EXHIBIT 10.1
CREDIT AGREEMENT
dated as of August 6, 2002
among
PROGRESSIVE SOFTWARE HOLDING, INC. and
PROGRESSIVE SOFTWARE, INC.,
as Borrowers,
ARK CLO 2000-1 LIMITED,
as Agent,
and
THE LENDERS PARTY HERETO
CREDIT AGREEMENT dated as of August 6, 2002, among PROGRESSIVE SOFTWARE
HOLDING, INC. ("Parent"), a Delaware Corporation, and PROGRESSIVE SOFTWARE,
INC., a North Carolina Corporation ("Progressive", and together with Parent, the
"Borrowers"), ARK CLO 2000-1 LIMITED ("ARK"), as the Agent (the "Agent"), and
the LENDERS party hereto from time to time.
RECITALS
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A. Capitalized terms used in these Recitals shall have the respective
meanings set forth for such terms in Section 1.1 hereof.
B. The Lenders have extended certain loans to Tridex Corporation ("Tridex")
and Progressive under that certain Credit Agreement dated as of April 17, 1998
among Fleet National Bank, Tridex and Progressive (as amended, the "Prior Credit
Agreement").
C. Tridex and Progressive commenced separate bankruptcy proceedings (the
"Bankruptcy Cases") on February 12, 2002 (the "Petition Date"). In connection
with the Bankruptcy Cases, Tridex and Progressive filed the Plan of
Reorganization pursuant to which, inter alia, the Lenders agreed to exchange
their prior loans for $5,300,000 of Term Loans to Borrowers and agreed to extend
to Borrowers up to$500,000 aggregate principal amount of Revolving Credit
Commitment.
D. The Borrowers have agreed to secure all of their obligations hereunder
by granting to the Agent, for the benefit of Lenders, a First Priority Lien on
substantially all of their assets, including a pledge of all of the Capital
Stock of each of their Subsidiaries.
AGREEMENT
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In consideration of the premises and the mutual covenants and the
agreements herein set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I
Defined Terms
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Section 1.1. Definitions. As used in this Agreement, including, without
limitation, the preamble, recitals, exhibits and schedules hereto, the following
terms have the meanings stated:
"Action" against a Person means an action, suit, litigation, arbitration,
investigation, complaint, contest, hearing, inquiry, inquest, audit, examination
or other proceeding threatened or pending against or affecting the Person or its
property, whether civil, criminal, administrative, investigative or appellate,
in law or equity before any arbitrator or Governmental Body.
"Affiliate" of a Person means any other Person (a) that directly or
indirectly controls, is controlled by or is under common control with, the
Person or any of its Subsidiaries, (b) that directly or indirectly beneficially
owns or holds 5% or more of any class of equity Security or other similar
interests of the Person or any of its Subsidiaries or (c) 5% or more of the
equity Securities of which is directly or indirectly beneficially owned or held
by the Person or any of its Subsidiaries. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, agreement or otherwise.
"Agent" has the meaning stated in the Heading of this Agreement.
"Agreement" means this Credit Agreement, as it may be amended, supplemented
or otherwise modified from time to time.
"Assignment Agreement" has the meaning stated in Section 10.4(b).
"Authorized Officer" means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of its vice presidents (or the equivalent thereof),
and such Person's chief financial officer or treasurer.
"Bankruptcy Cases" has the meaning stated in the Recitals of this
Agreement.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Borrower" has the meaning stated in the Heading of this Agreement.
"Borrowing" means the making of a Loan.
"Borrowing Date" means the date of a Borrowing.
"Borrowing Base" means an amount equal to 70% of Eligible Accounts
Receivable in excess of $400,000.00; provided, however, that in no event shall
the Borrowing Base exceed the aggregate amount of Revolving Credit Commitments
then in effect.
"Borrowing Base Certificate" has the meaning stated in Section 3.1(o).
"Business Day" means any day excluding Saturday, Sunday and any day which
is a legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close.
"Capital Lease" means, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is or should be accounted for as a capital lease on the balance sheet
of that Person.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including, without limitation, partnership interests and membership interests,
and any and all warrants, rights or options to purchase or other arrangements or
rights to acquire any of the foregoing.
"Capitalized Lease Obligation" means any Indebtedness consisting of
obligations under a Capital Lease.
"Change of Control" means any one or more of the following events:
(i) Any individual, corporation (other than any Borrower or any
Subsidiary), partnership, trust, association, pool, syndicate, or any other
entity or any group of persons acting in concert (other than (x) any employee
benefit plan (or any trust forming a part thereof) of any Borrower or any
Subsidiary or (y) any person or group of persons who shall directly or
indirectly own twenty percent (20%) or more of the Common Stock to be
distributed as of the Closing Date in connection with the consummation of the
Plan of Reorganization) becomes the beneficial owner, as that concept is defined
in Rule 13d-3 promulgated by the Securities and Exchange Commission under the
Exchange Act of securities of any Borrower possessing either (X) thirty percent
(30%) or more of the voting power for the election of directors of such Borrower
or (Y) thirty percent (30%) or more in value of the outstanding equity
securities (or the right to acquire thirty (30%) per cent or more) of such
Borrower;
(ii) There shall be consummated any consolidation, merger, or other
business combination involving any Borrower or the securities of any Borrower in
which (X) holders of voting securities of such Borrower immediately prior to
such consummation own, as a group, immediately after such consummation, voting
securities of such Borrower (or, if such Borrower does not survive such
transaction, voting securities of the corporation surviving such transaction)
having less than fifty percent (50%) of the total voting power in an election of
directors of such Borrower (or such other surviving corporation) or (Y) holders
of equity securities of any Borrower immediately prior to such consummation own,
as a group, immediately after such consummation, equity securities of such
Borrower (or, if such Borrower does not survive such transaction, voting
securities of the corporation surviving such transaction) having less than fifty
percent (50%) of the equity securities of such Borrower (or such other surviving
corporation);
(iii) During any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the directors of any Borrower cease for
any reason other than voluntary resignation, death, disability, retirement or as
otherwise provided in the Credit Documents to constitute at least a majority
thereof unless the election, or the nomination for election by such Borrower's
shareholders, of each new director of such Borrower was approved by a vote of at
least two-thirds (2/3) of the directors of such Borrower then still in office
who were directors of such Borrower at the beginning of any such period; or
(iv) There shall be consummated any sale, lease, exchange, or other
transfer (in one transaction or a series of related transactions) of assets
representing all or substantially all of the assets of any Borrower (on a
consolidated basis) to a party which is not controlled by or under common
control with such Borrower either before or after such transaction or series of
related transactions.
"Closing Date" means the date on which the Term Loans are made.
"Closing Date Certificate" has the meaning stated in Section 3.1(j).
"Collateral" has the meaning stated in the Security Agreement.
"Collateral Documents" means the Security Agreement and all other
instruments, documents and agreements delivered by any Credit Party pursuant to
this Agreement or any of the other Credit Documents in order to grant to the
Agent, for the benefit of Lenders, a Lien on any real, personal or mixed
property of that Credit Party as security for the Obligations.
"Compliance Certificate" has the meaning stated in Section 5.1(d).
"Confirmation Order" means that certain order of the bankruptcy court
confirming the Plan of Reorganization of Tridex and Progressive in the
Bankruptcy Cases.
"Consents" means any approval, consent, authorization or order of, notice
to or registration or filing with, or any other action by, any Governmental Body
or other Person.
"Consolidated Adjusted EBITDA" means, for any period, an amount determined
for the Borrowers and their Subsidiaries on a consolidated basis equal to (a)
the sum, without duplication, of the amounts for such period of (i) Consolidated
Net Income, (ii) Consolidated Interest Expense, (iii) provisions for taxes based
on income, (iv) total depreciation expense, (v) total amortization expense, and
(vi) other non-cash items reducing Consolidated Net Income (excluding any such
non-cash item to the extent that it represents an accrual or reserve for
potential cash items in any future period or amortization of a prepaid cash item
that was paid in a prior period), minus (b) other non-cash items increasing
Consolidated Net Income for such period (excluding any such non-cash item to the
extent it represents the reversal of an accrual or reserve for potential cash
item in any prior period).
"Consolidated Capital Expenditures" means, for any period, the aggregate of
all expenditures of Borrowers and their Subsidiaries during such period
determined on a consolidated basis that, in accordance with GAAP, are or should
be included in "purchase of property and equipment" or similar items reflected
in the consolidated statement of cash flows of the Borrowers and their
Subsidiaries.
"Consolidated Cash Interest Expense" means, for any period, Consolidated
Interest Expense for such period, excluding any amount not payable in cash.
"Consolidated Current Assets" means, as at any date of determination, the
total assets of Borrowers and their Subsidiaries on a consolidated basis that
may properly be classified as current assets in conformity with GAAP, excluding
cash and cash equivalents.
"Consolidated Current Liabilities" means, as at any date of determination,
the total liabilities of the Borrowers and their Subsidiaries on a consolidated
basis that may properly be classified as current liabilities in conformity with
GAAP, excluding the current portion of long term debt.
"Consolidated Excess Cash Flow" means, for any period, an amount (if
positive) equal to (a) Consolidated Adjusted EBITDA for such period, minus (b)
the amount of Taxes actually paid by the Borrowers and their Subsidiaries during
such period, minus (c) the Consolidated Working Capital Adjustment, minus (d)
Consolidated Capital Expenditures for such period, minus (e) the sum, without
duplication, of the amounts for such period of (i) voluntary and scheduled
repayments of Consolidated Total Debt (excluding repayments of Revolving Loans),
plus (ii) Consolidated Cash Interest Expense.
"Consolidated Fixed Charges" means, for any period, the sum, without
duplication, of the amounts determined for Borrowers and their Subsidiaries on a
consolidated basis equal to (a) Consolidated Cash Interest Expense for such
period; (b) Scheduled Principal Payments for such period; and (c) Taxes required
to be paid during such period in respect of income and profits, as determined in
accordance with GAAP.
"Consolidated Interest Expense" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of the Borrowers and their Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Borrowers and
their Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers acceptance financing.
"Consolidated Net Income" means, for any period, (a) the net Income (or
loss) of the Borrowers and their Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP,
minus (b) (i) the income of any Person (other than a Subsidiary of the Borrower)
in which any other Person (other than Borrowers or any of their Subsidiaries)
has a joint interest, except to the extent of the amount of dividends or other
distributions actually paid to Borrowers or any of their Subsidiaries by such
Person during such period, (ii) the income (or loss) of any Person accrued prior
to the date it becomes a Subsidiary of any Borrower or is merged into or
consolidated with Borrowers or any of their Subsidiaries or that Person's assets
are acquired by Borrowers or any of their Subsidiaries, (iii) the income of any
Subsidiary of any Borrower to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses attributable
to returned surplus assets of any Pension Plan, and (v) (to the extent not
included in clauses (i) through (iv) above) any net extraordinary gains or net
non-cash extraordinary losses.
"Consolidated Total Debt" means, as at any date of determination, the
aggregate stated balance sheet amount of all Indebtedness of Borrowers and their
Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Consolidated Working Capital" means, as at any date of determination, the
excess of Consolidated Current Assets over Consolidated Current Liabilities.
"Consolidated Working Capital Adjustment" means, for any period on a
consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the end of such period exceeds (or is less
than) Consolidated Working Capital as of the beginning of such period.
"Credit Document" means any of this Agreement, the Notes, if any, the
Collateral Documents and all other documents, instruments or agreements executed
and delivered by a Credit Party for the benefit of Agent or any Lender in
connection herewith.
"Credit Party" means each Person (other than the Agent or any Lender or any
representative thereof) from time to time party to a Credit Document.
"Currency Agreement" means any foreign exchange contract, currency swap
agreement, futures contract, option contract, synthetic cap or other similar
agreement or arrangement, each of which is for the purpose of hedging the
foreign currency risk associated with Borrower's and its Subsidiaries'
operations.
"Default" means a condition or event that, after notice or lapse of time or
both, would constitute an Event of Default.
"Deposit Account" means a demand, time, savings, passbook or like account
with a bank, savings and loan association, credit union or like organization,
other than an account evidenced by a negotiable certificate of deposit.
"Dollars" and the sign "$" mean the lawful money of the United States of
America.
"Eligible Accounts Receivable" means, as of any date of determination
thereof, all Receivables of the Borrowers net of the Borrowers' customary
reserves, discounts, credits, returns, rebates, allowances or set-offs,
excluding the following:
(i) any Receivable unpaid for 90 or more days from the date of the original
invoice;
(ii) any Receivable evidenced by chattel paper or an instrument of any kind
unless such chattel paper or instrument is pledged and delivered to the Agent or
unless the total amount of such Receivables at any one time does not exceed 5%
of total Eligible Receivables at such time;
(iii) any Receivable which is owed by an account debtor which is insolvent or
the subject of any bankruptcy or insolvency proceedings of any kind or of any
other proceeding or action, which might have an adverse effect on the business
of such account debtor;
(iv) all Receivables deemed uncollectible by any Borrower or turned over to
collection agencies or outside collection attorneys;
(v) any Receivable which is not a valid, legally enforceable obligation of
the account debtor or is subject to any present or contingent, or any fact
exists which is the basis for any future, offset or counterclaim or other
defense on the part of such account debtor;
(vi) any Receivable not evidenced by an invoice or other documentation in
form reasonably acceptable to the Agent;
(vii) any Receivable which arises out of any transaction between (A) any
Borrower and (B) any Subsidiary or any Affiliate or any other Borrower;
(viii) any Receivable which is subject to any provision prohibiting its
assignment or requiring notice not theretofor given or of consent not theretofor
obtained to such assignment;
(ix) all Receivables from customers having their place of business outside
of the United States of America, except for such Receivables backed by either
(A) letters of credit denominated in Dollars issued to any Borrower by banks
acceptable to the Agent or (B) credit insurance policies acceptable to the
Agent;
(x) all Receivables arising out of or in connection with advance xxxxxxxx
of a customer's requirements of supplies over a period of time, but only to the
extent that such Receivables exceed 10% of all Eligible Receivables;
(xi) all Receivables that do not conform to the representations and
warranties contained in Article IV of the Security Agreement;
(xii) all Receivables in which the Agent does not have a first perfected
security interest, subject to no other Lien prior to or on a parity with such
security interest;
(xiii) all Receivables not denominated in Dollars;
(xiv) all Receivables from an account debtor if more than 50% of the
aggregate Dollar amount of invoices billed with respect to such account debtor
is more than 90 days past due according to the original terms of payment;
(xv) if any account debtor owes greater than 20% of the Dollar value of
total Receivables collectively owed to the Borrowers on a consolidated basis,
then all Receivables owed by such account debtor in excess of such 20%
limitation shall be ineligible;
(xvi) any Receivables in respect of which the U.S. Government or any agency
thereof is the account debtor;
(xvii) any Receivable which is owed by an account debtor who has disputed
liability or made any claim with respect to any other account due from such
account debtor to a Borrower, except the foregoing exclusion shall not apply to
any account debtor unless and until such disputed amounts equal or exceed twenty
percent (20%) of the aggregate Dollar amount of accounts due from such account
debtor; and
(xviii) any Receivable which is determined by the Agent, in the exercise of
its reasonable judgment, to be ineligible for any other reason generally
accepted in the commercial finance business as a reason for ineligibility.
"Eligible Assignee" means (a) any Lender or any Affiliate of any Lender,
and (b) any commercial bank, insurance company, investment or mutual fund or
other entity that is an "accredited investor" (as defined in Regulation D under
the Securities Act) and which extends credit or buys loans as one of its
businesses; provided, neither any Borrower nor any Affiliate of any Borrower
shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is or was sponsored, maintained or contributed to
by, or required to be contributed by, the Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates.
"Environmental Laws" means all federal, state, local and foreign
Regulations relating to pollution, human health, safety, industrial hygiene or
protection of the environment, including, without limitation, laws relating to
releases or threatened releases of Hazardous Materials or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, release,
disposal, cleanup, transport or handling of Hazardous Materials and all
Regulations with regard to record keeping, notification, disclosure and
reporting requirements respecting Hazardous Materials and all similar federal
and state Regulations.
"Environmental Liability" has the meaning stated in Section 4.13(a).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
"ERISA Affiliate" means, as applied to any Person, (a) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member,
(b) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member, and (c)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (a) above or any trade or business described in clause (b)
above is a member. Any former ERISA Affiliate of the Borrowers or any of their
Subsidiaries shall continue to be considered an ERISA Affiliate of the Borrowers
or any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of the Borrowers or such Subsidiary
and with respect to liabilities arising after such period for which the
Borrowers or such Subsidiary could be liable under the Internal Revenue Code or
ERISA.
"ERISA Event" means (a) a "reportable event" within the meaning of Section
4043 of ERISA and the regulations issued thereunder with respect to any Pension
Plan (excluding those for which the provision for 30-day notice to the PBGC has
been waived by regulation), (b) the failure to meet the minimum funding standard
of Section 412 of the Internal Revenue Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment under
Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan, (c) the
provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA, (d) the withdrawal by
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the termination
of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064
of ERISA, (e) the institution by the PBGC of proceedings to terminate any
Pension Plan, or the occurrence of any event or condition which might constitute
grounds under ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan, (f) the imposition of liability on Borrower, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA, (g) the withdrawal of Borrower, any of its Subsidiaries or any
of their respective ERISA Affiliates in a complete or partial withdrawal (within
the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if
there is any potential liability therefor, or the receipt by Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA, (h) the occurrence of an act or omission
which could give rise to the imposition on Borrower, any of its Subsidiaries or
any of their respective ERISA Affiliates of fines, penalties, taxes or related
charges under Chapter 43 of the Internal Revenue Code or under Section 409,
Section 502(c), (i) or (1), or Section 4071 of ERISA in respect of any Employee
Benefit Plan, (i) the assertion of a material claim (other than routine claims
for benefits) against any Employee Benefit Plan other than a Multiemployer Plan
or the assets thereof, or against Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates in connection with any Employee Benefit Plan,
(j) receipt from the Internal Revenue Service of notice of the failure of any
Pension Plan (or any other Employee Benefit Plan intended to be qualified under
Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of
the Internal Revenue Code, or the failure of any trust forming part of any
Pension Plan to qualify for exemption from taxation under Section 501(a) of the
Internal Revenue Code, or (k) the imposition of a Lien pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with
respect to any Pension Plan.
"Event of Default" means each of the conditions or events set forth in
Section 8.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, and any successor statute.
"Existing Indebtedness" means all Indebtedness of the Borrowers and their
Subsidiaries as of the Closing Date.
"Final Order" means an order, ruling, judgment, the operation or effect of
a judgment or other decree issued and entered by the bankruptcy court or by any
state or other federal court or other court of competent jurisdiction which has
not been reversed, vacated, stayed, modified or amended and as to which (i) the
time to appeal or petition for review, rehearing, certiorari, reargument or
retrial has expired and as to which no appeal or petition for review, rehearing,
certiorari, reargument or retrial is pending or (ii) any appeal or petition for
review, rehearing, certiorari, reargument or retrial has been finally decided
and no further appeal or petition for review, rehearing, certiorari, reargument
or retrial can be taken or granted.
"Financial Officer Certification" means, with respect to the financial
statements for which such certification is required, the certification of the
chief financial officer of Borrowers that such financial statements fairly
present, in all material respects, the financial condition of Borrowers and
their Subsidiaries as at the dates indicated and the results of their operations
and their cash flows for the periods indicated, subject to changes resulting
from audit and normal year-end adjustments.
"Financial Plan" has the meaning stated in Section 5.1(h).
"Financial Statements" means the financial statements referred to in
Sections 4.7(a) and (b).
"First Priority" means, with respect to any Lien purported to be created in
any Collateral pursuant to any Collateral Document, that such Lien is the only
Lien to which such Collateral is subject, other than Permitted Liens.
"Fiscal Quarter" means a fiscal quarter of any Fiscal Year.
"Fiscal Year" means the fiscal year of the Borrowers and their Subsidiaries
ending on December 31 of each calendar year.
"Fixed Charge Coverage Ratio" means the ratio as of the last day of any
Fiscal Quarter of (a) Consolidated Adjusted EBITDA for the applicable Fiscal
Quarter period then ending, to (b) Consolidated Fixed Charges for such Fiscal
Quarter period.
"Funding Notice" has the meaning stated in Section 3.2(a).
"GAAP" means generally accepted accounting principles in the United States
as in effect from time to time, consistently applied throughout the periods to
which reference is made.
"Governmental Body" means any agency, bureau, commission, court,
department, official, political subdivision, tribunal or other instrumentality
of any administrative, judicial, legislative, executive, regulatory, police or
taxing authority of any government, whether supranational, national, federal,
state, regional, provincial, local, domestic or foreign.
"Hazardous Materials" means any hazardous or toxic substance, waste,
contaminant, pollutant, gas or material, including, without limitation,
radioactive materials, oil, petroleum and petroleum products and constituents
thereof, which are regulated under any Environmental Law, including, without
limitation, any substance, waste or material which is (a) designated a
"pollutant", "hazardous substance", "extremely hazardous substance" or "toxic
chemical" under any Environmental Law, or (b) regulated in any way under the
Regulations of any state where the Borrowers or any of their Subsidiaries
conducts their business or owns any real property or has any leasehold or in
which any Relevant Property is located.
"Hedge Agreement" means an Interest Rate Agreement or a Currency Agreement
entered into in order to satisfy the requirements of this Agreement or otherwise
in the ordinary course of Borrower's or any of its Subsidiaries' businesses.
"Indebtedness" of a Person at any date means, without duplication, the sum
of (a) all obligations of the Person (i) for borrowed money, (ii) evidenced by
bonds, debentures, notes or other similar instruments, (iii) to pay the deferred
purchase price of property or services (except any such balance that constitutes
an accrued expense or trade payable), if and to the extent such indebtedness
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, (iv) as lessee under Capital Leases, (v) under letters of
credit or guarantees issued for the account of the Person, (vi) arising under
acceptance facilities, plus (b) all Indebtedness of others guaranteed by the
Person, plus (c) all Indebtedness of others secured by a Lien on any asset of
the Person whether or not such Indebtedness is assumed by the Person, plus (d)
the aggregate unfunded vested liabilities under each Pension Plan.
"Interest Coverage Ratio" means the ratio as of the last day of any Fiscal
Quarter of (a) Consolidated Adjusted EBITDA for the applicable Fiscal Quarter
period then ended, to (b) Consolidated Cash Interest Expense for such applicable
Fiscal Quarter Period.
"Interest Payment Date" means the first Business Day of each month,
commencing on the first such date to occur on the first month after the Closing
Date, and the final maturity date of such Loan.
"Interest Rate Agreement" means any interest rate swap agreement, interest
rate cap agreement, interest rate collar agreement, interest rate hedging
agreement or other similar agreement or arrangement, each of which is for the
purpose of hedging the interest rate exposure associated with Borrower's and its
Subsidiaries' operations.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
to the date hereof and from time to time hereafter, and any successor statute.
"Investment" means (a) any direct or indirect purchase or other acquisition
by Borrowers or any of their Subsidiaries of, or of a beneficial interest in,
any of the Securities of any other Person, (b) any direct or indirect
redemption, retirement, purchase or other acquisition for value, by any
Subsidiary of any Borrower from any Person (other than Borrower), of any Capital
Stock of such Person, and (c) any direct or indirect loan, advance (other than
advances to employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or capital
contribution by Borrowers or any of their Subsidiaries to any other Person
(other than Borrower), 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.
"IRS Refund" means refundable income taxes associated with the filing of
Tridex's and its Subsidiaries' federal and state income tax returns for the
years ended December 31, 2000 and 2001 and the related carryback of federal net
operating losses.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; provided, in
no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"Knowledge of the Borrower" means the knowledge, after reasonable inquiry,
of any of the following persons: Xxxxxxx Xxxxx and Xxxxxxxxxxx Xxxxx.
"Leasehold Property" means any leasehold interest of any Credit Party as
lessee under any lease of real property, other than any such leasehold interest
designated from time to time by Agent in its sole discretion as not being
required to be included in the Collateral.
"Lender" means each financial institution listed on the signature pages
hereto as a Lender, together with each such institution's successors and
permitted assigns.
"Lien" means (a) any security interest, lien, claim, pledge, mortgage, deed
of trust, hypothecation, charge, deposit arrangement, preference, priority,
license, lease, conveyance of any right, or encumbrance of any kind, including,
without limitation, any conditional sale agreement or other title retention
agreement, any Capital Lease or financing lease having substantially the same
economic effect as the foregoing and the filing of or agreement to give any
financing statement under the uniform commercial code or comparable law of any
jurisdiction to evidence any of the foregoing, and (b) in the case of
Securities, any purchase option, call or similar right of a third party with
respect to such Securities.
"Loan" means a Term Loan or a Revolving Loan.
"Margin Stock" as defined in Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"Material Adverse Effect" means a material adverse effect upon any of (a)
the business, results, operations, assets, properties, the liabilities,
condition (financial or otherwise), or prospects of the Borrowers and their
Subsidiaries, (b) the ability of any Credit Party to fully and timely perform
the Obligations, (c) the legality, validity or enforceability of any of the
Credit Documents, (d) the rights, remedies and benefits available to, or
conferred upon, the Agent and any Lender under any Credit Document, or (e) the
Collateral or the Agent's Liens, on behalf of Agent and Lenders on the
Collateral or the priority of such Liens.
"Multiemployer Plan" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"Narrative Report" means, with respect to the financial statements for
which such narrative report is required, a narrative report describing the
operations of Borrowers and their Subsidiaries in the form prepared for
presentation to senior management thereof for the applicable, Fiscal Quarter or
Fiscal Year and for the period from the beginning of the then current Fiscal
Year to the end of such period to which such financial statements relate.
"Note" means a Term Note or a Revolving Note.
"Obligations" means all obligations of every nature of each Credit Party
from time to time owed to the Agent, the Lenders or any of them or their
respective Affiliates under any Credit Document or Hedge Agreement, whether for
principal, interest (including interest which, but for the filing of a petition
in bankruptcy with respect to such Credit Party, would have accrued on any
Obligation, whether or not a claim is allowed against such Credit Party for such
interest in the related bankruptcy proceeding), payments for early termination
of Hedge Agreements, fees, expenses, indemnification or otherwise.
"Parent" has the meaning stated in the Recitals of this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to Section 412 of the Internal Revenue Code or Section
302 of ERISA.
"Permit" means any permit, license, approval, consent, permission, notice,
franchise, confirmation, endorsement, waiver, certification, registration,
qualification, clearance or other authorization issued, granted, given or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any federal, state, local or foreign Regulation.
"Permitted Indebtedness" means (a) the Existing Indebtedness, (b) the 000
Xxxxx Xxxxxx Secured Note, as defined in the Plan of Reorganization but solely
to the extent the 000 Xxxxx Xxxxxx Note is actually issued in accordance with
the terms of the Plan of Reorganization, (c) Indebtedness secured by Liens
permitted by Section 6.2, and (d) Purchase Money Indebtedness in an aggregate
amount not to exceed the Maximum Consolidated Capital Expenditure for the
respective Fiscal Years set forth in Section 6.6(d) herein.
"Permitted Liens" means each of the Liens permitted pursuant to Section
6.2.
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Bodies.
"Petition Date" has the meaning stated in the Recitals of this Agreement.
"Plan of Merger" means that certain Plan of Merger dated as of August 6,
2002 by and between Tridex and Parent, providing for the merger of Tridex into
Parent with Parent being the surviving entity.
"Plan of Reorganization" means that certain First Amended Plan of
Reorganization of Tridex Corporation and Progressive Software, Inc. dated June
20, 2002.
"Prime Rate" means the rate published in the Eastern edition of The Wall
Street Journal as the "prime rate" from time to time.
"Principal Office" means, for the Agent, its office located at c/o
Patriarch Partners, LLC, 00 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
or such other office as the Agent may from time to time designate in writing to
Borrowers and each Lender.
"Prior Credit Agreement" has the meaning stated in the Recitals of this
Agreement.
"Progressive" has the meaning stated in the Recitals of this Agreement.
"Pro Rata Share" means (a) with respect to all payments, computations and
other matters relating to the Term Loans of any Lender, the percentage obtained
by dividing (i) the Term Loan Exposure of that Lender, by (ii) the aggregate
Term Loan Exposure of all Lenders; and (b) with respect to all payments,
computations and other matters relating to the Revolving Credit Commitment or
Revolving Loans of any Lender, the percentage obtained by dividing (i) the
Revolving Credit Exposure of that Lender, by (ii) the aggregate Revolving Credit
Exposure of all Lenders. For all other purposes with respect to each Lender,
"Pro Rata Share" means the percentage obtained by dividing (x) an amount equal
to the sum of the Term Loan Exposure and the Revolving Credit Exposure of that
Lender, by (y) an amount equal to the sum of the aggregate Term Loan Exposure
and the aggregate Revolving Credit Exposure of all Lenders.
"Projections" has the meaning stated in Section 4.7(d).
"Purchase Money Indebtedness" means Indebtedness (other than the
Obligations) incurred at the time of, or within 20 days after, the acquisition
of any fixed assets for the purpose of financing all or any part of the
acquisition cost thereof and Capitalized Lease Obligations.
"Register" as defined in Section 2.3(b).
"Regulation" means each applicable law, rule, regulation, order, guidance
or recommendation (or any hange in its interpretation or administration) by any
Governmental Body, central bank or comparable agency and any request or
directive (whether or not having the force of law) of any of those Persons and
each judgment, injunction, order, writ, decree or award of any Governmental
Body, arbitrator or other Person.
"Relevant Property" means all sites, facilities, locations, real property
and leaseholds (a) presently or formerly owned, leased, used or operated by the
Borrowers or any of their Subsidiaries (whether or not such properties are
currently owned, leased, used or operated by the Borrowers or any of their
Subsidiaries), (b) at which any Hazardous Material has been transported,
disposed, treated, stored or released by the Borrowers or any of their
Subsidiaries, or (c) that are directly adjacent to any sites, facilities,
locations, real property or leaseholds presently or formerly owned, leased, used
or operated by the Borrowers or any of their Subsidiaries.
"Required Lenders" means one or more Lenders having or holding Term Loan
Exposure and/or Revolving Credit Exposure representing more than 50% of the sum
of (a) the aggregate Term Loan Exposure of all Lenders, and (b) the aggregate
Revolving Credit Exposure of all Lenders.
"Restricted Junior Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of any
Borrower now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (b) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of any Borrower
now or hereafter outstanding, and (c) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of any Borrower now or hereafter outstanding.
"Revolving Credit Commitment" means the commitment of a Lender to make or
otherwise fund any Revolving Loan. The amount of each Lender's Revolving Credit
Commitment, if any, is set forth on Exhibit 1.1(a) or in the applicable
Assignment Agreement, subject to any adjustment or reduction pursuant to the
terms and conditions hereof. The aggregate amount of the Revolving Loan
Commitments as of the Closing Date is $500,000.00.
"Revolving Credit Commitment Period" means the period from the Closing Date
to but excluding the Revolving Credit Commitment Termination Date.
"Revolving Credit Commitment Termination Date" means the earliest to occur
of (a) the date which is 6 months after the Closing Date, (b) the date the
Revolving Credit Commitments are permanently reduced to zero pursuant to this
Agreement, (c) the date on which any Borrower receives any cash in connection
with or as a result of the IRS Refund, and (d) the date of the termination of
the Revolving Credit Commitments pursuant to Section 8.1 and 8.2.
"Revolving Credit Exposure" means, with respect to any Lender as of any
date of determination, (a) prior to the termination of the Revolving Credit
Commitments, that Lender's Revolving Credit Commitment, and (b) after the
termination of the Revolving Credit Commitments, the aggregate outstanding
principal amount of the Revolving Loans of that Lender.
"Revolving Loan" means a Loan made by a Lender to Borrowers pursuant to
Section 2.1(b).
"Revolving Note" has the meaning stated in Section 2.3(c)(i).
"Scheduled Principal Payments" means, for any fiscal period, the aggregate
amount of all principal required to be paid by the Borrowers during such period
under Section 2.5 herein in respect of the Term Loans.
"Securities" means any stock, shares, partnership interests, voting trust
certificates, certificates of interest or participation in any profit-sharing
agreement or arrangement, options, warrants, bonds, debentures, notes, or other
evidences of indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as "securities" or any
certificates of interest, shares or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and any successor statute.
"Security Agreement" has the meaning stated in Section 3.1(l).
"Solvent" means, with respect to any Person, that as of the date of
determination both (a)(i) the sum of such Person's debt (including contingent
liabilities) does not exceed the value of all of its property, at a fair
valuation, (ii) the present fair saleable value of the property of such Person
is not less than the amount that will be required to pay the probable
liabilities on such Person's then existing, debts as they become absolute, and
matured, (iii) such Person's capital is not unreasonably small in relation to
its business or any contemplated or undertaken transaction; and (iv) such Person
does not intend to incur, or believe (nor should it reasonably believe) that it
will incur, debts beyond its ability to pay such debts as they become due, and
(b) such Person is "solvent" within the meaning given that term and similar
terms under applicable laws relating to fraudulent transfers and conveyances.
For purposes of this definition, the amount of any contingent liability at any
time shall be computed as the amount that, in light of all of the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability (irrespective of whether
such contingent liabilities meet the criteria for accrual under Statement of
Financial Accounting Standard No. 5).
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof, provided, in determining the percentage of ownership interests of any
Person controlled by another Person, no ownership interest in the nature of a
"qualifying share" of the former Person shall be deemed to be outstanding.
"Tax" means any present or future tax, levy, impost, duty, assessment,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed, provided, "Tax on the overall net income" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person is organized or in which that Person's applicable principal office
(and/or, in the case of a Lender, its lending office) is located or in which
that Person (and/or, in the case of a Lender, its lending, office) is deemed to
be doing business on all or part of the net income, profits or gains (whether
worldwide, or only insofar as such income, profits or gains are considered to
arise in or to relate to a particular jurisdiction, or otherwise) of that Person
(and/or, in the case of a Lender, its applicable lending office).
"Term Loan" means a Term Loan made by a Lender to Borrowers pursuant to
Section 2.1(a).
"Term Loan Amount" means the amount of each Lender's Term Loan, as set
forth on Exhibit 1.1(b) or in the applicable Assignment Agreement, subject to
any adjustment or reduction pursuant to the terms and conditions hereof. The
aggregate amount of the Term Loan Amount as of the Closing Date is
$5,300,000.00.
"Term Loan Exposure" means, with respect to any Lender, as of any date of
determination, the outstanding principal amount of the Term Loans of such
Lender.
"Term Loan Maturity Date" means the earlier to occur of (a) August 6, 2007,
and (b) the date that all Term Loans shall become due and payable in full
hereunder, whether by acceleration or otherwise.
"Term Note" has the meaning stated in Section 2.3(c)(ii).
"Total Utilization of Revolving Credit Commitments" means, as at any date
of determination, the aggregate principal amount of all outstanding Revolving
Loans.
"Transfer" means a direct or indirect offer, transfer, sale, assignment,
pledge, hypothecation or other disposition of all or any interest.
"Tridex" has the meaning stated in the Recitals of this Agreement.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
ARTICLE II
Loans
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Section 2.1. Loans.
(a) Term Loans.
(i) General. As of the Closing Date, each Lender shall be deemed to
have exchanged its loans under the Prior Credit Agreement for its Term Loan
Amount. Any amount of Term Loans subsequently repaid or prepaid may not be
re-borrowed. Subject to Sections 2.6(a) and 2.7, all amounts owed hereunder
with respect to the Term Loans shall be paid in full no later than the Term
Loan Maturity Date.
(b) Revolving Loans.
(i) Revolving Credit Commitments. During the Revolving Credit
Commitment Period, subject to and upon the terms and conditions hereof,
each Lender, severally, and not jointly and severally, agrees to make
Revolving Loans to Borrowers in the aggregate amount up to but not
exceeding such Lender's Revolving Credit Commitment; provided, that after
giving effect to the making of any Revolving Loans in no event shall the
aggregate outstanding amount of Revolving Loans exceed the lower of (A) the
Borrowing Base then in effect and (B) the aggregate amount of Revolving
Credit Commitments then in effect. Amounts borrowed pursuant to this
Section 2.1(b) may be repaid and re-borrowed during the Revolving Credit
Commitment Period. Each Lender's Revolving Credit Commitment shall expire
on the Revolving Credit Commitment Termination Date and all Revolving Loans
and all other amounts owed hereunder with respect to the Revolving Loans
and the Revolving Credit Commitments shall be paid in full no later than
such date.
(ii) Borrowing Mechanics for Revolving Loans.
(A) Revolving Loans shall be made in an aggregate minimum amount
of $25,000 and integral multiples of $25,000 in excess of that amount.
(B) Whenever Borrowers desire that Lenders make Revolving Loans,
Borrowers shall deliver to Agent a fully executed Funding Notice no
later than 10:00 a.m. (New York City time) at least one Business Day
in advance of the proposed Borrowing Date.
(C) Notice of receipt of each Funding Notice in respect of
Revolving Loans, together with the amount of each Lender's Pro Rata
Share thereof, if any, together with the applicable interest rate,
shall be provided by Agent to each applicable Lender by facsimile with
reasonable promptness, but (provided, Agent shall have received such
notice by 10:00 a.m. (New York City time)) not later than 2:00 p.m.
(New York City time) on the same day as Agent's receipt of such Notice
from Borrowers.
(D) Each Lender shall make the amount of its Revolving Loan
available to Agent no later than 12:00 p.m. (New York City time) on
the applicable Borrowing Date by wire transfer of same day funds in
Dollars, at the Agent's Principal Office. Except as provided herein,
upon satisfaction or waiver of the conditions precedent specified
herein, Agent shall make the proceeds of such Revolving Loans
available to Borrowers on the applicable Borrowing Date by causing an
amount of same day funds in Dollars equal to the proceeds of all such
Revolving Loans received by Agent from Lenders to be credited to the
account of Borrowers designated in writing to Agent by Borrowers.
(E) Pro Rata Shares. All Loans shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for
any default by any other Lender in such other Lender's obligation to
make a Loan requested hereunder nor shall the Revolving Credit
Commitment of any Lender be increased or decreased as a result of a
default by any other Lender in such other Lender's obligation to make
a Loan requested hereunder.
Section 2.2. Use of Proceeds. The proceeds of the Revolving Loans made or
issued after the Closing Date shall be used by the Borrowers and their
Subsidiaries solely for working capital and general corporate purposes of the
Borrowers and their Subsidiaries. No portion of the proceeds of any Borrowing
shall be used by the Borrowers or any of their Subsidiaries in any manner that
might cause such Borrowing or the application of such proceeds to violate
Regulation T, Regulation U or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation thereof or to violate the
Exchange Act, in each case as in effect on the date or dates of such Borrowing
and such use of proceeds.
Section 2.3. Evidence of Debt; Register; Lenders' Books and Records; Notes.
(a) Lenders' Evidence of Debt. Each Lender shall maintain on its internal
records an account or accounts evidencing the Indebtedness of Borrowers to such
Lender, including the amounts of the Loans made by it and each repayment and
prepayment in respect thereof. Any such recordation shall be conclusive and
binding on Borrower, absent manifest error; provided, failure to make any such
recordation, or any error in such recordation, shall not affect any Lender's
Revolving Credit Commitments or Borrower's Obligations in respect of any
applicable Loans; and provided, further, in the event of any inconsistency
between the Register and any Lender's records, the recordations in the Register
shall govern.
(b) Register. Agent shall maintain at its Principal Office a register for
the recordation of the names and addresses of Lenders and the Revolving Credit
Commitments and Loans of each Lender from time to time (the "Register"). The
Register shall be available for inspection by Borrowers or any Lender at any
reasonable time and from time to time upon reasonable prior notice. Agent shall
record in the Register the Revolving Credit Commitments and the Loans, and each
repayment or prepayment in respect of the principal amount of the Loans, and any
such recordation shall be conclusive and binding on Borrowers and each Lender,
absent manifest error; provided, failure to make any such recordation, or any
error in such recordation, shall not affect any Lender's Revolving Credit
Commitments or Borrower's Obligations in respect of any Loan.
(c) Notes. If so requested by any Lender by written notice to Borrowers
(with a copy to Agent) at least two Business Days prior to the Closing Date, or
at any time thereafter, Borrowers shall execute and deliver to such Lender
(and/or, if applicable and if so specified in such notice, to any Person who is
an assignee of such Lender pursuant to Section 10.4) on the Closing Date (or, if
such notice is delivered after the Closing Date, promptly after Borrower's
receipt of such notice) (i) a promissory note, in the form of Exhibit 2.3(c)(i)
(each, a "Revolving Note"), to evidence such Lender's Revolving Loan, or (ii) a
promissory note, in the form of Exhibit 2.3(c)(ii) (each, a "Term Note"), to
evidence such Lender's Term Loan.
Section 2.4. Interest on Loans.
(a) Interest Rates. Except as otherwise set forth herein, each Loan shall
bear interest on the unpaid principal amount thereof from the date made through
repayment (whether by acceleration or otherwise) thereof at the Prime Rate, plus
2%.
(b) Calculation of Interest Rates. Interest payable pursuant to Section
2.4(a) shall be computed on the basis of a 365-day or 366-day year, as the case
may be, for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the making of such Loan
or the first day of an interest period applicable to such Loan shall be
included, and the date of payment of such Loan or the expiration date of an
interest period applicable to such Loan shall be excluded; provided, if a Loan
is repaid on the same day on which it is made, one day's interest shall be paid
on that Loan.
(c) Payment of Interest.
(i) Except as otherwise set forth in clause (ii) below, interest on
each Loan shall be payable in arrears on (A) each Interest Payment Date
applicable to that Loan, (B) any prepayment of that Loan, whether voluntary
or mandatory, to the extent accrued on the amount being prepaid, and (C) at
maturity, including final maturity.
(ii) Notwithstanding the provisions of clause (i) above, during the
period from the Closing Date through the date which is 6 months after the
Closing Date, on each Interest Payment Date occurring during such period,
any interest payable on any Term Loan or Revolving Loan accrued and payable
in accordance with the provisions of Section 2.4 hereof (each, an "Interest
Payment") shall be payable either, as elected by the Borrower, (A) in cash
or (B) by increasing the outstanding principal amount of such Term Loan or
Revolving Loan, as the case may be, by an amount equal to the Interest
Payment due on such Interest Payment Date. In the event that the Borrowers
shall elect to make an Interest Payment as provided in Section
2.4(c)(ii)(B), then for all purposes of this Agreement, the amount of such
Interest Payment shall be deemed to have been loaned by the Lenders to the
Borrowers on such Interest Payment Date and as of such Interest Payment
Date, the outstanding principal amount of the Term Loans and the Revolving
Loan, as the case may be, shall be increased by the amount of such Interest
Payment for all purposes of this Agreement.
(d) Default Interest. Upon the occurrence and during the continuance of an
Event of Default described in Section 8.1(a), the principal amount of all Loans
and, to the extent permitted by applicable law, any interest payments on the
Loans or any fees or other amounts owed hereunder not paid when due, in each
case whether at stated maturity, by notice of prepayment, by acceleration or
otherwise, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable on demand at a rate that is 2% per annum in excess of the interest rate
otherwise payable hereunder with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable hereunder on the Loans). Payment
or acceptance of the increased rates of interest provided for in this Section
2.4 is not a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any rights or
remedies of Agent or any Lender.
Section 2.5. Repayment; Scheduled Payments.
(a) Repayment. All of the Term Loans shall be due and payable, and the
Borrowers shall be required to repay all of the Term Loans, plus all accrued and
unpaid interest on the principal amounts of the Term Loans, on the Term Loan
Maturity Date. All of the Revolving Loans shall be due and payable, the
Revolving Credit Commitments shall be reduced to zero and the Borrowers shall be
required to repay all of the Revolving Loans, plus all accrued and unpaid
interest on the principal amounts of the Revolving Loans, on the Revolving
Credit Commitment Termination Date.
(b) Scheduled Payments. The principal amounts of the Term Loans shall be
repaid in the amounts set forth below on each of dates set forth below:
Date Term Loan Installments
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August 6, 2003 and $44,167.00 plus 1/120th of the amount of any
each month thereafter Interest Payments that have been added to the
principal amount in accordance with
Section 2.4(c)(ii)(B).
August 6, 2007 Entire unpaid principal balance and all
accrued interest and fees.
Notwithstanding the foregoing, such installments shall be reduced in
connection with any optional or mandatory prepayments of the Term Loans in
accordance with Sections 2.6 and 2.7.
Section 2.6. Optional Prepayments.
(a) Optional Prepayments. Any time and from time to time (i) with respect
to Term Loans, the Borrowers may prepay, without premium or penalty, any Term
Loans on any Business Day in whole or in part, in an aggregate minimum amount of
$25,000 and integral multiples of $25,000 in excess of that amount, and (ii)
with respect to Revolving Loans, Borrowers may prepay, without premium or
penalty, any Revolving Loans on any Business Day in whole or in part in an
aggregate minimum amount of $25,000 and integral multiples of $25,000 in excess
of that amount.
(b) Notice of Optional Prepayment. All such prepayments shall be made upon
not less than one Business Day's prior written or telephonic notice, in each
case given to Agent by 12:00 p.m. (New York City time) on the date required and,
if given by telephone, promptly confirmed in writing to Agent (and Agent will
promptly transmit such telephonic or original notice for Term Loans or Revolving
Loans, as the case may be, by facsimile or telephone to each Lender). Upon the
giving of any such notice, the principal amount of the Loans specified in such
notice shall become due and payable on the prepayment date specified therein.
Section 2.7. Mandatory Prepayments; Mandatory Commitment Reductions.
(a) Consolidated Excess Cash Flow. In the event that there shall be
Consolidated Excess Cash Flow at any time after the Closing Date, the Borrowers
shall prepay the Term Loans as follows:
(i) during the period from the Closing Date through December 31, 2002,
the Borrowers shall pay 25% of the Consolidated Excess Cash Flow for such
period to prepay the outstanding Term Loans, such amount to be paid on the
first Interest Payment Date following such period; and
(ii) during each Fiscal Quarter during the period from January 1, 2003
through the date on which the Term Loans shall have been repaid in full,
the Borrowers shall pay 25% of the Consolidated Excess Cash Flow for each
such Fiscal Quarter to prepay the outstanding Term Loans, such amount to be
paid at the same time as the reports or financial statements required under
Section 5.1 herein are due or on the date on which the Terms Loans shall
have been repaid in full, as the case may be; and
(iii) during each Fiscal Year during the period from January 1, 2003
through the date on which the Term Loans shall have been repaid in full,
the Borrowers shall pay 50% of the Consolidated Excess Cash Flow for such
Fiscal Year to prepay the outstanding Term Loans, such amount to be paid at
the same time as the reports or financial statements required under Section
5.1 herein are due or on the date on which the Terms Loans shall have been
repaid in full, as the case may be; provided, however, that payments
actually made by the Borrowers under clause (ii) above during such period
shall be credited to the required prepayments under this clause (iii).
(b) IRS Refund. In the event that the Borrowers shall receive the IRS
Refund, the Borrowers shall, within 5 days of receiving such IRS Refund, prepay
any outstanding Revolving Loans in the aggregate amount of such IRS Refund, and
the aggregate Revolving Credit Commitment shall be permanently be reduced by the
amount of any such IRS Refund.
(c) Revolving Loans. Borrowers shall from time to time prepay the Revolving
Loans to the extent necessary so that the aggregate outstanding amount of
Revolving Loans does not at any time exceed the lesser of (i) the Borrowing Base
then in effect and (ii) the aggregate amount of the Revolving Credit Commitments
then in effect.
(d) Prepayment Certificate. Concurrently with any prepayment of the Loans
and/or reduction of the Revolving Credit Commitments pursuant to Section 2.7(a)
or (b), Borrowers shall deliver to Agent a certificate of an Authorized Officer
demonstrating the calculation of the amount of Consolidated Excess Cash Flow or
the amount of the IRS Refund, as the case may be. In the event that Borrowers
shall subsequently determine that the actual amount received exceeded the amount
set forth in such certificate, Borrowers shall promptly make an additional
prepayment of the Loans in an amount equal to such excess, and Borrowers shall
concurrently therewith deliver to Agent a certificate of an Authorized Officer
demonstrating the derivation of such excess.
Section 2.8. Application of Prepayments.
(a) Application of Optional Prepayments. Any prepayment of any Loan
pursuant to Section 2.6(a) shall be applied as specified by Borrowers in the
applicable notice of prepayment; provided in the event Borrowers fails to
specify the Loans to which any such prepayment shall be applied, such prepayment
shall prepay each scheduled installment of principal on the Term Loans in
inverse order of due date.
(b) Application of Mandatory Prepayments. Any amount required to be paid
pursuant to Section 2.7 shall be applied to prepay each scheduled installment of
principal on the Term Loans in inverse order of due date to the full extent
thereof, and then to prepay the Revolving Loans to the full extent thereof and
to permanently reduce the Revolving Credit Commitments by the amount of such
prepayment.
Section 2.9. General Provisions Regarding Payments.
(a) Payments. All payments by Borrowers of principal, interest, fees and
other Obligations shall be made in Dollars in same day funds, without defense,
setoff or counterclaim, free of any restriction or condition, and delivered to
Agent not later than 12:00 p.m. (New York City time) on the date due at the
Agent's Principal Office for the account of Lenders. All funds received by Agent
after that time on such due date shall be deemed to have been paid by Borrowers
on the next succeeding Business Day.
(b) Non-Conforming Payments. The Agent shall deem any payment by or on
behalf of Borrowers hereunder that is not made in same day funds prior to 12:00
p.m. (New York City time) to be a non-conforming payment. Any such payment shall
not be deemed to have been received by Agent until the later of (i) the time
such funds become available funds, and (ii) the applicable next Business Day.
Agent shall give prompt telephonic notice to Borrowers and each applicable
Lender (confirmed in writing) if any payment is non-conforming. Any
non-conforming payment may constitute or become a Default or Event of Default in
accordance with the terms of Section 8.1(a). Interest shall continue to accrue
on any principal as to which a non-conforming payment is made until such funds
become available funds (but in no event less than the period from the date of
such payment to the next succeeding applicable Business Day) at the rate
determined pursuant to Section 2.4 from the date such amount was due and payable
until the date such amount is paid in full.
(c) Payments to Include Accrued Interest. All payments in respect of the
principal amount of any Loan (whether Mandatory or Optional) shall include
payment of accrued interest on the principal amount being, repaid or prepaid,
and all such payments (and, in any event, any payments in respect of any Loan on
a date when interest is due and payable with respect to such Loan) shall be
applied to the payment of interest before application to principal.
(d) Distributions by Agent. Agent shall promptly distribute to each Lender
at such address as such Lender shall indicate in writing, such Lender's
applicable Pro Rata Share of all payments and prepayments of principal and
interest due hereunder, together with all other amounts due thereto, including,
without limitation, all fees payable with respect thereto, to the extent
received by Agent.
(e) Business Days. Whenever any payment to be made hereunder shall be
stated to be due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder.
ARTICLE III
Conditions Precedent
--------------------
Section 3.1. Closing Date. The obligation of any Lender to make any Loan on
the Closing Date is subject to the satisfaction, or waiver in accordance with
Section 10.1, of the following conditions on or before the Closing Date:
(a) Secretary's Certificate. The Agent shall have received a certificate of
the secretary or assistant secretary, the manager or the general partner, as the
case may be, of each Credit Party, each substantially in the form of Exhibit
3.1(a), with respect to (i) the articles of incorporation, certificate of
formation or certificate of limited partnership, as the case may be, of such
Credit Party, (ii) the bylaws, operating agreement or limited partnership
agreement, as the case may be, of such Credit Party, (iii) the resolutions of
the board of directors, manager or general partner, as the case may be, of such
Credit Party approving each Credit Document to which such Credit Party is a
party and the other documents to be delivered by such Credit Party under the
Credit Documents and the performance of the obligations of such Credit Party
thereunder, and (iv) the names and true signatures of the officers of such
Credit Party or such other persons authorized to sign each Credit Document to
which such Credit Party is a party and the other documents to be delivered by it
under the Credit Documents.
(b) Organizational and Capital Structure. The organizational structure and
the capital structure of the Borrowers and their Subsidiaries, shall be as set
forth on Schedule 4.5.
(c) Good Standing Certificates. The Agent shall have received a good
standing certificate from the applicable Governmental Body of each Credit
Party's jurisdiction of incorporation, organization or formation and in each
jurisdiction in which it is qualified as a foreign corporation or other entity
to do business, each dated a recent date prior to the Closing Date.
(d) Plan of Reorganization. The Plan of Reorganization for Tridex and
Progressive shall have been confirmed by the Bankruptcy Court and the Bankruptcy
Court shall have entered the Confirmation Order which Order shall have become a
Final Order.
(e) Consents. The Agent shall have received copies of all Consents set
forth on Schedule 4.4, and each such Consent shall be in full force and effect
and in form and substance reasonably satisfactory to Agent.
(f) Financial Statements; Projections. The Agent shall have received (i)
the Financial Statements, and (ii) the Projections.
(g) Plan of Merger. The merger of Tridex with and into Parent in accordance
with the Plan of Merger shall have become effective.
(h) Evidence of Insurance. Agent shall have received a certificate from
Borrower's insurance broker or other evidence satisfactory to it that all
insurance required to be maintained pursuant to Section 5.9 is in full force and
effect and that Agent, for the benefit of Lenders has been named as additional
insured and loss payee thereunder to the extent required under Section 5.9.
(i) Opinions of Counsel. The Agent and the Lenders shall have received an
originally executed copy of the written opinion of Xxxxxxxx, Xxxxx & Xxxxxx LLP,
counsel for Credit Parties, in the form of Exhibit 3.1(i), and otherwise in form
and substance reasonably satisfactory to Agent.
(j) Closing Date Certificate. Agent shall have received an originally
executed Closing Date Certificate, in the form of Exhibit 3.1(j) (the "Closing
Date Certificate"), from the Borrower, together with all attachments thereto.
(k) UCC Financing Statements. Agent shall have received UCC Financing
Statements, duly executed by each applicable Credit Party with respect to all
personal and mixed property Collateral of such Credit Party, for filing in all
jurisdictions as may be necessary or, in the opinion of Agent, desirable, to
perfect the security interests created in such Collateral pursuant to the
Collateral Documents.
(l) Security Agreement. The Agent shall have received the Security
Agreement, in the form of Exhibit 3.1(l) (the "Security Agreement"), duly
executed and delivered by the Borrowers.
(m) Security Collateral. The Agent shall have received certificates,
instruments and promissory notes (which certificates, instruments and promissory
notes shall be accompanied by instruments of transfer or assignment duly
endorsed in blank and otherwise in form and substance satisfactory to Agent)
representing or evidencing all Security Collateral pledged pursuant to the
Security Agreement.
(n) Other Actions to Perfect Security Interests. The Agent shall have
received evidence that each Credit Party shall have taken or caused to be taken
any other action, executed and delivered or caused to be executed and delivered
any other agreement, document and instrument, and made or caused to be made any
other filing and recording (other than as set forth herein) reasonably required
by Agent.
(o) Borrowing Base Certificate. If the Borrowers desire that the Lenders
make Revolving Loans on the Closing Date, the Agent shall have received an
initial Borrowing Base Certificate, in the form of Exhibit 3.1(o) (a "Borrowing
Base Certificate") satisfactory to the Agent.
(p) Other Information. The Agent shall have received any other financial or
non-financial information regarding the Borrowers and their Subsidiaries as the
Agent or any Lender may reasonably request.
(q) Proceedings. All proceedings taken or to be taken in connection with
the transactions contemplated by this Agreement shall be satisfactory to the
Agent and its counsel.
Section 3.2. Conditions to Each Borrowing. The obligation of each Lender to
make any Loan on any Borrowing Date, including the Closing Date, are subject to
the satisfaction, or waiver in accordance with Section 10.1, of the following
conditions precedent:
(a) Funding Notice. The Agent shall have received a fully executed and
delivered Funding Notice, in the form of Exhibit 3.2(a) (each, a "Funding
Notice"), as provided in Section 2.1.
(b) Representations and Warranties. As of such Borrowing Date, the
representations, warranties and covenants of the Credit Parties contained in the
Credit Documents shall be true, correct and complied with on and as of that
Borrowing Date.
(c) No Default or Event of Default. As of such Borrowing Date, no event
shall have occurred and be continuing or would result from the consummation of
the applicable Borrowing that would constitute an Event of Default or a Default.
(d) Consents. The Agent shall have received such Consents and other
information, approvals, opinions or documents reasonably requested by the Agent
in connection with such Borrowing;
(e) Available Commitment. After making the Loans requested on such
Borrowing Date, the Total Utilization of Revolving Credit Commitments shall not
exceed the aggregate amount of Revolving Credit Commitments then in effect;
(f) Use of Proceeds. The Borrowers shall have confirmed that the proceeds
of such Borrowing shall be used only in accordance with the provisions of
Section 2.2;
(g) No Material Adverse Effect. No Material Adverse Effect shall have
occurred; and
(h) Borrowing Base Certificate. The Agent shall have received a current
Borrowing Base Certificate.
ARTICLE IV
Representations and Warranties
------------------------------
In order to induce the Lenders to enter into this Agreement and to make
each Borrowing to be made thereby, each Credit Party hereby represents and
warrants to each Lender, on the Closing Date and on each Borrowing Date as
follows.
Section 4.1. Existence and Power. Each of the Credit Parties (a) is a
corporation, limited liability company or limited partnership, as the case may
be, duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) is duly qualified under the laws of each
jurisdiction in which qualification is required to own, lease or license its
assets and properties and to carry on its business, and (c) has all necessary
corporate, limited liability company or partnership, as the case may be, power
and authority required to own, lease or license its assets and properties, to
carry on its business and to execute and deliver each of the Credit Documents
and to consummate the transactions contemplated thereby, except in the case of
clauses (b) and (c) where the failure to have such status, license,
qualification or authority could not reasonably be expected to have a Material
Adverse Effect.
Section 4.2. Authorization; Binding Effect. The execution and delivery by
the Credit Parties of each of the Credit Documents to which such Credit Parties
are a party, the performance by the Credit Parties of their obligations under
such Credit Documents and the consummation of the transactions contemplated
thereby has been duly authorized by all necessary corporate, limited liability
company or partnership, as the case may be, action on the part of the Credit
Parties. No other proceedings on the part of any Credit Party are necessary to
approve and adopt the Credit Documents or to approve the consummation of the
transactions contemplated thereby. Each of the Credit Documents is, or, when
executed and delivered in accordance with this Agreement will be, legal, valid
and binding obligations of the Credit Parties enforceable against the Credit
Parties in accordance with its terms, except that such enforcement (a) may be
limited by bankruptcy, insolvency, moratorium or similar laws affecting
creditors' rights generally and (b) is subject to the availability of equitable
remedies, as determined in the discretion of the court before which such a
proceeding may be brought.
Section 4.3. Contravention. Neither the execution, delivery and performance
of the Credit Documents by the Credit Parties nor the consummation of the
transactions contemplated thereby will (with or without notice or lapse of time
or both) (a) conflict with, violate or breach any provision of any Credit
Party's certificate of incorporation or bylaws, certificate of formation or
operating agreement or certificate of limited partnership or partnership
agreement, as the case may be, (b) conflict with, violate or breach any
Regulation by which the Credit Parties or any of their assets or properties may
be bound or affected, (c) conflict with, breach or result in a default under,
result in the acceleration of, or give rise to a right of termination,
cancellation, modification or acceleration or require any notice under, any
material contract or agreement to which any Credit Party or any of their assets
or properties may be bound or affected, (d) result in or require the creation or
imposition of any Lien on any of the Credit Parties' assets or properties, or
(e) result in a Material Adverse Effect.
Section 4.4. Consents. As of (a) the date of this Agreement, except for the
Consents set forth on Schedule 4.4, and (b) the Closing Date, all Consents have
been obtained which are required or advisable in connection with (i) the due
execution and delivery by the Credit Parties of the Credit Documents and the
performance of the Credit Parties' obligations thereunder and (ii) the
consummation of the transactions contemplated by the Credit Documents.
Section 4.5. Capitalization of the Borrowers. Immediately prior to the
consummation of the Plan of Merger, which shall take place on the Closing Date
and is a condition precedent set forth in Section 3.1(g) herein, Tridex had
total authorized capital stock consisting of 10,000,000 shares of common stock,
no par value, of which 5,654,289 shares were issued and outstanding, and
2,000,000 shares of preferred stock, $1.00 par value, of which none were issued
and outstanding. All of the issued and outstanding shares of common stock of
Tridex were duly authorized, validly issued and are fully paid and
nonassessable. The authorized Capital Stock of Parent consists of (i) 5,000,000
shares of common stock, of which 4,200,000 are designated Series A of which
approximately 3,769,530 shares are issued and outstanding, and (ii) 800,000
shares are designated as Series B, of which approximately 376,953 shares are
issued and outstanding, and (iii) 1,000,000 shares of preferred stock, of which
none are issued and outstanding. All of the issued and outstanding shares of
common stock and preferred stock have been duly authorized, validly issued and
are fully paid and nonassessable. Except for such shares of common stock and
preferred stock, there are no shares of Capital Stock of the Parent issued and
outstanding. The authorized Capital Stock of Progressive consists of (i) 100,000
shares of common stock, of which 10,000 shares are issued and outstanding. All
of the issued and outstanding shares of common stock have been duly authorized,
validly issued and are fully paid and nonassessable. Except for such shares of
common stock and preferred stock, there are no shares of Capital Stock of
Progressive issued and outstanding.
Section 4.6. Subsidiaries and Other Securities.
(a) Subsidiaries. Schedule 4.6(a) sets forth a true, correct and complete
list of each Subsidiary of the Borrower, showing (i) the jurisdiction of its
organization and jurisdictions in which it is qualified to do business, (ii) the
number of shares of Capital Stock of each class (A) authorized and (B) issued
and outstanding, (iii) the percentage of the outstanding shares of Capital Stock
of each Subsidiary owned directly or indirectly by the Borrower, (iv) the names
of the record holders of each class of outstanding shares of Capital Stock of
the Subsidiaries and the number of such shares held by each such holder, (v) the
number of shares of Capital Stock of each Subsidiary covered by all outstanding
options, warrants, rights of conversion or purchase, and similar rights, (vi)
the percentage of those options, warrants or rights owned directly or indirectly
by the Borrower, and (vii) the names of the record holders of such options,
warrants and rights and the number of such options, warrants and rights held by
each such holder.
(b) Subsidiary Capital Stock. All outstanding shares of Capital Stock of
each Subsidiary are duly authorized, validly issued, fully paid and
nonassessable and are free of any preemptive rights and, except as set forth on
Schedule 4.6(a), are owned, directly or indirectly, beneficially and of record
by the Borrower(s) free and clear of all Liens and any options, warrants and
other rights, other than the Permitted Liens created by and under the Credit
Documents.
(c) Securities. Schedule 4.6(c) sets forth a true, correct and complete
list and description of all Securities in which the Borrowers or any of their
Subsidiaries has an interest. Each of the Securities listed on Schedule 4.6(c)
that is an equity Security is duly authorized, validly issued, fully paid and
non-assessable. Each of the Securities listed on Schedule 4.6(c) that is a debt
Security is duly authorized and validly issued and constitutes the legal, valid
and binding obligation of the issuer thereof and each guarantor thereof. All of
the Securities listed on Schedule 4.6(c) are owned, beneficially and of record,
by the Borrower(s) or one of its Subsidiaries.
(d) No Assets. Allu Realty Trust, a Massachusetts business trust, is a
wholly owned subsidiary of the Parent and is a non-operating entity that has no
assets other than any interest it may have in and to the adversary proceeding
commenced under the Parent's Bankruptcy Case encaptioned "Ark CLO 2000-1,
Limited v. 000 Xxxxx Xxxxxx, Inc. and Tridex Corporation", Adv. Proc. No.
02-5031( AHWS), currently pending in the United States Bankruptcy Court for the
District of Connecticut, Bridgeport Division. RIL Corporation, a Connecticut
corporation, is a wholly owned subsidiary of the Parent and is a non-operating
entity that has no assets other than (a) that certain Promissory Note dated
January 21, 2000, executed by Xxxxxx X. Xxxxxxx, an individual, and STJ
Holdings, LLC, a Connecticut limited liability company, and made payable to the
order of RIL Corporation in the stated principal amount of One Hundred Thirteen
Thousand and 00/100 Dollars ($113,000.00) and (b) a mortgage from STJ Holdings,
LLC to RIL Corporation dated January 21, 2000 and recorded in Volume 853, Page
195 of the Bloomfield Land Records.
Section 4.7. Financial Information.
(a) [Reserved]
(b) Other Financial Statements. The statements of operations, for the
period from the Petition Date through June 30, 2002, of Tridex and Progressive,
copies of which are attached hereto as Schedule 4.7(b), were prepared in
accordance with the requirements of the Bankruptcy Code and fairly present the
results of operations, of Tridex and Progressive for such period.
(c) Accounts Receivable. Schedule 4.7(c) sets forth a true, correct and
complete accounts receivable of Tridex and Progressive as of the Friday
immediately preceding the Closing Date.
(d) Projections. The projections of the Borrowers and their Subsidiaries
for the current (as of the Closing Date) Fiscal Year through the 2005 Fiscal
Year (the "Projections"), a copy of which is attached hereto as Exhibit 4.7(d),
were prepared based on good faith estimates and assumptions made by the
management of the Borrower; provided, the Projections are not to be viewed as
facts and that actual results during the period or periods covered by the
Projections may differ from such Projections and that the differences may be
material; provided further, as of the Closing Date, the Borrowers believe that
the Projections are reasonable and attainable.
Section 4.8. Taxes. Except as set forth in Schedule 4.8, each of the
Borrowers and their Subsidiaries has timely filed all Tax returns that are
required to be filed by them and have timely paid all Taxes due and owing by
them. All such Tax returns were correct and complete in all material respects
when filed. The charges, accruals and reserves on the books of the Borrowers and
each of their Subsidiaries in respect of Taxes are accurate and adequate and
were calculated in the ordinary course of business consistent with past
practice.
Section 4.9. Litigation. Except as set forth on Schedule 4.9, there is no
Action (a) against the Borrowers or any of their Subsidiaries, or (b) that
questions the validity of any of the Credit Documents or that involves or
relates to any of the transactions contemplated thereby, or (c) affecting any of
the Credit Parties' assets or properties. Except as specifically indicated on
Schedule 4.9, none of the matters disclosed on Schedule 4.9 has had or could
reasonably be expected to have a Material Adverse Effect.
Section 4.10. Permits; Compliance With Laws. The Borrowers and each of
their Subsidiaries, as the case may be, own, hold or possess all material
Permits necessary or advisable to entitle them to own, lease, operate and use
their properties and assets and to carry on and conduct their business at full
capacity, and all such Permits are validly held and in full force and effect,
except for those Permits, the failure of which to have could not reasonably be
expected to have a Material Adverse Effect. The Borrowers and their Subsidiaries
are in compliance in all material respects with each Regulation and Permit
applicable to the Borrower, its Subsidiaries, their operations or their assets
or properties.
Section 4.11. Absence of Certain Changes or Events. Except as contemplated
by the Plan of Reorganization, since the date of the Confirmation Order, (a)
there has not occurred a Material Adverse Effect or any event or circumstance
which could reasonably be expected to have, a Material Adverse Effect, (b) the
Borrowers and each of their Subsidiaries have conducted its business only in the
ordinary course consistent with past practice, and (c) none of the Borrowers or
any of their Subsidiaries has (i) Transferred any material portion of its
properties or assets or permitted any of their properties or assets to become
subject to any Liens or suffered to exist any Lien on any of their properties or
assets, or (ii) directly or indirectly declared, ordered, paid or made, or set
apart any sum or property for, any Restricted Junior Payment or agreed to do so
except as expressly permitted pursuant to Section 6.4.
Section 4.12. Assets.
(a) The Assets. Each of the Borrowers or one of its Subsidiaries (i) owns
or leases, (ii) has the legal and valid right to use and (iii) has good and
marketable title to or leasehold interest in, free and clear of all Liens (other
than Liens disclosed in the financial statements or as may be permitted or
created under the Credit Agreement), all of the properties and assets, tangible
or intangible, including, without limitation, all real property, leaseholds,
equipment, fixtures, inventory, contract rights, intellectual property and
personal property (x) used in or necessary for the conduct of their businesses,
and (y) reflected in the financial statements referred to in Section 4.7 (other
than any properties or assets disposed of in the ordinary course of business
consistent with the past practices of Borrowers and their Subsidiaries).
(b) Real Property and Leaseholds. Schedule 4.12(b) sets forth a true,
correct and complete list and location of all real property and leaseholds in
which the Borrowers or any of their Subsidiaries has an interest. Except as set
forth on Schedule 4.12(b), none of such real property is subject to any lease,
sublease or other similar arrangement.
Section 4.13. Environmental Matters.
(a) No Environmental Liability. Except as set forth on Schedule 4.13, to
the best knowledge of the Borrowers, none of the Borrowers or any of their
Subsidiaries has any actual, alleged or contingent liability or obligation (A)
relating to the violation, or alleged violation of any Environmental Law or
Permit, (B) with respect to, or relating to, the generation, presence, disposal,
release, threatened release, handling, transportation, treatment, storage,
cleanup or contamination of or by any Hazardous Material at any Relevant
Property, or (C) with respect to, or relating to, the cleanup of any Relevant
Property (any such liability or obligation referred to in clauses (A), (B) and
(C) being an "Environmental Liability").
(b) Basis for Environmental Claims. None of the Borrowers or any of their
Subsidiaries has been identified or listed as a potentially responsible party or
a responsible party under the federal Comprehensive Environmental Response,
Compensation and Liability Act or any other Environmental Law, nor have any of
the Borrowers or any of their Subsidiaries received any information request from
a Governmental Body under any Environmental Law. There are no underground
storage tanks, storing or previously storing Hazardous Materials at any
property, site or facility currently or, to the best knowledge of the Borrowers,
previously owned, leased or operated by the Borrowers or any of their
Subsidiaries. To the best knowledge of the Borrowers, there are no conditions,
occurrences or activities which could reasonably be expected to form the basis
of an Environmental Liability against the Borrowers or any of their Subsidiaries
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 4.14. Material Contracts. Except for defaults arising as a result
of the filing or commencement of the Bankruptcy Cases, none of the Borrowers or
any of their Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
of the material contracts and agreements to which the Borrowers or any of their
Subsidiaries is a party or by which they or any of their properties, assets or
rights are or may be bound or subject (the "Material Contracts"), and no
condition exists which, with the giving of notice or the lapse of time or both,
could constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.
Section 4.15. Indebtedness and Liens.
(a) Schedule of Indebtedness. Schedule 4.15(a) sets forth a correct and
complete list of (i) all Indebtedness in respect of which any Credit Party is in
any manner directly or contingently obligated, (ii) the maximum principal or
face amounts of the Indebtedness outstanding or which may be outstanding under
each of those agreements and other arrangements, and (iii) the maturity date of
such Indebtedness.
(b) Lien Schedule. Schedule 4.15(b) sets forth a correct and complete list
of all Liens on assets or property owned, leased, licensed or used by any of the
Credit Parties. The Borrowers have delivered to Lender a correct and complete
copy of each instrument, agreement, judgment or other evidence giving rise to a
Lien.
Section 4.16. Insurance. The Borrowers, their Subsidiaries, all of their
assets and properties and their businesses are covered by valid and currently
effective insurance policies or binders of insurance, including, without
limitation, general liability insurance, property insurance, workers'
compensation insurance and business interruption insurance, issued in favor of
the Borrowers or one of their Subsidiaries, in each case, with financially sound
and reputable insurance companies and in such types and amounts and covering
such risks as are consistent with customary practices and standards of companies
engaged in business and operations substantially similar to those of the
Borrowers and their Subsidiaries. Section 1.1.
Section 4.17. Governmental Regulation. None of the Borrowers or any of
their Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act or the Investment Company Act of 1940
or under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable. None of the Borrowers or any of their
Subsidiaries is a "registered mezzanine company" or company "controlled" by a
"registered investment company" or a "principal underwriter" of a "registered
investment company" as such terms are defined in the Investment Company Act of
1940.
Section 4.18. Margin Stock. None of the Borrowers or any of their
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose of purchasing or carrying any
Margin Stock.
Section 4.19. Employee Matters. None of the Borrowers or any of their
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (a) no unfair labor
practice complaint pending against the Borrowers or any of their Subsidiaries,
or to the Knowledge of the Borrower, threatened against any of them before the
National Labor Relations Board and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement that is so pending
against the Borrowers or any of their Subsidiaries or to the Knowledge of the
Borrower, threatened against any of them, (b) no strike or work stoppage in
existence or threatened involving the Borrowers or any of their Subsidiaries
that could reasonably be expected to have a Material Adverse Effect, and (c) to
the Knowledge of the Borrower, no union representation question existing with
respect to the employees of the Borrowers or any of their Subsidiaries and, to
the Knowledge of the Borrower, no union organization activity that is taking
place, except (with respect to any matter specified in clause (a), (b) or (c)
above, either individually or in the aggregate) such as is not reasonably likely
to have a Material Adverse Effect.
Section 4.20. Employee Benefit Plans. Each of the Borrowers and each of
their Subsidiaries and each of their respective ERISA Affiliates are in
compliance in all material respects with all applicable provisions and
requirements of ERISA and the Internal Revenue Code and the regulations and
published interpretations thereunder with respect to each Employee Benefit Plan,
and have performed all their obligations under each Employee Benefit Plan in all
material respects. Each Employee Benefit Plan which is intended to qualify under
Section 401(a) of the Internal Revenue Code is so qualified. No material
liability to the PBGC (other than required premium payments), the Internal
Revenue Service, any Employee Benefit Plan or any Trust established under Title
IV of ERISA has been or is expected to be incurred by the Borrowers or any of
their Subsidiaries or any of their ERISA Affiliates. No ERISA Event has occurred
or is reasonably expected to occur. Except to the extent required under Section
4980B of the Internal Revenue Code or similar state laws, no Employee Benefit
Plan provides health or welfare benefits (through the purchase of insurance or
otherwise) for any retired or former employee of the Borrower, any of its
Subsidiaries or any of their respective ERISA Affiliates. As of the most recent
valuation date for any Pension Plan, the amount of unfunded benefit liabilities
(as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate
for all Pension Plans (excluding for purposes of such computation any Pension
Plans with respect to which assets exceed benefit liabilities), does not exceed
$25,000. As of the most recent valuation date for each Multiemployer Plan for
which the actuarial report is available, the potential liability of the
Borrower, its Subsidiaries and their respective ERISA Affiliates for a complete
withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of
ERISA), when aggregated with such potential liability for a complete withdrawal
from all Multiemployer Plans, based on information available pursuant to Section
4221(e) of ERISA, does not exceed $25,000. Each of the Borrower, each of its
Subsidiaries and each of their ERISA Affiliates have complied with the
requirements of Section 515 of ERISA with respect to each Multiemployer Plan and
are not in material "default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan.
Section 4.21. Certain Fees. No broker's or finder's fee or commission will
be payable with respect hereto or any of the transactions contemplated hereby.
Section 4.22. Solvency. Each Credit Party is and, upon the incurrence of
any Obligation by such Credit Party on any date on which this representation and
warranty is made, will be, Solvent.
Section 4.23. No Misstatements or Omissions. No information, certificate,
schedule or report furnished or to be furnished by the Borrowers or any of their
Subsidiaries (or by their employees, representatives, counsel, accountants or
other professionals) to the Agent or the Lenders or any of their representatives
in connection with (a) the transactions contemplated by the Credit Documents,
(b) the preparation or negotiation of any Credit Document or (c) the
satisfaction of any conditions set forth in any Credit Documents and no
representation or warranty contained in the Credit Documents, contained or will
contain, as the case may be, any material misstatement of fact or omitted or
will omit, as the case may be, to state a material fact or any fact necessary to
make the statement contained therein not materially misleading.
Section 4.24. Full Disclosure. There are no facts pertaining to the
Borrower, its Subsidiaries, their assets or properties or their businesses which
could reasonably be expected to have a Material Adverse Effect and which have
not been disclosed in this Agreement. None of the representations or warranties
of the Borrowers or any of their Subsidiaries contained in the Credit Documents
is untrue or incorrect. There is no information which would contradict or is
inconsistent with any representation or warranty of the Borrowers or their
Subsidiaries contained in the Credit Documents.
ARTICLE V
Affirmative Covenants
---------------------
Each Credit Party covenants and agrees that so long as any Revolving Credit
Commitment is in effect and until payment in full of all Obligations, each
Credit Party shall perform, and shall cause each of its Subsidiaries to perform,
all covenants in this Article V.
Section 5.1. Financial Statements and Other Reports. The Borrowers will
deliver to Agent and Lenders:
(a) Monthly Reports. As soon as available, and in any event within 15 days
after the end of each month ending after the Closing Date, (i) the consolidated
balance sheet of the Borrowers and their Subsidiaries as at the end of such
month and the related consolidated statements of income of the Borrowers and
their Subsidiaries for such month and for the period from the beginning of the
then current Fiscal Year to the end of such month, setting forth in each case in
comparative form the corresponding figures from the Financial Plan for the
current Fiscal Year, to the extent prepared on a monthly basis, and, commencing
with the first full month following the first anniversary of the Closing Date,
the corresponding figures for the corresponding periods of the previous Fiscal
Year, all in reasonable detail, together with a Financial Officer Certification
and a brief narrative with respect thereto highlighting and/or summarizing
unusual or prominent items, and (ii) the accounts receivable agings for the
Borrowers and their Subsidiaries;
(b) Quarterly Financial Statements. As soon as available, and in any event
within 45 days after the end of each of the Fiscal Quarters, the consolidated
and consolidating balance sheets of the Borrowers and their Subsidiaries as at
the end of such Fiscal Quarter and the related consolidated (and with respect to
statements of income, consolidating) statements of income, stockholders' equity
and cash flows of the Borrowers and their Subsidiaries for such Fiscal Quarter
and for the period from the beginning of the then current Fiscal Year to the end
of such Fiscal Quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Financial Plan for the current Fiscal
Year, all in reasonable detail, together with a Financial Officer Certification
and a Narrative Report with respect thereto;
(c) Annual Financial Statements. As soon as available, and in any event
within 120 days after the end of each Fiscal Year, (i) the consolidated and
consolidating balance sheets of the Borrowers and their Subsidiaries as at the
end of such Fiscal Year and the related consolidated (and with respect to
statements of income, consolidating) statements of income, stockholders' equity
and cash flows of the Borrowers and their Subsidiaries for such Fiscal Year,
setting forth in each case in comparative form the corresponding figures for the
previous Fiscal Year and the corresponding figures from the Financial Plan for
the Fiscal Year covered by such financial statements, in reasonable detail,
together with a Financial Officer Certification and a Narrative Report with
respect thereto, and (ii) with respect such consolidated financial statements a
report thereon of or other independent certified public accountants of
recognized national standing selected by the Borrower, and reasonably
satisfactory to Agent (which report shall be unqualified as to going concern and
scope of audit, and shall state that such consolidated financial statements
fairly present, in all material respects, the consolidated financial position of
the Borrowers and their Subsidiaries as at the dates indicated and the results
of their operations and their cash flows for the periods indicated in conformity
with GAAP applied on a basis consistent with prior years and that the
examination by such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted auditing
standards) together with a written statement by such independent certified
public accountants stating (x) that their audit examination has included a
review of the terms of the Credit Documents, (y) whether, in connection
therewith, any condition or event that constitutes a Default or an Event of
Default has come to their attention and, if such a condition or event has come
to their attention, specifying the nature and period of existence thereof, and
(z) that nothing has come to their attention that causes them to believe that
the information contained in any Compliance Certificate is not correct or that
the matters set forth in such Compliance Certificate are not stated in
accordance with the terms hereof;
(d) Compliance Certificate. Together with each delivery of financial
statements pursuant to Sections 5.1(b) and 5.1(c), a duly executed and completed
Compliance Certificate, in the form of Exhibit 5.1(d) (each, a "Compliance
Certificate");
(e) Notice of Default. Promptly upon any officer of any of the Borrowers
obtaining knowledge (i) of any condition or event that constitutes a Default or
an Event of Default or that notice has been given to any Borrowers with respect
thereto, (ii) any Person has given any notice to the Borrowers or any of their
Subsidiaries or taken any other action with respect to any event or condition
set forth in Section 8.1(b), (iii) of any condition or event of a type required
to be disclosed in a current report on Form 8-K of the Securities and Exchange
Commission; or (iv) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect, a
certificate of its Authorized Officers specifying the nature and period of
existence of such condition, event or change, or specifying the notice given and
action taken by any such Person and the nature of such claimed Event of Default,
Default, default, event or condition, and what action Borrowers have taken, are
taking and propose to take with respect thereto;
(f) Notice of Litigation. Promptly upon any officer of any Borrower
obtaining knowledge of (i) the institution of, or non-frivolous threat of, any
Action not previously disclosed in writing by any Borrower to Lenders, or (ii)
any material development in any Action that, in the case of either (i) or (ii)
if adversely determined, could be reasonably expected to have a Material Adverse
Effect, or seeks to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated hereby, written notice thereof together with such other information
as may be reasonably available to any Borrower to enable Lenders and their
counsel to evaluate such matters;
(g) ERISA. (i) Promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying, the
nature thereof, what action the Borrower, any of its Subsidiaries or any of
their respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto, and
(ii) with reasonable promptness, copies of (A) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by Borrower, any of
its Subsidiaries or any of their respective ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan, (B) all notices received by
Borrower, any of its Subsidiaries or any of their respective ERISA Affiliates
from a Multiemployer Plan sponsor concerning an ERISA Event, and (C) copies of
such other documents or governmental reports or filings relating to any Employee
Benefit Plan as Agent shall reasonably request;
(h) Financial Plan. As soon as practicable and in any event no later than
30 days prior to the beginning of each Fiscal Year, a consolidated plan and
financial forecast for such Fiscal Year and the next succeeding Fiscal Years (a
"Financial Plan"), including (i) a forecasted consolidated balance sheet and
forecasted consolidated statements of income and cash flows of the Borrowers and
their Subsidiaries for each such Fiscal Year, together with an explanation of
the assumptions on which such forecasts are based and (ii) forecasted
consolidated statements of income and cash flows of the Borrowers and their
Subsidiaries for each Fiscal Quarter of each such Fiscal Year, together with an
explanation of the assumptions on which such forecasts are based;
(i) Borrowing Base Certificate. (i) As soon as available, and in any event
within 30 days of the Closing Date, an initial Borrowing Base Certificate,
certified by the Borrowers' President or Chief Financial Officer; (ii) each week
during which any Revolving Loan is outstanding, a Borrowing Base Certificate,
certified by the Borrowers' President or Chief Financial Officer; (iii) three
Business Days prior to any request by the Borrowers for Lenders to make
Revolving Loans, a Borrowing Base Certificate, certified by the Borrowers'
President or Chief Financial Officer; and (iv) together with the delivery of any
Funding Notice, a Borrowing Base Certificate, certified by the Borrowers'
President or Chief Financial Officer.
(j) Insurance Report. As soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance reasonably satisfactory
to Agent outlining all material insurance coverage maintained as of the date of
such report by Borrowers and their Subsidiaries and all material insurance
coverage planned to be maintained by the Borrowers and their Subsidiaries in the
immediately succeeding Fiscal Year;
(k) Environmental Reports and Audits. As soon as practicable following
receipt thereof copies of all environmental audits and reports with respect to
environmental matters at any Relevant Property or which relate to any
Environmental Liabilities;
(l) Balance Sheet. As soon as practicable, and (i) in any event within 15
days after the Closing Date, an unaudited balance sheet of the Borrowers and
their Subsidiaries, dated as of the Closing Date, that fairly presents (but
without giving effect to fresh-start accounting) the financial position of
Borrowers and their Subsidiaries as of the Closing Date and (ii) in any event
within 90 days after the Closing Date, an audited balance sheet of the Borrowers
and their Subsidiaries, dated as of the Closing Date (the "Balance Sheet"),
prepared in accordance with GAAP applied on a consistent basis in accordance
with the past practice of Parent (except as required under fresh-start
accounting).
(m) Other Information. Promptly upon their becoming available, copies of
(i) all financial statements, reports, notices and proxy statements sent or made
available generally by the Borrowers or any of their Subsidiaries to its
security holders acting in such capacity, (ii) all regular and periodic reports
and all registration statements (other than on Form S-8 or a similar form) and
prospectuses, if any, filed by the Borrowers or any of their Subsidiaries with
any securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, (iii) all press releases and other
statements made available generally by the Borrowers or any of their
Subsidiaries to the public concerning material developments in the business of
the Borrowers or any of their Subsidiaries, and (iv) such other information and
data with respect to the Borrowers or any of their Subsidiaries as from time to
time may be reasonably requested by Agent or any Lender.
Section 5.2. Maintenance of Existence. Each of the Borrowers and their
Subsidiaries shall preserve and maintain its corporate existence and good
standing in the jurisdiction of its incorporation, and qualify and remain
qualified as a foreign corporation in each jurisdiction in which both such
qualification is required and the failure to so qualify could have a Material
Adverse Effect on its business, properties, operations, prospects or condition
(financial or otherwise).
Section 5.3. Maintenance of Records. Each of the Borrowers and their
Subsidiaries shall keep adequate records and books of account reflecting all its
financial transactions, keep minute books containing accurate records of all
meetings and accurately reflecting all action of its shareholders, members and
its board of directors (including committees), as the case may be, and keep
stock books and ledgers correctly recording all transfers and issuances of all
capital stock, as the case may be.
Section 5.4. Maintenance of Properties. Each of the Borrowers and their
Subsidiaries shall maintain, keep and preserve all its tangible and intangible
assets and properties necessary or useful in the proper conduct of its business
in good working order and condition, ordinary wear and tear excepted.
Section 5.5. Conduct of Business. Each of the Borrowers and their
Subsidiaries shall continue to engage solely in the business and activities
engaged in by the Borrowers and their Subsidiaries on the Closing Date.
Section 5.6. Inspections; Lenders Meetings. Each Credit Party will, and
will cause each of its Subsidiaries to, permit any authorized representatives
designated by any Lender to visit and inspect any of the properties of any
Credit Party and any of its respective Subsidiaries, to inspect, copy and take
extracts from its and their financial and accounting records, and to discuss its
and their affairs, finances and accounts with its and their officers and
independent public accountants, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested. Borrowers will, upon the request of Agent or Required Lenders,
participate in a meeting of Agent and Lenders once during each Fiscal Year to be
held at Borrowers' corporate offices (or at such other location as may be agreed
to by Borrowers and Agent) at such time as may be agreed to by Borrowers and
Agent.
Section 5.7. Payment of Taxes. Each of the Borrowers and their Subsidiaries
shall promptly pay its Tax liabilities before the same shall become delinquent
or in default, except where (a) the validity or amount thereof is being
contested in good faith by appropriate proceedings and (b) any Borrower or any
Subsidiary, as the case may be, has set aside on its books adequate reserves
with respect thereto in accordance with GAAP.
Section 5.8. Use of Proceeds. Each of the Borrowers and their Subsidiaries
shall use the proceeds of the Loans solely as provided in Section 2.2.
Section 5.9. Insurance. Each of the Borrowers and their Subsidiaries shall
maintain insurance as provided in Section 4.16.
Section 5.10. Compliance With Laws. Each of the Borrowers and their
Subsidiaries shall comply in all respects with all Regulations, writs,
judgments, injunctions, orders, decrees and awards of any Governmental Body
applicable to it or its business, properties or operations, if a failure to
comply with any of the foregoing, individually or in the aggregate, could
materially and adversely affect its business, properties, operations, prospects
or conditions (financial or otherwise) or, in the case of the Borrower, its
ability to perform its obligations under any Credit Document to which it is or
may become a party.
Section 5.11. Compliance with Credit Documents. Each of the Borrowers and
their Subsidiaries shall perform and observe all of the terms and provisions of
each Credit Document to be performed or observed by it and maintain each Credit
Document in full force and effect.
Section 5.12. Intellectual Property. As soon as practicable, and in any
event within 30 days after the Closing Date, Borrower shall enter into a
software escrow agreement and a license agreement in the form attached hereto as
Exhibit 5.12 with such changes as required by the Software Escrow Agent (as such
term is defined in the Security Agreement) and reasonably acceptable to the
Agent and deliver the underlying software into escrow, all as provided for in
the Security Agreement.
Section 5.13. Collateral Assignment of Mortgage and Security Instruments.
As soon as practicable, and in any event within 30 days after the Closing Date,
RIL Corporation, a subsidiary of Borrower, shall enter into an agreement
providing for the collateral assignment of (a) that certain Promissory Note
dated January 21, 2000, executed by Xxxxxx X. Xxxxxxx, an individual, and STJ
Holdings, LLC, a Connecticut limited liability company, and made payable to the
order of RIL Corporation in the stated principal amount of One Hundred Thirteen
Thousand and 00/100 Dollars ($113,000.00), (b) a mortgage from STJ Holdings, LLC
to RIL Corporation dated January 21, 2000 and recorded in Volume 853, Page 195
of the Bloomfield Land Records and (c) other instruments relating to the
foregoing in form and substance reasonably acceptable to the Agent.
Section 5.14. Blocked Account Agreement. As soon as practicable, and in any
event within 30 days after the Closing Date, Borrower shall enter into a blocked
account agreement in the form attached hereto as Exhibit 5.14 and reasonably
acceptable to the Agent.
Section 5.15. Further Assurances. Each of the Borrowers and their
Subsidiaries shall promptly upon request by Lender, correct, and cause each of
the other parties to the Credit Document to promptly correct, any defect or
error that may be discovered in any Credit Document or in the execution,
acknowledgment or recordation of the Credit Document. Promptly upon request by
Lender, each of the Borrowers and their Subsidiaries shall execute, acknowledge,
deliver, record, file and register, any and all such further acts, deeds,
conveyances, documents, security agreements, pledge agreements, mortgages, deeds
of trust, trust deeds, assignments, financing statements and continuations,
notices of assignment, transfers, certificates, assurances and other instruments
as the Agent or any Lender may reasonably require from time to time in order to
carry out more effectively the purposes of each Credit Document.
ARTICLE VI
Negative Covenants
------------------
Each Credit Party covenants and agrees that, so long as any Revolving
Credit Commitment is in effect and until payment in full of all Obligations,
such Credit Party shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Article VI.
Section 6.1. Indebtedness. No Credit Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or
guaranty, or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness, except for the Obligations hereunder and the
Permitted Indebtedness.
Section 6.2. Liens. No Credit Party shall, nor shall it permit any of its
Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of the Borrowers or any of their Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except:
(a) Liens in favor of Agent for the benefit of Lenders granted pursuant to
any Credit Document;
(b) Liens for Taxes, or claims the payment of which is not, at the time,
required thereby;
(c) statutory Liens of landlords, banks (and rights of set-off), of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens imposed by law (other than any such Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA), in each case
incurred in the ordinary course of business (i) for amounts not yet overdue or
(ii) for amounts that are overdue and that (in the case of any such amounts
overdue for a period in excess of 5 days) are being contested in good faith by
appropriate proceedings, so long as such reserves or other appropriate
provisions, if any, as shall be required by GAAP shall have been made for any
such contested amounts;
(d) Liens incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other types of
social security, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other Indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the Collateral on account thereof;
(e) judgments and other similar Liens arising in connection with court
proceedings; provided that (i) the execution or other enforcement of such Liens
is effectively stayed and claims secured thereby are being actively contested in
good faith and by appropriate proceedings (ii) a reserve with respect to such
Liens is established on the books and records of Borrowers in such amount as is
required under GAAP, and (iii) Agent is reasonably satisfied that, while any
such Liens are being contested, there will be no impairment of the
enforceability, validity, or priority of any of the Agent's Liens;
(f) easements, rights-of-way, restrictions, encroachments, and other minor
defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
Borrowers or any of their Subsidiaries;
(g) Liens in favor of the holders of Permitted Indebtedness and securing
such Permitted Indebtedness; and
(h) purchase money Liens or the interests of lessors under Capital Leases
to the extent that such Liens or interests secure Purchase Money Indebtedness
and so long as: (i) any property subject to any of the foregoing is acquired by
a Borrower or any such Subsidiary in the ordinary course of its business and the
Lien on any such property is created contemporaneously with such acquisition;
(ii) the obligations secured by any Lien so created shall not exceed 100 percent
of the lesser of cost or fair market value as of the time or acquisition of the
property covered thereby to a Borrower or any such Subsidiary acquiring the
same; (iii) the obligations secured by all Liens created pursuant to this
subsection, together with all other Purchase Money Indebtedness, does not exceed
the maximum Purchase Money Indebtedness permitted herein; and (iv) such Lien
attaches only to the property so acquired and fixed improvements thereon.
Section 6.3. Equitable Lien. If any Credit Party or any of its Subsidiaries
shall create or assume any Lien upon any of its properties or assets, whether
now owned or hereafter acquired, other than Permitted Liens, it shall make or
cause to be made effective provision whereby the Obligations will be secured by
such Lien equally and ratably with any and all other Indebtedness secured
thereby as long as any such Indebtedness shall be so secured; provided,
notwithstanding the foregoing, this covenant shall not be construed as a consent
by Required Lenders to the creation or assumption of any such Lien not otherwise
permitted hereby. Except with respect to (a) specific property encumbered to
secure payment of particular Indebtedness or to be sold pursuant to an executed
agreement with respect to a permitted Asset Sale and (b) restrictions by reason
of customary provisions restricting assignments, subletting or other transfers
contained in leases, licenses and similar agreements entered into in the
ordinary course of business (provided, that such restrictions are limited to the
property or assets secured by such Liens or the property or assets subject to
such leases, licenses or similar agreements, as the case may be) no Credit Party
nor any of its Subsidiaries shall enter into any agreement prohibiting the
creation or assumption of any Lien upon any of its properties or assets, whether
now owned or hereafter acquired.
Section 6.4. Restricted Payments; Restrictions on Subsidiary Distributions.
(a) No Restricted Payments. No Credit Party shall, nor shall it permit any
of its Subsidiaries to, directly or indirectly, declare, order, pay, make or set
apart any sum for any Restricted Junior Payment.
(b) No Restrictions on Subsidiary Distributions. Except as provided herein,
no Credit Party shall, nor shall it permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary of any
Borrower to (i) pay dividends or make any other distributions on any of such
Subsidiary's Capital Stock owned by any Borrower or any other Subsidiary of any
Borrower, (ii) repay or prepay any Indebtedness owed by such Subsidiary to any
Borrower or any other Subsidiary of any Borrower, (iii) make loans or advances
to any Borrower or any other Subsidiary of any Borrower, or (iv) transfer any of
its property or assets to any Borrower or any other Subsidiary of any Borrower.
Section 6.5. Investments. No Credit Party shall, nor shall it permit any of
its Subsidiaries to, directly or indirectly, make or own any Investment in any
Person, including without limitation any Joint Venture, except:
(a) cash equivalents;
(b) Investments owned as of the Closing Date and Investments made after the
Closing Date in wholly-owned Subsidiaries of Borrower;
(c) Investments (i) in accounts receivable arising and trade credit granted
in the ordinary course of business and in any Securities received in
satisfaction or partial satisfaction thereof from financially troubled account
debtors and (ii) deposits, prepayments and other credits to suppliers made in
the ordinary course of business consistent with the past practices of Borrowers
and their Subsidiaries; and
(d) Consolidated Capital Expenditures permitted by Section 6.6(d).
Section 6.6. Financial Covenants.
(a) Interest Coverage Ratio. The Borrowers shall not permit the Interest
Coverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending March 31, 2003, to be less than 2.0 to 1.0.
(b) Fixed Charge Coverage Ratio. The Borrowers shall not permit the Fixed
Charge Coverage Ratio as of the last day of any Fiscal Quarter, beginning with
the Fiscal Quarter ending March 31, 2003, to be less than (i) during each Fiscal
Quarter ending on or before September 30, 2003, 1.25 to 1.00, and (ii) during
any four Fiscal Quarter periods beginning with the Fiscal Quarter ending
December 31, 2003 through the date on which all of the Obligations shall have
been repaid in full, 1.50 to 1.00.
(c) Consolidated Adjusted EBITDA. During the period beginning on August 1,
2002 and ending on December 31, 2002, the Borrowers shall not permit
Consolidated Adjusted EBITDA as set forth in the monthly reports delivered
pursuant to Section 5.1(a) to be less than (i) for any consecutive two months
during such period, an amount equal to 50% of the aggregated projected EBITDA
for each such two-month period as set forth on Exhibit 6.6(c), (ii) for the
period commencing August 1, 2002 and ending October 31, 2002, an amount equal to
70% of the aggregated projected EBITDA for such period as set forth on Exhibit
6.6(c), and (iii) for the period commencing August 1, 2002 and ending on
December 31, 2002, an amount equal to 75% of the aggregated projected EBITDA for
such period as set forth on Exhibit 6.6(c); provided, however, that in
calculating Consolidated Adjusted EBITDA for purposes of this clause (c),
Consolidated Adjusted EBITDA shall exclude (A) pre-August 1 2002 operating
expenses relating to the pre-August 1, 2002 period, (B) professional fees
incurred in connection with the Borrower's audit, and the preparation of the
Borrower's 2000 and 2001 Tax Returns, (C) professional fees incurred in
connection with the IRS Refund, (D) the loss of the security deposit in
connection with the negotiations with the Borrower's landlord, (E) $50,000 paid
to Xxxx Xxxxxx, and $25,000 paid to Xxxx Xxxxx for post-confirmation services,
but, in each case, only to the extent actually paid, (F) unpaid rent accrued
during the bankruptcy proceedings of Tridex and Progressive, not to exceed
$55,000 and (G) to the extent not already accounted for in (A) through (F)
above, expenses and income items presented as "Reorganization Items" pursuant to
the adoption of fresh-start accounting in accordance with GAAP.
(d) Maximum Consolidated Capital Expenditures. The Borrowers shall not, and
shall not permit its Subsidiaries to, make or incur Consolidated Capital
Expenditures (which includes Purchase Money Indebtedness and Capitalized Lease
Obligations), in any Fiscal Year indicated below, in an aggregate amount for the
Borrowers and their Subsidiaries in excess of (i) for the remainder of the 2002
Fiscal Year, $20,000, (ii) for the 2003 Fiscal Year, $40,000, and (iii) for each
of the 2004 and 2005 Fiscal Years, $100,000; provided, that if Borrowers
relocate their headquarters to a location other than the location of such
headquarters as of the Closing Date, Borrowers shall be permitted to incur up to
an additional $150,000 of Consolidated Capital Expenditures, but only for the
purpose of acquiring a communications system.
Section 6.7. Fundamental Changes; Disposition of Assets; Acquisitions. No
Credit Party shall, nor shall it permit, any of its Subsidiaries to, enter into
any transaction of merger or consolidation, or liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease or
sub-lease (as lessor or sublessor), transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its business, assets
or property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible, whether now owned or hereafter acquired, or acquire by
purchase or otherwise (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of business) the business,
property or fixed assets of, or stock or other evidence of beneficial ownership
of, any Person or any division or line of business or other business unit of any
Person, except:
(a) any Subsidiary of any Borrower may be merged with or into such
Borrower, or be liquidated, wound up or dissolved, or all or any part of its
business, property or assets may be conveyed, sold, leased, transferred or
otherwise disposed of, in one transaction or a series of transactions, to such
Borrower; provided, in the case of such a merger, such Borrowers shall be the
continuing or surviving Person;
(b) disposals of obsolete, worn-out or surplus property;
(c) Investments made in accordance with Section 6.5;
(d) disposals of other property and assets for cash in the aggregate amount
not less than fair market value of such property and assets provided that the
net cash proceeds of such other dispositions do not exceed $100,000 in the
aggregate in any twelve (12) month period; and
(e) entering into software licensing agreements in the ordinary course of
business consistent with past practices of Borrowers and their Subsidiaries.
Section 6.8. Disposal of Subsidiary Interests. Except for any sale of 100%
of the Capital Stock of any of its Subsidiaries in compliance with the
provisions of Section 6.7, no Credit Party shall (a) directly or indirectly
sell, assign, pledge or otherwise encumber or dispose of any Capital Stock of
any of its Subsidiaries, except to qualify directors if required by applicable
law, or (b) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any Capital Stock of any of
its Subsidiaries, except to another Credit Party (subject to the restrictions on
such disposition otherwise imposed herein under), or to qualify directors if
required by applicable law.
Section 6.9. Sales and Lease-Backs. No Credit Party shall, nor shall it
permit any of its Subsidiaries to, directly or indirectly, become or remain
liable as lessee or as a guarantor or other surety with respect to any lease of
any property (whether real, personal or mixed), whether now owned or hereafter
acquired, which such Credit Party (a) has sold or transferred or is to sell or
to transfer to any other Person (other than the Borrowers or any of their
Subsidiaries), or (b) intends to use for substantially the same purpose as any
other property which has been or is to be sold or transferred by such Credit
Party to any Person (other than the Borrowers or any of their Subsidiaries) in
connection with such lease.
Section 6.10. Transactions with Shareholders and Affiliates. No Credit
Party shall, nor shall it permit any of its Subsidiaries to, directly or
indirectly, enter into or permit to exist any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of Capital Stock of the
Borrowers or any of their Subsidiaries or with any Affiliate of the Borrowers or
of any such holder, on terms that are less favorable to the Borrowers or that
Subsidiary, as the case may be, than those that might be obtained at the time
from a Person who is not such a holder or Affiliate.
Section 6.11. Conduct of Business. From and after the Closing Date, no
Credit Party shall, nor shall it permit any of its Subsidiaries to, engage in
any business other than (a) the businesses engaged in by such Credit Party on
the Closing Date and similar or related businesses, and (b) such other lines of
business as may be consented to by Required Lenders.
Section 6.12. Fiscal Year. No Credit Party shall, nor shall it permit any
of its subsidiaries to change its Fiscal Year-end from December 31 without the
prior consent of the Agent, which consent shall not be unreasonably withheld.
ARTICLE VII
Increased Costs; Taxes; Indemnification; Set-Off
------------------------------------------------
Section 7.1. Increased Costs; Capital Adequacy. In the event that any
Lender shall have determined that the adoption, effectiveness, phase-in or
applicability after the Closing Date of any law, rule or regulation (or any
provision thereof) regarding capital adequacy, or any change therein or in the
interpretation or administration thereof by any Governmental Body, central bank
or comparable agency charged with the interpretation or administration thereof,
or compliance by any Lender (or its applicable lending office) with any
guideline, request or directive regarding capital adequacy (whether or not
having the force of law) of any such Governmental Body, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or any corporation controlling such Lender as a
consequence of, or with reference to, such Lender's Loans or Revolving Credit
Commitments or other obligations hereunder with respect to the Loans to a level
below that which such Lender or such controlling corporation could have achieved
but for such adoption, effectiveness, phase-in, applicability, change or
compliance (taking into consideration the policies of such Lender or such
controlling corporation with regard to capital adequacy), then from time to
time, within 5 Business Days after receipt by Borrowers from such Lender of the
statement referred to in the next sentence, Borrowers shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
controlling, corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Borrowers (with a copy to Agent) a written statement, setting
forth in reasonable detail the basis for calculating the additional amounts owed
to Lender under this Section, which statement shall be conclusive and binding,
upon all parties hereto absent manifest error.
Section 7.2. Taxes; Withholding, etc.
(a) Payments to Be Free and Clear. All sums payable by any Credit Party
hereunder and under the other Credit Documents shall (except to the extent
required by law) be paid free and clear of, and without any deduction or
withholding on account of, any Tax (other than a Tax on the overall net income
of any Lender) imposed, levied, collected, withheld or assessed by or within the
United States of America or any political subdivision in or of the United States
of America or any other jurisdiction from or to which a payment is made by or on
behalf of any Credit Party or by any federation or organization of which the
United States of America or any such jurisdiction is a member at the time of
payment.
(b) Withholding of Taxes. If any Credit Party or any other Person is
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by any Credit Party to Agent or any Lender under
any of the Credit Documents: (i) Borrowers shall notify Agent of any such
requirement or any change in any such requirement as soon as Borrowers becomes
aware of it, (ii) Borrowers shall pay any such Tax before the date on which
penalties attach thereto, such payment to be made (if the liability to pay is
imposed on any Credit Party) for its own account or (if that liability is
imposed on Agent or such Lender, as the case may be) on behalf of and in the
name of Agent or such Lender, (iii) the sum payable by such Credit Party in
respect of which the relevant deduction, withholding or payment is required
shall be increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, Agent or such Lender, as the case may
be, receives on the due date a net sum equal to what it would have received had
no such deduction, withholding or payment been required or made, and (iv) within
30 days after paying any sum from which it is required by law to make any
deduction or withholding, and within 30 days after the due date of payment of
any Tax which it is required by clause (ii) above to pay, Borrowers shall
deliver to Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to the relevant
taxing or other authority; provided, no such additional amount shall be required
to be paid to any Lender under clause (iii) above except to the extent that any
change after the date hereof (in the case of each Lender listed on the signature
pages hereof on the Closing Date) or after the effective date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender) in any such requirement for a deduction, withholding or payment as
is mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date hereof or at the date of
such Assignment Agreement, as the case may be, in respect of payments to such
Lender.
Section 7.3. Indemnification.
(a) Indemnification by the Borrowers. Each of the Borrowers and their
Subsidiaries will indemnify and defend the Agent, the Lenders and each of their
respective shareholders, partners, members, managers, directors, officers,
employees, agents and Affiliates (collectively, the "Indemnified Persons")
against and hold each Indemnified Person harmless from any and all liabilities,
obligations, losses, damages, costs, expenses, claims, penalties, Actions,
judgments, disbursements of any kind or nature whatsoever, interest, fines,
cleanup costs, settlements, costs of preparation and investigation, costs
incurred in enforcing this indemnity and reasonable attorneys' fees and expenses
(collectively, "Losses"), that the Indemnified Persons may incur, suffer,
sustain or become subject to arising out of, relating to, or due to (i) any
inaccuracy or breach of any of the representations and warranties of any Credit
Party contained in any Credit Document or in any certificate delivered
thereunder, (ii) the nonfulfillment or breach of any covenant, undertaking,
agreement or other obligation of any Credit Party contained in any Credit
Document or in any certificate delivered thereunder, or (iii) any Environmental
Liability.
(b) Contribution. If the indemnification provided for in this Section 7.3
is prohibited under applicable Regulations to an Indemnified Person, then the
Borrower, in lieu of indemnifying the Indemnified Person, will contribute to the
amount paid or payable by the Indemnified Person as a result of the Losses in
such proportion as is appropriate to reflect the relative fault of the Borrower,
on the one hand, and of the Indemnified Person, on the other, in connection with
the events or circumstances which resulted in the Losses as well as any other
relevant equitable considerations.
Section 7.4. Right of Set-Off. In addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default each Lender is hereby authorized by
each Credit Party at any time or from time to time, without notice to any Credit
Party 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 Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by such Lender to or for the credit or
the account of any Credit Party against and on account of the Obligations of any
Credit Party to such Lender hereunder, irrespective of whether or not (a) such
Lender shall have made any demand hereunder or (b) the principal of or the
interest on the Loans or any other amounts due hereunder shall have become due
and payable pursuant to Article II and although such obligations and
liabilities, or any of them, may be contingent or unmatured.
ARTICLE VIII
Events of Default
-----------------
Section 8.1. Events of Default. Any one or more of the following events
which shall occur and be continuing shall constitute an "Event of Default":
(a) Failure to Make Payments When Due. Failure by Borrowers to pay (i) when
due any installment of principal of any Loan, whether at stated maturity, by
acceleration, by mandatory prepayment or otherwise, or (ii) any interest on any
Loan or any fee or any other amount due hereunder within 5 days after the date
due;
(b) Breach of Certain Covenants. Failure of any Credit Party to perform or
comply with any term or condition contained in Section 2.2, Section 5.2 or
Article VI;
(c) Breach of Representations, etc. Any representation, warranty,
certification or other statement made or deemed made by any Credit Party in any
Credit Document or in any statement or certificate at any time given by any
Credit Party or any of its Subsidiaries in writing, pursuant hereto or thereto
or in connection herewith or therewith shall be false in any material respect as
of the date made or deemed made;
(d) Other Defaults Under Credit Documents. Any Credit Party shall default
in the performance of or compliance with any term contained herein or any of the
other Credit Documents, other than any such term referred to in any other
section of this Section 8.1, and such default shall not have been remedied or
waived within 30 days after the earlier of (i) an officer of such Credit Party
becoming aware of such default or (ii) receipt by Borrowers of notice from Agent
or any Lender of such default; or
(e) Default in Other Agreements. (i) Failure of any Credit Party to pay
when due any principal of or interest on or any other amount payable in respect
of one or more items of Indebtedness in an individual principal amount of
$75,000 or more or with an aggregate principal amount of $150,000 or more, in
each case beyond the grace period, if any, provided therefor, or (ii) breach or
default by any Credit Party with respect to any other material term of (A) one
or more items of Indebtedness in the individual or aggregate principal amounts
referred to in clause (i) above or (B) any loan agreement, mortgage, indenture
or other agreement relating to such item of Indebtedness, in each case beyond
the grace period, if any, provided therefor, if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness (or
a trustee on behalf of such holder or holders), to cause, that Indebtedness to
become or be declared due and payable (or redeemable) prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be;
(f) Involuntary Bankruptcy, Appointment of Receiver, etc. (i) A court of
competent jurisdiction shall enter a decree or order for relief in respect of
the Borrowers or any of their Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed, or any
other similar relief shall be granted under any applicable federal or state law,
or (ii) an involuntary case shall be commenced against the Borrowers or any of
their Subsidiaries under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, or a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other officer having
similar powers over the Borrowers or any of their Subsidiaries, or over all or a
substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of the Borrowers or any of their Subsidiaries for all or a substantial
part of its property or a warrant of attachment, execution or similar process
shall have been issued against any substantial part of the property of Borrowers
or any of their Subsidiaries, and any such event described in this clause (ii)
shall continue for 60 days without having been dismissed, bonded or discharged;
(g) Voluntary Bankruptcy, Appointment of Receiver, etc. (i) Borrowers or
any of their Subsidiaries shall have an order for relief entered with respect to
it or shall commence a voluntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or Borrowers or any of their Subsidiaries shall make any assignment
for the benefit of creditors, or (ii) Borrowers or any of their Subsidiaries
shall be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the board of directors
(or similar governing body) of Borrowers or any of their Subsidiaries (or any
committee thereof) shall adopt any resolution or otherwise authorize any action
to approve any of the actions referred to herein or in Section 8.1(f);
(h) Judgments and Attachments. Any money judgment, writ or warrant of
attachment or similar process involving (i) in any individual case an amount in
excess of $100,000 or (ii) in the aggregate at any time an amount in excess of
$250,000 (in either case to the extent not adequately covered by insurance as to
which a solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against the Borrowers or any of their Subsidiaries or
any of their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of 60 days (or in any event later than 5 days
prior to the date of any proposed sale thereunder);
(i) Dissolution. Any order, judgment or decree shall be entered against any
Credit Party decreeing, the dissolution or split up of any Borrower or that
Subsidiary and such order shall remain undischarged or unstayed for a period in
excess of thirty 30 days;
(j) Change of Control. A Change of Control shall occur; or
(k) Collateral Documents and other Credit Documents. At any time after the
execution and delivery thereof, (i) this Agreement or any Credit Document ceases
to be in full force and effect (other than by reason of a release of Collateral
in accordance with the terms hereof or thereof or the satisfaction in full of
the Obligations in accordance with the terms hereof) or shall be declared null
and void, or Agent shall not have or shall cease to have a valid and perfected
Lien in any material Collateral purported to be covered by the Collateral
Documents with the priority required by the relevant Collateral Document, in
each case for any reason other than the failure of Agent or any Lender to take
any action within its control, or (ii) any Credit Party shall contest the
validity or enforceability of any Credit Document in writing or deny in writing
that it has any further liability, including with respect to future advances by
Lenders, under any Credit Document to which it is a party.
Section 8.2. Remedies. Upon and after the occurrence of an Event of
Default:
(a) Non-Bankruptcy Related Defaults. In the case of any Event of Default
specified in any Section other than Section 8.1(f) or 8.1(g), the Agent at the
request of or with the consent of the Required Lenders, may by notice to the
Borrowers (i) terminate the Revolving Credit Commitments, and they shall
thereupon terminate, and (ii) declare the Loans (together with accrued interest)
to be, and the Loans shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers.
(b) Bankruptcy Events of Default. In the case of any of the Events of
Default specified in Section 8.1(f) or 8.1(g), without any notice to the
Borrowers or any other act by Lender, automatically, (i) the Revolving Credit
Commitments shall thereupon immediately terminate, and (ii) the Loans (together
with accrued interest) shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrowers.
(c) Remedies in All Events of Default. The Agent shall, at the request of
or with the consent of the Required Lenders (i) exercise all rights and remedies
provided in the Credit Documents, (ii) exercise any right of counterclaim,
setoff, banker's lien or otherwise which it may with respect to money or
property of the Borrower, (iii) bring any lawsuit, action or other proceeding
permitted by law for the specific performance of, or injunction against any
violation of, any Credit Document and may exercise any power granted under or to
recover judgment under any Credit Document, (iv) enforce any and all Liens and
security interests created pursuant to Collateral Documents, and (v) exercise
any other right or remedy permitted by applicable Regulations.
ARTICLE IX
The Agent
---------
Section 9.1. Appointment of Agent. ARK CLO 2000-1, Limited is hereby
appointed Agent hereunder, and each Lender hereby authorizes Agent to act as its
agent in accordance with the terms hereof and the other Credit Documents. The
Agent hereby agrees to act upon the express conditions contained herein and the
other Credit Documents, as applicable. The provisions of this Article IX are
solely for the benefit of Agent and Lenders and no Credit Party shall have any
rights as a third party beneficiary of any of the provisions thereof. In
performing its functions and duties hereunder, the Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed any
obligation towards or relationship of agency or trust with or for Borrowers or
any of their Subsidiaries. The Agent without consent of or notice to any party
hereto, may assign any and all of its rights or obligations hereunder to any of
its Affiliates.
Section 9.2. Powers and Duties. Each Lender irrevocably authorizes the
Agent to take such action on such Lender's behalf and to exercise such powers,
rights and remedies hereunder and under the other Credit Documents as are
specifically delegated or granted to the Agent by the terms hereof and thereof,
together with such powers, rights and remedies as are reasonably incidental
thereto. The Agent shall have only those duties and responsibilities that are
expressly specified herein and the other Credit Documents. The Agent may
exercise such powers, rights and remedies and perform such duties by or through
its agents or employees. The Agent shall not have, by reason hereof or any of
the other Credit Documents, a fiduciary relationship in respect of any Lender
and nothing herein or any of the other Credit Documents, expressed or implied,
is intended to or shall be so construed as to impose upon the Agent any
obligations in respect hereof or any of the other Credit Documents except as
expressly set forth herein or therein.
Section 9.3. General Immunity.
(a) No Responsibility for Certain Matters. The Agent shall not be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectability or sufficiency hereof or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by the Agent to Lenders or by or on behalf of any
Credit Party to the Agent or any Lender in connection with the Credit Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of any Credit Party or any other Person liable for the payment
of any Obligations, nor shall the Agent be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Credit Documents or as to the
use of the proceeds of the Loans or as to the existence or possible existence of
any Event of Default or Default. Anything contained herein to the contrary
notwithstanding, Agent shall not have any liability arising from confirmations
of the amount of outstanding Loans.
(b) Exculpatory Provisions. None of the Agent or any of its officers,
trustees, members, partners, directors, employees or agents shall be liable to
Lenders for any action taken or omitted by the Agent under or in connection with
any of the Credit Documents except to the extent caused by the Agent's gross
negligence or willful misconduct. The Agent shall be entitled to refrain from
any act or the taking of any action (including the failure to take an action) in
connection herewith or any of the other Credit Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until the Agent shall have received instructions in respect thereof from
Required Lenders (or such other Lenders as may be required to give such
instructions under Section 10.1) and, upon receipt of such instructions from
Required Lenders (or such other Lenders, as the case may be), the Agent shall be
entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) the Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
communication, instrument or document believed by it to be genuine and correct
and to have been signed or sent by the proper Person or Persons, and shall be
entitled to rely and shall be protected in relying on opinions and judgments of
attorneys (who may be attorneys for the Borrowers and their Subsidiaries),
accountants, experts and other professional advisors selected by it, and (ii) no
Lender shall have any right of action whatsoever against the Agent as a result
of the Agent acting or (where so instructed) refraining from acting hereunder or
any of the other Credit Documents in accordance with the instructions of
Required Lenders (or such other Lenders as may be required to give such
instructions under Section 10.1).
Section 9.4. Agent Entitled to Act as Lender. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, the Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans, the Agent shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as if it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity. The Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with the Borrowers
or any of their Affiliates as if it were not performing the duties specified
herein, and may accept fees and other consideration from Borrowers for services
in connection herewith and otherwise without having to account for the same to
Lenders.
Section 9.5. Lenders' Representations, Warranties and Acknowledgment.
(a) Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the
Borrowers and their Subsidiaries in connection with Borrowings hereunder and
that it has made and shall continue to make its own appraisal of the
creditworthiness of the Borrowers and their Subsidiaries. The Agent shall not
have any duty or responsibility, either initially or on a continuing basis, to
make any such investigation or any such appraisal on behalf of Lenders or to
provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Loans or at any time
or times thereafter, and the Agent shall not have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
(b) Each Lender, by delivering its signature page to this Agreement and
funding its Term Loan Amount and/or a Revolving Loan on the Closing Date, shall
be deemed to have acknowledged receipt of, and consented to and approved, each
Credit Document and each other document required to be approved by the Agent,
Required Lenders or Lenders, as applicable on the Closing Date.
(c) Each Lender shall, with respect to any and all financial statements or
other reports, documents or other information delivered by the Borrowers to
Lenders pursuant to the terms of the Credit Documents, to the extent that such
information therein contained has not heretofore otherwise been disclosed in
such a manner as to render such information no longer confidential, employ
reasonable procedures designed to maintain the confidential nature of the
information therein contained; provided, however, that each Lender may disclose
or disseminate such information to: (a) the Lender's respective employees,
agents, attorneys and accountants who would ordinarily have access to such
information in the normal course of the performance of their duties in
connection with the administration of the Loans; (b) such third parties as may
be required by law or regulatory process; (c) any prospective Assignee (as
defined in Section 10.4(b)), in connection with an Assignment (as defined in
Section 10.4(b)), provided that such prospective Assignee shall have agreed in
writing to be bound by the terms of this Section 9.5(c), (d) any prospective
Participant (as defined in Section 10.4(c)), in connection with a Participation
(as defined in Section 10.4(c)), provided that such prospective Participant
shall have agreed in writing to be bound by the terms of this Section 9.5(c);
and (e) any entity utilizing such information to rate or classify any Lender's
debt or equity securities for sale to the public.
Section 9.6. Right to Indemnity. Each Lender, in proportion to its Pro Rata
Share, severally agrees to indemnify the Agent, to the extent that the Agent
shall not have been reimbursed by any Credit Party, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in exercising its powers, rights and remedies or performing
its duties hereunder or under the other Credit Documents or otherwise in its
capacity as the Agent in any way relating to or arising out hereof or the other
Credit Documents; provided, no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross negligence or
willful misconduct. If any indemnity furnished to the Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, the
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished; provided,
in no event shall this sentence require any Lender to indemnify the Agent
against any liability, obligation, loss, damage, penalty, action, judgment,
suit, cost, expense or disbursement in excess of such Lender's Pro Rata Share
thereof, and provided further, this sentence shall not be deemed to require any
Lender to indemnify the Agent against any liability, obligation, loss, damage,
penalty, action, judgment, suit, cost, expense or disbursement described in the
proviso in the immediately preceding sentence.
Section 9.7. Successor Agent. The Agent may resign at any time by giving 30
days prior written notice thereof to Lenders and Borrower, and Agent may be
removed at any time with or without cause by an instrument or concurrent
instruments in writing, delivered to Borrowers and Agent and signed by Required
Lenders. Upon any such notice of resignation or any such removal, Required
Lenders shall have the right, upon 5 Business Days' notice to Borrower, to
appoint a successor Agent. If no successor Agent is appointed prior to the
effective date of the resignation of Agent, Agent may appoint, after consulting
with the Required Lenders, a successor Agent. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, that successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Agent and the retiring or removed Agent
shall promptly (i) transfer to such successor Agent all sums, Securities and
other items of Collateral held under the Collateral Documents, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Agent under the Credit Documents, and
(ii) execute and deliver to such successor Agent such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Agent of the security interests
created under the Collateral Documents, whereupon such retiring or removed Agent
shall be discharged from its duties and obligations hereunder. After any
retiring or removed Agent's resignation or removal hereunder as Agent, the
provisions of this Article IX shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent hereunder.
Section 9.8. Collateral Documents.
(a) Agent as Agent under Collateral Documents. Each Lender hereby further
authorizes Agent, on behalf of and for the benefit of Lenders, to be the agent
for and representative of Lenders with respect to the Collateral and the
Collateral Documents. Subject to Section 10.1, without further written consent
or authorization from Lenders, Agent may execute any documents or instruments
necessary to release any Lien encumbering any item of Collateral that is the
subject of a sale or other disposition of assets permitted hereby or to which
Required Lenders (or such other Lenders as may be required to give such consent
under Section 10.1) have otherwise consented.
(b) Agent's Right to Realize on Collateral. Anything contained in any of
the Credit Documents to the contrary notwithstanding Borrower, Agent and each
Lender hereby agree that (i) no Lender shall have any right individually to
realize upon any of the Collateral, it being understood and agreed that all
powers, rights and remedies hereunder may be exercised solely by Agent, on
behalf of Lenders in accordance with the terms hereof, and (ii) in the event of
a foreclosure by Agent on any of the Collateral pursuant to a public or private
sale, Agent or any Lender may be the purchaser of any or all of such Collateral
at any such sale and Agent, as agent for and representative of Lenders (but not
any Lender or Lenders in its or their respective individual capacities unless
Required Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Obligations as a credit on account of the purchase price for
any collateral payable by Agent at such sale.
ARTICLE X
Miscellaneous
-------------
Section 10.1. Amendments and Waivers.
(a) General. Subject to Section 10.1(b) below, no amendment, modification,
termination or waiver of any provision of the Credit Documents, or consent to
any departure by any Credit Party therefrom, shall be effective without the
written consent of the Agent and the Required Lenders.
(b) Affected Lenders' Consent. Notwithstanding the provisions of Section
10.1(a) above, no amendment, modification, termination or waiver of any
provision of the Credit Documents, or consent to any departure by any Credit
Party therefrom, shall be effective without the written consent of the Agent,
the Required Lenders and each Lender that would be affected thereby, if the
effect thereof would:
(i) extend the scheduled final maturity of any Loan or Note or reduce
the principal amount of any Loan;
(ii) waive, reduce or postpone any scheduled repayment (but not
prepayment);
(iii) reduce the rate of interest on any Loan or any fee payable
hereunder, or extend the time for payment of any such interest or fees;
(iv) amend, modify, terminate or waive any provision of this Section
10.1(b) or Section 10.1(c);
(v) amend the definitions of "Required Lenders" or "Pro Rata Share";
(vi) release or otherwise subordinate all or substantially all of the
Collateral or except as expressly provided in the Credit Documents;
(vii) consent to the assignment or transfer by any Credit Party of any
of its rights and obligations under any Credit Document; or
(viii) increase any Revolving Credit Commitment of any Lender over the
amount thereof then in effect; provided, that no amendment, modification or
waiver of any condition precedent, covenant, Default or Event of Default
shall constitute an increase in any Revolving Credit Commitment of any
Lender.
(c) Effect of Notices, Waivers or Consents. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on any Credit Party in any case shall
entitle any Credit Party to any other or further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 10.1 shall be binding upon each Lender
at the time outstanding, each future Lender and, if signed by a Credit Party, on
such Credit Party.
Section 10.2. Notices. All notices, requests, demands and other
communications to any party or given under any Credit Document (collectively,
"Notices") will be in writing and delivered personally, by overnight courier or
by registered mail to the parties at the following address or sent by
telecopier, with confirmation received, to the telecopy number specified below
(or at such other address or telecopy number as will be specified by a party by
like notice given at least five calendar days prior thereto):
(a) If to the Borrowers, at:
0000 Xxxxxxxx Xxxx.
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Chief Executive Officer
Facsimile: 000-000-0000
With a copy to:
Xxxxxxxx, Xxxxx & Xxxxxx LLP
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
Facsimile: 401-277-9600
(b) If to the Agent, at:
c/o Patriarch Partners, LLC
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Facsimile: 000-000-0000
With a copy to:
Xxxxxxxx Xxxxxx Xxxxx & Xxxx
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Facsimile: 000-000-0000
(c) If to the Lenders, to the address for such Lender set forth on the
signature pages hereto.
All Notices will be deemed delivered when actually received. Each of the
parties will hereafter notify the other in accordance with this Section of any
change of address or telecopy number to which notice is required to be mailed.
Section 10.3. Expenses. Whether or not the transactions contemplated hereby
shall be consummated or any Loans shall be made, Borrowers agree to pay promptly
after the occurrence of a Default or an Event of Default, all fees, costs,
expenses and disbursements, including attorneys' fees and expenses (including,
without limitation, allocated costs of internal counsel) and costs of
settlement, incurred by the Agent or any Lender in enforcing any Obligations of
or in collecting any payments due from any Credit Party hereunder or under the
other Credit Documents by reason of such Default or Event of Default (including
in connection with the sale of, collection from, or other realization upon any
of the Collateral) or in connection with any refinancing or restructuring of the
credit arrangements provided hereunder in the nature of a "work-out" or pursuant
to any insolvency or bankruptcy cases or proceedings.
Section 10.4. Enforceability; Successors and Assigns.
(a) Enforceability; Successors and Assigns. This Agreement will be binding
upon and inure to the benefit of and is enforceable by the respective successors
and permitted assigns of the parties hereto. This Agreement may not be assigned
by the Borrowers hereto without the prior written consent of the Agent and the
Required Lenders. Any assignment or attempted assignment in contravention of
this Section will be void ab initio and will not relieve the assigning party of
any obligation under this Agreement.
(b) Assignments. Each Lender may assign (each, an "Assignment") to one or
more Eligible Assignees (each, an "Assignee") all or a portion of its rights and
obligations under this Agreement (including all or a portion of such Lender's
Loans, Revolving Credit Commitment and Notes, as the case may be), without the
consent of the Borrowers. In connection with any such assignment, the assigning
Lender and the Assignee shall execute and deliver to the Agent an Assignment
Agreement, in the form of Exhibit 10.4(b) (each, an "Assignment Agreement").
Upon its receipt of a duly executed and completed Assignment Agreement, Agent
shall record the information contained in such Assignment Agreement in the
Register, shall give prompt notice thereof to Borrowers and shall maintain a
copy of such Assignment Agreement. From and after the effective date of an
Assignment, the Assignee shall be a party hereto and, to the extent of the
interest assigned pursuant to the Assignment, have the rights and obligations of
a lender under this Agreement, and the Lender shall, to the extent of the
interest assigned, be released from its obligations under this Agreement. The
Borrowers hereby consent to the disclosure of any information obtained by Lender
in connection with this Agreement to any Person to which Lender sells, or
proposes to sell, its Loans, Revolving Credit Commitment or Notes.
(c) Participations. Each Lender may sell participations (each, a
"Participation") to one or more Persons (each, a "Participant") in all or a
portion of such Lender's rights and obligations under this Agreement (including
all or a portion of such Lender's Loans, Revolving Credit Commitment and Notes,
as the case may be); provided that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the Borrowers for the performance of such obligations, and (iii)
the Borrowers shall continue to deal solely and directly with the Lender in
connection with the Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which the Lender sells such a participation
shall provide that the Lender shall retain the sole right to enforce the Credit
Documents and to approve any amendment, modification or waiver of any provision
of the Credit Documents. The Borrowers hereby consent to the disclosure of any
information obtained by a Lender in connection with this Agreement to any Person
to which such Lender participates, or proposes to participate, its Loans,
Revolving Credit Commitment or the Note.
Section 10.5. Integration. This Agreement and the other Credit Documents
contain and constitute the entire agreement of the parties with respect to the
subject matter hereof and supersedes all prior negotiations, agreements and
understandings, whether written or oral, of the parties hereto.
Section 10.6. No Waiver; Remedies. No failure or delay by any party in
exercising any right, power or privilege under this Agreement or any of the
other Credit Documents will operate as a waiver of the right, power or
privilege. A single or partial exercise of any right, power or privilege will
not preclude any other or further exercise of the right, power or privilege or
the exercise of any other right, power or privilege. The rights and remedies
provided in the Credit Documents will be cumulative and not exclusive of any
rights or remedies provided by law.
Section 10.7. Submission to Jurisdiction. Each of the Borrower, the Agent
and the Lenders hereby (a) agrees that any Action with respect to any Credit
Document may be brought in the courts of the State of New York or of the United
States of America for the Southern District of New York, (b) accepts for itself
and in respect of its property, generally and unconditionally, the non-exclusive
jurisdiction of such courts, (c) irrevocably waives any objection, including,
without limitation, any objection to the laying of venue or based on the grounds
of forum non conveniens, which it may now or hereafter have to the bringing of
any Action in those jurisdictions, and (d) irrevocably consents to the service
of process of any of the courts referred to above in any Action by the mailing
of copies of the process to the parties hereto as provided in Section 10.2.
Service effected as provided in this manner will become effective ten calendar
days after the mailing of the process. Section 1.1.
Section 10.8. Execution in Counterparts. This Agreement may be executed
simultaneously in one or more counterparts, and by different parties hereto in
separate counterparts, each of which when executed will be deemed an original,
but all of which taken together will constitute one and the same instrument.
Section 10.9. Governing Law. This Agreement and the other Credit Documents
will be governed by, and construed in accordance with, the laws of the state of
New York applicable to contracts executed in and to be performed entirely within
that state, without reference to conflicts of laws provisions.
Section 10.10. Waiver of Jury. THE PARTIES HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION, OR IN
ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (WHETHER BASED ON
CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT, OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTY
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 10.11. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other conditions and provisions of this Agreement will
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the extent possible.
Section 10.12. Survival. All representations, warranties, covenants,
agreements, and conditions contained in or made pursuant to this Agreement or
the other Credit Documents shall survive (a) the making of any Loans and the
payment of the Obligations and (b) the performance, observance and compliance
with the covenants, terms and conditions, express or implied, of all Credit
Documents, until the due and punctual (i) indefeasible payment of the
Obligations and (ii) performance, observance and compliance with the covenants,
terms and conditions, express or implied, of this Agreement and all of the other
Credit Documents; provided, however, that the provisions of Article VII shall
survive (i) indefeasible payment of the Obligations and (ii) performance,
observance and compliance with the covenants, terms and conditions, express or
implied, of this Agreement and all of the other Credit Documents. Section 1.1.
Section 10.13. Lawful Interest. The Borrowers shall not be obligated to pay
any interest in excess of the maximum rate provided by law and interest under
any Credit Document otherwise in excess of that rate shall be reduced to that
rate.
Section 10.14. Interpretation. As used in this Agreement, references to the
singular will include the plural and vice versa and references to the masculine
gender will include the feminine and neuter genders and vice versa, as
appropriate. Unless otherwise expressly provided in this Agreement (a) the words
"hereof", "herein" and "hereunder" and words of similar import when used in this
Agreement will refer to this Agreement as a whole and not to any particular
provision of this Agreement and (b) article, section, subsection, schedule and
exhibit references are references with respect to this Agreement unless
otherwise specified. Unless the context otherwise requires, the term "including"
will mean "including, without limitation." The headings in this Agreement and in
the Schedules are included for convenience of reference only and will not affect
in any way the meaning or interpretation of this Agreement.
Section 10.15. Ambiguities. This Agreement and the other Credit Documents
were negotiated between legal counsel for the parties and any ambiguity in this
Agreement or the other Credit Documents shall not be construed against the party
who drafted this Agreement or such other Credit Documents.
[Remainder of page intentionally left blank; signatures on following pages.]
In witness whereof, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
PROGRESSIVE SOFTWARE HOLDING, INC.
By:/s/ Xxxxxxx X. Xxxxx
_______________________________________
Name:Xxxxxxx X. Xxxxx
Title:Treasurer
PROGRESSIVE SOFTWARE, INC.
By:/s/ Xxxxxxx X. Xxxxx
_______________________________________
Name:Xxxxxxx X. Xxxxx
Title:Treasurer
ARK CLO 2000-1, LIMITED, as Agent
By: Patriarch Partners, LLC
Its Collateral Manager
By:/s/ Xxxx Xxxxxx
_______________________________________
Name:Xxxx Xxxxxx
Title:
LENDERS:
-------
Address for Notices: ARK CLO 2000-1, LIMITED
-------------------
c/o Patriarch Partners, LLC
00 Xxxx Xxxxxx By: Patriarch Partners, LLC
Xxx Xxxx, Xxx Xxxx 00000 Its Collateral Manager
Facsimile No.:212-825- 2038
By:/s/ Xxxx Xxxxxx
_______________________________________
Name:Xxxx Xxxxxx
Title:
TABLE OF CONTENTS
-----------------
ARTICLE I
Defined Terms
Section 1.1. Definitions.....................................................1
ARTICLE II
Loans
Section 2.1. Loans.........................................................18
Section 2.2. Use of Proceeds...............................................20
Section 2.3. Evidence of Debt; Register; Lenders' Books and Records; Notes 20
Section 2.4. Interest on Loans.............................................21
Section 2.5. Repayment; Scheduled Payments ................................22
Section 2.6. Optional Prepayments..........................................22
Section 2.7. Mandatory Prepayments; Mandatory Commitment Reductions........23
Section 2.8. Application of Prepayments....................................24
Section 2.9. General Provisions Regarding Payments.........................24
ARTICLE III
Conditions Precedent
Section 3.1. Closing Date. ..............................................25
Section 3.2. Conditions to Each Borrowing ...............................27
ARTICLE IV
Representations and Warranties
Section 4.1. Existence and Power..........................................28
Section 4.2. Authorization; Binding Effect................................28
Section 4.3. Contravention................................................29
Section 4.4. Consents.....................................................29
Section 4.5. Capitalization of the Borrowers .............................29
Section 4.6. Subsidiaries and Other Securities ...........................30
Section 4.7. Financial Information........................................31
Section 4.8. Taxes........................................................31
Section 4.9. Litigation...................................................31
Section 4.10. Permits; Compliance With Laws................................31
Section 4.11. Absence of Certain Changes or Events.........................32
Section 4.12. Assets.......................................................32
Section 4.13. Environmental Matters........................................32
Section 4.14. Material Contracts...........................................33
Section 4.15. Indebtedness and Liens.......................................33
Section 4.16. Insurance....................................................33
Section 4.17. Governmental Regulation. ....................................34
Section 4.18. Margin Stock. ..............................................34
Section 4.19. Employee Matters. ..........................................34
Section 4.20. Employee Benefit Plans. ....................................34
Section 4.21. Certain Fees. ..............................................35
Section 4.22. Solvency. ..................................................35
Section 4.23. No Misstatements or Omissions................................35
Section 4.24. Full Disclosure. ...........................................35
ARTICLE V
Affirmative Covenants
Section 5.1. Financial Statements and Other Reports.......................36
Section 5.2. Maintenance of Existence.....................................39
Section 5.3. Maintenance of Records.......................................39
Section 5.4. Maintenance of Properties....................................39
Section 5.5. Conduct of Business..........................................39
Section 5.6. Inspections; Lenders Meetings................................39
Section 5.7. Payment of Taxes.............................................40
Section 5.8. Use of Proceeds..............................................40
Section 5.9. Insurance....................................................40
Section 5.10. Compliance With Laws. ......................................40
Section 5.11. Compliance with Credit Documents.............................40
Section 5.12. Intellectual Property. ......................................40
Section 5.13. Collateral Assignment of Mortgage and Security Instruments...40
Section 5.14. Blocked Account Agreement....................................41
Section 5.15. Further Assurances. ........................................41
ARTICLE VI
Negative Covenants
Section 6.1. Indebtedness. ..............................................41
Section 6.2. Liens. .....................................................41
Section 6.3. Equitable Lien. ............................................43
Section 6.4. Restricted Payments; Restrictions on Subsidiary Distributions43
Section 6.5. Investments. ...............................................43
Section 6.6. Financial Covenants..........................................44
Section 6.7. Fundamental Changes; Disposition of Assets; Acquisitions.....45
Section 6.8. Disposal of Subsidiary Interests.............................46
Section 6.9. Sales and Lease-Backs. .....................................46
Section 6.10. Transactions with Shareholders and Affiliates................46
Section 6.11. Conduct of Business. ........................................46
Section 6.12. Fiscal Year. ................................................46
ARTICLE VII
Increased Costs; Taxes; Indemnification; Set-Off
Section 7.1. Increased Costs; Capital Adequacy. ..........................46
Section 7.2. Taxes; Withholding, etc......................................47
Section 7.3. Indemnification..............................................48
Section 7.4. Right of Set-Off.............................................48
ARTICLE VIII
Events of Default
Section 8.1. Events of Default. .........................................49
Section 8.2. Remedies. ..................................................51
ARTICLE IX
The Agent
Section 9.1. Appointment of Agent.........................................52
Section 9.2. Powers and Duties. .........................................52
Section 9.3. General Immunity.............................................52
Section 9.4. Agent Entitled to Act as Lender .............................53
Section 9.5. Lenders' Representations, Warranties and Acknowledgment. ....53
Section 9.6. Right to Indemnity...........................................54
Section 9.7. Successor Agent..............................................55
Section 9.8. Collateral Documents.........................................55
ARTICLE X
Miscellaneous
Section 10.1. Amendments and Waivers.......................................56
Section 10.2. Notices......................................................57
Section 10.3. Expenses.....................................................58
Section 10.4. Enforceability; Successors and Assigns ......................58
Section 10.5. Integration..................................................59
Section 10.6. No Waiver; Remedies..........................................59
Section 10.7. Submission to Jurisdiction...................................59
Section 10.8. Execution in Counterparts....................................60
Section 10.9. Governing Law................................................60
Section 10.10. Waiver of Jury...............................................60
Section 10.11. Severability.................................................60
Section 10.12. Survival.....................................................60
Section 10.13. Lawful Interest..............................................60
Section 10.14. Interpretation...............................................61
Section 10.15. Ambiguities..................................................61
EXHIBITS
--------
Exhibit 1.1(a). Revolving Credit Commitment
Exhibit 1.1(b). Term Loan Amount
Exhibit 2.3(c)(i).Revolving Note
Exhibit 2.3(c)(ii).Term Note
Exhibit 3.1(a). Secretary's Certificates
Exhibit 3.1(i). Opinion of Counsel
Exhibit 3.1(j). Closing Date Certificates
Exhibit 3.1(l). Security Agreement
Exhibit 3.1(o). Borrowing Base Certificate
Exhibit 3.2(a). Funding Notice
Exhibit 4.7(d). Projections
Exhibit 5.1(d). Compliance Certificate
Exhibit 5.12. Software Escrow Agreement and License Agreement
Exhibit 5.14. Blocked Account Agreement
Exhibit 6.6(c). Consolidated Adjusted EBITDA Test
Exhibit 10.4(b). Assignment Agreement
SCHEDULES
Schedule 4.4 Consents
Schedule 4.5 Organizational and Capital Structure
Schedule 4.6(a) Subsidiaries
Schedule 4.6(c) Securities
Schedule 4.7(b) Statement of Operations from 2/12/02 to 6/30/02
Schedule 4.7(c) Accounts Receivable
Schedule 4.8 Taxes
Schedule 4.9 Litigation
Schedule 4.12(b) Real Property and Leaseholds
Schedule 4.13 Environmental Liability
Schedule 4.15(a) Indebtedness
Schedule 4.15(b) Liens
