SENIOR SECURED CREDIT AGREEMENT
SENIOR SECURED CREDIT AGREEMENT, dated as of September 12, 1997 (as
amended from time to time, the "Agreement"), by and among Cotelligent Group,
Inc., a Delaware corporation (the "Borrower"), and each of the Consolidated
Subsidiaries of the Borrower, the present list of which is set forth on Schedule
R-1 hereto (each a "Co-Borrower"; sometimes herein the Borrower and the
Co-Borrowers are collectively referred to as the "Borrowers," but references
herein to "the Borrower" shall refer to Cotelligent Group, Inc.), and the banks
and other financial institutions that either now or in the future are parties
hereto, including without limitation the Swingline Lender, as defined herein
(collectively the "Lenders" and each individually a "Lender"), and BankBoston
N.A., as agent and representative for the Lenders (in such capacity, BankBoston
N.A. or any successor in such capacity is referred to herein as the "Agent").
The Lenders and the Agent are collectively referred to herein as the "Lender
Parties" and each individually as a "Lender Party."
ARTICLE 1.
DEFINITIONS AND RELATED MATTERS
Section 1.1. Definitions.
The following terms with initial capital letters have the following
meanings:
"Adjusted LIBOR Rate" means, with respect to any day during any
Interest Period, a rate per annum (rounded upwards, if necessary, to the next
higher 1/100 of 1%) equal to (i) the applicable London Interbank Offered Rate
for such Interest Period, divided by (ii) 1.00 minus the LIBOR Reserve
Requirement for such day (expressed as a decimal).
"Accounts Receivable" means, as of any measurement date, all
"accounts," as such term is defined in Section 9106 of the California UCC, then
owned by any Borrower, including, without limitation, all accounts receivable,
book debts and other forms of obligations (other than forms of obligations
evidenced by chattel paper, documents or instruments) now owned by or belonging
or owing to any Borrower (including, without limitation, under any trade name,
style or division thereof) arising out of goods sold or services rendered by any
Borrower, whether billed or unbilled, and all monies due or to become due to any
Borrower under all purchase orders and contracts for the sale of goods or the
performance of services or both by such Borrower.
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person. The term
"control" means the possession, directly or indirectly, of the power, whether or
not exercised, (i) to vote ten percent (10%) or more of the securities having
voting power for the election of directors (or Persons performing similar
functions) of such Person or (ii) to direct or cause the direction of the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and the terms "controlled" and "common
control" have correlative meanings. Unless otherwise indicated, "Affiliate"
refers to an Affiliate of any of the Borrowers. Notwithstanding the foregoing,
in no event shall any Lender Party or any Affiliate of any Lender Party be
deemed to be an Affiliate of any Borrower.
"Agent" is defined in the Preamble and, where the context so requires,
includes BankBoston, N.A. in its individual capacity.
"Agent's Account" means the account of the Agent identified as such on
Schedule 1.1.B, or such other account as the Agent may hereafter designate by
notice to the Borrower and each Lender Party.
"Agent's Office" means the office of the Agent identified as such on
Schedule 1.1.B, or such other office as the Agent may hereafter designate by
notice to the Borrower and each Lender Party.
"Agreement" is defined in the Preamble and includes all Schedules and
Exhibits.
"Applicable Law" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws, rules, regulations and ordinances of
any Governmental Authority, (ii) Governmental Approvals, and (iii) orders,
decisions, judgments, awards and decrees of any Governmental Authority.
"Applicable Lending Office" means, with respect to any Lender, (i) in
the case of any payment with respect to LIBOR Rate Loans, the Lender's LIBOR
Lending Office, and (ii) in the case of any payment with respect to Base Rate
Loans or any other payment under the Loan Documents, the Lender's Domestic
Lending Office.
"Applicable Margin" is defined on Schedule 1.1.E.
"Assessment Rate" means, for any day, the average, determined by the
Agent, of the net annual assessment rates (rounded upwards, if necessary, to the
next higher 1/100 of 1%) actually incurred by the Agent to the Federal Deposit
Insurance Corporation (or any successor) for such Corporation's insuring Dollar
time deposits of the Agent at its office in the United States during the most
recent period for which such rate has been determined prior to such day.
"Asset Disposition" means any sale or other disposition of any assets
by any Borrower (including sales of any receivables but excluding sales of
inventory and dispositions of obsolete or worn-out equipment in the ordinary
course of business).
"Assignment" and "Assignment and Acceptance" are defined in
Section 9.6.2.
"Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as amended from time to time.
"Base Rate" means the greater of (i) the rate of interest announced
from time to time by BankBoston, N.A. at its head office as its "Base Rate," and
(ii) the Federal Funds Effective Rate plus 1/2 of 1% per annum (rounded upwards,
if necessary, to the next 1/8 of 1%).
"Base Rate Loan" means a Loan, or portion thereof, that bears interest
by reference to the Base Rate.
"Borrower" means Cotelligent Group, Inc., a Delaware corporation, and
any successor thereof.
"Borrower Account" means the account of the Borrower identified as such
on Schedule 9.5., or such other account as the Borrower may hereafter designate
by notice to the Agent.
"Borrowing" means a contemporaneous borrowing of Loans of the same
Type.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which banks in Boston, Massachusetts or San Francisco, California are
authorized or obligated to close.
"Capital Expenditures" means, for any period, the expenditures (whether
paid in cash or accrued and including payments made with respect to Capitalized
Leases during such period) of any Borrower during such period with respect to
property, plant and equipment (other than repairs) that are required to be
capitalized on the consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries.
"Capital Stock" means, with respect to any Person, all (i) shares,
interests, participations or other equivalents (howsoever designated) of capital
stock and other equity interests of such Person and (ii) rights (other than debt
securities convertible into capital stock or other equity interests), warrants
or options to acquire any such capital stock or other equity interests.
"Capitalized Leases" means all leases of any Borrower of real or
personal property that are required to be capitalized on the consolidated
balance sheet of the Borrower and its Subsidiaries. The amount of any
Capitalized Lease shall be the capitalized amount thereof.
"Cash" means cash and cash equivalents.
"Change of Control" means the acquisition, directly or indirectly, by
any person (as defined in Section 13(d)(3) of the Exchange Act), of 50% or more
of the total voting power in the aggregate of all classes of common stock or
other equity securities of the Borrower, then outstanding or of the ability,
whether or not exercised, to appoint 50% or more of the Board of Directors of
the Borrower, whether through the ownership of voting securities, by contract,
or otherwise.
"Closing Date" means the date of this Agreement or such later date on
which all conditions set forth in Section 3.1. have been satisfied or waived.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means the collateral under the Collateral Documents,
however defined.
"Collateral Documents" means the Security Agreement, the Pledge
Agreement, financing statements and all other documents executed or delivered
from time to time in connection therewith or otherwise to secure the Borrowers'
obligations under the Loan Documents, in each case as amended from time to time.
"Compliance Certificate" is defined in Section 5.1.3.
"Consolidated Subsidiary" means, at any time, any Subsidiary whose
accounts would be consolidated with those of the Borrower in the consolidated
financial statements of the Borrower at such time in accordance with GAAP.
"Contingent Obligation" means, as to any Person, any obligation, direct
or indirect, contingent or otherwise, of such Person (i) with respect to any
Debt or other obligation of another Person, including any direct or indirect
guarantee of such Debt (other than any endorsement for collection in the
ordinary course of business) or any other direct or indirect obligation, by
agreement or otherwise, to purchase or repurchase any such Debt or obligation or
any security therefor, or to provide funds for the payment or discharge of any
such Debt or obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), (ii) to provide funds to
maintain the financial condition of any other Person, or (iii) otherwise to
assure or hold harmless the holders of Debt or other obligations of another
Person against loss in respect thereof. The amount of any Contingent Obligation
under clause (i) or (ii) shall be the lesser of (a) the amount of the Debt or
obligation guarantied or otherwise supported thereby, and (b) the maximum amount
guarantied or supported by the Contingent Obligation.
"Contractual Obligation" means, as applied to any Person, any provision
of any security issued by that Person or of any agreement or other instrument to
which that Person is a party or by which it or any of the properties owned or
leased by it is bound or otherwise subject.
"Controlled Group" means all domestic and foreign members of a
controlled group of corporations under Section 1563(a) of the Code (determined
without regard to Section 1563(b)(2)(C) of the Code) and all trades or
businesses (irrespective of whether incorporated) that are under common control
with the Borrower or the Subsidiaries. With regard to all Plans and
Multiemployer Plans, "Controlled Group" includes all ERISA Affiliates.
"Debt" means, with respect to any Person, without duplication: (i) all
obligations for borrowed money; (ii) all obligations evidenced by bonds,
debentures, notes or other similar instruments; (iii) all obligations to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business that are not overdue by more than 60
days; (iv) all Capitalized Leases; (v) all obligations of others secured by a
Lien on any asset owned by such Person or Persons whether or not such obligation
or liability is assumed; (vi) all obligations of such Person or Persons,
contingent or otherwise, in respect of any letters of credit or bankers'
acceptances; (vii) all Contingent Obligations; and (viii) all obligations under
facilities for the discount or sale of receivables.
"Debt Service Coverage Ratio" means (i) at the end of the Fiscal
Quarter in which the Closing Date occurs, the ratio of (x) (a) EBITDA for such
Fiscal Quarter multiplied by four minus (b) Capital Expenditures made during
such Fiscal Quarter, multiplied by four, to (y) (a) Interest Expense for such
Fiscal Quarter, multiplied by four, plus scheduled payments of principal in
respect of Debt of any Borrower for such Fiscal Quarter, multiplied by four;
(ii) at the end of the first Fiscal Quarter following the Fiscal Quarter in
which the Closing Date occurs, the ratio of (x) (a) EBITDA for the two
consecutive Fiscal Quarters then ended, multiplied by two, minus (b) Capital
Expenditures made during the two consecutive Fiscal Quarters then ended,
multiplied by two, to (y) (a) Interest Expense for the two consecutive Fiscal
Quarters then ended, multiplied by two, plus scheduled payments of principal in
respect of Debt of any Borrower for the two consecutive Fiscal Quarters then
ended, multiplied by two; (iii) at the end of the second Fiscal Quarter
following the Fiscal Quarter in which the Closing Date occurs, the ratio of (x)
(a) EBITDA for the three consecutive Fiscal Quarters then ended, multiplied by
1.33, minus (b) Capital Expenditures made during the three consecutive Fiscal
Quarters then ended, multiplied by 1.33, to (y) (a) Interest Expense for the
three consecutive Fiscal Quarters then ended, multiplied by 1.33, plus scheduled
payments of principal in respect of Debt of any Borrower for the three
consecutive Fiscal Quarters then ended, multiplied by 1.33; and (iv) at the end
of any Fiscal Quarter thereafter, the ratio of (x) (a) EBITDA for the four
consecutive Fiscal Quarters then ended minus (b) Capital Expenditures for such
four-quarter period, to (y) (a) Interest Expense for such four-quarter period,
plus (b) scheduled payments of principal in respect of Debt of any Borrower for
such four-quarter period.
"Default" means any condition or event that, with the giving of notice
or lapse of time or both, would, unless cured or waived, become an Event of
Default.
"Defined Benefit Plan" means any plan subject to Title IV of ERISA that
is not a Multiemployer Plan.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means the office, branch or Affiliate of any
Lender identified on Schedule 1.1.B as its Domestic Lending Office or such other
office, branch or Affiliate as the Lender may hereafter designate as its
Domestic Lending Office for one or more Types of Loans by notice to the Borrower
and the Agent.
"EBIT" means, for the Borrowers for any period, (i) Net Income, plus
(ii) Interest Expense deducted in the determination of Net Income, plus (iii)
the amount of taxes based on or measured by income and deducted in the
determination of Net Income, plus (iv) the amount of any extraordinary losses
included in the determination of Net Income, minus (v) the amount of any
extraordinary gains included in the determination of Net Income, in each case
for such period.
"EBITDA" means, for the Borrowers for any period, an amount equal to
EBIT, plus the amount of depreciation and amortization expense deducted in
determining Net Income, in each case for such period.
"Environmental Damages" means all claims, judgments, damages, losses,
penalties, liabilities (including strict liability), costs and expenses,
including costs of investigation, remediation, defense, settlement and
reasonable attorneys' fees and consultants' fees, that are incurred at any time
as a result of the existence of Hazardous Material upon, about or beneath any
Real Property or migrating or threatening to migrate to or from any Real
Property, or arising in any manner whatsoever out of any violation of
Environmental Requirements.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for Environmental Damages.
"Environmental Requirements" means all Applicable Laws relating to
Hazardous Materials or the protection of human health or the environment,
including all requirements pertaining to reporting, permitting, investigation
and remediation of releases or threatened releases of Hazardous Materials into
the environment, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any Person (including for this purpose any
trade or business) that is or was a member of the controlled group of
corporations or trades or businesses (as defined in Subsection (b), (c), (m) or
(o) of Section 414 of the Code) of which any Borrower is or was a member at any
time within the last six years.
"Event of Default" is defined in Section 7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Excluded Taxes" is defined in Section 2.13.1.
"Existing Debt" means the Debt described on Schedule 1.1.C.
"Existing Liens" means the Liens described on Schedule 1.1.D.
"Federal Funds Effective Rate" means, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day), by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
Agent from three Federal funds brokers of recognized standing selected by the
Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fee Letter" means that certain letter dated July 16, 1997 between the
Borrower and the Agent.
"Fee Rate" is defined in Schedule 1.1.E.
"Fees" means, collectively, the fees described or referenced in
Section 2.6.
"Fiscal Year" means the fiscal year of the Borrower, which shall be the
12 month-period ending on December 31 in each year or such other period as the
Borrower may designate and the Agent may approve in writing. "Fiscal Quarter" or
"fiscal quarter" means any quarter of a Fiscal Year.
"Funding Date" means any date on which a Loan is (or is requested to
be) made.
"GAAP" means generally accepted accounting principles as in effect in
the United States of America from time to time.
"Governmental Approval" means an authorization, consent, approval,
permit or license issued by, or a registration or filing with, any Governmental
Authority.
"Governmental Authority" means any nation and any state or political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
tribunal or arbitrator of competent jurisdiction.
"Hazardous Materials" means any substance (i) the presence of which
requires investigation or remediation under any Applicable Law; (ii) that is or
becomes defined as a "hazardous waste" or "hazardous substance" under any
Applicable Law, including the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9601 et seq.) or the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.); (iii) that is toxic,
explosive, corrosive, inflammable, infectious, radioactive, carcinogenic,
mutagenic, or otherwise hazardous and is or becomes regulated by any
Governmental Authority; (iv) the presence of which on any Real Property causes
or threatens to cause a nuisance upon the Real Property or to adjacent
properties or poses or threatens to pose a hazard to any Real Property or to the
health or safety of Persons on or about any Real Property; or (v) without
limitation, that contains gasoline or other petroleum hydrocarbons,
polychlorinated biphenyls or asbestos.
"Indemnified Liabilities" is defined in Section 9.2.1.
"Indemnitee" is defined in Section 9.2.1.
"Intellectual Property Right" means (i) any patent, copyright,
trademark, service xxxx, trade name, trade secret or other intellectual property
right, (ii) all registrations and applications to register any such patent,
copyright, trademark, service xxxx, trade name or other intellectual property
right with any Governmental Authority and all renewals and extensions thereof,
and (iii) the goodwill of the business associated with or relating to any such
trademark, service xxxx, trade name or other intellectual property right.
"Intercompany Debt" means any Debt of any Borrower that is owed to any
other Borrower or any Affiliate.
"Interest Expense" means, for any period, total consolidated interest
expense of the Borrowers, including Fees and the portion of any Capitalized
Lease obligations allocable to interest expense, but excluding amortization or
write-off of debt discount and expense
"Interest Payment Date" means the last day of March, June, September
and December in each year (or, if such day is not a Business Day, the next
succeeding Business Day).
"Interest Period" means, subject to the next sentence, (i) with respect
to each LIBOR Rate Loan, the period commencing on the date specified in the
related Notice of Borrowing or Notice of Conversion/Continuation (or telephonic
notice in lieu thereof) and ending one, two, three, four, five, six, nine or
twelve months thereafter, as the Borrower may elect pursuant to Section 2.1.
Notwithstanding the foregoing: (a) if a LIBOR Rate Loan is continued,
the Interest Period applicable to the continued or converted Loan shall commence
on the day on which the Interest Period applicable to such LIBOR Rate Loan ends;
(b) any Interest Period applicable to a LIBOR Rate Loan (x) that would otherwise
end on a day that is not a LIBOR Business Day shall be extended to the next
succeeding LIBOR Business Day, unless such succeeding LIBOR Business Day falls
in another calendar month, in which case such Interest Period shall end on the
next preceding LIBOR Business Day, or (y) that begins on the last LIBOR Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last LIBOR Business Day of the calendar month; and (d) no
Interest Period shall end after the Stated Termination Date.
"Investment" means, with respect to any Person, (i) any direct or
indirect purchase or other acquisition by that Person of stock or securities, or
any beneficial interest in stock or other securities, of any other Person, any
partnership (whether general or limited) or limited liability company interest
in any other Person, or all or any substantial part of the business or assets of
any other Person, (ii) any direct or indirect loan, advance or capital
contribution by that Person to any other Person, including all indebtedness and
accounts receivable from that other Person that are not current assets or did
not arise from sales to that other Person in the ordinary course of business.
The amount of any Investment shall be the original cost of such Investment plus
the cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to such
Investment.
"Knowledge" means actual knowledge or knowledge imputed to a Senior
Officer in the ordinary course of such Senior Officer's duties.
"Lender" is defined in the Preamble. For purposes of the Sections
referred to in (and subject to) the last sentence of Section 9.6.4., "Lender"
includes a holder of a Participation.
"Lender Party" is defined in the Preamble. For purposes of the Sections
referred to in (and subject to) the last sentence of Section 9.6.4., "Lender
Party" includes a holder of a Participation.
"Leverage Ratio" means (i) for the purposes of calculating the
Applicable Margin during the first Pricing Period (as described in Schedule
1.1.E), the ratio of (x) the aggregate Total Liabilities of the Borrowers as of
June 30, 1997 to (y) the aggregate EBITDA of the Borrowers for the Fiscal
Quarter ended June 30, 1997, multiplied by four; (ii) at the end of the Fiscal
Quarter in which the Closing Date occurs, the ratio of (x) the aggregate Total
Liabilities of the Borrowers to (y) the aggregate EBITDA of the Borrowers for
the Fiscal Quarter then ended, multiplied by four; (iii) at the end of the first
Fiscal Quarter following the Fiscal Quarter in which the Closing Date occurs,
the ratio of (x) the aggregate Total Liabilities of the Borrowers to (y) the
aggregate EBITDA of the Borrowers for the two consecutive Fiscal Quarters then
ended, multiplied by two; (iv) at the end of the second Fiscal Quarter following
the Fiscal Quarter in which the Closing Date occurs, the ratio of (x) the
aggregate Total Liabilities of the Borrowers to (y) the aggregate EBITDA of the
Borrowers for the three consecutive Fiscal Quarters then ended, multiplied by
1.33, and (v) at the end of any Fiscal Quarter thereafter, the ratio of (x) the
aggregate Total Liabilities of the Borrowers to (y) the aggregate EBITDA of the
Borrowers for the four consecutive Fiscal Quarters then ended.
"LIBOR Business Day" means any Business Day on which commercial banks
are open for international business (including dealings in interbank Dollar
deposits) in London, England.
"LIBOR Lending Office" means the office, branch or Affiliate of any
Lender identified on Schedule 1.1.B as its LIBOR Lending Office or such other
office, branch or Affiliate as the Lender may hereafter designate as its LIBOR
Lending Office by notice to the Borrower and the Agent.
"LIBOR Rate Loan" means a Loan, or portion thereof, that bears interest
at a rate determined by reference to an Adjusted LIBOR Rate (and as to which a
single Interest Period is applicable).
"Lien" means any lien, mortgage, pledge, security interest, charge, or
encumbrance of any kind (including any conditional sale or other title retention
agreement or any lease in the nature thereof) and any agreement to give or
refrain from giving any lien, mortgage, pledge, security interest, charge, or
other encumbrance of any kind.
"Loan" means a Revolving Loan or a Swingline Loan made or to be made
pursuant to Article 2.
"Loan Account" is defined in Section 2.5.3.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Collateral Documents and any other agreement, instrument or other writing
executed or delivered by any Borrower in connection herewith, and all
amendments, exhibits and schedules to any of the foregoing.
"London Interbank Offered Rate" means, with respect to any Interest
Period, a rate of interest per annum, selected by the Agent acting in good
faith, at which deposits in dollars are offered to the Agent in the London
interbank market at approximately 11:00 A.M. (London time) two LIBOR Business
Days before the first day of such Interest Period in an amount approximately
equal to the principal amount of the LIBOR Rate Loan to which such Interest
Period is to apply and for a period of time comparable to such Interest Period.
"Mandatory Borrowing" is defined in Section |2.2.6.
"Margin Regulations" means Regulations G, T, U and X of the Federal
Reserve Board, as amended from time to time.
"Margin Stock" means "margin stock" as defined in the Margin
Regulations.
"Material," "Material Adverse Effect" or "Material Adverse Change"
means a condition or event material to, a material adverse effect on or a
material adverse change in, as the case may be, any one or more of the
following: (i) the operations, business, properties, or condition (financial or
otherwise) of the Borrowers taken as a whole; (ii) the Borrowers' ability, taken
as a whole, to perform their obligations under any Loan Document and avoid any
Event of Default; or (iii) the legality, validity, binding effect or
enforceability of any Loan Document. "Materially" has a correlative meaning.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
3(37) and Section 4001(a)(3)(A) of ERISA to which the Borrower or any of the
ERISA Affiliates is making or accruing an obligation to make contributions or to
which any such Person has within any of the preceding five plan years made or
accrued an obligation to make contributions.
"Multiple Employer Plan" means a "single employer plan," as defined in
Section 4001(a)(15) of ERISA, that (i) is maintained for employees of any
Borrower or any ERISA Affiliate and at least one person other than such Borrower
and the ERISA Affiliates or (ii) was so maintained and in respect of which such
Borrower or any ERISA Affiliate could have liability under Section 4064 or 4069
of ERISA if such plan has been or were to be terminated.
"Net Income" means, for any period, consolidated net income (or loss)
after taxes, determined in accordance with GAAP, of the Borrowers for such
period taken as a single accounting period, provided that there shall be
excluded therefrom (i) the income (or loss) of any Person (other than a
Borrower) in which any Borrower has an equity interest, except to the extent of
dividends or other distributions actually paid to such Borrower by such Person
during such period, (ii) the undistributed income of any Consolidated Subsidiary
to the extent that the declaration or payment of dividends or other
distributions by such Consolidated Subsidiary is not at the time permitted by
the terms of its charter or Contractual Obligations or Applicable Law binding on
such Consolidated Subsidiary, and (iii) the income (or loss) of any Consolidated
Subsidiary that is included in the calculation of Net Income but is attributable
to an owner of Capital Stock of such Consolidated Subsidiary other than the
Borrower, and provided further, Net Income shall be adjusted by the Pro Forma
Adjustments for any new Consolidated Subsidiary acquired by Borrower.
"Note" means a Revolving Loan Note made by the Borrowers payable to the
order of any Lender, in the original principal amount of such Lender's
Commitment which note is in substantially the form of Exhibit A-1, as amended
from time to time, or a Swingline Note, as defined below for any new
Consolidated subsidiary acquired by Borrower.
"Notice of Borrowing" is defined in Section 2.1.3.
"Notice of Conversion/Continuation" is defined in Section 2.4.3.2.
"Notice of Responsible Officer" is defined in Section 2.1.3.3.
"Obligations" means all present and future obligations and liabilities
of each Borrower of every type and description arising under or in connection
with the Loan Documents due or to become due to the Lender Parties or any Person
entitled to indemnification, or any of their respective successors, transferees
or assigns, whether for principal, interest, letter of credit or other
reimbursement obligations, cash collateral cover, Fees, expenses, indemnities or
other amounts (including attorneys' fees and expenses) and whether due or not
due, direct or indirect, joint and/or several, absolute or contingent, voluntary
or involuntary, liquidated or unliquidated, determined or undetermined, and
whether now or hereafter existing, renewed or restructured.
"Operating Lease" means, as applied to any Person, any lease of any
property (whether real, personal, or mixed) under which such Person is the
lessee and that is not capitalized on the balance sheet of such Person.
"Participation" is defined in Section 9.6.4.
"PBGC" means the Pension Benefit Guaranty Corporation, as defined in
Title IV of ERISA, or any successor.
"Permitted Acquisition" means the acquisition by the Borrower of all,
but not less than all, ownership interests in an entity, in connection with
which either (a) all of the following conditions are met: (i) the Leverage Ratio
is less than 2.50:1.00 prior to giving effect to such acquisition; (ii) the
Leverage Ratio will not exceed 2.75:1.00 after giving effect to such acquisition
as adjusted by the Pro Forma Adjustments; (iii) the acquired entity has
generated positive earnings before interest and taxes, as adjusted by the Pro
Forma Adjustments, for the twelve-month period immediately preceding the date of
such acquisition; (iv) the acquired entity is in a line of business
substantially similar in type to the businesses that Borrowers are already
engaged in; (v) the noncontingent cash portion of the purchase price for such
acquisition, regardless of when paid, does not exceed $5,000,000; (vi) the total
cash portion of the purchase price for such acquisition, regardless of when
paid, including in such total Borrower's reasonable estimate, based on the
historical performance of the acquired company, of the total amount of earnouts
to be paid in connection with such acquisition, does not exceed $10,000,000;
(vii) to the extent any such acquisition involves a merger, the Borrower is the
surviving entity; (viii) after giving effect to Pro Forma Adjustments with
respect to such acquisition, the Borrowers are in compliance with the covenants
set forth in Section 6.5. 6.1. hereof; (ix) at the time of such acquisition, no
Default or Event of Default has occurred and is continuing; (x) the Borrower's
acquisition of such entity is being accomplished with the cooperation and
consent of the management of, the board of directors (if any) of, the managing
member (if any) of, and the holders of ownership interests in, the acquired
entity, and (xi) any Debt incurred by any Borrower in connection with such
acquisition (other than the Obligations hereunder) shall be subordinated in
right of payment to the Obligations, and the contractual terms of such Debt
shall provide that the holders of such Debt shall have no payment blockage
rights of any kind, or (b) the Required Lenders have given their approval.
"Permitted Liens" means, with respect to any asset, the Liens (if any)
permitted to exist on such asset under Section 6.1.
"Person" means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated organization or any other entity
or organization, including a government or any agency or political subdivision
thereof.
"Plan" means any pension, retirement, disability, defined benefit,
defined contribution, profit sharing, deferred compensation, employee stock
ownership, employee stock purchase, health, life insurance, or other employee
benefit plan or arrangement, other than a Multiemployer Plan, irrespective of
whether any of the foregoing is funded, in which any personnel of the Borrower
or ERISA Affiliate participates or from which any such personnel may derive a
benefit.
"Pledge Agreement" means the Pledge Agreement between the Borrowers and
the Agent in substantially the form of Exhibit C-2, as amended from time to
time.
"Post-Default Rate" means, at any time, a rate per annum equal to the
rate of interest otherwise in effect at such time pursuant to the terms hereof
plus 2%; provided that with respect to any amount not paid when due (whether
principal, interest, or otherwise), the Post-Default Rate means the Base Rate in
effect at such time plus the Applicable Margin plus 2%.
"Pro Forma Adjustments" means, in the context of an acquisition by the
Borrower of a new Consolidated Subsidiary, adjustments to the actual historical
financial data of the acquired entity to reflect (i) compensation differentials
to former owners and employees of such acquired entity, (ii) the termination of
contributions by the acquired entity to retirement plans, (iii) removal of
non-recurring transaction costs incurred by the Borrower in connection with the
acquisition of such acquired entity, and (iv) income taxes as if the Borrower
and such acquired entity were combined and subject to the effective federal and
state statutory rates throughout the fiscal period during which the acquired
entity was acquired by the Borrower, all as if the acquired entity had been a
Consolidated Subsidiary for the entire fiscal period during which it was
acquired.
"Prohibited Transaction" means a transaction that is prohibited under
Section 4975 of the Code or Section 406 or 407 of ERISA and not exempt under
Section 4975 of the Code or Section 408 of ERISA.
"Quick Ratio" means, at any time of determination thereof, (i) the sum
of (x) the aggregate of all Borrowers' Cash plus (y) the aggregate of all
Borrowers' Accounts Receivable (net of any reserves required pursuant to GAAP),
divided by (ii) the aggregate of all Borrowers' current liabilities.
"Real Property" means each of those parcels (or portions thereof) of
real property, improvements and fixtures thereon and appurtenances thereto now
or hereafter owned or leased by any Borrower.
"Regulation D" means Regulation D of the Federal Reserve Board, as
amended from time to time.
"Regulatory Change" means (i) the adoption or becoming effective after
the date hereof of any treaty, law, rule or regulation, (ii) any change in any
such treaty, law, rule or regulation (including Regulation D), or any change in
the administration or enforcement thereof, by any Governmental Authority,
central bank or other monetary authority charged with the interpretation or
administration thereof, in each case after the date hereof, or (iii) compliance
after the date hereof by any Lender Party (or its Applicable Lending Office or,
in the case of capital adequacy requirements, any holding company of any Lender
Party) with, any interpretation, directive, request, order or decree (whether or
not having the force of law) of any such Governmental Authority, central bank or
other monetary authority.
"Reportable Event" means any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder, except any such event (other than the
failure to meet minimum funding standards of Section 412 of the Code or Section
302 of ERISA) as to which the provision for 30 days' notice to the PBGC is
waived under applicable regulations.
"Required Lenders" means Lenders having at least 66-2/3% of the
aggregate amount of the Commitments or, if the Commitments have terminated,
Lenders holding at least 66-2/3% of the aggregate unpaid principal amount of the
Revolving Loans.
"Reserve Requirement" means, with respect to any LIBOR Rate Loan and
for any day, the maximum rate at which reserves (including any marginal,
supplemental, special or emergency reserve) are required to be maintained on
such day under Regulation D by member banks of the Federal Reserve System in New
York City with deposits exceeding $5 billion against "Euro-Currency
Liabilities," as that term is used in Regulation D (or in respect of any other
category of liabilities that includes deposits by reference to which the
interest rate on LIBOR Rate Loans is determined or any category of extensions of
credit or other assets that includes loans by a non-United States office of any
bank to United States residents).
"Responsible Officer" is defined in Section 2.1.3.3.
"Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any Capital Stock of any Borrower now or
hereafter outstanding, except (a) a dividend or other distribution payable
solely in shares or equivalents of the same class of Capital Stock and (b) the
issuance of equity interests upon the exercise of outstanding warrants, options
or other rights, or (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
Capital Stock of any Borrower now or hereafter outstanding.
"Revolving Commitment" means, with respect to each Lender, the amount
set forth for such Lender as its "Revolving Commitment" on Schedule 1.1.A as the
amount of such Lender's commitment to make Revolving Loans and purchase
participations in, and assignments of, Swingline Loans to the Borrowers, as
reduced or terminated from time to time pursuant to the terms hereof.
"Revolving Commitment Usage" means, at any time, (i) with respect to
any Lender, the aggregate unpaid principal amount of all Revolving Loans made by
such Lender (including, with respect to the Swingline Lender, the aggregate
unpaid principal amount of all Swingline Loans made by the Swingline Lender, and
(ii) with respect to all Lenders, the aggregate unpaid principal amount of all
Revolving Loans (including all Swingline Loans), in each case giving effect to
Borrowings then requested.
"Revolving Loans" is defined in Section 2.1.1.
"SEC" means the United States Securities and Exchange Commission, and
any successor.
"Securities Act" means the Securities Act of 1933, as amended from time
to time.
"Security Agreement" means a Security Agreement between the Borrowers
and the Agent in substantially the form of Exhibit C-1, as amended from time to
time.
"Senior Officer" means the President, the Chief Executive Officer, the
Chief Accounting Officer, or the Chief Financial Officer of the Borrower.
"Single Employer Plan" means a Plan other than a Multiemployer Plan.
"Solvent" means, with respect to any Person, that: (i) the total
present fair salable value of such Person's business on a going concern basis is
in excess of the total amount of such Person's liabilities, including contingent
liabilities; (ii) such Person is able to pay its liabilities and contingent
liabilities as they become due; and (iii) such Person does not have unreasonably
small capital to carry on such Person's business as theretofore operated and as
proposed to be operated.
"Stated Termination Date" is defined in Section 2.7.
"Swingline Commitment" means Six Million Dollars ($6,000,000).
"Swingline Lender" means BankBoston, N.A. in its individual capacity
and not as Agent.
"Swingline Loan" has the meaning assigned to such term in
Section 2.2.1.
"Swingline Maturity Date" means the date which is five Business Days
prior to the Maturity Date.
"Swingline Note" means the Swingline Note made by the Borrowers payable
to the order of the Swingline Lender, in the original principal amount of Six
Million Dollars ($6,000,000), which note is in substantially the form of Exhibit
A-2, as amended from time to time.
"Subsidiary" means, with respect to any Person, any other Person of
which more than 50% of the total voting power of the Capital Stock entitled to
vote in the election of the board of directors (or other Persons performing
similar functions) are at the time directly or indirectly owned by such first
Person. Unless otherwise indicated, "Subsidiary" refers to a Subsidiary of the
Borrower.
"Taxes" means any present or future income, stamp and other taxes,
charges, fees, levies, duties, imposts, withholdings or other assessments,
together with any interest and penalties, additions to tax and additional
amounts imposed by any federal, state, local or foreign taxing authority upon
any Person.
"Termination Date" is defined in Section 2.7.1.
"Termination Event" means: (i) a Reportable Event or an event described
in Section 4068(f) of ERISA; (ii) the withdrawal of the Borrower or any of its
ERISA Affiliates from a Multiple Employer Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the
cessation of operations at a facility in the circumstances described in Section
4068(f) of ERISA; (iii) the filing of a notice of intent to terminate a Defined
Benefit Plan (including any such notice with respect to a Defined Benefit Plan
amendment referred to in Section 4041(e) of ERISA) or the termination of a
Defined Benefit Plan excluding, for purposes of this clause (iii), any standard
termination under Section 4041(b) of ERISA; (iv) the institution of proceedings
to terminate a Defined Benefit Plan by the PBGC; or (v) the appointment of a
trustee to administer any Defined Benefit Plan under Section 4042 of ERISA; or
(vi) any other event or condition that might reasonably constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Defined Benefit Plan.
"Total Liabilities" means, with respect to any Person, without
duplication, the sum of such Person's (i) Debt, (ii) financial obligations of
the kind customarily appearing as "liabilities" on a balance sheet prepared in
accordance with GAAP, and (iii) noncontingent exposure to financial liability of
any type, kind or nature, regardless of how incurred and regardless of whether
the amount of any such exposure would be required to be disclosed in any
financial reporting of such Person (provided, however, that earnouts payable in
connection with any acquisition shall not in any event be included in amounts
covered by this clause (iii)). For purposes of this definition, the amount of
any exposure of the kind referred to in clause (iii) above that is not
liquidated shall be assumed to be the maximum amount of such exposure.
"Wholly-Owned" means, with respect to any Subsidiary, that all the
Capital Stock (except for directors' qualifying shares) of such Subsidiary is
directly or indirectly owned by the Borrower.
Section 1.2. Related Matters.
1.2.1. Construction.
Unless the context of this Agreement clearly requires
otherwise, references to the plural include the singular, the singular includes
the plural, the part includes the whole, "including" is not limiting, and "or"
has the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder" and similar terms in this Agreement
refer to this Agreement as a whole (including the Preamble, the Recitals, the
Schedules and the Exhibits) and not to any particular provision of this
Agreement. Article, section, subsection, exhibit, schedule, recital and preamble
references in this Agreement are to this Agreement unless otherwise specified.
References in this Agreement to any agreement, other document or law "as
amended" or "as amended from time to time," or to amendments of any document or
law, shall include any amendments, supplements, replacements, renewals, waivers
or other modifications not prohibited by the Loan Documents. References in this
Agreement to any law (or any part thereof) include any rules and regulations
promulgated thereunder (or with respect to such part) by the relevant
Governmental Authority, as amended from time to time.
1.2.2. Determinations.
Any determination or calculation contemplated by this
Agreement that is made by any Lender Party shall be final and conclusive and
binding upon the Borrower, and, in the case of determinations by the Agent, also
the other Lender Parties, in the absence of manifest error. References in this
Agreement to any "determination" by any Lender Party include good faith
estimates by such Lender Party (in the case of quantitative determinations), and
good faith beliefs by such Lender Party (in the case of qualitative
determinations). All references herein to "discretion" of any Lender Party (or
terms of similar import) shall mean "absolute and sole discretion." All consents
and other actions of any Lender Party contemplated by this Agreement may be
given, taken, withheld or not taken in such Lender Party's discretion (whether
or not so expressed), except as otherwise expressly provided herein.
1.2.3. Accounting Terms and Determinations.
Unless otherwise specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared in accordance with GAAP, applied on a basis consistent with the audited
financial statements referred to in Section 4.4.
|1.2.4. Independence of Covenants.
All covenants under this Agreement shall each be given
independent effect so that if a particular action or condition is not permitted
by any such covenant, the fact that it would be permitted by another covenant,
by an exception thereto, or be otherwise within the limitations thereof, shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.
ARTICLE 2.
AMOUNTS AND TERMS OF THE CREDIT FACILITY
Section 2.1. Revolving Loans.
|2.1.1. Revolving Commitment.
Each Lender severally agrees, upon the terms and subject to
the conditions set forth in this Agreement, at any time from and after
the Closing Date until the Business Day next preceding the Termination
Date, to make revolving loans (each such revolving loan, including
those made in connection with Mandatory Borrowings, a "Revolving Loan")
to the Borrower, provided that (a) the Revolving Commitment Usage of
any Lender shall not exceed, at any time, the Revolving Commitment of
such Lender, and (b) the Revolving Commitment Usage of all Lenders at
any time, in the aggregate, shall not exceed the aggregate Revolving
Commitments of all Lenders.
Revolving Loans may be voluntarily prepaid pursuant to Section
2.8.3. and, subject to the provisions of this Agreement, any
amounts so prepaid may be re-borrowed, up to the amount available
under this Section 2.1. at the time of such re-borrowing.
2.1.2. Type of Loans and Minimum Amounts.
Revolving Loans made under this Section 2.1. may be Base Rate
Loans, or LIBOR Rate Loans (each a "Type" of Loan), subject, however,
to Section 2.4.2. and 2.11.
Each Borrowing of Revolving Loans shall be in a minimum
aggregate amount of $500,000 and integral multiples of $10,000, in the
case of a Borrowing of Base Rate Loans, or a minimum aggregate amount
of $1,000,000, and integral multiples of $1,000,000, in the case of a
Borrowing of LIBOR Rate Loans.
|2.1.3. Notice of Borrowing.
When the Borrower desires to borrow Revolving Loans pursuant
to Section 2.1., it shall deliver to the Agent a Notice of Borrowing
substantially in the form of Exhibit E-1, duly completed and executed
by a Responsible Officer (a "Notice of Borrowing"), no later than 11:00
a.m. (California time) (a) at least one Business Day before the
proposed Funding Date, in the case of a Borrowing of Base Rate Loans,
or (b) at least three LIBOR Business Days before the proposed Funding
Date, in the case of a Borrowing of LIBOR Rate Loans.
In lieu of delivering a Notice of Borrowing, the Borrower,
through a Responsible Officer, may give the Agent telephonic notice of
any proposed Borrowing by the time a Notice of Borrowing would be
required to be delivered and containing all information required for a
Notice of Borrowing; provided, however, that such notice shall be
confirmed in writing by delivery of a Notice of Borrowing to the Agent
on or before the proposed Funding Date (or, in case of a Base Rate
Borrowing, one Business Day after the Funding Date). The Lender Parties
shall incur no liability to the Borrower or the other Lender Parties in
acting upon any telephonic notice that the Agent believes to have been
given by a Responsible Officer or for otherwise acting in good faith
under this Section 2.1. and in making any Loan in accordance with this
Agreement pursuant to any telephonic notice.
The Borrower shall notify the Agent of the names of its
officers and employees authorized to request and take other actions
with respect to Loans on behalf of the Borrower (each a "Responsible
Officer") by providing the Agent with a Notice of Responsible Officers
substantially in the form of Exhibit E-7, duly completed and executed
by a Senior Officer (a "Notice of Responsible Officer"). The Agent
shall be entitled to rely conclusively on a Responsible Officer's
authority to request and take other actions with respect to Loans on
behalf of the Borrower until the Agent receives a new Notice of
Responsible Officer that no longer designates such Person as a
Responsible Officer. The Agent shall have no duty to verify the
authenticity of the signature appearing on any Notice of Borrowing,
Notice of Responsible Officer or any other notice given under the Loan
Documents.
Any Notice of Borrowing (or telephone notice in lieu thereof)
delivered pursuant to this Section 2.1.3.4. shall be irrevocable and
the Borrower shall be bound to make a borrowing in accordance
therewith.
The Agent shall promptly notify each Lender of the contents of
any Notice of Borrowing (or telephonic notice in lieu thereof) received
by it and such Lender's pro rata portion of the Borrowing requested.
Not later than 11:30 a.m. (California time) on the date specified in
such notice as the Funding Date (or, in the case of Base Rate Loans,
10:30 a.m. (California time) on such date), each Lender, subject to the
terms and conditions hereof, shall make its pro rata portion of the
Borrowing available, in immediately available funds, to the Agent at
the Agent's Account.
2.1.4. Funding.
Not later than 11:00 a.m. (California time) or such later time
as may be agreed to by the Borrower and the Agent, and subject to and upon
satisfaction of the applicable conditions set forth in Article 3. as determined
by the Agent, the Agent shall arrange for a wire transfer of immediately
available funds in the amount of the requested Loans to the account designated
by the Borrower pursuant to wire instructions set forth in the Notice of
Borrowing.
Section 2.2. Swingline Loans.
2.2.1. Swingline Commitment.
Subject to the terms and conditions set forth herein, the
Swingline Lender severally agrees to lend to the Borrower, and the Borrower may
borrow, repay, and reborrow from time to time between the Closing Date and the
Swingline Maturity Date upon notice by the Borrower to the Swingline Lender
given in accordance with Section 2.2.4, such sums as are requested by Borrower
(each a "Swingline Loan") up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to the Swingline
Commitment, provided that the sum of the outstanding amount of the Swingline
Loans (after giving effect to all amounts requested), plus the then-outstanding
aggregate amount of all of the Revolving Loans shall not at any time exceed the
aggregate of all Lenders' Revolving Commitments. Each request for a Swingline
Loan hereunder shall constitute a representation and warranty by the Borrower
that the conditions set forth in Article 3 have been satisfied on the date of
such request.
2.2.2. The Swingline Note.
The Swingline Loan shall be evidenced by the Swingline Note,
dated the Closing Date and completed with appropriate insertions. The Swingline
Note shall be payable to the order of the Swingline Lender in a principal amount
equal to the Swingline Commitment. Each Borrower irrevocably authorizes the
Swingline Lender to make or cause to be made, at or about the time of the
Funding Date of any Swingline Loan or at the time of receipt of any payment of
principal on the Swingline Note, an appropriate notation on the Swingline Note
reflecting the making of such Swingline Loan or (as the case may be) the receipt
of such payment. The outstanding amount of the Swingline Loans set forth on the
Swingline Note shall be prima facie evidence of the principal amount thereof
owing and unpaid to the Swingline Lender, but the failure to record, or any
error in so recording, any such amount shall not limit or otherwise affect the
obligations of the Borrowers hereunder or under the Swingline Note to make
payments of principal of or interest on the Swingline Note when due.
2.2.3. Interest on Swingline Loans.
Except as otherwise provided in 2.4.1.2. , each Swingline Loan
shall bear interest for the period commencing with the Funding Date thereof and
ending on the date of repayment thereof at a rate per annum equal to the Base
Rate. The Borrower promises to pay interest on each Swingline Loan in arrears on
the earlier to occur of (a) the day on which such Swingline Loan is repaid and
(b) the next occurring Interest Payment Date for Base Rate Loans. Prior to the
date of any Mandatory Borrowing in respect of a Swingline Loan, interest on such
Swingline Loan shall be for the Swingline Lender's account, and following any
Mandatory Borrowing in respect of any Swingline Loan, interest on such Swingline
Loan shall be for the account of all Lenders, pro rata in accordance with the
amounts of such Lenders' Revolving Loan Commitments.
2.2.4. Notice of Borrowing of Swingline Loans.
The Borrower shall give to the Agent written notice in the
form of Exhibit E-2 hereto (or telephonic notice confirmed in a writing in the
form of Exhibit E-2 hereto) of each Swingline Loan requested hereunder (a
"Swingline Loan Request") no later than 12:00 noon, California time, on the
proposed Funding Date of any Swingline Loan. Each such notice shall specify (a)
the principal amount of the Swingline Loan requested, and (b) the proposed
Funding Date of such Swingline Loan. Each Swingline Loan Request shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Swingline Loan requested from the Swingline Lender on the proposed
Funding Date. Each Swingline Loan Request shall be in a minimum amount of
$10,000 or an integral multiple thereof. Swingline Lender agrees and
acknowledges that the parties intend that the Swingline loans be funded on the
same day as they are requested and agrees to use its best efforts to honor each
Swingline Loan Request that is timely made pursuant to the terms hereof.
Notwithstanding the foregoing, Borrower agrees and acknowledges that the
Swingline Lender shall incur no liability as a result of its inability to fund
the amount requested in any Swingline Loan Request until the Business Day
following the day on which such Swingline Loan Request is made.
2.2.5. Limitations on Swingline Lender's Obligation to Make
Swingline Loans.
The Swingline Lender will not make any Swingline Loan after it
has received written notice from the Required Lenders (other than the Swingline
Lender) that one or more of the applicable conditions precedent set forth in
Section 3.1 are not then satisfied (provided that the delivery and receipt of
such written notice shall not limit, affect or modify the Lenders' obligations
in respect of a Mandatory Borrowing in respect of any Swingline Loan made prior
to the receipt of such notice, as specified in Section 2.2.5.).
|2.2.6. Mandatory Borrowings.
On any Business Day, either the Borrower or the Swingline
Lender may, in its sole discretion, give notice to Agent pursuant to that all
then outstanding Swingline Loans shall be funded with a borrowing of Revolving
Loans (provided that such notice shall be deemed to have been automatically
given by the Swingline Lender upon the occurrence of a Default, and further
provided that such notice shall be deemed to have been automatically given on
the fourth Business Day after any day on which the principal amount of Swingline
Loans outstanding equals or exceeds Five Hundred Thousand Dollars ($500,000)),
in which case a borrowing of Revolving Loans constituting Base Rate Loans (each
such borrowing, a "Mandatory Borrowing") shall be made on the Funding Date set
forth in the notice of such Mandatory Borrowing (which shall be a Business Day
and shall not be later than the first Business Day after the date of such
notice, and in the case of a notice deemed to be given automatically hereunder,
shall be the same day on which such notice is deemed given), by all Lenders pro
rata in accordance with each Lender's Revolving Commitment, and the proceeds
thereof shall be applied directly to repay the Swingline Lender for all
outstanding Swingline Loans. Each Lender hereby irrevocably agrees to make
Revolving Loans pursuant to each Mandatory Borrowing in the amount and in the
manner specified in the preceding sentence, and on the date specified in writing
by the Swingline Lender, notwithstanding (i) whether any conditions specified in
Article 3 are then satisfied; (ii) whether a Default or Event of Default has
occurred and is continuing; (iii) the date of such Mandatory Borrowing; and (iv)
any reduction in the Commitments after any such Swingline Loans were made. In
the event that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a case under the Bankruptcy Code in respect of Borrower), each
Lender (other than the Swingline Lenders) hereby agrees that it will forthwith
purchase from the Swingline Lenders (without recourse or warranty) such
assignment of their outstanding Swingline Loans as shall be necessary to cause
the Lenders to share in such Swingline Loans ratably based upon their respective
Revolving Commitments, provided that all interest payable on such Swingline
Loans shall be for the account of the Swingline Lenders until the date the
respective assignment is purchased and, to the extent attributable to the
purchased assignment, shall be payable to the Lender purchasing such assignment
from and after the date of purchase. Each Lender's obligations under this
Section |2.2.6. shall be absolute and unconditional.
Section 2.3. Use of Proceeds.
The proceeds of the Loans shall be used by the Borrower only for
working capital, acquisitions, and other general corporate purposes. No part of
the proceeds of the Loans shall be used directly or indirectly for the purpose,
whether immediate, incidental or ultimate, of purchasing or carrying any Margin
Stock or maintaining or extending credit to others for such purpose or for any
other purpose that otherwise violates the Margin Regulations.
Section 2.4. Interest; Interest Periods; Conversion/Continuation.
2.4.1. Interest Rate and Payment.
Each Loan shall bear interest on the unpaid principal amount
thereof, from and including the date of the making of such Loan to and
excluding the due date or the date of any repayment thereof, at the
following rates per annum: (a) for so long as and to the extent that
such Loan is a Base Rate Loan, at the Base Rate (as in effect from time
to time); (b) for so long as and to the extent that such Loan is a
LIBOR Rate Loan, at the LIBOR Rate for each day during each Interest
Period applicable thereto plus the Applicable Margin;
Notwithstanding the foregoing provisions of this Section
2.4.1., any principal, interest or other amount payable under this
Agreement and the other Loan Documents that is not paid when due shall
bear interest at a rate per annum equal to the Post-Default Rate,
without notice or demand of any kind.
Accrued interest shall be payable in arrears (a) in the case
of a Base Rate Loan, on each Interest Payment Date; (b) in the case of
a LIBOR Rate Loan, on each Interest Payment Date that occurs during
such Interest Period applicable thereto; provided that if the Interest
Period applicable to a LIBOR Rate Loan is longer than three months,
interest also shall be payable on the last day of the third month of
such Interest Period; (c) in the case of any interest accrued at the
Post-Default Rate, on demand, and (d) in the case of any Loan, when the
Loan shall become due (whether at maturity, by reason of prepayment,
acceleration or otherwise).
|2.4.2. Interest Periods and Minimum Amounts.
Notwithstanding anything herein to the contrary, (a) all
Interest Periods applicable to LIBOR Rate Loans shall comply with the definition
of "Interest Period," (b) there may be no more than ten different Interest
Periods for all LIBOR Rate Loans outstanding at the same time, and (c) LIBOR
Rate Loans of each Type and with the same Interest Period outstanding at any
time shall be in an aggregate amount at least equal to $1,000,000 and in an
integral multiple of $1,000,000. For purposes of the foregoing clause (b),
Interest Periods applicable to Loans of different Types shall constitute
different Interest Periods even if they are coterminous.
|2.4.3. Conversion or Continuation.
Subject to this Section 2.4.3. and Sections 2.4.2. and 2.11.,
the Borrower shall have the option (a) at any time, to convert all or
any part of its outstanding Base Rate Loans to LIBOR Rate Loans, (b) on
the last day of the Interest Period applicable thereto, to (i) convert
all or any part of its outstanding LIBOR Rate Loans to Base Rate Loans,
(ii) to continue all or any part of its LIBOR Rate Loans as Loans of
the same Type, or (iii) to convert all or any part of its outstanding
LIBOR Rate Loans to LIBOR Rate Loans of another Type; provided that, in
the case of clause (a), (b) (ii) or (b)(iii), there does not exist a
Default or an Event of Default at such time. If a Default or an Event
of Default shall exist upon the expiration of the Interest Period
applicable to any LIBOR Rate Loan, such Loan automatically shall be
converted into a Base Rate Loan.
If the Borrower elects to convert or continue a Loan under
this Section 2.4.3., it shall deliver to the Agent a Notice of
Continuation/Conversion substantially in the form of Exhibit E-3, duly
completed and executed by a Responsible Officer (a "Notice of
Continuation/Conversion"), (a) not later than 11:00 a.m. (California
time) at least three LIBOR Business Days before the proposed conversion
or continuation date, if the Borrower proposes to convert into, or to
continue, a LIBOR Rate Loan, and (b) otherwise not later than 11:00
a.m. (California time) on the Business Day next preceding the proposed
conversion or continuation date.
In lieu of delivering a Notice of Continuation/Conversion, the
Borrower, through a Responsible Officer, may give the Agent telephonic
notice of any proposed continuation or conversion by the time a Notice
of Continuation/Conversion would be required to be delivered and
containing all information required therefor; provided, however, that
such notice shall be confirmed in writing by delivery of a Notice of
Continuation/Conversion to the Agent on or before the proposed
continuation or conversion date. The Lender Parties shall incur no
liability to the Borrower or the other Lender Parties in acting upon
any telephonic notice that the Agent believes to have been given by a
Responsible Officer or for otherwise acting in good faith under this
Section 2.4.3. and in converting or continuing any Loan (or a part
thereof) pursuant to any telephonic notice.
Any Notice of Conversion/Continuation (or telephonic notice in
lieu thereof) shall be irrevocable and the Borrower shall be bound to
convert or continue in accordance therewith. If any request for the
conversion or continuation of a Loan is not made in accordance with
this Section 2.4.3., or if no notice is so given with respect to a
LIBOR Rate Loan as to which the Interest Period expires, then such Loan
automatically shall be converted into a Base Rate Loan.
2.4.4. Computations.
Interest on each LIBOR Rate Loan and all Fees and other
amounts payable hereunder or the other Loan Documents shall be computed on the
basis of a 360-day year, and interest on Base Rate Loans shall be computed on
the basis of a 365 or 366-day year, and the actual number of days elapsed
(including the first and excluding the last day of the period). Any change in
the interest rate on any Loan or other amount resulting from a change in the
rate applicable thereto (or any component thereof) pursuant to the terms hereof
shall become effective as of the opening of business on the day on which such
change in the applicable rate (or component) shall become effective.
2.4.5. Maximum Lawful Rate of Interest.
The rate of interest payable on any Loan or other amount shall
in no event exceed the maximum rate permissible under Applicable Law. If the
rate of interest payable on any Loan or other amount is ever reduced as a result
of this Section and at any time thereafter the maximum rate permitted by
Applicable Law shall exceed the rate of interest provided for in this Agreement,
then the rate provided for in this Agreement shall be increased to the maximum
rate provided by Applicable Law for such period as is required so that the total
amount of interest received by the Lenders is that which would have been
received by the Lenders but for the operation of the first sentence of this
Section.
Section 2.5. Notes, Etc.
2.5.1. Loans Evidenced by Notes.
The Revolving Loans made by each Lender to any Borrower shall
be evidenced by one or more Revolving Loan Notes executed by each of the
Borrowers, provided that all of such Revolving Loan Notes shall comprise a joint
and several obligation in an amount not exceeding the aggregate amount of the
Lenders' Revolving Commitments.
|2.5.2. Notation of Amounts and Maturities, Etc.
Each Lender is hereby irrevocably authorized to record on the
schedule attached to its Revolving Loan Note (or a continuation thereof) the
information contemplated by such schedule. The failure to record, or any error
in recording, any such information shall not, however, affect the obligations of
the Borrower hereunder or under any Revolving Loan Note to repay the principal
amount of the Loans evidenced thereby, together with all interest accrued
thereon. All such notations shall constitute conclusive evidence of the accuracy
of the information so recorded, in the absence of manifest error.
|2.5.3. Loan Account.
The Agent shall maintain a loan account (the "Loan Account")
on its books in which shall be recorded (a) all Loans made by the Lenders to the
Borrowers pursuant to this Agreement, (b) all other appropriate debits and
credits as and when due in accordance with this Agreement, including all Fees,
charges, expenses and interest, and (c) all payments made by any Borrower on the
Obligations. All entries in the Loan Account shall be made in accordance with
the customary accounting practices of the Agent as in effect from time to time.
The balance in the Loan Account shall be rebuttable presumptive evidence of the
amounts due and owing the Lenders by the Borrowers.
Section 2.6. Fees.
|2.6.1. Commitment Fee.
The Borrower shall pay to the Agent, for the pro rata benefit
of the Lenders, a commitment fee for each day from and after the Closing Date
until the Stated Termination Date, upon the excess, if any, of (a) the aggregate
Revolving Commitments of the Lenders over (b) the Revolving Commitment Usage, in
each case for such day. Such Fee shall be payable in arrears on each Interest
Payment Date and the Termination Date. The commitment fee shall accrue at a rate
of (i) at any time when the Applicable Margin is 1.75, 0.35% per annum; (ii) at
any time when the Applicable Margin is 1.50, 0.30% per annum; (iii) at any time
when the Applicable Margin is 1.25, 0.25% per annum, and (iv) at any time when
the Applicable Margin is 1.00, 0.20% per annum.
|2.6.2. Other Fees.
On the Closing Date and from time to time thereafter as
specified in the Fee Letter, the Borrower shall pay to the Agent the fees
specified in the Fee Letter.
2.6.3. Fees Non-Refundable.
All Fees shall be fully earned when payable hereunder and
shall be non-refundable.
Section 2.7. Termination and Reduction of Revolving Commitments.
|2.7.1.
Each Lender's Revolving Commitment shall terminate without
further action on the part of such Lender on the earlier to occur of (a)
September 11, 2001 (or if that date is not a Business Day, the next preceding
LIBOR Business Day) (the "Stated Termination Date"), and (b) the date of
termination of the Revolving Commitment pursuant to Section 2.7.2. or 7.2. (such
earlier date being referred to herein as the "Termination Date"). The Swingline
Commitment shall expire without further action on the part of the Swingline
Lender on the Termination Date.
2.7.2.
The Borrower shall have the right, at any time or from time to
time after the Closing Date, to terminate in whole or permanently reduce in
part, without premium or penalty, the Revolving Commitments of the Lenders on a
pro rata basis to an amount not less than the Revolving Commitment Usage of all
Lenders, by giving the Agent not less than seven Business Days' prior written
notice of such termination or reduction and the amount of any partial reduction.
Any such termination or partial reduction shall be effective on the date
specified in the Borrower's notice and shall be in a minimum amount of
$10,000,000 and integral multiples of $5,000,000. In addition, each termination
of the Revolving Commitments of the Lenders, or reduction of such Revolving
Commitments to an aggregate amount less than the amount of the Swing Line
Commitment then in effect, shall automatically terminate or reduce the Swing
Line Commitment to the amount of the Revolving Commitments then in effect.
Section 2.8. Repayments and Prepayments.
2.8.1. Repayment.
The unpaid principal amount of all Revolving Loans shall be
paid in full on the Termination Date.
2.8.2. Mandatory Prepayment.
If at any time the aggregate Revolving Commitment Usage of all
Lenders exceeds the aggregate amount of the Revolving Commitments then
in effect, the Borrower shall, on the Business Day on which the
Borrower learns or is notified of the excess, notify the Agent that on
the next Business Day the Borrower will make mandatory prepayments of
the Revolving Loans as may be necessary so that, after such prepayment
and provision, such excess is eliminated.
All proceeds of Collateral and other amounts received by the
Agent pursuant to the provisions of the Security Agreement shall be
credited to Borrower's Loan Account and applied to the repayment of the
Obligations one Business Day after the Agent's receipt thereof
(conditional upon the Agent's receipt of immediately available funds at
the end of such one-Business Day period).
The Borrower shall give the Agent not less than one Business
Day's prior written notice of the date on which a Mandatory Prepayment
will be made. Each Mandatory Prepayment shall be applied to the unpaid
principal amount of the Loans; provided that each Mandatory Prepayment
shall be applied first to reduce the Base Rate Loan constituting a
portion of the respective Loan and then to the LIBOR Rate Loans
constituting a portion thereof, in the inverse order of termination of
Interest Periods applicable thereto. Each Mandatory Prepayment shall be
made together with accrued interest on the amount prepaid to the date
of prepayment.
2.8.3. Optional Prepayments
Subject to this Section 2.8.3., the Borrower may, at its
option, at any time or from time to time, prepay the Loans in whole or
in part, without premium or penalty.
If the Borrower elects to prepay a Loan under this Section
2.8.3.2., it shall deliver to the Agent a notice of optional prepayment
(i) not later than 11:00 a.m. California time) at least three LIBOR
Business Days before the proposed prepayment, if the Borrower proposes
to prepay a LIBOR Rate Loan, and (c) otherwise not later than 12:00
noon (California time) on the proposed prepayment date (which shall be
a Business Day). Any notice of optional prepayment shall be
irrevocable, and the payment amount specified in such notice shall be
due and payable on the date specified in such notice, together with
interest accrued thereon to such date.
2.8.4. Payments Set Aside.
To the extent the Agent or any Lender receives payment of any
amount under the Loan Documents, whether by way of payment by the Borrower,
set-off, as proceeds of Collateral or otherwise, which payment is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy law,
other law or equitable cause, in whole or in part, then, to the extent of such
payment received, the Obligations or part thereof intended to be satisfied
thereby shall be revived and continue in full force and effect, together with
all Collateral security therefor, as if such payment had not been received by
the Agent or Lender. If prior to any such invalidation, declaration, setting
aside or requirement, this Agreement shall have been canceled or surrendered,
this Agreement shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, discharge or otherwise affect the
obligations of the Borrower in respect of the amount of the affected payment.
Section 2.9. Manner of Payment.
2.9.1.
Except as otherwise expressly provided, the Borrower shall
make each payment under the Loan Documents to the Agent in Dollars and in
immediately available funds, without any deduction whatsoever, including any
deduction for any set-off, recoupment, counterclaim or Taxes (other than
Excluded Taxes), at the Agent's Office, for the account of the Applicable
Lending Offices of the Lender Party entitled to such payment, by depositing such
payment in the Agent's Account not later than 11:00 a.m. (California time) on
the due date thereof. Any payments received after 11:00 a.m. (California time)
on any Business Day shall be deemed received on the next succeeding Business
Day. Not later than 1:00 p.m. (California time) on the day such payment is made,
the Agent shall deliver to each Lender, for the account of the Lender's
Applicable Lending Office, in Dollars and in immediately available funds, such
Lender's share of the payment so made, determined pursuant to Section 2.15.
Delivery shall be made in accordance with the written instructions satisfactory
to the Agent from time to time given to the Agent by each Lender. Without
limiting the rights of the Lender Parties under Section 9.10., each Lender Party
shall have the right, at any time, to charge any account of the Borrower
maintained with the Lender Party for the amount of any payment due by the
Borrower under the Loan Documents or to deduct the amount of any such payment
from any remittance due to the Borrower hereunder.
2.9.2.
Whenever any payment to be made hereunder shall be due on a
day that is not a Business Day (or, in the case of any payment with respect to
any LIBOR Rate Loan, not a LIBOR Business Day), such payment shall instead be
made on the next succeeding Business Day (or, in the case of any such payment
with respect to any LIBOR Rate Loan, the next succeeding LIBOR Business Day),
together with interest accrued during the period of such extension.
Section 2.10. Pro Rata Treatment.
Except to the extent otherwise expressly provided herein,
2.10.1.
Revolving Loans shall be requested from the Lenders pro rata
according to their respective Revolving Commitments.
|2.10.2.
Mandatory Borrowings in respect of Swingline Loans shall be
funded by the Lenders pro rata according to their respective Revolving
Commitments.
2.10.3.
Each reduction of the Revolving Commitments of the Lenders
shall be applied to the respective Revolving Commitments of the Lenders pro rata
according to their respective Revolving Commitments before such reduction.
2.10.4.
Each payment or prepayment by the Borrower of principal of the
Revolving Loans shall be made for the account of the Lenders pro rata according
to the respective unpaid principal amount of the Revolving Loans, owed to the
Lenders, and each payment by the Borrower of interest on the Revolving Loans
shall be made for the account of the Lenders pro rata according to the
respective accrued but unpaid interest on the Revolving Loans owed to such
Lenders. Each payment by the Borrower of Fees payable to the Lenders pursuant to
Section 2.6.1. shall be made for the account of the Lenders pro rata according
to the respective amounts of their Revolving Commitments.
|Section 2.11. Mandatory Suspension and Conversion of LIBOR Rate
Loans.
Each Lender's obligation to make, continue or convert Loans into LIBOR
Rate Loans shall be suspended, all outstanding LIBOR Rate Loans shall be
converted into Base Rate Loans on the last day of the respective Interest
Periods applicable thereto (or, if earlier, in the case of clause |2.11.2.
below, on the last day that such Lender can lawfully continue to maintain LIBOR
Rate Loans) and all pending requests for the making or continuation of, or
conversion into, LIBOR Rate Loans shall be disregarded, if:
|2.11.1.
on or prior to the determination of the interest rate for a
LIBOR Rate Loan for any Interest Period, the Agent determines that for any
reason appropriate quotations are not available to the Agent in the relevant
interbank market for purposes of determining the Adjusted LIBOR Rate or that
such rate would not accurately reflect the cost to the Lenders of making,
continuing, or converting a Loan into, a LIBOR Rate Loan for such Interest
Period; or
|2.11.2.
after the date hereof a Lender notifies the Agent (which shall
thereupon notify the Borrower and the other Lenders) of its determination that
any Regulatory Change makes it unlawful or impossible for such Lender or its
LIBOR Lending Office to make or maintain any LIBOR Rate Loan, to obtain in the
interbank eurodollar market through its LIBOR Lending Office the funds with
which to make any LIBOR Rate Loan or to comply with its obligations hereunder in
respect thereof.
Section 2.12. Regulatory Changes.
|2.12.1. Increased Costs.
If, on or after the date hereof, any Regulatory Change shall
impose, modify or deem applicable any reserve, special deposit, compulsory loan,
insurance or similar requirement (other than any such requirement with respect
to any LIBOR Rate Loan to the extent included in the LIBOR Reserve Requirement),
against, or any fees or charges in respect of, assets held by, deposits with or
other liabilities for the account of, commitments of, advances or Loans by, or
other credit extended by, any Lender Party (or its Applicable Lending Office) or
shall impose on any Lender Party (or its Applicable Lending Office) or on the
relevant interbank market any other condition affecting any LIBOR Rate Loan, or
any obligation to make LIBOR Rate Loans, and the effect of the foregoing is (i)
to increase the cost to such Lender Party (or its Applicable Lending Office) of
making, issuing, renewing or maintaining any LIBOR Rate Loan or its Revolving
Commitment or Revolving Commitments in respect thereof or (ii) to reduce the
amount of any sum received or receivable by such Lender Party (or its Applicable
Lending Office) hereunder or under any other Loan Document with respect thereto,
then, subject to Section |2.15.1., the Borrower shall from time to time pay to
such Lender Party, within 10 days after request by such Lender Party, such
additional amounts as may be specified by such Lender Party as sufficient to
compensate such Lender Party for such increased cost or reduction.
2.12.2. Capital Costs.
If a Regulatory Change regarding capital adequacy (including
the adoption or becoming effective of any treaty, law, rule, regulation or
guideline adopted pursuant to or arising out of the July 1988 report of the
Basle Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards") has or
would have the effect of reducing the rate of return on the capital of or
maintained by any Lender Party or any company controlling such Lender Party as a
consequence of such Lender Party's Loans, Revolving Commitments or obligations
hereunder and other commitments of this type to a level below that which such
Lender Party or company could have achieved but for such Regulatory Change
(taking into account such Lender Party's or company's policies with respect to
capital adequacy), then, subject to Section |2.15.1., the Borrower shall from
time to time pay to such Lender Party, within 10 days after request by such
Lender Party, such additional amounts as may be specified by such Lender Party
as sufficient to compensate such Lender Party or company for such reduction in
return, to the extent such Lender Party or such company determines such
reduction to be attributable to the existence, issuance or maintenance of such
Loans or obligations for the account of the Borrower.
Section 2.13. Taxes.
2.13.1.
If the Borrower is required by Applicable Law to make any
deduction or withholding in respect of any Taxes (other than Excluded Taxes)
from any amount payable under any Loan Document to or for the account of any
Lender Party, the Borrower shall pay to or for the account of such Lender Party,
on the date such amount is payable, such additional amounts as such Lender Party
reasonably determines may be necessary so that the net amounts received by it or
for its account, in the aggregate, after all applicable deductions or
withholdings, shall equal the amount that such Lender Party would have been
entitled to receive if no deductions or withholdings were made. "Excluded Taxes"
means, with respect to any payment to any Lender Party, (a) any taxes imposed on
or measured by the overall net income (including a franchise tax based on net
income) of such Lender Party or its Agent's Office or Applicable Lending Office
by the jurisdiction in which it is incorporated, maintains its principal
executive office or in which such Agent's Office or Applicable Lending Office is
located, and (b) "Excluded Taxes" arising under Section 2.13.3. If the Borrower
shall deduct or withhold any Taxes from any payments under the Loan Documents,
it shall provide to the relevant Lender Party (i) a statement setting forth the
amount and type of Taxes so deducted or withheld, the applicable rate and any
other information or documentation that such Lender Party may reasonably request
and (ii) as promptly as possible after payment is made to the relevant
Governmental Authority, a certified copy of any original official receipt
received by the Borrower showing payment.
|2.13.2.
If any Lender Party is required by law to make any payment on
account of Taxes (other than Excluded Taxes) on or in relation to any sum
received or receivable by it under any Loan Document, or any liability for Taxes
(other than Excluded Taxes) in respect of any such payment is imposed, levied or
assessed against such Lender Party, then the Borrower shall pay when due such
additional amounts as such Lender Party reasonably determines to be necessary so
that the amount received by it, less any such Taxes paid, imposed, levied or
assessed, including any Taxes (other than Excluded Taxes) imposed on such
additional amounts, shall equal the amount that such Lender Party would have
been entitled to retain in the absence of the payment, imposition, levy or
assessment of such Taxes.
|2.13.3.
If any Lender Party is not organized and existing under the
laws of the United States of America or any political subdivision thereof or
therein (a "Foreign Lender Party"), to the extent entitled to do so under
Applicable Law, such Lender Party shall furnish to the Borrower, on the Closing
Date (or on the date on which such Foreign Lender Party first becomes a Lender
Party pursuant to Section 9.3.) a duly executed certificate to the effect that
such Foreign Lender Party is entitled to receive all amounts payable under the
Loan Documents without deduction or withholding (or at a reduced rate of
deduction or withholding) on account of Taxes imposed by the United States (A)
pursuant to the terms of an applicable tax treaty in effect with the United
States of America (in which case such certificate shall be accompanied by two
executed copies of IRS Form 1001), or (B) under Code Section 1441(c) (in which
case such certificate shall be accompanied by two executed copies of IRS Form
4224) (such forms being the "Prescribed Forms"). If requested by the Borrower
from time to time after the Closing Date (upon the obsolescence of any
previously delivered form or otherwise), a Foreign Lender Party shall, to the
extent entitled thereto under Applicable Law, provide to the Borrower new
Prescribed Forms, in each case duly executed and completed by such Foreign
Lender Party. If a Foreign Lender Party does not furnish Prescribed Forms
establishing a complete exemption from deduction and withholding on account of
Taxes imposed by the United States of America, any deductions or withholdings
required to be made by the Borrower under Applicable Law on account of Taxes
imposed by the United States of America (including deductions or withholdings on
account of such Taxes at the rate shown in such Prescribed Forms), and any
payments required to be made by, and any liability imposed, levied or assessed
against, such Lender Party on account of such Taxes, shall constitute "Excluded
Taxes," provided that any such deductions, withholdings, payments or liabilities
shall not constitute "Excluded Taxes" to the extent they are attributable to a
Regulatory Change occurring after the date hereof (or, in the case of any Person
who becomes a Lender Party after the date hereof pursuant to Section 9.3., the
date on which such Person becomes a Lender Party) if such Lender Party has
furnished to the Borrower all Prescribed Forms required to be furnished by this
Section 2.13.3.
Section 2.14. Compensation for Funding Losses.
The Borrower shall pay to any Lender, upon demand by such Lender, such
amount or amounts as such Lender reasonably determines is or are necessary to
compensate it for any loss, cost, expense or liabilities incurred (including any
loss, cost, expense or liability incurred by reason of the liquidation or
redeployment of deposits but excluding loss of future margin) by it as a result
of (a) any payment, prepayment or conversion of any LIBOR Rate Loan for any
reason (including by reason of a Mandatory Prepayment, an acceleration pursuant
to Section 7.2. or by operation of Section 2.11.) on a date other than the last
day of an Interest Period applicable to such LIBOR Rate Loan, or (b) any LIBOR
Rate Loan for any reason not being made (other than a wrongful failure to fund
by such Lender), converted or continued, or any payment of principal of or
interest thereon not being made, on the date therefor determined in accordance
with the applicable provisions of this Agreement.
Section 2.15. Certificates Regarding Yield Protection, Etc.
|2.15.1.
Any request by any Lender for payment of additional amounts
pursuant to Sections 2.12., 2.13. and 2.14. shall be submitted through the Agent
and shall be accompanied by a certificate of such Lender Party setting forth the
basis and amount of such request, including a description or explanation in
reasonable detail of how such amount was determined and a statement that such
Lender Party has assessed, or is in the process of assessing, such Lender
Party's other similarly situated borrowers for similar amounts. In determining
the amount of such payment, such Lender Party may use such reasonable
attribution or averaging methods as it deems appropriate and practical.
|2.15.2.
Before any Lender Party requests compensation under Section
2.12. or 2.13., such Lender Party shall designate a different Applicable Lending
Office if such designation (a) will avoid the need for such request or reduce
the amount payable under such Section and (b) will not cause the imposition on
such Lender Party of any additional costs or legal, regulatory or administrative
burdens deemed by such Lender Party to be material or otherwise be deemed by
such Lender Party in its discretion to be materially disadvantageous to it.
Section 2.16. Applicable Lending Office; Discretion of Lenders as to
Manner of Funding.
Each Lender may make, carry or transfer LIBOR Rate Loans at, to, or for
the account of an Affiliate of the Lender, provided that such Lender shall not
be entitled to receive any greater amount under Section 2.12. or 2.13. as a
result of the transfer of any such Loan than such Lender would be entitled to
immediately prior thereto unless (a) such transfer occurred at a time when
circumstances giving rise to the claim for such greater amount did not exist or
(b) such claim would have arisen even if such transfer had not occurred.
Notwithstanding any other provision of this Agreement, each Lender Party shall
be entitled to fund and maintain its funding of all or any part of its LIBOR
Rate Loans in any manner it sees fit, it being understood, however, that for
purposes of this Agreement all determinations hereunder shall be made as if each
Lender Party had actually funded and maintained each LIBOR Rate Loan through the
purchase of deposits in the relevant interbank market having a maturity
corresponding to such Loan's Interest Period and bearing interest at the
applicable rate.
ARTICLE 3.
CONDITIONS TO LOANS
Section 3.1. Closing Conditions.
The occurrence of the Closing Date shall be subject to satisfaction of
the following conditions:
3.1.1. Closing Date.
The Closing Date shall occur on or before September 15, 1997.
3.1.2. Certain Documents.
The Agent shall have received the documents listed on Schedule
3.1.2., all of which shall be duly executed and in form and substance
satisfactory to the Agent.
3.1.3. Fees and Expenses Paid.
The Borrower shall have paid (a) all Fees due on or before the
Closing Date and (b) all expenses for which the Borrower shall have been billed
on or before the Closing Date.
3.1.4. Satisfaction of Certain Conditions.
The conditions set forth in Sections 3.2.3., 3.2.4. and
3.2.5. shall be satisfied on and as of the Closing Date as if such date were a
Funding Date.
3.1.5. Absence of Litigation Events.
There has not been issued any injunction, order or decree that
prohibits or limits any of the transactions contemplated by the Loan Documents
and there shall not be any action, suit, proceeding or investigation pending or,
to the Knowledge of the Borrower, currently threatened against the Borrower or
any Lender Party that (i) draws into question the validity, legality or
enforceability of any Loan Document or to consummate the transactions
contemplated thereby or (ii) might result, either individually or in the
aggregate, in any Material Adverse Change, except as set forth in Schedule 4.6.
3.1.6. General.
All other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered or
executed or recorded in form and substance satisfactory to the Agent and the
Agent shall have received all such counterpart originals or certified copies
thereof as Agent may request. Without limiting the generality of the foregoing,
the Agent shall have received evidence that UCC-1 financing statements
reflecting the Agent's security interest in the collateral described in the
Security Agreement have been duly filed in the office of the California
Secretary of State and all other filing offices deemed necessary or appropriate
by the Agent and reflect that the Agent's security interest holds first
priority, subject only to exceptions consented to by all Lenders.
3.1.7. No Material Adverse Change.
No Material Adverse Change shall have occurred since March 31,
1997.
Section 3.2. Conditions Precedent to Revolving Loans and Swingline
Loans.
The obligation of the Lenders or the Swingline Lender, as the case may
be, to make any Loan on any Funding Date shall be subject to the following
conditions precedent:
3.2.1. Occurrence of Closing Date.
The conditions precedent set forth in Section 3.1. shall have
been satisfied or waived in writing by the Agent.
3.2.2. Notice of Borrowing.
The Borrower shall have delivered to the Agent or the
Swingline Lender, as the case may be, after the time the conditions set forth in
Section 3.1. shall have been satisfied or waived and otherwise in accordance
with the applicable provisions of this Agreement, a Notice of Borrowing (or
telephonic notice in lieu thereof).
3.2.3. Representations and Warranties.
All of the representations and warranties of the Borrower contained in
the Loan Documents shall be true and correct in all material respects on and as
of the Funding Date as though made on and as of that date (except to the extent
that such representations and warranties expressly were made only as of a
specific date).
3.2.4. No Default.
No Default or Event of Default shall exist or result from the making of
the Loan.
3.2.5. No Material Adverse Change.
No Material Adverse Change shall have occurred since the date
of the financial statements referred to in Section 4.4.1.
3.2.6. Satisfaction of Conditions.
Each borrowing of a Loan shall constitute a representation and
warranty by the Borrower as of the Funding Date that the conditions contained in
Sections 3.2.3. through 3.2.5. have been satisfied.
3.2.7. No Violation of Applicable Law.
No Lender shall be prohibited by any Applicable Law from
extending the credit requested in such Notice of Borrowing.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
Each of the Borrowers represents and warrants to the Lender Parties as
follows:
Section 4.1. Organization, Powers and Good Standing.
Each of the Borrowers is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, as shown as of the date hereof on Schedule 4.1., and has all
requisite corporate power and authority and the legal right to own and operate
its properties, to carry on its business as heretofore conducted and as proposed
to be conducted, to enter into the Loan Documents to which it is a party and to
carry out the transactions contemplated thereby. Each of the Borrowers possesses
all Governmental Approvals, in full force and effect, free from unduly
burdensome restrictions, that are necessary for the ownership, maintenance and
operation of its properties and conduct of its business as now conducted and
proposed to be conducted, and is not in Material violation thereof. Each of the
Borrowers is duly qualified to do business and in good standing in each
jurisdiction where any failure to be so qualified, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 4.2. Authorization, Binding Effect, No Conflict, Etc.
The execution, delivery and performance by each of the
Borrowers of each Loan Document and each other Transaction Document have been
duly authorized by all necessary corporate or other action on the part of each
of the Borrowers. Each such Loan Document has been duly executed and delivered
by each of the Borrowers and is the joint and several legal, valid and binding
obligation of each such Borrower, enforceable against it in accordance with its
terms, except as enforcement may be limited by equitable principles and by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
creditors' rights generally.
The execution, delivery and performance by each of the
Borrowers of each Loan Document and the consummation of the transactions
contemplated thereby, do not and will not (a) violate any provision of the
charter or other organizational documents of any Borrower, (b) except for
consents that have been obtained and are in full force and effect, conflict
with, result in a breach of, or constitute (or, with the giving of notice or
lapse of time or both, would constitute) a default under, or require the
approval or consent of any Person pursuant to, any Contractual Obligation of any
such Borrower, or violate any Applicable Law binding on any such Borrower,
except where such violation, conflict, breach, or default would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect and would not subject any Lender Party to any liability, or (c)
result in the creation or imposition of any Lien upon any asset of any Borrower,
except for Liens in favor of the Agent under the Collateral Documents.
4.2.3. Governmental Approvals.
Except for filings and recordings in connection with the
perfection of Liens created by the Collateral Documents listed on Schedule
3.1.2., no Governmental Approval is or will be required in connection with the
execution, delivery and performance by each of the Borrowers of any Loan
Document to which it is party or the transactions contemplated thereby or to
ensure the legality, validity or enforceability thereof, except where the
failure to obtain such Governmental Approval would not, individually and in the
aggregate, reasonably be expected to have a Material Adverse Effect and would
not subject any Lender Party to any liability.
Section 4.3. Subsidiaries; Investments .
|4.3.1. Subsidiaries.
Each Consolidated Subsidiary of the Borrower, the authorized
and issued Capital Stock of each such Consolidated Subsidiary and the record and
beneficial owner of such Capital Stock are identified in Schedule 4.3., as
amended from time to time. All of the outstanding shares of Capital Stock of
each of the Subsidiaries of the Borrower have been duly authorized and validly
issued and are fully paid and nonassessable. Except as disclosed on Schedule
4.3., as amended from time to time, there are not outstanding any securities
convertible into or exchangeable for shares of Capital Stock of any of the
Subsidiaries of the Borrower, or any options, warrants or other rights to
purchase any such Capital Stock, or any commitments of any kind for the issuance
of additional shares of such Capital Stock or any such convertible or
exchangeable securities or options, warrants or rights to purchase such Capital
Stock. Except for directors qualifying shares or similar arrangements or as
disclosed on Schedule 4.3., neither the Borrower nor any Consolidated Subsidiary
thereof is a party to any agreement with respect to the issuance, voting or sale
of issued or unissued shares of Capital Stock of any Consolidated Subsidiary of
the Borrower.
|4.3.2. Borrower Capital Stock.
The authorized and outstanding Capital Stock of the Borrower
is as set forth on Schedule 4.3. All outstanding shares of such Capital Stock
are duly authorized and validly issued and are fully paid and nonassessable, and
Borrower's ownership interest in its Subsidiaries is free and clear of all Liens
except for Liens in favor of the Agent.
Section 4.4. Financial Information.
|4.4.1.
The consolidated balance sheets of the Borrower and its
consolidated subsidiaries as of March 31, 1997 and the consolidated statements
of income, stockholders' equity and cash flow of the Borrower and its
consolidated subsidiaries for the Fiscal Years then ended, certified by the
Borrower's independent certified public accountants, copies of which have been
delivered to the Lender Parties, were prepared in accordance with GAAP
consistently applied and fairly present the consolidated financial position of
the Borrower and its consolidated subsidiaries, as of the respective dates
thereof and the results of operations and cash flow of the Borrower and its
consolidated subsidiaries for the periods then ended. Neither the Borrower nor
any Consolidated Subsidiary on such dates had any material Contingent
Obligations, liabilities for Taxes or long-term leases, forward or long-term
commitments or unrealized losses from any unfavorable commitments that are not
reflected in the foregoing statements or in the notes thereto and that,
individually or in the aggregate, are Material.
4.4.2.
The unaudited consolidated balance sheet of the Borrower and
its consolidated subsidiaries as of June 30, 1997 and the related consolidated
statements of income, stockholders' equity and cash flow for the periods then
ended, certified by the Chief Financial Officer of the Borrower, copies of which
have been delivered to the Lender Parties, were prepared in accordance with GAAP
consistently applied (except to the extent noted therein) and fairly present the
consolidated financial position of the Borrower and its consolidated
subsidiaries as of such date and the results of operations and cash flow for the
periods covered thereby, subject to the absence of footnotes and normal year-end
audit adjustments. Neither the Borrower nor any Consolidated Subsidiary on such
date had any material Contingent Obligations, liabilities for Taxes or long-term
leases, forward or long-term commitments or unrealized losses from any
unfavorable commitments that are not reflected in the foregoing statements or in
the notes thereto and that, individually or in the aggregate, are Material.
|4.4.3.
The projected consolidated statements of income and cash flow
of the Borrower and its consolidated subsidiaries for the period from April 1,
1997 to and including March 31, 2001 , and the projected annual consolidated
balance sheets of the Borrower and its consolidated subsidiaries as of the end
of each Fiscal Year through March 31, 2001, copies of which have been furnished
to the Lender Parties, were prepared by or under the supervision of the Chief
Executive Officer and the Chief Financial Officer of the Borrower, are complete
and have been prepared on the basis of reasonable assumptions and in good faith
utilizing historical financial information that was prepared in accordance with
GAAP.
Section 4.5. No Material Adverse Changes; Solvency.
Since the date of the Financial Statements referred to in Section
4.4.1., there has been no Material Adverse Change. Each of the Borrowers is and
will be Solvent after giving effect to any Loans then being requested.
Section 4.6. Litigation.
Except as disclosed in Schedule 4.6., there are no actions, suits or
proceedings pending or, to the Knowledge of the Borrower, threatened against or
affecting the Borrower, any of its Subsidiaries or any of its properties before
any Governmental Authority (a) in which there is a reasonable possibility of an
adverse determination that could result in a Material liability or could
reasonably be expected to have a Material Adverse Effect or (b) that in any
manner draws into question the validity, legality or enforceability of any Loan
Document or any transaction contemplated thereby.
Section 4.7. Agreements; Applicable Law.
None of the Borrowers is in violation of any Applicable Law, or in
default under its charter or bylaws or any of its Contractual Obligations,
except where such violation or default could not individually or in the
aggregate be reasonably expected to have a Material Adverse Effect. None of the
Borrowers is a party to or bound by any unduly burdensome Contractual Obligation
that, individually or in the aggregate, can be reasonably expected to have a
Material Adverse Effect.
Section 4.8. Governmental Regulation.
None of the Borrowers is (a) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as amended,
or a company controlled by such a company, or (b) subject to regulation under
any Federal or state, statute or regulation limiting its ability to incur Debt
for money borrowed (other than the Margin Regulations).
Section 4.9. Margin Regulations.
None of the Borrowers is engaged principally, or as one of its
important activities, in the business of extending credit for the purposes of
purchasing or carrying Margin Stock. The aggregate value of all Margin Stock
held by the Borrowers constitutes less than 25% of the value, as determined in
accordance with the Margin Regulations, of all aggregate assets of the
Borrowers.
Section 4.10. Employee Benefit Plans.
None of the Borrowers sponsors, maintains or contributes to,
or has an obligation to contribute to, or, within the five years prior to the
Closing Date, maintained, contributed to or was required to contribute to, any
"employee pension benefit plan" within the meaning of Section 3(2) of ERISA that
is subject to Title IV of ERISA.
4.10.2.
There exists no Multiemployer Plan. Each Borrower and each of
the ERISA Affiliates is in compliance in all Material respects with all
Applicable Laws, including any applicable provisions of ERISA and the Code, with
respect to all Plans. There have been no Prohibited Transactions with respect to
any Plan that are reasonably likely to result in any Material liability of any
Borrower or any ERISA Affiliate. Each Borrower and the ERISA Affiliates have not
had asserted and do not expect to have asserted against them any Material
penalty, interest or excise tax under Sections 4971, 4972, 4975, 4976, 4977,
4979, 4980 or 4980B of the Code or Sections 502(c)(1) or 502(i) of ERISA. Each
Plan covering employees of any of the Borrowers or any of the ERISA Affiliates
is able to pay benefits thereunder when due. There is no claim pending or, to
the Knowledge of the Borrower, threatened, against or involving any Plan by any
Governmental Authority or other Plan, other than ordinary claims for benefits
pursuant to terms of any Plan and other claims that are not Material.
Section 4.11. Title to Property.
Each of the Borrowers has good title to or valid and subsisting
leasehold interests in all of its property reflected in its books and records as
being owned or leased by it. No such property is subject to any Lien, other than
Permitted Liens.
Section 4.12. Intellectual Property, Etc.
Each of the Borrowers owns or holds valid licenses in and to all
Intellectual Property Rights that are material to the conduct of its business as
heretofore operated and as proposed to be conducted. None of the Borrowers has
infringed, or been charged or, to the Knowledge of the Borrower, threatened to
be charged with any infringement of, any unexpired Intellectual Property Right
of any Person, except where the effect thereof would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect. No Borrower
is bound by or a party to any options, licenses or agreements of any kind with
respect to the Intellectual Property Rights of any other Person except for
arrangements that, if terminated, would not be reasonably likely to result in a
Material Adverse Effect. None of the Borrowers is aware that any of its
employees is obligated under any Contractual Obligation (including licenses,
covenants or commitments of any nature), or subject to any judgment, decree
(except as imposed by laws of general application) or order (except as imposed
by laws of general application) of any Governmental Authority, that would
interfere with the use of his or her best efforts to promote the interests of
such Borrower or that would conflict with its business as proposed to be and as
currently conducted. To the Knowledge of each of the Borrowers, there is no
material violation by any Person of any right of the Borrowers with respect to
any Intellectual Property Rights owned or used by it.
Section 4.13. Environmental Condition.
Except as set forth on Schedule 4.13.:
4.13.1.
There exists no order, judgment or decree, and there is not
pending or, to the Knowledge of the Borrower, threatened, any action, suit,
proceeding or investigation relating to any actual or alleged liability arising
out of the presence or suspected presence of Hazardous Material, any actual or
alleged violation of Environmental Requirements or any actual or alleged
liability for Environmental Damages in connection with any Real Property or the
business or operations of any of the Borrowers that has had, or as to which
there is a reasonable possibility of an adverse determination that would have, a
Material Adverse Effect nor, to the Knowledge of the Borrower, does there exist
any basis for such action, suit, proceeding or investigation being instituted or
filed.
Section 4.14. Absence of Certain Restrictions.
Except as set forth in Schedule 4.14., none of the Borrowers is subject
to any Contractual Obligation that restricts or limits the ability of any
Consolidated Subsidiary to (a) make Restricted Payments to the Borrower, (b) pay
Debt owed the Borrower or any Consolidated Subsidiary thereof, (c) make any
loans or advances to the Borrower (except as provided in Section 5.11.) or (d)
except as provided in Contractual Obligations respecting the specific assets
subject to Permitted Liens, transfer any of its property to the Borrower.
Section 4.15. Labor Matters.
There are no material strikes or other labor disputes or grievances
pending or, to the Knowledge of the Borrower, threatened against any Borrower.
Except as set forth in Schedule 4.15., there are no collective bargaining
agreements to which any Borrower thereof is a party. Each of the Borrowers has
complied in all material respects with the requirements of the Worker Adjustment
and Restraining Notification Act, 29 U.S.C. Section 2101 et seq. (the "WARN
Act"). No claim under the WARN Act is pending or, to the Knowledge of the
Borrower, threatened against the Borrower or any Consolidated Subsidiary thereof
nor is there any reasonable basis to anticipate any such claim, except where the
effect thereof, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
Section 4.16. Disclosure.
The information in each document, certificate or written statement
(other than information referred to in Section 4.4.) furnished to the Lender
Parties by or on behalf of any Borrower or any Consolidated Subsidiary with
respect to the business, assets, results of operation or financial condition of
any Borrower for use in connection with the transactions contemplated by this
Agreement at the time of delivery thereof, was true and correct in all Material
respects and did not omit, when considered as a whole, any material fact
necessary in order to make the statements made not misleading, in light of the
circumstances under which they were made. There is no fact known to any Borrower
(other than matters of a general economic nature) that has had or could
reasonably be expected to have a Material Adverse Effect and that has not been
disclosed herein or in such other documents, certificates or statements.
ARTICLE 5.
AFFIRMATIVE COVENANTS OF THE BORROWERS
So long as any portion of the Revolving Commitments is in effect or any
Obligations remain unpaid or have not been performed in full:
Section 5.1. Financial Statements and Other Reports.
The Borrower shall deliver to the Lender Parties:
5.1.1.
as soon as practicable and in any event within 90 days after
the end of each Fiscal Year, the consolidated balance sheet of the Borrower and
the consolidated subsidiaries as of the end of such year and the related
consolidated statements of income, stockholders' equity and cash flow of the
Borrower and the consolidated subsidiaries for such Fiscal Year, setting forth
in each case in comparative form the consolidated figures for the previous
Fiscal Year, all in reasonable detail and (i) in the case of such consolidated
financial statements, accompanied by an unqualified report thereon of Price
Waterhouse LLP or other independent certified public accountants of recognized
national standing selected by the Borrower and reasonably satisfactory to the
Required Lenders, which report shall state that such consolidated financial
statements fairly present the consolidated financial position of the Borrower
and the consolidated subsidiaries as of the date indicated and their results of
operations and cash flows for the periods indicated are in conformity with GAAP
(except as otherwise stated therein) and that the examination by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards and (ii) in the
case of such consolidating financial statements, certified by the chief
financial officer of the Borrower as being fairly stated in all material
respects when considered in relation to the audited consolidated financial
statements of the Borrower and the consolidated subsidiaries;
|5.1.2.
as soon as practicable and in any event within 45 days after
the end of each Fiscal Quarter a consolidated balance sheet of the Borrower and
the consolidated subsidiaries as of the end of such quarter and the related
consolidated statements of income, stockholders' equity and cash flow for such
quarter and the portion of the Fiscal Year ended at the end of such quarter,
setting forth in each case in comparative form the consolidated figures for the
corresponding periods of the prior Fiscal Year, all in reasonable detail and
certified by the Borrower's chief financial officer as fairly presenting the
consolidated financial condition of the Borrower and its consolidated
subsidiaries as of the dates indicated, and their consolidated results of
operations and cash flows for the periods indicated, in conformity with GAAP,
subject to normal year-end adjustments and the absence of footnotes;
together with each delivery of financial statements pursuant
to Sections 5.1.1. and 5.1.2. above, and not later than one (1) Business Day
after the consummation of any Permitted Acquisition, a certificate of the chief
financial officer of the Borrower substantially in the form of Exhibit F-6 (a
"Compliance Certificate"), duly completed and setting forth the calculations
required to establish compliance with Section 6.5. on the date of such financial
statements or such Permitted Acquisition, as the case may be;
5.1.4.
within three business days after any Senior Officer of the
Borrower becomes aware of the occurrence of any Default or Event of Default,
written or telephonic notice of the nature of such Default or Event of Default,
and within seven days thereafter, a certificate of a Senior Officer of the
Borrower setting forth the details thereof and the action that the Borrower is
taking or proposes to take with respect thereto;
5.1.5.
promptly upon their becoming available, copies of all
financial statements, reports, notices and proxy statements sent or made
available by the Borrower to its security holders, all registration statements
(other than the exhibits thereto) and annual, quarterly or monthly reports, if
any, filed by the Borrower with the SEC and all press releases by the Borrower
or any Consolidated Subsidiary thereof concerning material developments in the
business of the Borrower or any such Consolidated Subsidiary;
5.1.6.
within three days after the Borrower becomes aware of the
occurrence of (a) any Reportable Event in connection with any Plan, or (b) any
Prohibited Transaction in connection with any Plan (or any trust created
thereunder), notice providing reasonable details about such Reportable Event or
Prohibited Transaction;
5.1.7.
within three days after the Borrower obtains Knowledge of the
threat or commencement of litigation or proceedings affecting any Borrower, or
of any material development in any pending or future litigation, (a) that
involves alleged liability in excess of $1,000,000 (in the aggregate), (b) in
which injunctive or similar relief is sought that, if obtained, could reasonably
be expected to have a Material Adverse Effect or (c) that questions the validity
or enforceability of any Loan Document, notice providing reasonable details
about the threat or commencement of such litigation or about such material
development;
5.1.8.
within three days after receipt thereof, copies of all final
reports or letters submitted to the Borrower by its independent certified public
accountants in connection with each audit of the financial statements of the
Borrower or its consolidated subsidiaries made by such accountants, including
any management report, which reports the Borrower agrees to obtain in connection
with each of its annual audits;
5.1.9.
within 60 days after the end of each Fiscal Year of the
Borrower, a forecast for the next succeeding Fiscal Year of the consolidated
balance sheet and the consolidated results of operations and cash flow of the
Borrower and its consolidated subsidiaries, together with (a) an outline of the
major assumptions upon which the forecast is based, and (b) a calculation in
reasonable detail evidencing compliance with all covenants set forth herein on
the basis of, and after giving effect to, such forecast;
5.1.10.
within three days after the receipt thereof by any Senior
Officer of the Borrower, a copy of any notice, summons, citation or written
communication concerning any actual, alleged, suspected or threatened violation
of Environmental Requirements, or liability of the Borrower or any of its
Subsidiaries for Environmental Damages;
5.1.11.
within five days after the availability thereof, copies of all
amendments to the charter, bylaws or other organizational documents of the
Borrower or any of its Subsidiaries;
5.1.12.
not less than five Business Days before the anticipated
consummation of a proposed acquisition by the Borrower, documentation
demonstrating to the Agent's reasonable satisfaction that the requirements set
forth in the definition of "Permitted Acquisition" are met with respect to the
proposed acquisition; and
5.1.13.
from time to time, such additional information regarding the
Borrower or its Subsidiaries or its business, assets, liabilities, prospects,
results of operation or financial condition as any Lender Party may reasonably
request.
Section 5.2. Records and Inspection.
Each Borrower shall, and shall cause each of its Subsidiaries to,
maintain adequate books, records and accounts as may be required or necessary to
permit the preparation of consolidated financial statements in accordance with
sound business practices and GAAP. Each Borrower shall, and shall cause each of
its Subsidiaries to, permit such Persons as the Agent may designate, at
reasonable times and as often as may be reasonably requested, under reasonable
circumstances, to (a) visit and inspect any of its properties, (b) inspect and
copy its books and records, and (c) discuss with its officers and employees, its
investment bankers and its independent accountants, its business, assets,
liabilities, prospects, results of operation or financial condition, provided
that so long as no Event of Default has occurred and is continuing, Agent shall
conduct no more than three such visits and inspections per year and no more than
one such visit and inspection in any Fiscal Quarter.
Section 5.3. Audits of the Collateral.
Each Borrower shall permit, and shall cause each of its Subsidiaries to
permit, the Agent or its designee to perform audits of the Collateral as the
Agent may reasonably request, provided that so long as no Event of Default has
occurred and is continuing, Agent shall perform no more than three such audits
in any year and no more than one such audit in any Fiscal Quarter.
Section 5.4. Corporate Existence, Etc.
Each Borrower shall, and shall cause each of its Subsidiaries to, at
all times preserve and keep in full force and effect its corporate existence and
all Material rights and franchises, provided, however, that the corporate
existence of any Consolidated Subsidiary of any Borrower may be terminated (a)
as contemplated and permitted by Section 6.6. or (b) if such termination is
determined by the Board of Directors of the relevant Borrower to be in the best
interest of such Borrower and is not disadvantageous in any Material respect to
the Lender Parties.
Section 5.5. Payment of Taxes.
Each Borrower shall, and shall cause each of its Subsidiaries to, pay
and discharge all Taxes imposed upon it or any of its properties or in respect
of any of its franchises, business, income or property before any penalty shall
be incurred with respect to such Taxes, provided, however, that, unless and
until foreclosure, distraint, levy, sale or similar proceedings shall have
commenced, the Borrowers and the Subsidiaries need not pay or discharge any such
Tax so long as the validity or amount thereof is being contested in good faith
and by appropriate proceedings and so long as any reserves or other appropriate
provisions as may be required by GAAP shall have been made therefor.
Section 5.6. Maintenance of Properties.
Each Borrower shall, and shall cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and condition
(ordinary wear and tear excepted), all properties and other assets useful or
necessary to its business, and from time to time the Borrower shall make or
cause to be made all appropriate repairs, renewals and replacements thereto.
Section 5.7. Maintenance of Insurance.
|5.7.1.
Each Borrower shall, and shall cause each of its Subsidiaries
to, maintain with financially sound and reputable insurance companies insurance
in at least such amounts, of such character and against at least such risks as
is usually maintained by companies of established repute engaged in the same or
a similar business in the same general area. All liability insurance policies
shall name the Agent as a loss payee. Each insurance policy covering Collateral
shall include endorsements or stipulations providing that coverages will not be
canceled or diminished without at least 10 days' prior written notice to the
Agent and further providing, if available on commercially reasonable terms, that
coverage in favor of the Agent will not be impaired in any way by any act,
omission or default of the Borrower or any other Person. In connection with all
policies of insurance covering Collateral, the Borrower will provide the Agent
with such loss payable or other endorsements as the Agent may reasonably
require.
In addition to any requirements under the Collateral
Documents, (a) all property loss or damage insurance policies with respect to
any assets of any Borrower or any Consolidated Subsidiary shall contain lender's
loss payable endorsements in favor of the Agent in form and substance
satisfactory to it, which shall provide that all insurance proceeds (i) in
excess of $500,000 or (ii) payable after the insurer has received written notice
from the Agent that an Event of Default then exists (until a contrary notice is
received), shall be payable directly to the Agent, (b) all insurance policies
shall (i) provide that no cancellation, reduction in amount or material adverse
change in coverage thereof shall be effective until at least 30 days after
receipt by the Agent of written notice thereof, (ii) insure the interests of the
Lender Parties regardless of any breach of or violation by the Borrower or any
other Person of any warranties, declarations or conditions contained therein,
(iii) provide that the Lender Parties shall have no obligation or liability for
premiums, commissions, assessments or calls in connection with such insurance or
in connection with any representation or warranty made by the Borrower or any
Consolidated Subsidiary thereof in connection with obtaining of such insurance,
(c) all business interruption and extra expense insurance shall name the Agent
as a loss payee, and (d) all applicable insurance policies shall contain such
other provisions as are required under the relevant Collateral Documents.
|5.7.3.
Thirty days prior to the expiration date of each insurance
policy maintained hereunder, the Borrower shall either (a) deliver to the Agent
either (i) if available, a copy of the renewal of such policy or (ii) a copy of
the binder for such renewal or (b) notify the Agent that such policy has not
been renewed. If a copy of a binder is delivered pursuant to clause (a)(i)
hereof, then as soon as it is available, but in any event not more than sixty
(60) days after the effective date of renewal of the policy, the Borrower shall
deliver to the Agent a copy of such policy, certified to be true and correct by
the insurer named therein. If at any time after the Closing Date the Borrower or
any Consolidated Subsidiary thereof obtains any new property loss or damage
insurance policy providing coverage in excess of $500,000, the Borrower shall,
within 30 days after such new policy is obtained, give notice to the Agent
describing the new insurance and provide to the Agent a copy of such policy,
including endorsements as required hereby, certified to be true and correct by
the insurer named therein.
Section 5.8. Conduct of Business.
Each Borrower shall, and shall cause each of its Subsidiaries to,
engage only in the businesses in which such Borrower or Consolidated Subsidiary
is engaged on the date hereof, except for other businesses that are ancillary,
incidental or necessary to its ongoing business as presently conducted. Each
Borrower shall, and shall cause each of its Subsidiaries to, conduct its
business in compliance in all material respects with all Applicable Law and all
its Contractual Obligations.
Section 5.9. Future Information.
All data, certificates, reports, statements, documents and other
information required to be furnished to the Lender Parties in connection with
the Loan Documents shall, at the time the information is furnished, not contain
any untrue statement of a material fact, shall be complete and correct in all
material respects to the extent necessary to give the Lender Parties sufficient
and accurate knowledge of the subject matter thereof, and shall not omit to
state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances under which such
information is furnished.
Section 5.10. New Borrowers and Additional Collateral.
5.10.1.
Upon the creation or acquisition after the date hereof of any
Consolidated Subsidiary, the Borrower shall cause such Consolidated Subsidiary
to execute and deliver a Revolving Loan Note in favor of each Lender and to
become jointly and severally liable with the already-existing Borrowers with
respect to their Obligations hereunder, in form and substance satisfactory to
the Agent, and the Borrower shall grant, or cause to be granted, a first
priority Lien on the Capital Stock of such Consolidated Subsidiary and on the
assets of such Consolidated Subsidiary, pursuant to documents in form and
substance satisfactory to the Agent. Upon the acquisition or lease by any
Borrower or any Borrower's Subsidiaries of any Material personal property asset
that is not then subject to a first priority Lien in favor of the Agent, such
Borrower shall execute and deliver, or shall cause such Consolidated Subsidiary
to execute and deliver, to the Agent a Collateral Document creating such a first
priority Lien, in each case in form and substance satisfactory to the Agent.
Such Borrower and such Consolidated Subsidiary, at their own expense, shall
execute and deliver, or cause to be executed and delivered, and thereafter cause
to be registered, filed or recorded with the appropriate Governmental Authority,
any and all documents and instruments deemed by the Agent to be necessary or
desirable for the creation and perfection of the foregoing Liens and shall pay
all Taxes and fees related to such registration, filing or recording.
Section 5.11. Subordination of Intercompany Debt.
The Borrowers shall cause all Intercompany Debt to be subordinated to
the prior payment in full in cash of the Obligations on terms of subordination
satisfactory to the Required Lenders; provided, however, that as long as no
Event of Default then exists, the Borrowers may pay such Intercompany Debt in
the ordinary course of business consistent with past practice.
Section 5.12. Environmental Compliance.
Each Borrower shall comply, and shall cause its Subsidiaries to comply,
in all material respects with all Environmental Requirements and shall not cause
or permit to exist on any Real Property any Hazardous Materials.
Section 5.13. New Consolidated Subsidiaries To Become Borrowers.
Borrower shall cause each entity that becomes a Consolidated Subsidiary
of the Borrower after the Closing Date immediately to become a Co-Borrower
hereunder and to execute and deliver this Agreement, the Revolving Note, the
Swingline Note, the Security Agreement, a UCC-1 financing statement, and each of
the other documents set forth on Schedule 5.13.
ARTICLE 6.
NEGATIVE COVENANTS OF THE BORROWERS
So long as any portion of the Revolving Commitments is in effect or any
Obligations remain unpaid or have not been performed in full:
Section 6.1. Liens.
No Borrower shall, or shall permit any of its Subsidiaries to, directly
or indirectly, create, incur, assume or permit to exist any Lien on or with
respect to any asset of any Borrower or any Consolidated Subsidiary of any
Borrower, whether now owned or hereafter acquired, except, without duplication:
6.1.1.
Liens securing the Obligations;
6.1.2.
Existing Liens on assets of the entities listed on Schedule
R-1 hereto ;
6.1.3.
(a) Liens for taxes, assessments or charges of any
Governmental Authority for claims that are not Material and are not yet due or
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being maintained in
accordance with of GAAP; (b) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen, bankers and other Liens imposed by law and
created in the ordinary course of business for amounts that are not Material and
are not yet due or being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with GAAP; (c) Liens incurred and deposits made
in the ordinary course of business for purchase-money obligations, in an amount
not exceeding $500,000 at any time, or Liens incurred and deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security benefits or to secure
the performance (including by way of surety bonds or appeal bonds) of tenders,
bids, leases, contracts, statutory obligations or similar obligations or arising
as a result of progress payments under contracts, in each case in the ordinary
course of business and not relating to the repayment of Debt; (d) easements,
rights-of-way, covenants, consents, reservations, encroachments, variations and
other restrictions, charges or encumbrances (whether or not recorded) that do
not Materially interfere with the ordinary conduct of business, Materially
detract from the value of the asset to which they attach or Materially impair
the use thereof; (e) building restrictions, zoning laws and other statutes,
laws, rules, regulations, ordinances and restrictions; and (f) leases or
subleases granted in the ordinary course of business to others not Materially
interfering with the business of, and consistent with past practices of, the
Borrower, provided that clauses (a), (b) and (c) shall not apply to
Environmental Liens, Liens that, under Applicable Law, would have priority over
the Lien of the Collateral Documents or Liens imposed under ERISA;
6.1.4.
any attachment or judgment Lien not constituting an Event of
Default;
6.1.5.
Liens on assets securing Debt permitted to be incurred or
assumed on a secured basis pursuant to Section 6.1.5., including any interest or
title of a lessor under any Capitalized Lease, provided that any such Lien does
not encumber any property other than assets acquired, constructed or improved
with the proceeds of such Debt;
|6.1.6.
Liens existing on assets of any Person at the time such Person
becomes a Consolidated Subsidiary, provided (a) such Lien was not created in
contemplation of such Person becoming a Consolidated Subsidiary, and (b) such
Lien does not encumber any assets other than the assets subject to such Lien at
the time such Person becomes a Consolidated Subsidiary;
|6.1.7.
any Lien constituting a renewal, extension or replacement of
any Existing Lien or any Lien permitted by Section 6.1.5. or 6.1.6., provided
(a) the principal amount of Debt or other obligation secured by such renewal,
extension or replacement Lien does not exceed the principal amount of the Debt
or other obligation renewed, extended or replaced unless such excess is
otherwise permitted hereby at the time of the extension, renewal or replacement,
(b) the average weighted maturity of such Debt or other obligation is not
shortened and (c) such Lien is limited to all or a part of the property subject
to the Lien extended, renewed or replaced.
Section 6.2. Debt.
No Borrower shall, or shall permit any of its Subsidiaries to, directly
or indirectly, create, incur, assume, guarantee, or otherwise become or remain
liable with respect to, any Debt, except:
6.2.1.
the Obligations;
6.2.2.
Existing Debt of entities that are listed on Schedule R-1
hereto;
|6.2.3.
Intercompany Debt of a Consolidated Subsidiary to a Borrower
or to a Consolidated Subsidiary of a Borrower, to the extent otherwise permitted
hereunder and in compliance with Section 5.11.;
|6.2.4.
Contingent Obligations (i) in connection with a Permitted
Acquisition or (ii) with respect to letters of credit in an aggregate amount for
all Borrowers and all of their Subsidiaries not exceeding $1,000,000 at any time
outstanding, provided that such Debt (i) is incurred in the ordinary course of
business, (a) is unsecured and (b) remains contingent;
|6.2.5.
Contingent Obligations of a Borrower or any Consolidated
Subsidiary with respect to Debt of other Borrowers or their Subsidiaries that is
otherwise permitted under this Section 6.2.;
|6.2.6.
Debt incurred to refinance Debt described in Section 6.2.2.;
provided that (a) the unpaid principal balance is not increased (except to the
extent the increase is then otherwise permitted hereunder), and (b) if such
refinanced Debt is repaid prior to its scheduled maturity, such refinancing Debt
shall comply with the provisions of Section 6.9.2.; and
6.2.7.
Debt incurred in connection with a Permitted Acquisition; and
6.2.8.
Debt incurred in the ordinary course of business for
purchase-money obligations, in an amount not exceeding $500,000 at any time.
Section 6.3. Restricted Payments.
No Borrower shall, nor shall any Borrower permit any Consolidated
Subsidiary to, directly or indirectly, declare, pay or make, or agree to
declare, pay or make, any Restricted Payment.
Section 6.4. Investments.
No Borrower shall, nor shall any Borrower permit any Consolidated
Subsidiary to, directly or indirectly, make or own any Investment, except:
6.4.1.
(a) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case maturing
within one year from the date of acquisition thereof, (b) marketable direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and having, at the time of
acquisition, the highest rating obtainable from either Standard & Poor's Rating
Group or Xxxxx'x Investors Service, Inc., (c) commercial paper having, at the
time of acquisition, the highest rating obtainable from either Standard & Poor's
Rating Group or Xxxxx'x Investors Service, Inc., (d) demand deposits,
certificates of deposit, other time deposits, and bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any bank
operating under the laws of the United States or any state thereof or the
District of Columbia that has combined capital and surplus of not less than
$500,000,000, or (e) institutional money market funds organized under the laws
of the United States of America or any state thereof that are described on
Schedule 1.1. or approved in writing by the Agent or, if not so described or
approved, substantially all of whose assets are securities of the types
described in the foregoing clauses (a), (b), (c), and (d);
6.4.2.
(a) trade credit extended on usual and customary terms in the
ordinary course of business, and (b) advances to employees for moving,
relocation and travel expenses, drawing accounts and similar expenditures in the
ordinary course of business;
|6.4.3.
any Investment identified on Schedule 4.3., limited to the
amount of such Investment on the date hereof;
|6.4.4.
Permitted Acquisitions; and
6.4.5.
Investments in Non-Cash Proceeds of permitted Asset
Dispositions.
Section 6.5. Financial Covenants.
6.5.1. Leverage Ratio.
The Leverage Ratio as of the last day of any Fiscal Quarter
shall not exceed 3.00 to 1.00 at any time.
6.5.2. Quick Ratio.
The Quick Ratio as of the last day of any Fiscal Quarter shall
not be less than 1:00 to 1:00.
6.5.3. Debt Service Coverage Ratio.
As of the last day of any Fiscal Quarter the Debt Service
Coverage Ratio for the period determined in accordance with the definition of
"Debt Service Coverage Ratio" shall not be less than 2.50 to 1.00 when
calculated without regard to any earnouts required to be paid during such Fiscal
Quarter, and (ii) shall not be less than 1.50 to 1:00 when calculated including
any such earnouts in the denominator of such ratio.
6.5.4. Operating Income and Net Income.
As of the last day of each Fiscal Quarter, the total of all
Borrowers' income from operations, determined in accordance with GAAP and
calculated as it would be for the purposes of determining Net Income hereunder,
and Borrowers' Net Income for the four consecutive Fiscal Quarters then ended,
shall each be greater than zero.
Section 6.6. Restriction on Fundamental Changes.
No Borrower shall, and no Borrower shall permit any Consolidated
Subsidiary to, directly or indirectly, enter into any merger, consolidation,
reorganization or recapitalization, reclassify its Capital Stock, liquidate,
wind up or dissolve or sell, lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, a significant portion of its or their
business or assets, whether now owned or hereafter acquired, provided that (a)
as long as no Default or Event of Default shall exist after giving effect to
such merger, consolidation or sale, any Consolidated Subsidiary of any Borrower
may be merged or consolidated with or into any Borrower or any Wholly-Owned
Subsidiary of any Borrower or be liquidated, wound up or dissolved, or all or
substantially all of its business or assets may be sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to any
Borrower or any Wholly-Owned Subsidiary of any Borrower.
Section 6.7. Asset Dispositions; Sales of Receivables.
6.7.1.
No Borrower shall, and no Borrower shall permit any
Consolidated Subsidiary to, directly or indirectly, make or agree to make, any
Asset Disposition unless
the Board of Directors of the Borrower has reasonably
determined in good faith that the terms of such transaction are fair
and reasonable to the Borrower or such Consolidated Subsidiary, as the
case may be, if the transaction involves assets having a Material fair
market value; and
the Asset Disposition is otherwise permissible under the
Collateral Documents and under Sections 6.6. and 6.8. and if the
transaction involves assets having a Material fair market value, the
terms of such transaction shall have been approved in advance by the
Required Lenders.
6.7.2.
As promptly as practicable but in no event later than 10 days
after any Asset Disposition (other than an Asset Disposition required to be
approved by the Required Lenders), the Borrower shall deliver to the Agent a
certificate, duly executed by a Senior Officer of the Borrower, setting forth in
detail a description of such Asset Disposition, copies of any related
agreements, the date or scheduled date of such Asset Disposition, the
determination of the Net Cash Proceeds of such Asset Disposition, the
description of any Non-Cash Proceeds and the Collateral arrangements with
respect thereto and such other documents and information as is necessary to
demonstrate compliance with this Section 6.7.
6.7.3.
No Borrower shall, nor shall any Borrower permit any
Consolidated Subsidiary to, directly or indirectly, sell with or without
recourse, discount (except in the ordinary course of business consistent with
past practice to compromise disputes with customers) or otherwise sell for less
than the face value thereof or for consideration other than cash, any of its
Accounts Receivable and other receivables.
Section 6.8. Transactions with Affiliates.
No Borrower shall, and no Borrower shall permit any Consolidated
Subsidiary to, directly or indirectly, enter into any transaction (including the
transfer or lease of any property or the rendering of any service) with any
Affiliate of any Borrower, unless (a) such transaction is in the ordinary course
of business of such Borrower, and (b) such transaction is on fair and reasonable
terms no less favorable to such Borrower or its Consolidated Subsidiary, as the
case may be, than those terms that might be obtained at the time in a comparable
arm's length transaction with a Person who is not an Affiliate of such Borrower
or, if such transaction is not one that by its nature could be obtained from
such other Person, is on fair and reasonable terms and was negotiated in good
faith, (c) if such transaction is Material, such Borrower shall have delivered
to the Agent a certified resolution of its Board of Directors determining that
the standards set forth in clause (b) above are satisfied with respect to such
transaction and (d) if such transaction is Material, such Borrower shall deliver
to the Agent an opinion of a recognized appraisal or valuation firm that the
transaction is fair to the Borrower from a financial point of view, provided
that this Section 6.8. shall not restrict (i) dividends, distributions and other
payments and transfers on account of the Capital Stock of a Borrower or any
Wholly-Owned Subsidiary of a Borrower, (ii) payments pursuant to the terms of
any Contractual Obligations in effect on the date hereof listed on Schedule
6.8., or (iii) any transaction in the ordinary course of business between a
Borrower and any Wholly-Owned Subsidiary of a Borrower.
Section 6.9. Prepayment of Debt.
No Borrower shall, nor shall any Borrower permit any Consolidated
Subsidiary to, directly or indirectly, make any payment or distribution on
account of, or voluntarily purchase, acquire, redeem or retire, any Debt, prior
to 30 days before its originally stated maturity (or its stated maturity on the
date hereof, in the case of Debt outstanding on the date hereof), or in the case
of interest, its stated due date, or directly or indirectly become obligated to
do any of the foregoing by amending the terms thereof or otherwise, except for:
6.9.1.
Prepayments of the Loans or of other amounts pursuant to the
Loan Documents;
6.9.2.
Prepayments made with the proceeds of new Debt incurred for
the purpose of refinancing the Debt being prepaid, provided that (a) no portion
of such new Debt matures or is required to be prepaid, purchased or otherwise
retired earlier than the corresponding portion of the Debt being prepaid, (b)
such new Debt has the same priority vis-a-vis other Debt, and the same provision
for recourse, as the Debt being paid, (c) no Default or Event of Default then
exists or would result from such prepayment or refinancing; and
6.9.3.
Prepayments by Subsidiaries of Debt owed to any Borrower.
Section 6.10. Employee Benefit Plans.
Except to the extent that a Borrower gives thirty (30) days' prior
written notice to the Agent, no Borrower will sponsor or contribute to any new
Plan, make any change to any existing Plan, or incur any obligations in respect
of any Multiemployer Plan that would in any Material way increase the
obligations of the Borrowers in any Material respect.
Section 6.11. Amendments of Charter Documents.
No Borrower shall amend its charter, bylaws or other charter documents
in any respect that affects the voting rights of Capital Stock included in the
Collateral or holders thereof, increases payment obligations of a Borrower,
affects the validity or enforceability of any Loan Document or Lien thereunder
or that otherwise could reasonably be expected to have a Material Adverse
Effect, without in each case obtaining the prior written consent of the Required
Lenders.
Section 6.12. Restrictive Agreements.
No Borrower shall, nor shall any Borrower permit any Consolidated
Subsidiary to, enter into any Contractual Obligation that, directly or
indirectly, restricts or limits the ability of such Consolidated Subsidiary to
(a) pay dividends or make distributions on its Capital Stock, (b) pay Debt owed
to the Borrower or any Consolidated Subsidiary, (c) make any loans or advances
to the Borrower (except as provided in Section 5.11.), or (d) except as provided
in Contractual Obligations respecting the specific assets subject to Permitted
Liens, transfer any of its property to the Borrower.
Section 6.13. Negative Pledges, Etc.
No Borrower shall, or shall permit any Consolidated Subsidiary to,
enter into or otherwise become subject to, directly or indirectly, any agreement
prohibiting or restricting a Borrower or any Consolidated
Subsidiary of a Borrower in any manner (including by way of covenant,
representation or default), from (a) incurring, creating or assuming any Debt or
Lien upon any of its assets, (b) selling or otherwise disposing of any of its
assets, (c) making any Investments or Capital Expenditures, (d) suffering any
change of control, or (e) amending any Loan Document, except that clauses (a)
and (b) shall not apply to any Debt otherwise permissible under Section 6.2; or
providing that any default by a Borrower that is not a party
to such agreement with respect to any obligation not arising under such
agreement is a default under such agreement.
ARTICLE 7.
EVENTS OF DEFAULT
Section 7.1. Events of Default.
The occurrence of any one or more of the following events, acts or
occurrences shall constitute an event of default (each an "Event of Default"):
7.1.1. Failure to Make Payments.
A Borrower (a) shall fail to pay as and when due (whether at
stated maturity, upon acceleration, upon required prepayment or otherwise) any
principal of any Loan, or (b) shall fail to pay any interest, Fees or other
amounts payable under the Loan Documents within three Business Days of the date
when due under the Loan Documents; or
7.1.2. Default in Other Debt.
(a) Any Borrower or any Consolidated Subsidiary of any
Borrower shall default in the payment (whether at stated maturity, upon
acceleration, upon required prepayment or otherwise), beyond any period of grace
provided therefor, of any principal of or interest on any other Debt with a
principal amount in excess of $400,000 or (b) any other breach or default (or
other event or condition) shall occur under any agreement, indenture or
instrument relating to any such other Debt, if the effect of such breach or
default (or such other event or condition) is to cause, or to permit the holder
or holders of the other Debt (or a Person on behalf of such holder or holders)
to cause (upon the giving of notice, the lapse of time or both, or otherwise),
such other Debt to become or be declared due and payable, or required to be
prepaid, redeemed, purchased or defeased (or an offer of prepayment, redemption,
purchase or defeasance be made), prior to its stated maturity (other than by a
scheduled mandatory prepayment); or
7.1.3. Breach of Certain Covenants.
The Borrower shall fail to perform, comply with or observe
any agreement, covenant or obligation under Section 2.3., Section 5.1.4.,
Section 5.4. (insofar as it requires the preservation of the corporate existence
of the Borrower), or any Section of Article 6. not covered by 7.1.4 hereof; or
7.1.4. Certain Defaults Under Article 6.
Any Borrower shall fail to perform, comply with or observe any
agreement, covenant or obligation under any provision of Sections (inclusive of
subsections thereof) and such failure shall not have been remedied within ten
(10) days after a Senior Officer of Borrower has Knowledge of such failure;
provided, however, that no such ten (10) day cure period shall be available with
respect to any failure by any Borrower that by its nature is incapable of being
remedied; or
7.1.5. Other Defaults Under Loan Documents.
Any Borrower shall fail to perform, comply with or observe any
agreement, covenant or obligation under any provision of any Loan Document
(other than those provisions referred to in Sections 7.1.1. 7.1.3.) and such
failure shall not have been remedied within 20 days after a Senior Officer of
the Borrower has Knowledge of such failure; or
7.1.6. Breach of Warranty.
Any representation or warranty or certification made or
furnished by the Borrower under any Loan Document shall prove to have been false
or incorrect in any material respect when made (or deemed made); or
7.1.7. Involuntary Bankruptcy; Appointment of Receiver, Etc.
There shall be commenced against any Borrower, or any
Consolidated Subsidiary, an involuntary case seeking the liquidation or
reorganization of such Borrower or Consolidated Subsidiary under Chapter 7 or
Chapter 11, respectively, of the Bankruptcy Code or any similar proceeding under
any other Applicable Law or an involuntary case or proceeding seeking the
appointment of a receiver, liquidator, sequestrator, custodian, trustee or other
officer having similar powers of such Borrower or Consolidated Subsidiary or to
take possession of all or a substantial portion of its property or to operate
all or a substantial portion of its business, and any of the following events
occur: (a) such Borrower or Consolidated Subsidiary consents to the institution
of the involuntary case or proceeding; (b) such petition commencing the
involuntary case or proceeding is not timely controverted; (c) the petition
commencing the involuntary case or proceeding remains undismissed and unstayed
for a period of 60 days; or (d) an order for relief shall have been issued or
entered therein; or
7.1.8. Voluntary Bankruptcy; Appointment of Receiver, Etc.
Any Borrower or any Consolidated Subsidiary shall institute a
voluntary case seeking liquidation or reorganization under Chapter 7 or Chapter
11, respectively, of the Bankruptcy Code or any similar proceeding under any
other Applicable Law, or shall consent thereto; or shall consent to the
conversion of an involuntary case to a voluntary case; or shall file a petition,
answer a complaint or otherwise institute any proceeding seeking, or shall
consent to or acquiesce in the appointment of, a receiver, liquidator,
sequestrator, custodian, trustee or other officer with similar powers of it or
to take possession of all or a substantial portion of its property or to operate
all or a substantial portion of its business; or shall make a general assignment
for the benefit of creditors; or shall generally not pay its debts as they
become due; or the Board of Directors of the Borrower or Consolidated Subsidiary
(or any committee thereof) adopts any resolution or otherwise authorizes action
to approve any of the foregoing; or
7.1.9. Change of Control.
A Change of Control shall occur at any time; or
7.1.10. Termination of Loan Documents, Etc.
Any Loan Document, or any material provision thereof, shall
cease to be in full force and effect for any reason, or any Lien in favor of the
Agent thereunder shall fail to have the priority required thereunder with
respect to any Material item of collateral, except upon a release or termination
of such Loan Document or Lien pursuant to the terms thereof; or the Borrower
shall contest or purport to repudiate or disavow any of its obligations under or
the validity of enforceability of any Loan Document or any Material provision
thereof; or
|7.1.11. Material Adverse Change.
A Material Adverse Change shall have occurred since the
Closing Date; or
7.1.12. Judgments and Attachments.
(a) Any Borrower or any Consolidated Subsidiary shall suffer
any money judgments, fines, writs or warrants of attachment or similar processes
that, individually or in the aggregate, involve an amount or value in excess of
$400,000 (excluding therefrom money judgments to the extent covered by insurance
as to which the carrier has accepted liability) and such judgments, writs,
warrants or other orders shall continue unsatisfied and unstayed for a period of
30 days or, in any event, within 10 days of the date of any proposed sale
thereunder; or (b) a judgment creditor shall obtain possession of any Material
portion of the assets of the Borrowers by any means, including levy, distraint,
replevin or self-help.
Section 7.2. Remedies.
Upon the occurrence of an Event of Default:
7.2.1.
If an Event of Default occurs under Section 7.1.7. or 7.1.8.,
then the Revolving Commitments shall automatically and immediately terminate,
and the obligation of the Lender Parties to make any Loan hereunder shall cease,
and the unpaid principal amount of the Loans and all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest, notice or other requirements of any kind, all of which are hereby
expressly waived by the Borrower.
7.2.2.
If an Event of Default occurs, other than under Section 7.1.7.
or 7.1.8., the Agent may, or upon written request of the Required Lenders shall,
by written notice to the Borrower, declare the Revolving Commitments terminated,
whereupon the obligation of the Lender Parties to make any Loan hereunder shall
cease, and/or declare the unpaid principal amount of the Loans and all other
Obligations to be, and the same shall thereupon become, due and payable, without
presentment, demand, protest, any additional notice or other requirements of any
kind, all of which are hereby expressly waived by the Borrower, and may, as set
forth in Article 8 hereof, pursue the remedies available to it pursuant to
applicable law.
ARTICLE 8.
THE AGENT AND THE BANKS
Section 8.1. Authorization and Action.
8.1.1.
Each Lender hereby irrevocably appoints and authorizes the
Agent to act as its agent hereunder and under the other Loan Documents
(including as its collateral agent under the Collateral Documents), to execute
and deliver or accept, on its behalf, the other Loan Documents and any other
documents, instruments and agreements related thereto or hereto to take such
action on its behalf under the provisions hereof and thereof and to exercise
such rights, remedies, powers and privileges hereunder and thereunder as are
delegated to the Agent by the terms hereof and thereof, together with such
rights, remedies, powers and privileges as are reasonably incidental thereto.
8.1.2.
Except for any matters expressly subject to the consent or
approval of the Agent under the Loan Documents, the Agent shall not, without the
prior approval of the Required Lenders (or, as provided in Section 9.3., all of
the Lenders), consent to any departure by any Borrower from the terms of, waive
any default or otherwise amend this Agreement or any other Loan Documents. The
Agent will, to the extent practicable under the circumstances, consult with the
other Lender Parties prior to taking action on their behalf under the Loan
Documents and in acting as their Agent thereunder. The Agent will not take any
action contrary to the written direction of Required Lenders, will take any
lawful action not contrary to the provisions of the Loan Documents prescribed in
written instructions of the Required Lenders (or, as provided in Section 9.3.,
all the Lenders) and, as to any matters not expressly provided for by the Loan
Documents (including enforcement or collection), may decline to take any action,
except upon the written instructions of the Required Lenders (or, as provided in
Section 9.3., all the Lenders). If such instructions are requested reasonably
promptly, the Agent shall be absolutely entitled to refrain from taking any
action and shall not have any liability to the Borrower or any Lender for
refraining from taking any action until it shall have received such
instructions; provided, however, that the Agent shall in no event be required to
take or refrain from taking any action that would, in the Agent's opinion, be
inconsistent with the Agent's practice in similar situations when acting solely
for its own account or be contrary to the provisions of any Loan Document or
Applicable Law.
8.1.3.
The Agent shall not have any duties or responsibilities except
those expressly set forth in the Loan Documents. No duty to act, or refrain from
acting, and no other obligation whatsoever, shall be implied on the basis of any
right, power or authority granted to the Agent or shall become effective in the
event of any temporary or partial exercise of such rights, power or authority.
The Agent shall not be required to exercise any right, power, remedy or
privilege granted to it in any Loan Document, to ascertain or inquire whether
any Default or Event of Default has occurred and is continuing, or to inspect
the property (including the books and records) of the Borrower or to take any
other affirmative action, except as provided in Section 7.2., or unless
requested or directed to do so in accordance with the provisions of Section
8.1.2.
8.1.4.
The duties of the Agent shall be mechanical and administrative
in nature. The Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any other Lender Party. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lender Parties by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Lender Party with any credit or other information
concerning the affairs, financial condition or business of the Borrower that may
come into the possession of the Agent or any of its Affiliates.
Section 8.2. Exculpation; Agent's Reliance; Etc.
Neither the Agent nor any of its directors, officers, agents, attorneys
or employees shall be liable to the Borrower or any other Lender Party for any
action taken or omitted to be taken by it or them under or in connection with
any Loan Document (a) with the consent or at the request of the Required Lenders
(or, as provided in Section 9.3., all the Lenders), or (b) in any other
circumstances, except for its or their own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. The Agent makes no warranty or representation to any other Lender
Party and shall not be responsible to any other Lender Party for any recitals,
statements, warranties or representations made in, or in connection with, any
Loan Document or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, or sufficiency of any Loan Document or any
financial information, opinions of counsel or other documents executed and
delivered pursuant thereto, or for the financial condition of the Borrower. The
Agent shall not be responsible to any Lender for the satisfaction of any
condition specified in Article 3., except receipt of items required to be
delivered to the Agent, or for the value, effectiveness, priority, genuineness,
validity, of any Collateral or any Lien thereon. The Agent may treat the payee
of any Note as the holder thereof until the Agent receives the related
Assignment and Acceptance signed by such holder and the assignee and in form
satisfactory to the Agent. The Agent shall be entitled to rely upon any notice,
certificate or other writing believed by the Agent to be genuine and correct and
to have been signed or sent by the proper Person or Persons. The Agent shall be
entitled to consult with legal counsel, independent public accountants and other
experts selected by the Agent and to act in reliance upon the advice of such
counsel and other experts concerning its actions and duties hereunder.
Section 8.3. Agent and Affiliates.
The Agent and each other Lender that is a party hereto as a Lender and
in some other capacity, shall in its capacity as a Lender, have the same rights,
powers and obligations under this Agreement and the other Loan Documents as any
other Lender and may exercise or refrain from exercising the same as though it
were not the Agent or such other Lender Party, including the right to give or
deny consent to any action requiring consent or direction of the Required
Lenders or all the Lenders. The Agent, each such other Lender Party and its
Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, any Borrower,
any Consolidated Subsidiary and any Affiliate of any Borrower, all as if the
Agent or such other Lender Party were not the Agent or such other Lender Party
and without any duty to account therefor to the Lenders. The Agent or such other
Lender Party shall be entitled to receive from any Borrower its fees or portions
thereof in connection with this transaction without any liability to account
therefor to any other Lender, except as the Agent or such other Lender Party may
have expressly agreed.
Section 8.4. Lender Credit Decision.
Each Lender Party acknowledges that it has, independently and without
reliance upon the Agent or any other Party Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender Party also acknowledges that
it will, independently and without reliance upon the Agent or any other Lender
Party and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents.
Section 8.5. Indemnification.
The Agent shall in no event be required to take any action under the
Loan Documents or in relation thereto unless it shall first be indemnified to
its satisfaction by the other Lender Parties against any and all liability and
expense that it may incur by reason of taking any such action. Each Lender
agrees to indemnify and hold the Agent harmless (to the extent not promptly paid
or reimbursed by a Borrower), ratably according to their respective Revolving
Commitments, from and against any and all (a) costs, expenses and other amounts
incurred by the Agent otherwise payable by a Borrower pursuant to Section 9.1.
and (b) Indemnified Liabilities that may be imposed on, incurred by, or asserted
against the Agent, except to the extent they are finally adjudged by a court of
competent jurisdiction to have directly resulted from the gross negligence or
willful misconduct of the Agent. Without limitation of the foregoing, each
Lender agrees to reimburse the Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, the Loan Documents, to the extent that the Agent is not
promptly reimbursed for such expenses by the Borrower.
Section 8.6. Successor Agent.
The Agent may resign at any time as Agent under the Loan Documents by
giving written notice thereof to the Lenders and the Borrower and the Agent may
be removed at any time with or without cause by written action of the Required
Lenders (not including the Agent) delivered to the Agent. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's notice of resignation or the removal of the Agent, then the
retiring or removed Agent may, on behalf of the other Lender Parties, appoint a
successor Agent, which shall be a financial institution having a combined
capital and surplus of at least $100,000,000, or a branch or agency of such a
financial institution, organized or licensed to do business under the laws of
the United States of America or any State thereof. Upon the acceptance of any
appointment as the Agent by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged of
its duties and obligations under the Loan Documents. Upon any retiring Agent's
resignation or removal, the provisions of this Article 8. (as well as other
expense reimbursement, indemnification and exculpatory provisions in the other
Loan Documents) shall continue in effect for its benefit as to any actions taken
or omitted by it while it was Agent.
Section 8.7. Excess Payments.
If any Lender shall obtain any payment or other recovery (whether
voluntary, involuntary, by application of setoff or otherwise) on account of any
Obligations in excess of its pro rata share of payments and other recoveries on
account of such Obligations obtained by all Lenders, such Lender shall purchase
from the other Lenders such participations in such Obligations held by them as
shall be necessary to cause such purchasing Lender to share the excess payment
or other recovery ratably with each of the other Lenders; provided, however,
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and the
purchase price restored to such Lender to the extent of such recovery, but
without interest. Each Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 8.7. may, to the
fullest extent permitted by Applicable Law and by Section 9.10., exercise all of
its rights of payment (including setoff) with respect to such participation as
fully as if such Lender were the direct creditor of each Borrower in the amount
of such participation.
Section 8.8. Lender Parties.
The provisions of this Article 8. are solely for the benefit of the
Agent and the other Lender Parties and no Borrower shall have any rights to rely
on or enforce any of the provisions hereof (except that (i) the provisions of
Sections 8.6. and 8.9.5. are also for the benefit of each Borrower and (ii) each
Borrower is entitled to rely on any release executed by the Agent as authorized
by Section 8.9.). In performing its functions and duties under the Loan
Documents, the Agent shall act solely as agent of the Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Borrower.
Section 8.9. Collateral Matters.
|8.9.1.
Except as specifically otherwise provided in any of the
Collateral Documents, the Agent is hereby authorized on behalf of all of the
Lenders, without assumption of any duty or obligation in respect of and without
the necessity of any notice to or further consent from any other Lender Party,
to take any action with respect to any Collateral or Collateral Documents that
may be necessary to perfect and maintain perfected the Agent's Liens upon the
Collateral.
8.9.2.
The Lenders hereby irrevocably authorize the Agent, in its
discretion, to release any Lien held by the Agent upon any Collateral (a) from
and after the day of termination of any Collateral Document pursuant to the
terms thereof; (b) constituting property being sold or disposed of if the
Borrower certifies to the Agent that the sale or disposition is permitted under
the relevant Collateral Document (and the Agent may rely conclusively on any
such certificate, without further inquiry, unless notified to the contrary by
the Required Lenders); or (c) approved, authorized or ratified in writing by all
Lender Parties in accordance with Section 9.3.; provided, however, that (i) the
Agent shall not be required to execute any such documents on terms that create
any obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens upon (or obligations of
the Borrower in respect of) all assets retained by the Borrower, including the
proceeds of any Asset Disposition, all of which shall continue to constitute
part of the Collateral. Upon request by the Agent at any time, the other Lender
Parties will confirm in writing the Agent's authority to release particular
types or items of Collateral pursuant to this Section 8.9.2.
8.9.3.
The Agent shall have no obligation whatsoever to any other
Lender Party or other Person to assure that the Collateral exists or is owned by
a Borrower or (except as otherwise expressly required by the Collateral
Documents) is cared for, protected or insured, or that the Liens of the Agent
thereunder have been properly created, perfected, protected or enforced or are
entitled to any particular priority.
8.9.4.
Except as otherwise provided in the Loan Documents, the Agent
may act in any manner it may deem appropriate in respect of the Collateral, in
its discretion, given the Agent's own interest in the Collateral as a Lender,
and the Agent shall have no duty or liability whatsoever with respect thereto to
any other Lender Party.
8.9.5.
Each Lender Party hereby approves the form of the other Loan
Documents attached as exhibits to this Agreement and hereby authorizes the Agent
on its behalf to accept from the Borrower and execute and deliver as Agent, the
other Loan Documents in substantially the form of such exhibits, with such
changes, additions or deletions as the Agent, in its discretion, may approve as
necessary or appropriate, such approval to be conclusively evidenced by the
Agent's acceptance or execution thereof. Each Lender Party also authorizes the
Agent to accept, or execute and deliver, such additional documents (including
financing statements, opinions, certificates and other documents in form and
substance satisfactory to the Agent, in its discretion) in connection with the
closing pursuant to Section 3.1. or any subsequent closing for the pledge of any
other Collateral or any additional guaranties as the Agent, in its discretion,
may approve, such approval to be conclusively evidenced by the Agent's
acceptance or execution thereof.
Section 8.10. Payments; Availability of Funds; Certain Notices.
8.10.1.
If the Agent shall fail to deliver to any other Lender Party
its share of any payment received from the Borrower as and when required by
Section 2.9., the Agent shall pay to such Lender its share of such payment
together with interest on such amount at the Federal Funds rate, for each day
from the date such amount was required to be paid to such Lender until the date
the Agent pays such amount to such Lender, calculated as set forth in Section
2.4.4.
8.10.2.
Unless (a) the Agent shall have been notified by a Lender
prior to the date upon which a Loan is to be made or (b) the Agent shall have
been notified by the Borrower prior to the date on which the Borrower is
required to make any payment hereunder that such Lender or the Borrower, as the
case may be (the "Obligated Party"), does not intend to make available to the
Agent the Obligated Party's portion of such Loan or such payment, the Agent may
assume that the Obligated Party will make such amount available to the Agent on
such date and the Agent may, in reliance upon such assumption (but shall not be
required to), make available to the Borrower (in the case of a Loan) or the
Lenders (in the case of a payment by the Borrower) a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by the
Obligated Party, the Agent shall be entitled to recover such amount on demand
from the Obligated Party (or, in the case of a Loan, if the Lender that is the
Obligated Party fails to pay such amount forthwith upon such demand, from the
Borrower). Such amount shall be payable together with interest thereon from the
day on which such corresponding amount was made available by the Agent to the
Lender or the Borrower, as applicable, to the date of payment by the Obligated
Party (or the Borrower, as applicable), at a rate of interest equal to (i) in
the case of any payment by any other Lender Party, the Federal Funds Effective
Rate, and (ii) in the case of any payment by the Borrower, the interest rate
applicable to the Loan.
8.10.3.
The Agent shall promptly notify the Lenders by telex or
telecopy of each Interest Period chosen by the Borrower, the LIBOR Rate for each
Interest Period (and the relevant interest rate), the date of any expected
payment and all other material notices transmitted by the Borrower.
Section 8.11. Obligations of Lender Parties Several; Enforcement by
the Agent.
8.11.1.
Each Lender Party's obligations hereunder are several, and not
joint or joint and several. The failure of any Lender Party to make any Loan or
otherwise to perform its obligations hereunder will not increase the obligations
of any other Lender Party. Notwithstanding the foregoing, any Lender may assume,
but shall have no obligation to any Person to assume, any non-performing
Lender's obligation to make a Loan. Nothing contained in this Agreement and no
action taken by the Agent or any other Lender Party pursuant to this Agreement
shall be deemed to constitute the Agent and any other Lender Party to be a
partnership, an association, a joint venture or any other kind of entity.
8.11.2.
Each Lender agrees that, except with the prior written consent
of the Agent or as provided in Section 9.10., no Lender Party shall have any
right individually to realize upon the Collateral or otherwise enforce any Loan
Document or any provision thereof, or make demand thereunder, it being agreed
that such rights and remedies may only be exercised by the Agent for the ratable
benefit of the Lenders upon the terms of this Agreement.
ARTICLE 9.
MISCELLANEOUS
Section 9.1. Expenses.
The Borrowers shall pay within 10 days (or, in the case of costs and
expenses incurred prior to the Closing Date, within one Business Day) after
demand:
9.1.1.
any and all reasonable attorneys' fees and disbursements and
all reasonable out-of-pocket costs and expenses incurred by the Agent in
connection with (a) the development, drafting and negotiation of the Loan
Documents and the syndication and closing of the transactions contemplated
thereby and (b) any amendments to or the administration of the Loan Documents
(including reasonable costs and expenses incurred in connection with any
appraisal or environmental assessment); and
9.1.2.
any and all costs and expenses (including fees and
disbursements of in-house and other attorneys, appraisers and consultants)
incurred by the Lender Parties in any workout, restructuring or similar
arrangements or, after a Default, in connection with the protection,
preservation, exercise or enforcement of any of the terms of the Loan Documents
or in connection with any foreclosure, collection or bankruptcy proceedings.
Section 9.2. Indemnity.
9.2.1.
Each Borrower shall indemnify, defend and hold harmless each
Lender Party and the officers, directors, employees, agents, attorneys,
affiliates, successors and assigns of each Lender Party (collectively, the
"Indemnitees") from and against (a) any and all transfer taxes, documentary
taxes, assessments or charges made by any Governmental Authority by reason of
the execution and delivery of the Loan Documents or the making of the Loans, and
(b) any and all liabilities, losses, damages, penalties, judgments, claims,
costs and expenses of any kind or nature whatsoever (including reasonable
attorneys' fees, including allocated costs of in-house counsel, and
disbursements in connection with any actual or threatened investigative,
administrative or judicial proceeding, whether or not such Indemnitee shall be
designated a party thereto) that may be imposed on, incurred by or asserted
against such Indemnitee, in any manner relating to or arising out of the Loan
Documents, the Loans, the use or intended use of the proceeds of the Loans (the
"Indemnified Liabilities"); provided that (i) no Indemnitee shall have the right
to be indemnified or held harmless hereunder for its own gross negligence or
willful misconduct, as determined by a final judgment of a court of competent
jurisdiction, and (ii) no Borrower shall have any obligation hereunder in
respect of (A) legal proceedings between the Lender Parties or between any
Lender Party and any participant or (B) Indemnified Liabilities arising from a
breach of any Loan Document by the Indemnitee making a claim hereunder.
|9.2.2.
Each Indemnitee will promptly notify the Borrower of each
event of which it has knowledge that may give rise to a claim under clause (b)
of Section 9.2.1., provided that the failure to so notify the Borrower shall in
no way impair the Borrowers' obligations under this Section 9.2.2 (except to the
extent that such failure to so notify arises from the gross negligence or
willful misconduct of such Indemnitee and has an adverse effect on the
Borrowers, taken as a whole). If any investigative, judicial or administrative
proceeding is brought against any Indemnitee indemnified or intended to be
indemnified pursuant to this Section 9.2.2, the Borrower, to the extent and in
the manner directed by the Indemnitee, will resist and defend such proceeding
with counsel designated by the Borrower (which counsel shall be reasonably
satisfactory to the Indemnitee). Each Indemnitee will use its best efforts to
cooperate in the defense of any such action, writ, or proceeding. The Borrower
shall keep such Indemnitee advised of the status of such defense and consult
with such Indemnitee prior to taking any material position with respect thereto.
Such Indemnitee shall, however, be entitled to employ counsel separate from
counsel for the Borrower and from any other party in such proceeding if such
Indemnitee shall reasonably determine that a conflict of interest or other
circumstance exists that makes representation by counsel chosen by the Borrower
not advisable. The reasonable fees and disbursements of such separate counsel
shall be paid by the Borrower. Such Indemnitee shall not agree to the settlement
of any such claim without the consent of the Borrower, unless the Borrower shall
have been given notice of the commencement of an action and shall have failed to
provide the defense thereof as herein provided or an Event of Default shall have
occurred.
9.2.3.
To the extent that the undertaking to indemnify and hold
harmless set forth in Section 9.2.1. may be unenforceable as violative of any
Applicable Law or public policy, the Borrower shall make the maximum
contribution to the payment and satisfaction of each of the Indemnified
Liabilities that is permissible under Applicable Law. All Indemnified
Liabilities shall be payable on demand.
Section 9.3. Waivers; Amendments in Writing.
9.3.1.
No amendment of any provision of this Agreement or any other
Loan Document (including a waiver thereof or consent relating thereto) shall be
effective unless the same shall be in writing and signed by the Agent and the
Required Lenders. Notwithstanding the foregoing,
no amendment that has the effect of (a) reducing the rate or
amount, or extending the stated maturity or due date, of any amount
payable by the Borrowers to any Lender Party under the Loan Documents,
(b) increasing the amount, or extending the stated termination or
reduction date, of any Lender's Revolving Commitment hereunder or
subjecting any Lender Party to any additional obligation to extend
credit, (c) altering the rights and obligations of the Borrowers to
prepay the Loans, (d) permitting the creation of any Lien ranking prior
to or on a parity with the Lien of any Collateral Document, releasing
any part of the Collateral (except as permitted under the Loan
Documents) or depriving any Lender Party of the security afforded by
the Lien of any Collateral Document, or (e) changing this Section 9.3.
or the definition of the term "Required Lenders," shall be effective
unless the same shall be signed by or on behalf of all of the Lenders;
no amendment that has the effect of (a) increasing the duties
or obligations of the Agent, (b) increasing the standard of care or
performance required on the part of the Agent, or (c) reducing or
eliminating the indemnities or immunities to which the Agent is
entitled (including any amendment of this Section 9.3.1.2.), shall be
effective unless the same shall be signed by or on behalf of the Agent;
and
no amendment that has the effect of (a) increasing the duties
or obligations of the Swingline Lender, (b) increasing the standard of
care or performance required on the part of the Swingline Lender, or
(c) reducing or eliminating the indemnities or immunities to which the
Swingline Lender is entitled (including any amendment of this Section
9.3.1.2.), shall be effective unless the same shall be signed by or on
behalf of the Swingline Lender; and
Notwithstanding anything to the contrary, Schedule 4.3. may be
amended by written notice by the Borrower to the Agent, to the extent
necessary to reflect transactions occurring after the date hereof that
are otherwise permissible hereunder.
Any waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No notice to or
demand on the Borrower in any case shall entitle the Borrower to any
other or further notice or demand in similar or other circumstances.
Any amendment effected in accordance with this Section 9.3. shall be
binding upon each present and future Lender Party and the Borrower.
Section 9.4. Cumulative Remedies; Failure or Delay.
The rights and remedies provided for under this Agreement are
cumulative and are not exclusive of any rights and remedies that may be
available to the Lender Parties under Applicable Law or otherwise. No failure or
delay on the part of any Lender Party in the exercise of any power, right or
remedy under the Loan Documents shall impair such power, right or remedy or
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or remedy preclude other or further exercise thereof or of any
other power, right or remedy.
Section 9.5. Notices, Etc.
All notices and other communications under this Agreement shall be in
writing and (except for financial statements, other related informational
documents and routine communications, which may be sent by first-class mail,
postage prepaid) shall be personally delivered or sent by prepaid courier, by
overnight, registered or certified mail (postage prepaid), or by prepaid telex
or telecopy, and shall be deemed given when received by the intended recipient
thereof. Unless otherwise specified in a notice sent or delivered in accordance
with this Section 9.5., all notices and other communications shall be given to
the parties hereto at their respective addresses (or to their respective telex
or telecopier numbers) indicated on Schedule 1.1.B (in the case of the Lender
Parties) or 9.5. (in the case of the Borrower).
Section 9.6. Successors and Assigns.
9.6.1.
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns. No
Borrower may assign or transfer any interest hereunder without the prior written
consent of each Lender Party.
9.6.2.
Each Lender shall have the right at any time to assign (an
"Assignment") all or any portion of such Lender's Revolving Commitment and
outstanding Loans to one or more banks or other institutions; provided, however,
that (a) each Assignment shall be of a portion of the Revolving Commitment of at
least equal to $5,000,000, (b) unless otherwise agreed by the Agent, each
Assignment shall be of a constant, and not a varying, percentage of all of the
assigning Lender's rights and obligations under this Agreement and the other
Loan Documents; (c) unless a Default or Event of Default then exists, no
Assignment (other than an Assignment to a Person that is then a Lender or an
Affiliate of a Lender) shall be effective without the consent of the Borrower
and the Agent, which consents shall not be unreasonably withheld or delayed; (d)
the parties to the Assignment shall execute and deliver to the Agent an
Assignment and Acceptance substantially in the form of Exhibit H (an "Assignment
and Acceptance"); (c) the assignee shall pay to the Agent a processing and
recording fee of $2,500; and no Assignment shall be effective for any purpose
unless and until the Agent accepts such Assignment and makes an appropriate
entry thereof in the Register (as defined below). Upon satisfaction of the
conditions in clauses (a) through (f) of the proviso to the immediately
preceding sentence with respect to any proposed Assignment, the Agent shall
accept the Assignment, make appropriate entries thereof in the Register and send
notice thereof to the Borrower and all other Lender Parties. From and after the
date on which the conditions in the foregoing clauses and the Assignment and
Acceptance have been satisfied, the assignee shall be a "Lender" hereunder and,
to the extent that rights and obligations hereunder have been assigned to it,
shall have the rights and obligations of the assigning Lender hereunder, and the
assigning Lender shall, to the extent that rights and obligations hereunder have
been assigned by it, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment covering all or the
remaining portion of the assigning Lender's rights and obligations under this
Agreement, cease to be a party hereto).
The Agent shall maintain at the Agent's Office a copy of each
Assignment and Acceptance delivered to it and a register (the "Register") for
the recordation of the names of the Lender Parties and their respective
Revolving Commitments. The entries in the Register shall be conclusive as
against the Borrower and each Lender Party, in the absence of manifest error,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower at any reasonable time and from time to time upon
reasonable prior notice.
9.6.4.
Each Lender shall have the right at any time to grant or sell
participations (each a "Participation") in all or any portion of such Lender's
Revolving Commitment and outstanding Loans to one or more banks or other
institutions, subject to the terms and conditions set forth in this Section
9.6.4. If any Lender sells or grants a Participation, (a) such Lender shall make
and receive all payments for the account of its participant, (b) such Lender's
obligations under this Agreement shall remain unchanged, (c) such Lender shall
continue to be the sole holder of its Notes and other Loan Documents subject to
the Participation and shall have the sole right to enforce its rights and
remedies under the Loan Documents, (d) the Borrower and the other Lender Parties
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under the Loan Documents, and (e) the
Participation agreement shall not restrict such Lender's ability to agree to any
amendment of the terms of the Loan Documents, or to exercise or refrain from
exercising any powers or rights that such Lender may have under or in respect of
the Loan Documents or any Collateral, except that the participant may be granted
the right to consent to any (a) reduction of the rate or amount, or any
extension of the stated maturity or due date, of any principal, interest or Fees
payable by the Borrower and subject to the Participation, (b) increase in the
amount or extension of the stated termination or any reduction date of the
affected Revolving Commitment or (c) release of all or substantially all of the
Collateral, except to the extent otherwise provided in the Loan Documents. A
participant shall have the rights of the Lenders under Sections 2.11.,2.13. and
9.10., subject to the obligations imposed by such Sections; provided that
amounts payable to any participant shall not exceed the amounts that would have
been payable under such Sections to the Lender granting the Participation, had
such Participation not been granted, unless the Participation is made with the
prior written consent of the Borrower.
9.6.5.
Each Lender may at any time assign or pledge any portion of
its rights under the Loan Documents to a Federal Reserve Bank. No such
assignment or pledge shall be subject to the provisions of Sections 9.6.2. or
9.6.4.
9.6.6.
Subject to the provisions of Section 9.7., each Lender Party
shall have the right at any time to furnish one or more potential assignees or
participants with any information concerning the Borrowers and the Subsidiaries
that has been supplied by any Borrower to any Lender Party. The Borrower shall
supply all reasonably requested information and execute and deliver all such
instruments and take all such further action (including, in the case of an
Assignment, the execution and delivery of replacement Notes) as the Agent may
reasonably request in connection with any Assignment or Participation
arrangement.
Section 9.7. Confidentiality.
Each Lender will maintain any confidential information that it may
receive from any Borrower or Consolidated Subsidiary pursuant to this Agreement
confidential and shall not disclose such information to third parties without
the prior consent of the Borrower, except for disclosure: (a) to legal counsel,
accountants and other professional advisors to the Lender Party; (b) to
regulatory officials having jurisdiction over the Lender Party; (c) required by
Applicable Law or in connection with any legal proceeding; (d) to any other
Lender Party;(e) to another Person in connection with a potential Assignment or
Participation, provided such Person shall have agreed in writing to be subject
to this Section 9.7.; (f) to prospective purchasers of Collateral after an Event
of Default; and (g) of information that has been previously disclosed publicly
without breach of this provision.
Section |9.8. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF CALIFORNIA (OTHER THAN CHOICE OF LAW RULES THAT WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION).
Section 9.9. Choice of Forum.
9.9.1.
All actions or proceedings arising in connection with this
Agreement shall be tried and litigated in state or Federal courts located in
County of Suffolk, Commonwealth of Massachusetts, unless such actions or
proceedings are required to be brought in another court to obtain subject matter
jurisdiction over the matter in controversy. EACH BORROWER AND EACH OF THE
LENDER PARTIES WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS, TO ASSERT THAT IT IS NOT SUBJECT TO THE JURISDICTION OF SUCH COURTS
OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION.
|9.9.2.
IN ANY ACTION AGAINST ANY BORROWER, SERVICE OF PROCESS MAY BE
MADE UPON THE BORROWER BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO ITS ADDRESS INDICATED IN SCHEDULE 9.5., WHICH SERVICE SHALL BE
DEEMED SUFFICIENT FOR PERSONAL JURISDICTION AND SHALL BE DEEMED EFFECTIVE 10
DAYS AFTER MAILING.
9.9.3.
Nothing contained in this Section shall preclude the Lender
Parties from bringing any action or proceeding arising out of or relating to
this Agreement in the courts of any place where the Borrower or any of its
assets may be found or located. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS
OF ANY SUCH JURISDICTION, EACH BORROWER HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF ANY SUCH COURT AND EXPRESSLY WAIVES, IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING, THE JURISDICTION OF ANY OTHER COURT OR COURTS THAT NOW OR
HEREAFTER, BY REASON OF SUCH PARTY'S PRESENT OR FUTURE DOMICILE, OR OTHERWISE,
MAY BE AVAILABLE TO IT.
Section 9.10. Set Off.
In addition to any rights now or hereafter granted under Applicable
Law, during the existence of any Event of Default, each Lender Party is hereby
irrevocably authorized by each Borrower, at any time or from time to time,
without notice to any Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including certificates of deposit, whether matured
or unmatured, but not including trust accounts) and any other indebtedness, in
each case whether direct or indirect or contingent or matured or unmatured at
any time held or owing by such Lender Party to or for the credit or the account
of the Borrower, against and on account of the obligations of the Borrower to
such Lender Party under the Loan Documents to which the Borrower is a party,
irrespective of whether or not such Lender Party shall have made any demand for
payment and although such obligations may be contingent and unmatured.
Section 9.11. Changes in Accounting Principles.
If any changes in generally accepted accounting principles after the
date of this Agreement result from the promulgation of rules, regulations,
pronouncements, or opinions of, or the imposition of requirements by, the
Financial Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with similar functions),
or there shall occur any change in the Borrower's fiscal or tax years and, as a
result of any such changes, there shall result a change in the method of
calculating any of the negative covenants, standards or other terms or
conditions found in this Agreement, then the parties hereto agree to enter into
negotiations in order to amend such provisions so as to equitably reflect such
changes with the desired result that the criteria for evaluating the Borrowers'
financial condition shall be the same after such changes as if such changes had
not been made.
Section |9.12. Headings.
The Article and Section headings used in this Agreement are for
convenience of reference only and shall not affect the construction hereof.
Section |9.13. Severability.
If any provision of this Agreement shall be held to be invalid, illegal
or unenforceable under Applicable Law in any jurisdiction, such provision shall
be ineffective only to the extent of such invalidity, illegality or
unenforceability, which shall not affect any other provisions hereof or the
validity, legality or enforceability of such provision in any other
jurisdiction.
Section 9.14. Survival of Agreements, Representations and Warranties.
All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the closing and the
extensions of credit hereunder and shall continue until payment and performance
of any and all Obligations. Any investigation at any time made by or on behalf
of the Lender Parties shall not diminish the Lender Parties' right to rely
thereon. Without limitation, the agreements and obligations of the Borrowers
contained in Sections 2.11., 2.12., 2.13.,2.1.3., 9.1. and 9.1., and the
obligations of the Lenders under Section 8.5. and 9.7 shall survive the payment
in full of all other Obligations.
Section 9.15. Execution in Counterparts.
This Agreement may be executed in any number of counterparts, each of
which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but one
and the same Agreement. This Agreement shall become effective upon the execution
of a counterpart hereof by each of the parties hereto. Faxed signatures to this
Agreement shall be binding for all purposes.
Section 9.16. Complete Agreement.
This Agreement, together with the other Loan Documents, is intended by
the parties as the final expression of their agreement regarding the subject
matter hereof and as a complete and exclusive statement of the terms and
conditions of such agreement.
Section 9.17. Limitation of Liability.
No claim shall be made by any Borrower or any Consolidated Subsidiary
of any Borrower against any Lender Party or the Affiliates, directors, officers,
employees or agents of any Lender Party for any special, indirect, consequential
or punitive damages in respect of any claim for breach of contract or under any
other theory of liability arising out of or related to the transactions
contemplated by this Agreement, or any act, omission or event occurring in
connection therewith; and the Borrower waives, releases and agrees not to xxx
upon any claim for any such damages, whether or not accrued and whether or not
known or suspected to exist in its favor.
[Space intentionally left blank.]
Section 9.18. WAIVER OF TRIAL BY JURY.
THE BORROWERS AND THE LENDER PARTIES WAIVE THE RIGHT TO A TRIAL BY JURY
IN ANY ACTION UNDER THIS AGREEMENT OR ANY ACTION ARISING OUT OF THE TRANSACTIONS
CONTEMPLATED HEREBY, REGARDLESS OF WHICH PARTY INITIATES SUCH ACTION OR ACTIONS.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first set forth above.
Agent:
BankBoston, N.A., a national banking
association, as Agent and a Lender
By:
Name:
Title:
Lenders:
U.S. Bank,
a national banking association,
By:
Name:
Title:
Sumitomo Bank of California,
a California banking corporation
By:
Name:
Title:
By:
Name:
Title:
Borrowers:
Cotelligent Group, Inc.,
a Delaware corporation
By:
Name:
Title:
BFR Co., Inc., a New Jersey corporation
By:
Name:
Title:
Xxxxxxxxxxx Associates, Inc., a California
corporation
By:
Name:
Title:
Data Arts & Sciences, Inc.,
a Massachusetts corporation
By:
Name:
Title:
ESP Software Services, Inc., a Minnesota
corporation
By:
Name:
Title:
Financial Data Systems, Inc., a Washington
corporation
By:
Name:
Title:
INNOVA Solutions, Inc., a Texas corporation
By:
Name:
Title:
Cotelligent/JasTech Corporation, a Florida
corporation
By:
Name:
Title:
Pittsburgh Business Consultants, Inc.,
a Pennsylvania corporation
By:
Name:
Title:
TRC Information Systems, Inc.,
a California corporation
By:
Name:
Title:
United Data Processing, Inc., an Oregon
corporation
By:
Name:
Title:
EPIC Consulting Group, Ltd., a Missouri
corporation
By:
Name:
Title:
Credit Agreement
FA972470.024 Schedule R-1
SCHEDULE R-1
CONSOLIDATED SUBSIDIARIES OF BORROWER
BFR Co., Inc.:
Xxxx Xxxxxxxxxxx I
000 Xxxxx 000-000
Xxxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Confidential Fax: (000) 000-0000
Xxxxxxxxxxx Associates, Incorporated:
0000 Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Data Arts & Sciences, Inc.:
0 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
ESP Software Services, Inc.:
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Financial Data Systems, Inc.:
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Street Address:
000 000xx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Confidential Fax: (000) 000-0000
INNOVA Solutions, Incorporated:
0000 XXX Xxxxxxx
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Cotelligent/JasTech Corporation:
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Pittsburgh Business Consultants, Inc.:
000 0xx Xxxxxx, Xxxxx 0000X
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
TRC Information Services, Inc.:
0000 Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
United Data Processing, Inc.:
0000 X.X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
EPIC Consulting Group, Ltd.:
00000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxx, XX
Phone: (000) 000-0000
Fax: (000) 000-0000
Credit Agreement
FA972470.024 Schedule 1.1A
SCHEDULE 1.1.A
COMMITMENTS
----------------------------------------------------- -------------------------
Lender Revolving Commitment
----------------------------------------------------- -------------------------
BankBoston, N.A. $20,000,000
----------------------------------------------------- -------------------------
U.S. Bank $10,000,00
----------------------------------------------------- -------------------------
Sumitomo Bank of California $10,000,000
----------------------------------------------------- -------------------------
Total $40,000,000
----------------------------------------------------- -------------------------
Credit Agreement
FA972470.024 Schedule 1.1B
SCHEDULE 1.1.B
LENDER INFORMATION
Agent's Office:
BankBoston, N.A.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Phone: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Agent's Account (for funding of Loans by the Lenders and payments by the
Borrower):
Method of Payment: Fed Wire
Account No.: 00000000
Reference: Cotelligent
ABA No.: 000000000
Attn: The Hightech Adm. 50
Lenders:
----------------------------------- ---------------------------------- -----------------------------------
Lender Domestic Lending Office LIBOR Lending Office
----------------------------------- ---------------------------------- -----------------------------------
`U.S. Bank 0000 0xx Xxx. 0000 0xx Xxx.
Xxxxxxx, Xxxxxxxxxx 00000 Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Phone: (000) 000-0000 Phone: (000) 000-0000
Attn: Xxxxx Xxxxxxx Attn: Xxxxx Xxxxxxx
----------------------------------- ---------------------------------- -----------------------------------
Sumitomo Bank of California 000 Xxxx 0xx Xxxxxx 000 Xxxx 0xx Xxxxxx
Xxxxx 0000 Xxxxx 0000
Xxx Xxxxxxx, XX 00000 Xxx Xxxxxxx, XX 00000
Fax: (000) 000-0000 Fax: (000) 000-0000
Phone: (000) 000-0000 Phone: (000) 000-0000
Attn: Xxxxx Xxxx Attn: Xxxxx Xxxx
----------------------------------- ---------------------------------- -----------------------------------
Credit Agreement
FA972470.024 Schedule 1.1C
SCHEDULE 1.1.C
EXISTING DEBT
Notes Payable
BFR Co., Inc.
Creditor: Xxxxxx X'Xxxxxxx
Commencement of Note: February 1996
Payment Terms: $100,000/Year for 4 years;
$75,000/Year for 1 year
Credit Agreement
FA972470.024 Schedule 1.1D
SCHEDULE 1.1.D
EXISTING LIENS
Pittsburgh Business Consultants, Inc.
Lien Holder: Vanguard Financial Services Corp.
Equipment: San Diego Office Copier
Lease Type: Operating
Credit Agreement
FA972470.024 Schedule 1.1E
SCHEDULE 1.1.E
APPLICABLE MARGIN & FEE RATE
The "Applicable Margin" in respect of LIBOR Rate Loans (and amounts not
paid when due) and the "Fee Rate" for any day are the respective rates per annum
set forth below in the applicable row under the column corresponding to the
Pricing Level that applies on such day:
---------------------------------- ----------------- ---------------- ----------------- -----------------
Pricing Level Level I Level II Level III Level IV Pricing
Pricing Pricing Pricing
----------------------------------- ----------------- ---------------- ----------------- -----------------
----------------------------------- ----------------- ---------------- ----------------- -----------------
Applicable Margin (LIBOR Rate 1.75 1.50 1.25 1.00
Loans and amounts not paid when
due)
----------------------------------- ----------------- ---------------- ----------------- -----------------
----------------------------------- ----------------- ---------------- ----------------- -----------------
Fee Rate 0.35 0.30 0.25 0.20
----------------------------------- ----------------- ---------------- ----------------- -----------------
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Pricing" applies during any Pricing Period if (i) in the case
of Compliance Certificates prepared in conjunction with financial statements
delivered pursuant to Sections 5.1.1 and 5.1.2, at the end of the Fiscal Quarter
most recently ended prior to the first day of such Pricing Period, and (ii) in
the case of Compliance Certificates prepared in conjunction with Permitted
Acquisitions, as of the day on which such Compliance Certificate is delivered
(as reflected in the pro forma calculations included in such Compliance
Certificate), the Leverage Ratio was greater than 2.75 to 1.00.
"Level II Pricing" applies during any Pricing Period if no higher
Pricing Level applies and, if, (i) in the case of Compliance Certificates
prepared in conjunction with financial statements delivered pursuant to Sections
5.1.1 and 5.1.2, at the end of the Fiscal Quarter most recently ended prior to
the first day of such Pricing Period, and (ii) in the case of Compliance
Certificates prepared in conjunction with Permitted Acquisitions, as of the day
on which such Compliance Certificate is delivered (as reflected in the pro forma
calculations included in such Compliance Certificate) the Leverage Ratio was
less than or equal to 2.75 to 1.00, but greater than 2.25 to 1.00.
"Level III Pricing" applies during any Pricing Period if no higher
Pricing Level applies and if, (i) in the case of Compliance Certificates
prepared in conjunction with financial statements delivered pursuant to Sections
5.1.1 and 5.1.2, at the end of the Fiscal Quarter most recently ended prior to
the first day of such Pricing Period, and (ii) in the case of Compliance
Certificates prepared in conjunction with Permitted Acquisitions, as of the day
on which such Compliance Certificate is delivered (as reflected in the pro forma
calculations included in such Compliance Certificate) the Leverage Ratio was
less than or equal to 2.25 to 1.00, but greater than 1.75 to 1.00.
"Level IV Pricing" applies during any Pricing Period if no higher
Pricing Level applies and if, (i) in the case of Compliance Certificates
prepared in conjunction with financial statements delivered pursuant to Sections
5.1.1 and 5.1.2, at the end of the Fiscal Quarter most recently ended prior to
the first day of such Pricing Period, and (ii) in the case of Compliance
Certificates prepared in conjunction with Permitted Acquisitions, as of the day
on which such Compliance Certificate is delivered (as reflected in the pro forma
calculations included in such Compliance Certificate) the Leverage Ratio was
less than 1.75 to 1.00.
"Pricing Period" means a period beginning on (and including) the day on
which a Compliance Certificate required pursuant to Section 5.1.2. is delivered,
and ending on (and excluding) the day on which the next such Compliance
Certificate is delivered, except that the first Pricing Period shall begin on
the Closing Date and shall end on the earlier to occur of (i) the day on which
the Compliance Certificate in respect of the first Permitted Acquisition to be
closed after the Closing Date is delivered and (ii) the day on which the
Compliance Certificate required in respect of the Fiscal Quarter ending
September 30, 1997 is delivered.
"Pricing Level" refers to such of Level I Pricing, Level II Pricing,
Level III Pricing or Level IV Pricing as applies during any particular day. The
numbering of Pricing Levels is in descending order (e.g., Level II Pricing is
referred to as a "lower" Pricing Level than Level I Pricing).
Credit Agreement
FA972470.024 Schedule 3.1.2
SCHEDULE 3.1.2.
CLOSING DOCUMENTS
TITLE SIGNATORIES
------------------------------------------------------------------------- ----------------------------------------------
Senior Secured Credit Agreement BKB (as Agent, Swingline Lender, Lender), US
Bank, Sumitomo, CGI, BFR, CAI, DAS, ESP,
FDS, ISI, CJC, PBCI, TRC, UDP, ECG
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Swingline Note -- BankBoston, N.A. CGI, BFR, CAI, DAS, ESP, FDS, ISI, CJC,
PBCI, TRC, UDP, ECG
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Revolving Loan Note -- BankBoston, N.A. CGI, BFR, CAI, DAS, ESP, FDS, ISI, CJC,
PBCI, TRC, UDP, ECG
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Revolving Loan Note -- X.X.Xxxx CGI, BFR, CAI, DAS, ESP, FDS, ISI, CJC,
PBCI, TRC, UDP, ECG
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Revolving Loan Note -- Sumitomo Bank of California CGI, BFR, CAI, DAS, ESP, FDS, ISI, CJC,
PBCI, TRC, UDP, ECG
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Security Agreement BKB, CGI, BFR, CAI, DAS, ESP, FDS, ISI, CJC,
PBCI, TRC, UDP, ECG
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Pledge Agreement BKB, CGI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Initial Notice of Borrowing CGI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Officer's Closing Certificate CGI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Opinion of PM&S PM&S
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- Cotelligent Group, Inc. BKB, CGI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- BFR Co., Inc. BKB, BFR
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- Xxxxxxxxxxx Associates, Inc. BKB, CAI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- Data Arts & Sciences, Inc. BKB, DAS
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- ESP Software Services, Inc. BKB, ESP
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- Financial Data Systems, Inc. BKB, FDS
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- INNOVA Solutions, Inc. BKB, ISI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- Cotelligent/JasTech Corporation BKB, CJC
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- Pittsburgh Business Consultants, Inc. BKB, PBCI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- TRC Information Services, Inc. BKB, TRC
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- United Data Processing, Inc. BKB, UDP
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
UCC Financing Statement -- EPIC Consulting Group, Ltd. BKB, ECG
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- Cotelligent Group, Inc. Delaware Secretary of State
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- BFR Co., Inc. New Jersey Secretary of State
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- Xxxxxxxxxxx Associates, Inc. California Secretary of State
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- Data Arts & Sciences, Inc. Massachusetts authority
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- ESP Software Services, Inc. Minnesota authority
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- Financial Data Systems, Inc. Washington authority
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- INNOVA Solutions, Inc. Texas authority
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- Cotelligent/JasTech Corporation Florida authority
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- Pittsburgh Business Consultants, Inc. Pennsylvania authority
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- TRC Information Services, Inc. California Secretary of State
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- United Data Processing, Inc. Oregon Secretary of State
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Good Standing Certificate-- EPIC Consulting Group, Ltd. Missouri Secretary of State
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (Cotelligent Group, Inc.) CGI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (BFR, Inc.) BFR
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (Xxxxxxxxxxx Associates, Inc.) CAI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (Data Arts & Sciences, Inc.) DAS
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (ESP Software Services, Inc.) ESP
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (Financial Data Systems, Inc.) FDS
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (INNOVA Solutions, Inc.) ISI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (Cotelligent/JasTech Corporation) CJC
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (Pittsburgh Business Consultants, Inc.) PBCI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (TRC Information Services, Inc.) TRC
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (United Data Processing, Inc.) UDP
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Corporate Resolution: Borrowing (EPIC Consulting Group, Ltd.) ECG
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (Cotelligent Group, Inc.) CGI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (BFR Inc.) BFR
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (Xxxxxxxxxxx Associates, Inc.) CAI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (Data Arts & Sciences, Inc.) DAS
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (ESP Software Services, Inc..) ESP
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (Financial Data Systems, Inc.) FDS
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (INNOVA Solutions, Inc.) ISI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (Cotelligent/JasTech Corporation) CJC
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (Pittsburgh Business Consultants, Inc.) PBCI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (TRC Information Services, Inc.) TRC
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (United Data Processing, Inc.) UDP
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Secretary's Certificate (EPIC Consulting Group, Ltd.) ECG
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (Cotelligent Group, Inc.) CGI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (BFR, Inc.). BFR
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (Xxxxxxxxxxx Associates, Inc.) CAI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (Data Arts & Sciences, Inc.) DAS
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (ESP Software Services, Inc..) ESP
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (Financial Data Systems, Inc.) FDS
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (INNOVA Solutions, Inc.) ISI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (Cotelligent/JasTech Corporation) CJC
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (Pittsburgh Business Consultants, PBCI
Inc.)
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (TRC Information Services Inc.) TRC
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (United Data Processing, Inc.) UDP
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Certified Articles of Incorporation (EPIC Consulting Group, Ltd.) ECG
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Interim Unaudited Financial Statements (June 30, 1997) CGI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Consolidated Balance Sheet for Borrower and Consolidated Subsidiaries CGI
(dated as of March 31, 1997)
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Quarterly Statements as of June 30, 1997 CGI
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Projected Consolidated Statements of Income and Cash Flow for Borrower CGI
and Consolidated Subsidiaries (for the period from January 1, 1997 to
December 31, 1999)
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Projected Annual Consolidated Balance Sheets for each fiscal year CGI
through 1999 for Borrower and Consolidated Subsidiaries
------------------------------------------------------------------------- ----------------------------------------------
------------------------------------------------------------------------- ----------------------------------------------
Evidence of Insurance CGI
------------------------------------------------------------------------- ----------------------------------------------
Credit Agreement
FA972470.024 Schedule 4.1
SCHEDULE 4.1.
ORGANIZATION OF BORROWER AND
SUBSIDIARIES
NAME OF COMPANY STATE OF INCORPORATION OWNERSHIP INTEREST
1. Cotelligent Group, Inc. Delaware Parent
2. BFR Co., Inc. New Jersey 100% by Cotelligent Group, Inc.
3. Xxxxxxxxxxx Associates, California 100% by Cotelligent Group, Inc.
Incorporated
4. Data Arts & Sciences, Inc. Massachusetts 100% by Cotelligent Group, Inc.
5. Financial Data Systems, Inc. Washington 100% by Cotelligent Group, Inc.
6. ESP Software Services, Inc. Minnesota 100% by Cotelligent Group, Inc.
7. INNOVA Solutions Incorporated Texas 100% by Cotelligent Group, Inc.
8. Cotelligent/JasTech Corporation Florida 100% by Cotelligent Group, Inc.
9. Pittsburgh Business Consultants, Pennsylvania 100% by Cotelligent Group, Inc.
Inc.
10. United Data Processing, Inc. Oregon 100% by Cotelligent Group, Inc.
11. TRC Information Services, Inc. California 100% by Cotelligent Group, Inc.
12. EPIC Consulting Group, Ltd. Missouri 100% by Cotelligent Group, Inc.
Credit Agreement
FA972470.024 Schedule 4.3
SCHEDULE 4.3.
SUBSIDIARIES AND OTHER INVESTMENTS
SUBSIDIARIES
NAME OF COMPANY STATE OF INCORPORATION OWNERSHIP INTEREST
1. Cotelligent Group, Inc. Delaware Parent
2. BFR Co., Inc. New Jersey 100% by Cotelligent Group, Inc.
3. Xxxxxxxxxxx Associates, California 100% by Cotelligent Group, Inc.
Incorporated
4. Data Arts & Sciences, Inc. Massachusetts 100% by Cotelligent Group, Inc.
5. Financial Data Systems, Inc. Washington 100% by Cotelligent Group, Inc.
6. ESP Software Services, Inc. Minnesota 100% by Cotelligent Group, Inc.
7. INNOVA Solutions Incorporated Texas 100% by Cotelligent Group, Inc.
8. Cotelligent/JasTech Corporation Florida 100% by Cotelligent Group, Inc.
9. Pittsburgh Business Consultants, Pennsylvania 100% by Cotelligent Group, Inc.
Inc.
10. United Data Processing, Inc. Oregon 100% by Cotelligent Group, Inc.
11. TRC Information Services, Inc. California 100% by Cotelligent Group, Inc.
12. EPIC Consulting Group, Ltd. Missouri 100% by Cotelligent Group, Inc.
OTHER INVESTMENTS
None.
Credit Agreement
FA972470.024 Schedule 4.6
SCHEDULE 4.6.
MATERIAL LITIGATION
None.
Credit Agreement
FA972470.024 Schedule 4.13
SCHEDULE 4.13.
ENVIRONMENTAL CONDITION
None.
Credit Agreement
FA972470.024 Schedule 4.14
SCHEDULE 4.14.
CERTAIN RESTRICTIONS
None.
Credit Agreement
FA972470.024 Schedule 4.15
SCHEDULE 4.15.
LABOR MATTERS
None.
Credit Agreement
FA972470.024 Schedule 6.8
SCHEDULE 6.8.
EXISTING CONTRACTUAL OBLIGATIONS
Indenture of Lease dated October 26, 1995 between Data Arts and Sciences, Inc.
and Xxxx Xxxxxxx and Xxxxx Xxxxxxx, as Trustees of Strathmore Realty Trust for
offices.
Demand Note in the amount of $150,000 from Xxxxxx Xxxxxxx to Cotelligent Group,
Inc.
Stock Purchase Agreement dated August 27, 1997 between Xxxxxxx Xxxxxxxx and
Cotelligent Group, Inc. for the purchase of EPIC Consulting Group, Ltd.
Business Lease dated December 31, 1990 between BFR Co., Inc. and BFR Properties,
a partnership partially owned by Xxxxxxx Xxxxxxxxx for office furniture and
equipment.
Business Lease dated December 31, 1989 between BFR Co., Inc. and BFR Properties,
a partnership partially owned by Xxxxxxx Xxxxxxxxx for office furniture and
equipment.
Lease Agreement dated April 1, 1995 between BFR Systems [tradename for BFR Co.,
Inc.] and BFR Properties, a partnership partially owned by Xxxxxxx Xxxxxxxxx for
offices.
Employment Agreement between Cotelligent Group, Inc. and Xxxxxxx X. Xxxxx dated
February 20, 1996.
Employment Agreement between Cotelligent Group, Inc. and Xxxxxx X. Xxxxxxx dated
February 20, 1996.
Employment Agreement between Cotelligent Group, Inc. and Xxxxx X. Xxxxxxx dated
February 20, 1996.
Employment Agreement by and among Cotelligent Group, Inc., BFR Co., Inc. and
Xxxxxxx X. Xxxxxxxxx dated February 20, 1996.
Employment Agreement by and among Cotelligent Group, Inc., BFR Co., Inc. and
Xxxxxxx X. Xxxxxx dated February 20, 1996.
Employment Agreement by and among Cotelligent Group, Inc., BFR Co., Inc. and
Xxxxxxx X. Xxxxxxx dated February 20, 1996.
Employment Agreement by and among Cotelligent Group, Inc., Xxxxxxxxxxx
Associates, Inc. and Xxxx X. Xxxxxxxxxxx dated February 20, 1996.
Employment Agreement by and among Cotelligent Group, Inc., Data Arts & Sciences,
Inc. and Xxxx X. Xxxxxxx dated February 20, 1996.
Employment Agreement between INNOVA Solutions, Inc. and Xxxxx X. Xxxxx dated
June 28, 1996.
Employment Agreement among Cotelligent Group, Inc., Jastech, Inc. and Xxxx
Xxxxxxx dated September 30, 1996.
Employment Agreement between Pittsburgh Business Consultants, Inc. and Xxxxxxx
X. Xxxxxx dated December 1, 1996.
Employment Agreement between Cotelligent/TRC Acquisition Corporation and Xxxxx
X. Xxxx dated February 10, 1997.
Employment Agreement between Innova Solutions, Inc. and Xxxxxxx Xxxxxxxx dated
August 27, 1997.
Credit Agreement
FA972470.024 Schedule 9.5
SCHEDULE 9.5.
BORROWER INFORMATION
Address for Notices:
BFR Co., Inc.:
Xxxx Xxxxxxxxxxx I
000 Xxxxx 000-000
Xxxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Confidential Fax: (000) 000-0000
Xxxxxxxxxxx Associates, Incorporated:
0000 Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Data Arts & Sciences, Inc.:
0 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
ESP Software Services, Inc.:
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Financial Data Systems, Inc.:
X.X. Xxx 0000
Xxxxxxxx, XX 00000-0000
Street Address:
000 000xx Xxxxxx, X.X., Xxxxx 0000
Xxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Confidential Fax: (000) 000-0000
INNOVA Solutions, Incorporated:
0000 XXX Xxxxxxx
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Cotelligent/JasTech Corporation:
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Pittsburgh Business Consultants, Inc.:
000 0xx Xxxxxx, Xxxxx 0000X
Xxxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
TRC Information Services, Inc.:
0000 Xxxxxx Xxxxx
Xxx Xxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
United Data Processing, Inc.:
0000 X.X. Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
EPIC Consulting Group, Ltd.:
00000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxx, XX
Phone: (000) 000-0000
Fax: (000) 000-0000
Borrower Account (for the funding of Loans): U.S. Bank, Account No. 0747239416
SENIOR SECURED CREDIT AGREEMENT
among
COTELLIGENT GROUP , INC.,
THE BANKS LISTED HEREIN
and
BANKBOSTON, N.A.
as Agent
September 12, 1997
$40,000,000 Revolving Facility
9
TABLE OF CONTENTS
SENIOR SECURED CREDIT AGREEMENT...................................................................................1
ARTICLE 1. DEFINITIONS AND RELATED MATTERS.................................................................1
Section 1.1. Definitions. ....................................................................1
Section 1.2. Related Matters. ...............................................................16
---------------
1.2.1. Construction. .........................................................16
1.2.2. Determinations. .......................................................16
1.2.3. Accounting Terms and Determinations. ..................................16
1.2.4. Independence of Covenants. ............................................16
ARTICLE 2. AMOUNTS AND TERMS OF THE CREDIT FACILITY.......................................................17
Section 2.1. Revolving Loans. ...............................................................17
---------------
2.1.1. Revolving Commitment. .................................................17
2.1.2. Type of Loans and Minimum Amounts. ....................................17
2.1.3. Notice of Borrowing. ..................................................17
2.1.4. Funding. ..............................................................18
Section 2.2. Swingline Loans. ...............................................................18
---------------
2.2.1. Swingline Commitment. .................................................18
2.2.2. The Swingline Note. ...................................................19
2.2.3. Interest on Swingline Loans. ..........................................19
2.2.4. Notice of Borrowing of Swingline Loans. ...............................19
2.2.5. Limitations on Swingline Lender's Obligation to Make Swingline Loans. .20
2.2.6. Mandatory Borrowings. .................................................20
Section 2.3. Use of Proceeds. ...............................................................20
Section 2.4. Interest; Interest Periods; Conversion/Continuation. ...........................21
---------------------------------------------------
2.4.1. Interest Rate and Payment. ............................................21
2.4.2. Interest Periods and Minimum Amounts. .................................21
2.4.3. Conversion or Continuation. ...........................................21
2.4.4. Computations. .........................................................22
2.4.5. Maximum Lawful Rate of Interest. ......................................22
Section 2.5. Notes, Etc. ....................................................................23
2.5.1. Loans Evidenced by Notes. .............................................23
2.5.2. Notation of Amounts and Maturities, Etc. ..............................23
2.5.3. Loan Account. .........................................................23
Section 2.6. Fees. ..........................................................................23
2.6.1. Commitment Fee. .......................................................23
2.6.2. Other Fees. ...........................................................23
2.6.3. Fees Non-Refundable. ..................................................24
Section 2.7. Termination and Reduction of Revolving Commitments. ............................24
2.7.1. ........................................................................24
2.7.2. ........................................................................24
Section 2.8. Repayments and Prepayments. ....................................................24
--------------------------
2.8.1. Repayment. ............................................................24
2.8.2. Mandatory Prepayment. .................................................24
2.8.3. Optional Prepayments ..................................................25
2.8.4. Payments Set Aside. ...................................................25
Section 2.9. Manner of Payment. .............................................................25
2.9.1. ........................................................................25
2.9.2. ........................................................................26
Section 2.10. Pro Rata Treatment. ............................................................26
2.10.1. ........................................................................26
2.10.2. ........................................................................26
2.10.3. ........................................................................26
2.10.4. ........................................................................26
Section 2.11. Mandatory Suspension and Conversion of LIBOR Rate Loans. .......................26
2.11.1. ........................................................................27
2.11.2. ........................................................................27
Section 2.12. Regulatory Changes. ............................................................27
2.12.1. Increased Costs. ......................................................27
2.12.2. Capital Costs. ........................................................27
Section 2.13. Taxes. .........................................................................28
2.13.1. ........................................................................28
2.13.2. ........................................................................28
2.13.3. ........................................................................28
Section 2.14. Compensation for Funding Losses. ...............................................29
Section 2.15. Certificates Regarding Yield Protection, Etc.....................................29
2.15.1. ........................................................................29
2.15.2. ........................................................................29
Section 2.16. Applicable Lending Office; Discretion of Lenders as to Manner of Funding. ......30
------------------------------------------------------------------------
ARTICLE 3. CONDITIONS TO LOANS............................................................................30
Section 3.1. Closing Conditions. ............................................................30
------------------
3.1.1. Closing Date. .........................................................30
3.1.2. Certain Documents. ....................................................30
3.1.3. Fees and Expenses Paid. ...............................................30
3.1.4. Satisfaction of Certain Conditions. ...................................30
3.1.5. Absence of Litigation Events. .........................................30
3.1.6. General. ..............................................................30
3.1.7. No Material Adverse Change. ...........................................31
Section 3.2. Conditions Precedent to Revolving Loans and Swingline Loans. ...................31
-----------------------------------------------------------
3.2.1. Occurrence of Closing Date. ...........................................31
3.2.2. Notice of Borrowing. ..................................................31
3.2.3. Representations and Warranties. .......................................31
3.2.4. No Default. ...........................................................31
3.2.5. No Material Adverse Change. ...........................................31
3.2.6. Satisfaction of Conditions. ...........................................31
3.2.7. No Violation of Applicable Law. .......................................31
ARTICLE 4. REPRESENTATIONS AND WARRANTIES.................................................................32
Section 4.1. Organization, Powers and Good Standing. ........................................32
Section 4.2. Authorization, Binding Effect, No Conflict, Etc. ...............................32
4.2.1. Authorization, Binding Effect, Etc......................................32
4.2.2. No Conflict.............................................................32
4.2.3. Governmental Approvals. ...............................................32
Section 4.3. Subsidiaries; Investments . ....................................................33
4.3.1. Subsidiaries. .........................................................33
4.3.2. Borrower Capital Stock. ...............................................33
Section 4.4. Financial Information............................................................33
4.4.1. ........................................................................33
4.4.2. ........................................................................33
4.4.3. ........................................................................34
Section 4.5. No Material Adverse Changes; Solvency. .........................................34
Section 4.6. Litigation. ....................................................................34
Section 4.7. Agreements; Applicable Law. ....................................................34
Section 4.8. Governmental Regulation. .......................................................34
Section 4.9. Margin Regulations. ............................................................34
Section 4.10. Employee Benefit Plans. ........................................................35
4.10.1. ........................................................................35
4.10.2. ........................................................................35
Section 4.11. Title to Property. .............................................................35
Section 4.12. Intellectual Property, Etc. ....................................................35
Section 4.13. Environmental Condition. .......................................................36
4.13.1. ........................................................................36
Section 4.14. Absence of Certain Restrictions. ...............................................36
Section 4.15. Labor Matters. .................................................................36
Section 4.16. Disclosure. ....................................................................36
ARTICLE 5. AFFIRMATIVE COVENANTS OF THE BORROWERS.........................................................37
Section 5.1. Financial Statements and Other Reports. ........................................37
--------------------------------------
5.1.1. ........................................................................37
5.1.2. ........................................................................37
5.1.3. ........................................................................37
5.1.4. ........................................................................38
5.1.5. ........................................................................38
5.1.6. ........................................................................38
5.1.7. ........................................................................38
5.1.8. ........................................................................38
5.1.9. ........................................................................38
5.1.10. ........................................................................38
5.1.11. ........................................................................38
5.1.12. ........................................................................39
5.1.13. ........................................................................39
Section 5.2. Records and Inspection. ........................................................39
Section 5.3. Audits of the Collateral. ......................................................39
Section 5.4. Corporate Existence, Etc. ......................................................39
Section 5.5. Payment of Taxes. ..............................................................39
Section 5.6. Maintenance of Properties. .....................................................39
Section 5.7. Maintenance of Insurance. ......................................................40
5.7.1. ........................................................................40
5.7.2. ........................................................................40
5.7.3. ........................................................................40
Section 5.8. Conduct of Business. ...........................................................41
Section 5.9. Future Information. ............................................................41
Section 5.10. New Borrowers and Additional Collateral. .......................................41
5.10.1. ........................................................................41
Section 5.11. Subordination of Intercompany Debt. ............................................41
Section 5.12. Environmental Compliance. ......................................................42
Section 5.13. New Consolidated Subsidiaries To Become Borrowers. .............................42
ARTICLE 6. NEGATIVE COVENANTS OF THE BORROWERS............................................................42
Section 6.1. Liens. .........................................................................42
-----
6.1.1. ........................................................................42
6.1.2. ........................................................................42
6.1.3. ........................................................................42
6.1.4. ........................................................................43
6.1.5. ........................................................................43
6.1.6. ........................................................................43
6.1.7. ........................................................................43
Section 6.2. Debt. ..........................................................................43
----
6.2.1. ........................................................................43
6.2.2. ........................................................................43
6.2.3. ........................................................................43
6.2.4. ........................................................................43
6.2.5. ........................................................................43
6.2.6. ........................................................................44
6.2.7. ........................................................................44
6.2.8. ........................................................................44
Section 6.3. Restricted Payments. ...........................................................44
Section 6.4. Investments. ...................................................................44
-----------
6.4.1. ........................................................................44
6.4.2. ........................................................................44
6.4.3. ........................................................................44
6.4.4. ........................................................................44
6.4.5. ........................................................................44
Section 6.5. Financial Covenants..............................................................45
-------------------
6.5.1. Leverage Ratio. .......................................................45
6.5.2. Quick Ratio. ..........................................................45
6.5.3. Debt Service Coverage Ratio. ..........................................45
6.5.4. Operating Income and Net Income. ......................................45
Section 6.6. Restriction on Fundamental Changes. ............................................45
Section 6.7. Asset Dispositions; Sales of Receivables. ......................................45
6.7.1. ........................................................................45
6.7.2. ........................................................................46
6.7.3. ........................................................................46
Section 6.8. Transactions with Affiliates. ..................................................46
Section 6.9. Prepayment of Debt. ............................................................46
6.9.1. ........................................................................46
6.9.2. ........................................................................47
6.9.3. ........................................................................47
Section 6.10. Employee Benefit Plans. ........................................................47
Section 6.11. Amendments of Charter Documents. ...............................................47
Section 6.12. Restrictive Agreements. ........................................................47
Section 6.13. Negative Pledges, Etc. .........................................................47
6.13.1. ........................................................................47
6.13.2. ........................................................................47
ARTICLE 7. EVENTS OF DEFAULT..............................................................................48
Section 7.1. Events of Default. .............................................................48
-----------------
7.1.1. Failure to Make Payments. .............................................48
7.1.2. Default in Other Debt. ................................................48
7.1.3. Breach of Certain Covenants. ..........................................48
7.1.4. Certain Defaults Under Article 6. .....................................48
7.1.5. Other Defaults Under Loan Documents. ..................................48
7.1.6. Breach of Warranty. ...................................................48
7.1.7. Involuntary Bankruptcy; Appointment of Receiver, Etc. .................49
7.1.8. Voluntary Bankruptcy; Appointment of Receiver, Etc. ...................49
7.1.9. Change of Control. ....................................................49
7.1.10. Termination of Loan Documents, Etc. ...................................49
7.1.11. Material Adverse Change. ..............................................49
7.1.12. Judgments and Attachments. ............................................49
Section 7.2. Remedies. ......................................................................50
7.2.1. ........................................................................50
7.2.2. ........................................................................50
ARTICLE 8. THE AGENT AND THE BANKS........................................................................50
Section 8.1. Authorization and Action. ......................................................50
------------------------
8.1.1. ........................................................................50
8.1.2. ........................................................................50
8.1.3. ........................................................................51
8.1.4. ........................................................................51
Section 8.2. Exculpation; Agent's Reliance; Etc. ............................................51
Section 8.3. Agent and Affiliates. ..........................................................52
Section 8.4. Lender Credit Decision. ........................................................52
Section 8.5. Indemnification. ...............................................................52
Section 8.6. Successor Agent. ...............................................................53
Section 8.7. Excess Payments. ...............................................................53
Section 8.8. Lender Parties. ................................................................53
Section 8.9. Collateral Matters. ............................................................54
------------------
8.9.1. ........................................................................54
8.9.2. ........................................................................54
8.9.3. ........................................................................54
8.9.4. ........................................................................54
8.9.5. ........................................................................54
Section 8.10. Payments; Availability of Funds; Certain Notices.................................55
8.10.1. ........................................................................55
8.10.2. ........................................................................55
8.10.3. ........................................................................55
Section 8.11. Obligations of Lender Parties Several; Enforcement by the Agent. ...............55
8.11.1. ........................................................................55
8.11.2. ........................................................................56
ARTICLE 9. MISCELLANEOUS..................................................................................56
Section 9.1. Expenses. ......................................................................56
9.1.1. ........................................................................56
9.1.2. ........................................................................56
Section 9.2. Indemnity. .....................................................................56
9.2.1. ........................................................................56
9.2.2. ........................................................................57
9.2.3. ........................................................................57
Section 9.3. Waivers; Amendments in Writing. ................................................57
9.3.1. ........................................................................57
Section 9.4. Cumulative Remedies; Failure or Delay. .........................................58
Section 9.5. Notices, Etc. ..................................................................58
Section 9.6. Successors and Assigns. ........................................................59
----------------------
9.6.1. ........................................................................59
9.6.2. ........................................................................59
9.6.3. ........................................................................59
9.6.4. ........................................................................59
9.6.5. ........................................................................60
9.6.6. ........................................................................60
Section 9.7. Confidentiality. ...............................................................60
Section 9.8. Governing Law. .................................................................60
Section 9.9. Choice of Forum. ...............................................................61
9.9.1. ........................................................................61
9.9.2. ........................................................................61
9.9.3. ........................................................................61
Section 9.10. Set Off. .......................................................................61
Section 9.11. Changes in Accounting Principles. ..............................................61
Section 9.12. Headings. ......................................................................62
Section 9.13. Severability. ..................................................................62
Section 9.14. Survival of Agreements, Representations and Warranties. ........................62
Section 9.15. Execution in Counterparts. .....................................................62
Section 9.16. Complete Agreement. ............................................................62
Section 9.17. Limitation of Liability. .......................................................62
Section 9.18. Waiver of Trial By Jury. .......................................................64
EXHIBITS
Exhibit A-1 Form of Revolving Loan Note
Exhibit A-2 Form of Swingline Note
Exhibit C-1 Form of Security Agreement
Exhibit C-2 Form of Pledge Agreement
Exhibit E-1 Form of Notice of Borrowing
Exhibit E-2 Form of Notice of Swingline Borrowing
Exhibit E-3 Form of Notice of Conversion/Continuation
Exhibit E-7 Form of Notice of Responsible Officers
Exhibit F-1 Form of Secretary's Certificate
Exhibit F-3 Form of Officers' Closing Certificate
Exhibit F-6 Form of Compliance Certificate
Exhibit G-1 Form of Borrower's Counsel Opinion
Exhibit H Form of Assignment and Acceptance
SCHEDULES
Schedule R-1 Consolidated Subsidiaries of Borrower
Schedule 1.1A Revolving Commitments
Schedule 1.1B Lender Information
Schedule 1.1C Existing Debt
Schedule 1.1D Existing Liens
Schedule 1.1E Applicable Margin & Fee Rate
Schedule 3.1.2. Closing Documents
Schedule 4.1. Organization of Borrower and Subsidiaries
Schedule 4.3. Subsidiaries and Other Investments
Schedule 4.6. Material Litigation
Schedule 4.13. Environmental Condition
Schedule 4.14. Certain Restrictions
Schedule 4.15. Labor Matters
Schedule 6.8. Existing Contractual Obligations
Schedule 9.5. Borrower Information
