Law, or (ii)
violate, conflict with or result in a breach of any term or condition of,
or constitute a default under, or result in (or give rise to any right,
contingent or otherwise, of any Person to cause) any termination,
cancellation, prepayment or acceleration of performance of, or result in
the creation or imposition of (or give rise to any obligation, contingent
or otherwise, to create or impose) any lien upon any of property of
Borrower pursuant to, or otherwise result in (or give rise to any right,
contingent or otherwise, of any Person to cause) any change in any right,
power, privilege, duty or obligation of Borrower under or in connection
with (a) the Organic Documents of Borrower, (b) any agreement or instrument
creating, evidencing or securing any Indebtedness or Guaranty Equivalent to
which Borrower is a party or by which its or any of its properties (now
owned or hereafter acquired) may be subject or bound, or (c) any other
agreement or instrument or arrangement to which Borrower is a party or by
which it or any of its properties (now owned or hereafter acquired) may be
subject or bound.
(d) Execution and Binding Effect. This Agreement and each other Loan
Document to which Borrower is a party and which is executed and delivered
or required to be executed and delivered on or before the date of which
this representation and warranty is made, or deemed made, has been duly and
validly executed and delivered by Borrower. This Agreement and each such
other Loan Document constitutes, and each other Loan Document when executed
and delivered by Borrower will constitute, the legal,
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valid and binding obligations of Borrower, enforceable against Borrower in
accordance with its terms.
(e) Ownership
(i) Schedule 5.1(e) sets forth all classes of stock of
Borrower, the shareholders thereof (other than members of
the general public), addresses of each such shareholder,
number of shares owned and how the shares are held.
(ii) Schedule 5.1(e) (as may be amended from time to time) sets
forth all options, warrants and other rights to acquire
Stock or other equity interests of Borrower, the nature of
such option, warrant or right and the conditions for the
exercise thereof. Bank hereby expressly consents to the
transfer, issuance or conveyance of Stock and/or other
Equity Interests of any Person in accordance with such
options, warrants and rights.
(iii) Borrower is not, and will not be, subject to any
obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital
stock. All of the outstanding shares of Borrower's capital
stock are and at all times will be validly issued, fully
paid and nonassessable. There are no statutory or
contractual stockholders' preemptive rights with respect
to Borrower's shares. Borrower has not violated and will
not violate any applicable federal or state securities
laws in connection with the offer, sale and issuance of
any of its capital stock. There are no agreements between
Borrower's stockholders with respect to the voting or
transfer of Borrower's capital stock.
(f) Fictitious Names. Each of the fictitious names, if any, used by
Borrower during the five (5) year period preceding the date of this
Agreement is set forth on Schedule 5.1(f) attached hereto (as amended from
time to time) and none of such fictitious names are registered trademarks
or tradenames with the U.S. Patent and Trademark Office, except as set
forth in Schedule 5.1(f).
(g) Liens/Title. Schedule 5.1(g) is a true, accurate and complete
list of all Liens, relating to the Assets of Borrower on the date hereof.
At all times following acquisition thereof, Borrower shall have good,
indefeasible and merchantable title to and ownership of all of its Assets,
free and clear of all liens, claims, security interests and encumbrances,
except the Permitted Liens.
(h) Financial Warranty. Borrower: (i) is now, and at all times
hereafter shall be generally paying its debts as they mature, (ii) now
owns, and shall at all times hereafter own, property which, at a fair
valuation, is greater than the sum of its debt, and (iii) now
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has, and shall have at all times hereafter, capital sufficient to
carry on its business and transactions and all businesses and transactions
in which it is about to engage.
(i) Proceedings. There are no actions or proceedings which are
pending or threatened against Borrower which might result in any material
and adverse change in its business, operations, Assets, condition
(financial or otherwise) or its ability to fully perform its obligations
and liabilities under the Loan Documents to which it is a party.
(j) Intentionally Deleted.
(k) Adequate Licenses. Borrower possesses adequate Assets, licenses,
patents, copyrights, trademarks and tradenames to continue to conduct its
business as previously conducted by it and as contemplated in the
foreseeable future except such licenses, patents, copyrights, trademarks
and trade names the failure of which to obtain could not have a material
adverse effect on Borrower's business, operations, Assets, condition
(financial or otherwise) or ability to perform its obligations under those
Loan Documents to which it is a party.
(l) Government Permits; Consents.
(i) Borrower has and is in good standing with respect to all
governmental permits, certificates, consents and franchises
necessary to continue to conduct its business as previously
conducted prior to the date hereof and to own or lease and
operate its properties as now owned or leased by it. None of
said permits, certificates, consents or franchises contain
any term, provision, condition or limitation more burdensome
than such as are generally applicable to Persons engaged in
the same or similar business as the Borrower.
(ii) Except for the actions of Borrower's Board of Directors
authorizing this Agreement and the related transactions and
documents, Borrower does not require the approval, consent
or waiver by any other Person (including but not limited to
shareholders, partners, members, equity owners, holders of
Indebtedness Instruments, or any owner of any lien upon the
Assets of any one or more of them or their Affiliates) for
the consummation of the transactions contemplated herein,
including but not limited to the borrowing of the Loan, and
the payment and performance of all Borrower's Liabilities
and Borrower's Obligations.
(m) Charge; Restrictions. To the best of Borrower's knowledge,
Borrower is not a party to (nor are any of its Assets otherwise subject to)
any contract or agreement or subject to any Charge restriction, judgment,
decree or order materially and adversely affecting its business, property,
assets, operations or condition, financial or otherwise.
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(n) Compliance with Laws. To the best of Borrower's knowledge,
Borrower, is not and will not be during the term hereof, in violation of
any applicable statute, regulation, order or ordinance of the United States
of America, of any state, city, town, municipality, county or of any other
jurisdiction, or of any agency thereof, including the Federal Reserve
Board, in any respect materially and adversely affecting its business,
operations, Assets, or condition (financial or otherwise) or its ability to
perform its obligations under those Loan Documents to which it is a party.
(o) Compliance with Indebtedness Instruments. Borrower is not and at
no time during the term hereof shall be in default under any Indebtedness
Instrument.
(p) Financials. The Financials heretofore delivered by Borrower, or
any other Loan Party to Bank, fairly and accurately present the assets,
liabilities and financial conditions and results of operations of Borrower,
and such other Persons described therein as of and for the periods ending
on such dates and have been prepared in accordance with generally accepted
accounting principles and such principles have been applied on a basis
consistently followed in all material respects throughout the periods
involved.
(q) Taxes. All tax and information returns required to be filed by or
on behalf of Borrower have been properly prepared, executed and filed. All
taxes, assessments, fees and other Charges upon Borrower, or upon any of
its properties, incomes, sales or franchises which are due and payable have
been paid other than those not yet delinquent and payable without premium
or penalty, and except for those being diligently contested in good faith
by appropriate proceedings, and in each case adequate reserves and
provisions for taxes have been made on the books of Borrower. The reserves
and provisions for taxes on the books of Borrower are adequate for all open
years and for its current fiscal period. Borrower does not know of any
proposed additional assessment or basis for any material assessment for
additional taxes (whether or not reserved against). The federal, state and
local income tax liabilities of Borrower have been finally determined by
the Internal Revenue Service and other relevant taxing authorities, or the
time for audit has expired, for all fiscal periods ending on or prior to
December 31,1994 and all such liabilities (including all deficiencies
assessed following audit) have been satisfied.
(r) No Adverse Change. There has been no material and adverse change
in the Assets, liabilities or financial condition of Borrower since the
date of the Financials.
(s) No Indebtedness. Except as disclosed in the most recent
Financials heretofore delivered by Borrower to Bank or otherwise disclosed
in writing to Bank, none of Borrower nor any Affiliate has any Indebtedness
(except for Indebtedness arising in the ordinary course of its business
since the dates reflected in the Financials that is not Indebtedness for
borrowed money), has guaranteed or entered into any Guaranty Equivalent
(other than as a result of the endorsement of any instrument of items of
payment for deposit or collection in the ordinary course of business or as
otherwise expressly permitted pursuant to the terms hereof) the obligations
of any Person, and there are no actions or proceedings which are pending
or, to the best of Borrower's knowledge,
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threatened against Borrower or any Affiliate which, in any of the foregoing
cases, are reasonably likely to result in any material adverse change in
its financial condition or materially adversely affect its assets or its
ability to fully perform and satisfy its obligations under the Loan
Documents.
(t) Intentionally Deleted.
(u) No Liability on Bank. The execution, delivery and performance by
Borrower and each other Loan Party of this Agreement and/or the Other
Agreements will not, except to the extent caused by independent actions of
Bank, impose on or subject Bank to any liability, whether fixed or
contingent, in respect of any Environmental Law relating to the operation
of Borrower's business. Bank's exercise of any of the rights or remedies
described in this Agreement or in any of the Other Agreements shall not
constitute a breach of any provision contained in any agreement, instrument
or document concerning the assignment or license of, or the payment of
royalties for, any patents, patent rights, tradenames, trademarks, trade
secrets, know-how, copyrights or any other form of intellectual property
now or at any time or times hereafter protected as such by any applicable
law.
(v) Affiliates. Schedule 5.1(v) attached hereto is a true, accurate
and complete schedule of Borrower's Affiliates, together with a description
of Borrower's relationship to each such Affiliate. Borrower is not a
partner (general or limited) of any partnership, a party to any joint
venture or owns (beneficially or of record) any equity or similar interest
in any Person (including but not limited to any interest pursuant to which
Borrower has or may in any circumstance have an obligation to make capital
contributions to, or be generally liable for or on account of the
liabilities, acts or omissions of such other Person).
(w) Real Property; Environmental Issues. Borrower does not now own
and at no time in the last five (5) years has owned, any real property.
Borrower has not received a summons, citation, notice, or directive from
the Environmental Protection Agency or any other federal or state
governmental agency concerning any action or omission resulting in the
releasing, or otherwise disposing of hazardous waste or hazardous
substances into the environment with respect to any real property.
(x) Investment Company Act and Public Utility Holding Company Act..
Borrower is not (a) an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company Act of
1940, as amended, (b) a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of either a "holding company" or a
"subsidiary company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (c) subject to any other law which
purports to restrict or regulate the ability to borrow money or obtain
credit.
(y) Intellectual Property. Attached hereto as Schedule 5.1(y) is a
true, accurate and complete list of all United States and foreign patents,
trademarks, tradenames, service marks, copyrights and applications therefor
owned and or used by Borrower (the "Intellectual Property Rights"). Except
as set forth on Schedule 5.1(y),
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the Intellectual Property Rights are owned by Borrower or Borrower will own
or possess the royalty-free licenses or other rights to use all
Intellectual Property Rights. To the best of Borrower's knowledge, none of
the products or processes used in Borrower's business conflicts with or
infringes or has infringed upon any patents, trademarks, trade names,
service marks or copyrights of any other person or entity; and to the best
of Borrower's knowledge, Borrower has the full right to conduct its
business as heretofore conducted by Borrower, without incurring license
fees or royalty or other payment obligations to any person or entity in
respect of the Intellectual Property Rights.
(z) WARN. Borrower is now, and at all times during the term or any
renewal term hereof Borrower shall be, in compliance with the Worker's
Adjustment and Retraining Notification Act.
(aa) REG U et al. Borrower warrants and represents to Bank that
Borrower shall use the proceeds of all Loans solely to and for general
corporate purposes and consistently with all applicable laws and statutes.
Borrower's use of the proceeds of any Loan made by Bank are legal and
proper uses (duly authorized by all requisite action of the board of
directors of Borrower), in accordance with applicable laws, rules and
regulations, as in effect from time to time. Borrower's execution and
delivery of this Agreement or any of the other Loan Documents and
Borrower's conduct of its business and use of proceeds of the Loan does not
and will not directly or indirectly violate or result in a violation of the
Securities Exchange Act of 1934, as amended, or Regulations U, G, T and X
of the Board of Governors of the Federal Reserve System (12 CFR 221, 207,
220 and 224, respectively). Borrower further warrants and represents to
Bank and covenants with Bank that Borrower is not in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board of Governors of the
Federal Reserve System), and no proceeds of any Loans will be used to
purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
(bb) Fiscal Year End. Currently and at all times when Borrower's
Liabilities are outstanding, Borrower's fiscal year will end December 31.
(cc) Disclosure. To the best knowledge of Borrower, neither this
Agreement nor any Loan Document nor any statement, list, certificate or
other document or information, nor any schedules to this Agreement or any
other Loan Document, delivered or to be delivered to Bank, contains or will
contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary to make statements contained herein or
therein, in light of the circumstances in which they are made, not
misleading.
5.2 Reaffirmation of Warranties, Representations and Covenants.
Each request for an Advance made by Borrower pursuant to this
Agreement or the Other Agreements shall constitute (i) an automatic
warranty and representation by Borrower to Bank that there does not
then exist an Event of Default or an Unmatured Default, and (ii) a
reaffirmation as of the date of said Borrowing Request that each and
every warranty and representation and covenant of
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Borrower contained in this Article 5 and other sections of this
Agreement and in the Other Agreements, is true and correct in all
material respects, except where such representation or warranty
specifically relates to an earlier date.
5.3 Survival of Warranties and Representations. Borrower
covenants, warrants and represents to Bank that all representations
and warranties of Borrower contained in this Agreement and the Other
Agreements shall be true on the date hereof, and shall survive the
execution, delivery and acceptance hereof and thereof by the parties
thereto and the closing of the transactions described herein and
therein or related hereto or thereto. Unless expressly limited by the
terms of this Article 5, each representation and warranty shall be
deemed to be remade concurrently with each Advance hereunder.
6. COVENANTS AND CONTINUING AGREEMENTS.
6.1 Financial Covenants. Borrower shall, at all times during the
term hereof, measured quarterly:
(a) maintain a ratio of total liabilities (less deferred revenue) to
Tangible Net Worth of less than 1.35 to 1;
(b) maintain a ratio of current assets to current liabilities of
greater than 1.5 to 1; and
(c) maintain Tangible Net Worth greater than the applicable amount
below from and after each of the dates identified below:
May 29, 1998 $19,000,000
January 1, 1999 $20,000,000
January 1, 2000 $21,000,000
January 1, 2001 $22,000,000
All covenants set forth herein shall be measured quarterly, upon receipt of the
statements delivered to Bank pursuant to Section 6.2(c)(iii) or the annual
consolidated financial statements delivered in accordance with Section
6.2(c)(i), if available.
6.2 Affirmative Covenants. Borrower warrants and represents to
and covenants with Bank that Borrower shall, unless Bank otherwise
consents thereto in writing, do all of the following during the term
hereof:
(a) Representation and Warranties. To the extent any representation
or warranty contained herein refers to an event or state of facts which
exists on the date hereof and shall exist during the term hereof or at the
time of each Advance hereunder, said representation or warranty shall be
deemed to be an affirmative covenant of Borrower to take all actions, omit
to take such actions or cause such actions to be taken which shall
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be necessary or desirable to cause such representation or warranty to be
true and accurate at all times during the term hereof. To the extent any
representation, warranty or covenant herein (including the negative
covenants set forth in Section 6.3) relates to any other Person, it shall
be deemed to be a covenant of Borrower to cause such Person to comply with
or otherwise perform such representation, warranty or covenant, whether or
not Borrower has the legal, corporate or other ability to cause such
compliance or performance.
(b) Corporate Existence. Borrower shall preserve and maintain its
corporate existence, rights, privileges and franchises in the jurisdiction
of its incorporation or organization, and qualify and remain qualified to
do business in each other jurisdiction in which such qualification is
necessary in view of its business or operations, except such jurisdictions
where failure to qualify would not have a material adverse effect on
Borrower's, business, Assets, operations, condition (financial or
otherwise) or ability to perform its obligations under the Loan Documents.
(c) Records; Reports. Borrower covenants with Bank that Borrower
shall keep Records and prepare financial statements and shall cause to be
furnished to Bank the following (all of the foregoing and following which
comprise financial statements are to be kept and prepared in accordance
with GAAP applied on a basis consistent with the Financials unless
Borrower's certified public accountants concur in any changes therein and
such changes are consistent with then applicable GAAP).
(i) As soon as available but not later than ninety (90)
days after the close of each fiscal year of Borrower,
a balance sheet of Borrower as at the end of such
year, the related statement of operations (including
income statement) for such year and a reconciliation
of capital for such year, all certified on an
unqualified basis by a firm of independent certified
public accountants selected by Borrower and
acceptable to Bank, in Bank's sole and absolute
discretion.
(ii) As soon as available but not later than forty-five
(45) days after the end of each calendar quarter
hereafter, a balance sheet of Borrower as at the end
of, and the related statement of operations for, both
such calendar quarter and the portion of such
Borrower's fiscal year then elapsed, all reviewed by
a firm of independent certified public accountants
selected by Borrower and acceptable to Bank, in
Bank's sole and absolute discretion.
(iii) Concurrently with delivery to its shareholders,
copies of all financial and other information
delivered by Borrower to such Persons, including
without limitation, its proxy statements and annual
reports to stockholders. Concurrently with delivery
to the SEC by Borrower, copies of all reports filed
by Borrower with the SEC, including without
limitation, all reports on Forms 10K, 10Q or 8K
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promulgated under the Securities Exchange Act of 1934, as
amended.
(iv) Concurrently with delivery of the Financials required
pursuant to Sections 6.2(c)(i) and (ii) hereof, a
certificate executed by the President, Treasurer or Chief
Financial Officer of Borrower that such Financials present
fairly the financial position and results of operations of
Borrower for the applicable period, and that no Event of
Default or Unmatured Default has occurred and is continuing
(including but not limited to compliance with the covenants
set forth in Section 6.1) or if an Event of Default or
Unmatured Default has occurred, setting forth the details of
such event and the action which Borrower proposes to take
with respect thereto.
(v) In satisfaction of Borrower's obligation to deliver to Bank
the items identified at (i), (ii) and (iii) above,
Borrower's executive officer's certificate to be delivered
to Bank pursuant to (iv) above may itemize those Financials,
shareholder information and SEC filings which at the
relevant dates are available in full text on the world wide
web; provided that such executive officer's certificate
shall identify the world wide web location of all documents
that are not SEC filings available in full text in a timely
fashion in the XXXXX database located at xxx.xxx.xxx. All of
the foregoing information that Bank expressly requests,
together with all other information required to be delivered
to Bank pursuant to (I), (ii) and (iii) above, shall be
delivered to Bank by Borrower in paper form.
(vi) Such other data and information (financial and otherwise) as
Bank, from time to time, reasonably may request bearing upon
or related to Borrower's financial condition and/or results
of operations.
(d) Insurance. Borrower, at its sole cost and expense, shall keep and
maintain: (i) policies of insurance against all hazards and risks
ordinarily insured against by others in similar business or as reasonably
requested in writing by Bank; and (ii) public liability insurance relating
to Borrower's ownership and use of its Assets. All such policies of
insurance shall be in form, with insurers and in such amounts as may be
satisfactory to Bank. Promptly upon Bank's request, Borrower shall deliver
to Bank the original (or certified) copy of each policy of insurance, and
evidence of payment of all premiums for each such policy. Such policies of
insurance (except those of public liability) shall contain an endorsement,
in form and substance acceptable to Bank, showing losses payable to Bank.
Such endorsement or an independent instrument furnished to Bank, shall
provide that all insurance companies will give Bank at least thirty (30)
days prior written notice before any such policy or policies of insurance
shall be altered or canceled and that no act or default of Borrower or any
other Person shall affect the right of Bank to recover under
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such policy or policies of insurance in case of loss or damage. Borrower
hereby directs all insurers under such policies of insurance (except those
of public liability) following an Event of Default to pay all proceeds
payable thereunder directly to Bank. Following an Event of Default,
Borrower, irrevocably, appoints Bank (and all officers, employees or agents
designated by Bank) as Borrower's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims
under such policies of insurance, endorsing the name of Borrower on any
check, draft, instrument or other item of payment for the proceeds of such
policies of insurance and for making all determinations and decisions with
respect to such policies of insurance. In the event Borrower at any time or
times hereafter shall fail to obtain or maintain any of the policies of
insurance required above or to pay any premium in whole or in part relating
thereto, then Bank, without waiving or releasing any of Borrower's
Obligations or Borrower's Liabilities or any Event of Default or Unmatured
Default hereunder, may at any time or times thereafter (but shall be under
no obligation to do so) obtain and maintain such policies of insurance and
pay such premium and take any other action with respect thereto which Bank
deems advisable. All sums so disbursed by Bank, including reasonable
attorneys' fees, court costs, expenses and other charges relating thereto,
shall be part of Borrower's Liabilities, payable by Borrower to Bank on
demand. The Bank shall also have been named as an additional insured with
respect to Borrower's liability insurance.
(e) Payment of Charges. Borrower shall pay promptly, when due, all
Charges and Borrower, shall not permit the Charges to arise or to remain
unpaid, and will promptly discharge the same. In the event Borrower, at
any time or times hereafter, shall fail to pay the Charges or to obtain
such discharges as required herein, Borrower promptly shall so advise Bank
thereof in writing. Bank may, without waiving or releasing any of
Borrower's Obligations or Borrower's Liabilities or any Event of Default or
Unmatured Default hereunder, in its sole and absolute discretion, at any
time or times thereafter, make such payment, or any part thereof, or obtain
such discharge and take any other action with respect thereto which Bank
deems advisable. All sums so paid by Bank and any expenses, including
reasonable attorneys' fees, court costs, expenses and other charges
relating thereto, shall be part of Borrower's Liabilities, payable by
Borrower to Bank on demand. Notwithstanding the foregoing, Borrower, may
permit or suffer the Charges to attach to its Assets and may dispute,
without prior payment thereof, the Charges, on the conditions that: (i)
Borrower in good faith, shall be contesting the same in an appropriate
proceeding diligently pursued; (ii) enforcement thereof against any Assets
of Borrower shall be stayed; and (iii) appropriate reserves therefor shall
have been established on the Records of Borrower in accordance with GAAP.
(f) Pay Debts. Borrower shall pay or discharge or otherwise satisfy
all Indebtedness at or before maturity or before the same becomes
delinquent; provided that Borrower shall not be required to pay any
Indebtedness while the same is being contested by it in good faith and by
appropriate proceedings so long as Borrower shall have set aside on its
books reserves in accordance with GAAP with respect thereto and title to
any property of Borrower is not jeopardized.
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(g) Compliance with Laws. Borrower shall comply with all laws,
rules, regulations and governmental orders (federal, state and local),
including all Environmental Laws, having applicability to it or to the
business or businesses at any time conducted by it, where the failure to so
comply would have a material adverse effect, either individually or in the
aggregate, on the business, Assets, operations, condition (financial or
otherwise) or its ability to perform its obligations under the Loan
Documents.
(h) Perform Obligations. Borrower shall duly and punctually pay and
perform each of its obligations under this Agreement and the Other
Agreements in accordance with the terms thereof.
(i) Operating and Disbursement Accounts. Borrower shall maintain all
of its general operating accounts and primary disbursement accounts at
Bank. Schedule 6.2(i) sets out all depository, investment and other
accounts maintained by Borrower with financial institutions and/or brokers
other than Bank. Borrower promptly shall deliver an amended Schedule 6.2(i)
to Bank reflecting each addition to and deletion of such accounts.
6.3 Negative Covenants. Borrower warrants and represents to and
covenants with Bank that Borrower shall not, without Bank's prior
written consent, which Bank may or may not give in its sole and
absolute discretion, concurrently or hereafter do any of the
following:
(a) Sell or Encumber Assets. Borrower, shall not assign, sell or
transfer any of its Assets to any Person, other than in the ordinary course
of business, nor permit, grant, or suffer a security interest, lien, claim
or encumbrance upon any of its Assets, except the Permitted Liens.
(b) Attachment. Borrower, shall not permit or suffer any levy,
attachment or restraint to be made affecting any of its Assets;
(c) Receiver. Borrower, shall not permit or suffer any receiver,
trustee or assignee for the benefit of creditors, or any other custodian to
be appointed to take possession of all or any of its Assets.
(d) Amend Organizational Documents; Business Objectives. Borrower,
shall not make any change: (i) in its Organic Documents or capital
structure; or (ii) in any of its business objectives, purposes and
operations, including by undertaking additional business activities.
Borrower shall not engage in any business not of the same general type as
those conducted by it on the date hereof.
(e) Mergers and Acquisitions. Neither Borrower nor any Subsidiary
shall liquidate, dissolve, enter into any merger, consolidation,
partnership, joint venture or other combination, except that any Person
which is in the general line of business of Borrower may merge into or with
or be acquired by Borrower or any Subsidiary, provided that Borrower or
such Subsidiary, as applicable, shall be the continuing or surviving
entity.
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(f) Adverse Transactions. Borrower, shall not enter into any
transaction which materially and adversely affects its ability to perform
its obligations under the Loan Documents or to pay any other Indebtedness.
(g) Investments. Borrower shall not make any investment in the Stock,
other equity interests in, or obligations of any Person; provided that in
connection with Borrower's management of its cash on a short-term basis in
the ordinary course of business Borrower may invest in obligations of other
Persons that are cash or cash equivalents and provided that Borrower may
create new Subsidiaries of which Borrower is the 100% owner of all equity
interests.
(h) Loan; Guaranty Debt. Borrower shall not make any loan to any
Person. Borrower has not entered into and shall not enter into any Guaranty
Equivalents.
(i) Borrow Indebtedness; Pay Indebtedness. Other than amounts loaned
by Bank to Borrower hereunder, Borrower shall not incur any Indebtedness
for borrowed money in excess on $1,000,000 of unsecured borrowings in the
aggregate outstanding at any one time. Except in the ordinary course of
business, Borrower, shall not defease, prepay, repay, purchase, redeem or
otherwise acquire any of its Indebtedness for borrowed money.
(j) Issue Power of Attorney. Except pursuant to this Agreement and
the Other Agreements, Borrower, shall not issue any power of attorney or
other contract or agreement giving any Person power or control over the
day-to-day operations of Borrower's, business, other than in connection
with Permitted Liens or Indebtedness expressly permitted pursuant to the
terms of this Agreement.
(k) Amendment of Credit Agreements. Except in the ordinary course of
business, Borrower shall not amend, modify or extend any note, credit
agreement, security agreement or other document, instrument of agreement
evidencing or securing Indebtedness of Borrower, without in each case
Bank's prior written consent.
6.4 Required Notices
(a) In addition to those notices required elsewhere in this
Agreement, Borrower shall notify Bank promptly after obtaining knowledge
of:
(i) except as otherwise previously disclosed in writing to Bank, any
event or occurrence which Borrower has determined has caused a
material loss or decline in value of Borrower's, Assets due to
casualty or any other adverse occurrence and the estimated (or
actual, if available) amount of such loss or decline;
(ii) the institution of any suit or administrative proceeding which,
if determined adversely to Borrower, is reasonably likely to
materially adversely affect the operations, financial condition
or business of Borrower;
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(iii) Borrower, becoming subject to any Charge,
restriction, judgment, decree or order which could
materially and adversely affect Borrower's business,
operations, Assets, condition (financial or
otherwise) or ability to perform its respective
obligations under the Loan Documents.
(iv) the commencement of any lockout, strike or walkout
relating to any labor contract to which Borrower is a
party;
(v) except as otherwise previously disclosed, any event
or occurrence which Borrower has determined will have
a material adverse affect on the ability of any
obligor of a Pledged Note to repay the Note;
(vi) the occurrence of a default by Borrower, under any
agreement, document or instrument to which it is a
party which could materially and adversely affect its
business, operations, Assets, condition (financial or
otherwise) or ability to perform its respective
obligations under the Loan Documents;
(vii) the filing of a petition under any section or chapter
of the United States Bankruptcy Code or any similar
law or regulation shall be filed by or against
Borrower or Borrower shall make an assignment for the
benefit of its creditors or if any case or proceeding
is filed by or against Borrower for its dissolution
or liquidation;
(viii) the making of an application for the appointment of
a receiver, trustee or custodian for any of the
assets of Borrower;
(ix) as soon as possible and in any event within five (5)
days after Borrower shall have obtained knowledge of
the occurrence of an Event of Default or Unmatured
Default, the written statement of the chief financial
officer of Borrower setting forth the details of such
event and the action which Borrower proposes to take
with respect thereto; and
(x) the exercise of any holder of any option, warrant or
right to purchase any equity interest in Borrower,
other than the exercise of rights disclosed in
Section 5.1(e).
6.5 Payment of Claims. Bank, in its sole and absolute
discretion, without waiving or releasing any of Borrower's Liabilities
or Borrower's Obligations or any Event of Default or Unmatured Event
of Default, may at any time or times hereafter, but shall be under no
obligation to, pay, acquire and/or accept an assignment of any
security interest, lien, encumbrance or claim asserted by any Person
against the Assets of Borrower. All sums paid by Bank in respect
thereof and all reasonable Costs relating thereto incurred by Bank or
for which
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Bank becomes obligated on account thereof shall be part of
Borrower's Liabilities payable by Borrower to Bank on demand and any
amount not paid on demand shall bear interest at the Default Rate.
6.6 Year 2000 Compliance.
(a) Borrower is currently reviewing its computer and management
information systems to determine whether they are adequate for the conduct
of Borrower's business as presently conducted and as proposed to be
conducted and Borrower is actively addressing all known material
requirements for systems integration, upgrade and replacement, and Borrower
covenants and agrees promptly to notify Bank in writing of any facilities
or software inadequacies that could reasonably be expected to have a
material adverse effect on the business of the Borrower.
(b) The Borrower, will be Year 2000 Compliant on or before March 31,
1999 and at all times thereafter. As used in the preceding sentence, "Year
2000 Compliant" means the ability of the software and other information
processing capabilities of Borrower to correctly interpret and process all
data in whatever form so as to avoid errors that may otherwise occur
because of the inability of software or other information processing
capabilities to recognize accurately the year 2000 or subsequent dates.
(c) Any reprogramming required to permit the proper functioning of the
computer and management information systems of the Borrower during and
following the year 2000 will be completed by March 31, 1999 and the cost of
such reprogramming is not expected to have a material adverse effect on the
business of the Borrower.
7. DEFAULT
7.1 Events of Default. The occurrence of any one
of the following events shall constitute a default ("Event of
Default") under this Agreement:
(a) If Borrower fails or neglects to perform, keep or observe any
of Borrower's Obligations and the same is not cured within thirty (30) days
after such default or, if such default is not susceptable to cure within
thirty (30) days, then within ninety (90) days so long as Borrower is
actively taking all commercially reasonable measures to cure the same;
provided that all failures, if any, to timely pay Borrower's Liabilities
are governed by (c) below and that a breach of any of the provisions,
terms, conditions or covenants contained in Sections 6.2(d), 6.3 and 6.4
shall automatically be an Event of Default without any notice or cure
period;
(b) If any representation, warranty or material statement, report or
certificate made or delivered by Borrower, or any of its directors,
officers, authorized employees or agents, to Bank is not true and correct;
(c) If Borrower fails to pay any of Borrower's Liabilities, when due
and payable or declared due and payable and the same is not cured within
five (5) days,
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provided however, that Interest shall accrue at the Default Rate
commencing immediately after non-payment;
(d) If Borrower shall be in default under the terms of any
Indebtedness Instrument, other than the Loan Documents;
(e) If Borrower fails or neglects to perform, keep or observe any of
Borrower's Obligations contained in Section 6.2(e) and the same is not
cured within ten (10) days after Bank gives Borrower notice of such
default;
(f) If any of Borrower's Assets or any portion thereof are attached,
seized, subjected to a writ of distress warrant, or are levied upon, or
come within the possession of any receiver, trustee, custodian or assignee
for the benefit of creditors and the same is not terminated or dismissed
within forty-five (45) days thereafter;
(g) If a petition under any section or chapter of the United States
Bankruptcy Code or any similar law or regulation shall be filed by
Borrower, or if Borrower shall make an assignment for the benefit of its
creditors or if any case or proceeding is filed by Borrower for its
dissolution or liquidation;
(h) If Borrower is enjoined, restrained or in any way prevented by
court order from conducting all or any material part of its business
affairs or if a petition under any section or chapter of the United States
Bankruptcy Code or any similar law or regulation is filed against Borrower
or if any case or proceeding is filed against Borrower for its dissolution
or liquidation and such injunction, restraint or petition is not dismissed
or stayed within forty-five (45) days after the entry or filing thereof;
(i) If an application is made by Borrower for the appointment of a
receiver, trustee or custodian for any of its assets;
(j) If an application is made by any Person other than Borrower for
the appointment of a receiver, trustee, or custodian for any of the Assets
of Borrower and the same is not dismissed within forty-five (45) days after
the application therefor;
(k) Except as expressly permitted pursuant to Section 6.2(e), (i) if
a notice of any Charge is filed of record with respect to all or any of
Borrower's Assets, or (ii) if any Charge becomes a lien or encumbrance upon
any of its assets and the same is not released within forty-five (45) days
after the same becomes a lien or encumbrance;
(l) The occurrence of an Event of Default under any of the Other
Agreements, which is not cured within the time, if any, specified therefor
in such Other Agreement;
(m) If any final non-appealable judgment for the payment of money in
excess of $1,000,000 (after giving effect to any amount covered by
insurance as to which the insurer shall not have defied or questioned its
obligation to pay) shall be rendered against Borrower and the same shall
remain undischarged for a period of thirty (30) days during
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which execution shall not be effectively stayed or diligently
contested in good faith by appropriate proceedings;
(n) If Borrower or any ERISA Affiliate (i) shall effect
a complete or partial withdrawal (as defined in ERISA Sections 4203 or
4205) from a Multiemployer Plan, if such withdrawal could subject either
Borrower or any ERISA Affiliate to liability; (ii) shall fail to pay when
due an amount that is payable by it to the PBGC or to an Employee Benefit
Plan; (iii) has instituted against it by a fiduciary of any Multiemployer
Plan an action to enforce ERISA Section 515 and such proceedings shall not
have been dismissed within thirty (30) days thereafter; (iv) has imposed
against it any tax under Code Section 4980B(a); (v) has assessed against it
by the Secretary of Labor a civil penalty with respect to any Employee
Benefit Plan under ERISA Section 502(c) or 502(l); (vi) shall apply for a
waiver of the minimum funding standards of the Code; or (vii) shall permit
any other event or condition to occur or exist with respect to an Employee
Benefit Plan that could subject either Borrower or any ERISA Affiliate to
liability;
(o) Except as set forth in Section 7.1(d) or (e), a default by
Borrower shall occur under any agreement, document or instrument (other
than this Agreement or any of the other Loan Documents) now or hereafter
existing, to which Borrower is a party and the effect of such default is
reasonably likely to have a material adverse effect on the financial
conditions or business operations of such Loan Party; and
(p) If Borrower dissolves, liquidates or fails to maintain its
corporate existence, without the prior written consent of Bank.
7.2 Remedies Cumulative. All of Bank's rights and remedies under
this Agreement and the Other Agreements are cumulative and
non-exclusive.
7.3 Acceleration. Upon the occurrence an Event of Default and
the continuation thereof, without notice by Bank to or demand by Bank
to Borrower, Bank shall have no further obligation to and may then
forthwith cease advancing monies, extending credit or issuing letters
of credit to or for the benefit of Borrower under this Agreement and
the Other Agreements. Upon an Event of Default, without notice by Bank
to or demand by Bank to Borrower, all Borrower's Liabilities shall be
due and payable, forthwith.
7.4 Remedies. Upon the occurrence of an Event of Default and the
continuation thereof, Bank, in its sole and absolute discretion, may
exercise any and all rights and remedies that it may have under the
other Loan Documents, at law or in equity.
7.5 Injunctive Relief. Borrower recognizes that upon the
occurrence of an Event of Default, no remedy of law will provide
adequate relief to Bank, and agrees that Bank shall be entitled to
temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
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7.6 Advances During Unmatured Default. Upon the occurrence of
any Unmatured Default or Event of Default, Bank shall not be obligated
to make any Advances; provided that, nothing contained herein shall
prohibit Bank from making any Advances.
8. CONDITIONS PRECEDENT TO DISBURSEMENT
8.1 Checklist Items. The obligation of Bank to make the Loan to
Borrower is subject to the condition precedent that, in addition to
satisfaction of the conditions set forth in Sections 8.2 and 8.3, Bank
shall have received, prior to the first disbursement of the proceeds
of any of the Loan hereunder all documents, instruments, agreements,
notes, evidences of Borrower's authority, and all other instruments as
Bank may reasonably request, including but not limited to all items on
the documentation checklist, delivered by Bank to Borrower prior to
the date hereof.
8.2 Necessary Actions. The obligation of Bank to make the Loan
to Borrower is subject to the further condition precedent that all
proceedings taken in connection with the transactions contemplated by
this Agreement, and all instruments, authorizations and other
documents applicable thereto, shall be reasonably satisfactory in form
and substance to Bank and its counsel.
8.3 Conditions Precedent. In addition to the foregoing, prior to
Bank making any and all Loans hereunder, all of the following shall
have been satisfied in a manner satisfactory to Bank:
(a) no change in the condition or operations, financial or otherwise,
of Borrower shall have occurred which change, in the sole credit judgment
of Bank, may have a material adverse effect on Borrower;
(b) no litigation shall be outstanding or have been instituted or
threatened which Bank determines to be material against Borrower;
(c) all of the representations and warranties of Borrower set forth
in this Agreement and each of the Other Agreements to which Borrower is a
party shall be true and correct on the date of the contemplated Loan to the
same extent as originally made on such date; and
(d) no Event of Default or Unmatured Default shall exist
or be continuing.
9. GENERAL
9.1 ERISA Matters.
(a) Representations and Warranties. Borrower hereby represents and
warrants and covenants and agrees that:
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(i) There are no Employee Benefit Plans maintained or
sponsored by or participated in or contributed to by
Borrower or any of its Subsidiaries or other
Affiliates or to which Borrower or any of its
Subsidiaries or other Affiliates have any
obligations; and
(ii) Borrower shall not, and shall not permit any of its
Subsidiaries or other Affiliates to establish,
maintain, contribute to or otherwise be or become
obligated with respect to one or more Employee
Benefit Plans without first receiving the prior
written consent of Bank, which Bank may grant or
withhold in its sole and absolute discretion.
(b) Definitions. For purposes of this Section 9.1, the following
definitions shall apply:
(i) "Code" shall mean the Internal Revenue Code of 1986,
as amended.
(ii) "Employee Benefit Plan" shall mean an employee
benefit plan within the meaning of Section 3(3) of
ERISA that is maintained, sponsored, participated in
or contributed to by Borrower or any ERISA Affiliate.
(iii) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time,
or any successor thereto.
(iv) "ERISA Affiliate" shall mean any corporation, trade
or Business that is, along with Borrower, a member of
a controlled group of trades or businesses, or a
member of any group of organizations, within the
meaning of Sections 414(b), (c), (m) or (o) of the
Code, and any regulations thereunder.
9.2 Costs/Service Charges. Borrower hereby agrees that it shall
reimburse Bank on demand, as part of Borrower's Obligations, for any
and all Costs and any amount not paid on demand shall bear interest at
the Default Rate. Borrower acknowledges that Bank will charge Borrower
monthly service charges for various services performed by Bank in
connection with the Loan and/or any other aspect of the relationship
between Borrower and Bank, which charges shall be such as are
generally imposed on customers of Bank for similar services. Borrower
hereby agrees that Bank may charge such service charges against
Borrower's operating account at Bank, or in the absence of sufficient
collected balances in such operating account to satisfy such service
charges, the amount thereof shall become a Loan hereunder bearing
interest at the Prime Interest Rate.
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9.3 Statement. Each statement of account by Bank delivered to
Borrower relating to Borrower's Liabilities shall be presumed correct
and accurate and shall constitute an account stated between Borrower
and Bank unless Bank subsequently corrects such statement of its own
volition or, within thirty (30) days after Borrower's receipt of said
statement, Borrower delivers to Bank, by registered or certified mail
addressed to Bank at the address specified in Section 9.4, written
objection thereto specifying the error or errors, if any, which
Borrower asserts are contained in any such statement.
9.4 Notices. Any and all notices given in connection with this
Agreement shall be deemed adequately given only if in writing (which
term "writing", for all purposes of this Agreement and the other Loan
Documents, shall include original signatures and other writings
transmitted by telecopy) and addressed to the party for whom such
notices are intended at the address set forth below. All notices shall
be sent by personal delivery, Federal Express or other over-night
messenger service, first class registered or certified mail, postage
prepaid, return receipt requested or by other means at least as fast
and reliable as first class mail. A written notice shall be deemed to
have been given to the recipient party on the earlier of (a) the date
it shall be delivered to the address required by this Agreement; (b)
the date delivery shall have been refused at the address required by
this Agreement; or (c) with respect to notices sent by mail, the date
as of which the postal service shall have indicated such notice to be
undeliverable at the address required by this Agreement. Any and all
notices referred to in this Agreement, or which either party desires
to give to the other, shall be addressed as follows:
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IF TO BORROWER: SPSS, Inc.
000 Xxxxx Xxxxxx Xxxxx
00xx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopy: 000-000-0000
IF TO BANK: American National Bank and Trust Company of
Chicago
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxx
Telecopy: 000-000-0000
WITH A COPY TO: Xxxxxxxx & Xxxxxx, Ltd.
Xxxxx 0000
00 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
Telecopy: 000-000-0000
The above addresses may be changed by notice of such change, mailed as provided
herein, to the last address designated.
9.5 Amendments and Waivers. This Agreement and the other Loan
Documents may not be modified, altered or amended except by an
agreement in writing signed by Borrower and Bank. Borrower expressly
agrees that for purposes of this Agreement and each and every other
Loan Document: (i) this Agreement and each and every other Loan
Document shall be a "credit agreement" under the Illinois Credit
Agreements Act, 815 ILCS 160/1 et. seq. (the "Act"); (ii) the Act
applies to this transaction including, but not limited to, the
execution of this Agreement and each and every other Loan Document;
and (iii) any action on or in any way related to this Agreement and
each and every other Loan Document shall be governed by the Act.
Borrower may not sell, assign or transfer this Agreement or the Other
Agreements or any portion thereof, including, without limitation,
Borrower's rights, titles, interests, remedies, powers and/or duties
hereunder or thereunder. Borrower hereby consents to Bank's sale,
assignment, transfer or other disposition, at any time and from time
to time hereafter, of this Agreement or the Other Agreements, or of
any portion thereof or participation therein, including, without
limitation, Bank's rights, titles, interests, remedies, powers and/or
duties.
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9.6 No Implied Waiver; Remedies Cumulative. Bank's failure at
any time or times hereafter to require strict performance by Borrower
of any provision of this Agreement or any other Loan Document shall
not waive, affect or diminish any right of Bank thereafter to demand
strict compliance and performance therewith. Any suspension or waiver
by Bank of an Event of Default or an Unmatured Default by Borrower or
any other Loan Party under this Agreement or the Other Agreements
shall not suspend, waive or affect any other Event of Default or
Unmatured Default by Borrower or any other Loan Party under this
Agreement or the Other Agreements, whether the same is prior or
subsequent thereto and whether of the same or of a different type.
None of the undertakings, agreements, warranties, covenants and
representations of Borrower contained in this Agreement or the Other
Agreements and no Event of Default or Unmatured Default by Borrower or
any other Loan Party under this Agreement or the Other Agreements
shall be deemed to have been suspended or waived by Bank unless such
suspension or waiver is by an instrument in writing signed by an
officer of Bank and directed to Borrower or such applicable other Loan
Party specifying such suspension or waiver.
9.7 Severability. If any provision (in whole or in part) of this
Agreement or the other Loan Documents or the application thereof to
any person or circumstance is held invalid or unenforceable, then such
provision shall be deemed modified, restricted, or reformulated to the
extent and in the manner necessary to render the same valid and
enforceable, or shall be deemed excised from this Agreement or the
other Loan Document, as the case may require, and this Agreement and
such other Loan Document shall be construed and enforced to the
maximum extent permitted by law, as if such provision had been
originally incorporated herein as so modified, restricted, or
reformulated or as if such provision had not been originally
incorporated herein or therein, as the case may be. The parties
further agree to seek a lawful substitute for any provision found to
be unlawful. If such modification, restriction or reformulation is not
reasonably possible, the remainder of this Agreement and the other
Loan Documents and the application of such provision to other persons
or circumstances will not be affected thereby and the provisions of
this Agreement and the other Loan Documents shall be severable in any
such instance.
9.8 Incorporation of Other Loan Documents. The provisions of the
Other Agreements are incorporated in this Agreement by this reference
thereto. Except as otherwise provided in this Agreement and except as
otherwise provided in the Other Agreements by specific reference to
the applicable provision of this Agreement, if any provision contained
in this Agreement is in conflict with, or inconsistent with, any
provision in the Other Agreements or the other Loan Documents, Bank
shall have the right to elect, in its sole and absolute discretion,
which provision shall govern and control. Except to the extent
provided to the contrary in this Agreement and in the other Loan
Documents, no termination or cancellation (regardless of cause or
procedure) of this Agreement or the Other Agreements shall in any way
affect or impair the powers,
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obligations, duties, rights and liabilities of Borrower or Bank
in any way or respect relating to (a) any transaction or event
occurring prior to such termination or cancellation, and/or (b) any of
the undertakings, agreements, covenants, warranties and
representations of Borrower contained in this Agreement or the Other
Agreements. All such undertakings, agreements, covenants, warranties
and representations shall survive such termination or cancellation.
9.9 Acceptance. This Agreement and the other Loan Documents are
submitted by Borrower to Bank (for Bank's acceptance or rejection
thereof) at Bank's principal place of business as an offer by Borrower
to borrow monies from Bank now and from time to time hereafter and
shall not be binding upon Bank or become effective until and unless
accepted by Bank, in writing, at said place of business. If so
accepted by Bank, this Agreement and the other Loan Documents and the
other Loan Documents shall be deemed to have been made at said place
of business.
9.10 Knowledge. As used herein the phrase "to the best of
Borrower's knowledge" or words of such import shall mean all
knowledge, including, actual knowledge and knowledge of matters which
any reasonable person in such position knew or should have known, of
the respective officers, directors and managers of Borrower.
9.11 Waiver by Borrower. EXCEPT AS OTHERWISE PROVIDED FOR IN
THIS AGREEMENT OR REQUIRED BY LAW, BORROWER WAIVES (A) PRESENTMENT,
DEMAND AND PROTEST, NOTICE OF PROTEST, NOTICE OF PRESENTMENT, DEFAULT,
NON-PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR
RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS,
DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD
BY BANK ON WHICH BORROWER MAY IN ANY WAY BE LIABLE; (B) ALL RIGHTS TO
NOTICE AND A HEARING PRIOR TO BANK'S TAKING POSSESSION OR CONTROL OF,
OR TO BANK REPLEVY, ATTACHMENT OR LEVY UPON THE COLLATERAL OR ANY BOND
OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING
BANK TO EXERCISE ANY OF BANK'S REMEDIES; AND (C) THE BENEFIT OF ALL
VALUATION, APPRAISEMENT, EXTENSION AND EXEMPTION LAWS.
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9.12 Governing Law. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS HAVE BEEN DELIVERED FOR ACCEPTANCE BY BANK IN CHICAGO,
ILLINOIS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF THE
STATE OF ILLINOIS AS TO INTERPRETATION, ENFORCEMENT, VALIDITY,
CONSTRUCTION, EFFECT AND IN ALL OTHER RESPECTS INCLUDING, BUT NOT
LIMITED TO, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER HEREBY (A)
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT
LOCATED IN CHICAGO, ILLINOIS OVER ANY ACTION OR PROCEEDING TO ENFORCE
OR DEFEND ANY MATTER ARISING FROM OR RELATED TO THIS AGREEMENT; (B)
IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT; (C)
AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING IN ANY
SUCH COURT SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED
BY LAW; AND (D) AGREES NOT TO INSTITUTE OR MAINTAIN ANY LEGAL ACTION
OR PROCEEDING AGAINST BANK OR ANY OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS OR PROPERTY, CONCERNING ANY MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT IN ANY COURT OTHER THAN ONE
LOCATED IN XXXX COUNTY, ILLINOIS. NOTHING IN THIS SECTION SHALL AFFECT
OR IMPAIR BANK'S RIGHT TO SERVE LEGAL PROCESS IN ANY MANNER PERMITTED
BY LAW OR BANK'S RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST
BORROWER OR BORROWER'S PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
9.13 Waiver of Marshaling. All rights of marshaling
of assets of Borrower, including any such right with respect to the
Pledged Property, are hereby waived by Borrower.
9.14 Limitation by Law. All rights, remedies and
powers provided in this Agreement may be exercised only to the extent
that the exercise thereof does not violate any applicable provision of
law, and all the provisions of this Agreement are intended to be
subject to all applicable mandatory provisions of law which may be
controlling and to be limited to the extent necessary so that they
will not render this Agreement invalid, unenforceable, in whole or in
part, or not entitled to be recorded, registered or filed under the
provisions of any applicable law.
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9.15 Survival of Representations and Warranties. All
representations and warranties contained in this Agreement or made in
writing by Borrower in connection herewith shall survive the execution
and delivery of this Agreement and repayment of Borrower's
Liabilities. Any investigation by Bank shall not diminish in any
respect whatsoever its rights to rely on such representations and
warranties.
9.16 Service of Process. Borrower hereby irrevocably appoints
and designates CT Corporation System, Inc., 000 X. XxXxxxx Xxxxxx,
Xxxxxxx, XX 00000 as its true and lawful attorney-in-fact and duly
authorized agent for service of legal process and agrees that service
of such process upon such agent and attorney-in- fact shall constitute
personal service of such process upon Borrower.
9.17 Representation by Counsel. Borrower hereby represents that
it has been represented by competent counsel of its choice in the
negotiation and execution of this Agreement and the other Loan
Documents; that it has read and fully understood the terms hereof;
Borrower and its counsel have been afforded an opportunity to review,
negotiate and modify the terms of this Agreement, and that it intends
to be bound hereby. In accordance with the foregoing, the general rule
of construction to the effect that any ambiguities in a contract are
to be resolved against the party drafting the contract shall not be
employed in the construction and interpretation of this Agreement.
9.18 Release of Bank. Borrower releases Bank from any and all
causes of action or claims which Borrower may now or hereafter have
for any asserted loss or damage to Borrower claimed to be caused by or
arising from any act or omission to act on the part of Bank, its
officers, agents or employees, except for willful misconduct or gross
negligence.
9.19 Invalidated Payments. To the extent that either Bank
receives any payment on account of Borrower's Liabilities, and any
such payment(s) and/or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside,
subordinated and/or required to be repaid to a trustee, receiver or
any other Person under any bankruptcy act, state or federal law,
common law or equitable cause, then, to the extent of such payment(s)
or proceeds received, Borrower's Liabilities or part thereof intended
to be satisfied shall be revived and continue in full force and
effect, as if such payment(s) and/or proceeds had not been received by
Bank and applied on account of Borrower's Liabilities.
9.20 Designated Person. Until Bank is notified by Borrower to
the contrary in accordance with Section 9.4, the signature upon this
Agreement or upon any of the Other Agreements of any partner, manager,
employee or agent of Borrower, or of any other Person designated in
writing to Bank by any of the foregoing, or of a "Designated Person"
(as that term is defined in Borrower's
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Secretary's Certificate of even date herewith, constituting one
of the Other Agreements) shall bind Borrower and be deemed to be the
duly authorized act of Borrower.
9.21 Headings. The descriptive headings of the
various provisions of this Agreement and the other Loan Documents are
inserted for convenience of reference only and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
9.22 Counterparts. This Agreement and the other
Loan Documents may be executed in any number of counterparts, and by
the different parties hereto and thereto on the same or separate
counterparts, each of which when so executed and delivered shall be
deemed to be an original; all the counterparts for each such Loan
Document shall together constitute one and the same agreement.
9.23 Fax Execution. For purposes of negotiating
and concluding this Agreement and the Loan Documents (including any
subsequent amendments thereto), any signed document transmitted by
facsimile machine ("FAX") shall be treated in all manner and respects
as an original document, except that delivery by FAX shall not
constitute delivery for the purposes of notices delivered pursuant to
Section 9.4 above. The original signature of any party that is
transmitted by FAX shall be considered for these purposes as an
original signature. Any document delivered by FAX shall be considered
to have the same binding legal effect as an original document,
provided that an original of the faxed document was mailed by
certified or registered first class US Mail or personally delivered to
the recipient. At the request of either party, any FAX document
subject to this Agreement shall be re-executed by both parties in an
original form. The undersigned parties hereby agree that neither shall
raise the use of the FAX or the fact that any signature or document
was transmitted or communicated through the use of a FAX as a defense
to the formation of this Agreement or any other Loan Document.
9.24 No Third Party Beneficiaries. This Agreement
is solely for the benefit of the Bank, Borrower and their respective
successors and assigns (except as otherwise expressly provided herein)
and nothing contained herein shall be deemed to confer upon any Person
other than Borrower and its successors and assigns any right to insist
on or to enforce the performance or observance of any of the
obligations contained herein. All conditions to the obligations of the
Bank to make the Loans hereunder are imposed solely and exclusively
for the benefit of the Bank and its respective successors and assigns
and no other Person shall have standing to require satisfaction of
such conditions in accordance with their terms and no other Persons
shall under any circumstances be deemed to be a beneficiary of such
conditions.
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9.25 Domicile of Loans. Bank may make, maintain or transfer any
of its Loans hereunder to, or for the account of, any branch office,
subsidiary or affiliate of Bank.
9.26 Entire Agreement. This Agreement and the other Loan
Documents constitute the entire agreement of Borrower and Bank with
respect to the subject matter hereof and supersede all prior and
contemporaneous negotiations, agreements, understandings and
communications. No representation, understanding, promise or condition
concerning the subject matter hereof shall be binding upon Bank unless
expressed herein or therein. No course of dealing, course or
performance, trade usage or parole evidence of any nature, whether
based on actions, omissions or circumstances occurring or existing
heretofore or hereafter, may be used in any way to alter or supplement
the terms hereof.
9.27 Construction. In this Agreement, unless the context
otherwise clearly requires, references to the plural include the
singular, the singular the plural, and the part the whole; the neuter
case includes the masculine and feminine cases; and "or" is not
exclusive. In this Agreement, any references to property (and similar
terms) include an interest in such property (or other item referred
to); "include," "includes," "including" and similar terms are not
limiting; and "hereof," "herein," "hereunder" and similar terms refer
to this Agreement as a whole and not to any particular provision; and
"expenses," "costs," "out-of-pocket expenses" and similar terms
include the charges of in-house counsel, auditors and other
professionals of the relevant Person to the extent that such amounts
are routinely identified and charged under such Person's cost
accounting system. Section and other references in this Agreement are
to this Agreement unless otherwise specified.
9.28 Successors and Assigns. This Agreement shall be binding
upon Borrower and its successors and assigns, and shall inure to the
benefit of and be enforceable by Bank and its successors and assigns.
Without limitation of the foregoing, Bank (and any successive assignee
or transferee) from time to time may assign or otherwise transfer all
or any portion of its rights or obligations under the Loan Documents
(including all or any portion of any commitment to extend credit), or
any Borrower's Liabilities, to any other Person, and such (including
any Borrower's Liabilities resulting from extension of credit by such
other Person under or in connection with the Loan Documents) shall be
and remain Borrowers entitled to the benefit of this Agreement, and to
the extent of its interest in such Borrowers such other Person shall
be vested with all the benefits in respect thereof granted to Bank in
this Agreement or otherwise.
9.29 Waiver of Trial by Jury. TO THE EXTENT PERMITTED BY LAW,
BORROWER AND BANK EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS
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AGREEMENT OR THE OTHER AGREEMENTS OR ANY COURSE OF CONDUCT,
COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS
OF EITHER PARTY IN CONNECTION HEREWITH. BORROWER HEREBY EXPRESSLY
ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR BANK TO
MAKE THE LOAN.
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IN WITNESS WHEREOF, this Loan Agreement has been duly executed as of
the day and year specified at the beginning hereof.
BORROWER:
SPSS, INC.
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------
Title: Treasurer
BANK:
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
By: /s/ Xxxx Xxxxxxxxx
------------------------------------
Title: Commercial Banking Officer
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Schedule of Schedules
Schedule 5.1(e) Schedule of Shareholders, Stock and Options
Schedule 5.1(f) Schedule of Fictitious Names
Schedule 5.1(g) Schedule of Permitted Liens
Schedule 5.1(v) Schedule of Affiliates
Schedule 5.1(y) Schedule of Intellectual Property Rights
Schedule 6.2(i) Schedule of Depository Accounts
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Schedule 5.1(e)
Schedule of Shareholders, Stock and Options
3
60
Schedule 5.1(f)
Schedule of Fictitious Names
4
61
Schedule 5.1(g)
Schedule of Permitted Liens
5
62
Schedule 5.1(v)
Schedule of Affiliates
6
63
Schedule 5.1(y)
Schedule of Intellectual Property Rights
7
64
Schedule 6.2(I)
Schedule of Depository Accounts
8
