EXHIBIT 10.46
LOAN AGREEMENT
BY AND AMONG
VIEWLOGIC SYSTEMS, INC.
AND
FLEET NATIONAL BANK, AS AGENT AND A LENDER
AND
THE OTHER FINANCIAL INSTITUTIONS NOW OR
HEREAFTER PARTIES HERETO
$18,000,000 SECURED TERM LOAN
AND
$6,000,000 SECURED REVOLVING CREDIT LOAN
OCTOBER 2, 1998
INDEX TO
LOAN AGREEMENT
PAGE
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ARTICLE 1. DEFINITIONS AND ACCOUNTING AND OTHER TERMS. . . . . . . . . . . . . 1
SECTION 1.1. CERTAIN DEFINED TERMS . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. ACCOUNTING TERMS. . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 1.3. OTHER TERMS . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 2. AMOUNT AND TERMS OF THE LOANS . . . . . . . . . . . . . . . . . . . 17
SECTION 2.1. THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 2.1.0. The Revolving Credit Loans . . . . . . . . . . . . . . . . 17
Section 2.1.1. Term Loans . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.2. INTEREST AND FEES ON THE LOANS. . . . . . . . . . . . . . . . 19
Section 2.2.1. Default Rate of Interest; Suspension of Libor Loans; Etc . 19
Section 2.2.2. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 2.2.3. Increased Costs - Capital . . . . . . . . . . . . . . . . 20
SECTION 2.3. NOTATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.4. COMPUTATION OF INTEREST . . . . . . . . . . . . . . . . . . . 21
SECTION 2.5. TIME OF PAYMENTS AND PREPAYMENTS IN IMMEDIATELY
AVAILABLE FUNDS . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.5.1. Time . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 2.5.2. Setoff, etc. . . . . . . . . . . . . . . . . . . . . . . . 23
Section 2.5.3. Unconditional Obligations and No Deductions . . . . . . . 23
SECTION 2.6. PREPAYMENT AND CERTAIN PAYMENTS . . . . . . . . . . . . . . . 25
Section 2.6.1. Mandatory Payments . . . . . . . . . . . . . . . . . . . . 25
Section 2.6.2. Voluntary Prepayments . . . . . . . . . . . . . . . . . . 27
Section 2.6.3. Prepayment of Libor Loans . . . . . . . . . . . . . . . . 27
Section 2.6.4. Permanent Reduction of Commitment . . . . . . . . . . . . 27
SECTION 2.7. PAYMENT ON NON-BUSINESS DAYS. . . . . . . . . . . . . . . . . 28
SECTION 2.8. USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.9. SPECIAL LIBOR LOAN PROVISIONS . . . . . . . . . . . . . . . . 28
Section 2.9.1. Requests . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 2.9.2. Libor Loans Unavailable . . . . . . . . . . . . . . . . . 28
Section 2.9.3. Libor Lending Unlawful . . . . . . . . . . . . . . . . . . 29
Section 2.9.4. Additional Costs on Libor Loans . . . . . . . . . . . . . 30
Section 2.9.5. Libor Funding Losses . . . . . . . . . . . . . . . . . . . 31
Section 2.9.6. Banking Practices . . . . . . . . . . . . . . . . . . . . 32
Section 2.9.7. Borrower's Options on Unavailability or Increased Cost
of Libor Loans. . . . . . . . . . . . . . . . . . . . . . 32
Section 2.9.8. Assumptions Concerning Funding of Libor Loans . . . . . . 33
SECTION 2.10. INTEREST RATE PROTECTION. . . . . . . . . . . . . . . . . . . 33
ARTICLE 3. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.1. CONDITIONS PRECEDENT TO THE COMMITMENT AND TO ALL LOANS . . . 34
Section 3.1.1. The Commitment and Initial Loans . . . . . . . . . . . . . 34
Section 3.1.2. The Commitment and the Loans . . . . . . . . . . . . . . . 37
ARTICLE 4. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . 38
i
SECTION 4.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. . . . . . . . 38
Section 4.1.1. Organization and Existence . . . . . . . . . . . . . . . . 38
Section 4.1.2. Authorization and Absence of Defaults. . . . . . . . . . . 38
Section 4.1.3. Acquisition of Consents. . . . . . . . . . . . . . . . . . 39
Section 4.1.4. Validity and Enforceability. . . . . . . . . . . . . . . . 39
Section 4.1.5. Financial Information. . . . . . . . . . . . . . . . . . . 39
Section 4.1.6. No Litigation. . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.1.7. Regulation U . . . . . . . . . . . . . . . . . . . . . . . 40
Section 4.1.8. Absence of Adverse Agreements. . . . . . . . . . . . . . . 40
Section 4.1.9. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.1.10. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 4.1.11. Ownership of Properties. . . . . . . . . . . . . . . . . . 42
Section 4.1.12. Accuracy of Representations and Warranties . . . . . . . . 42
Section 4.1.13. No Investment Company. . . . . . . . . . . . . . . . . . . 42
Section 4.1.14. Solvency, etc. . . . . . . . . . . . . . . . . . . . . . . 42
Section 4.1.16. Ownership Interests. . . . . . . . . . . . . . . . . . . . 43
Section 4.1.16. Licenses, Registrations, Compliance with Laws, etc. . . . 43
Section 4.1.18. Principal Place of Business; Books and Records . . . . . . 43
Section 4.1.19. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . 43
Section 4.1.20. Copyright. . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 4.1.21. Environmental Compliance . . . . . . . . . . . . . . . . . 44
Section 4.1.22. Material Agreements, etc. . . . . . . . . . . . . . . . . 44
Section 4.1.22. Patents, Trademarks and Other Property Rights. . . . . . . 45
Section 4.1.24. Related Transaction Documents. . . . . . . . . . . . . . . 45
Section 4.1.25. Material Adverse Effect. . . . . . . . . . . . . . . . . . 45
Section 4.1.26. Year 2000. . . . . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 5. COVENANTS OF THE BORROWER . . . . . . . . . . . . . . . . . . . . . 45
SECTION 5.1. AFFIRMATIVE COVENANTS OF THE BORROWER OTHER THAN
REPORTING REQUIREMENTS. . . . . . . . . . . . . . . . . . . . 45
Section 5.1.1. Payment of Taxes, etc. . . . . . . . . . . . . . . . . . . 46
Section 5.1.2. Maintenance of Insurance . . . . . . . . . . . . . . . . . 46
Section 5.1.3. Preservation of Existence, etc. . . . . . . . . . . . . . 47
Section 5.1.4. Compliance with Laws, etc. . . . . . . . . . . . . . . . . 47
Section 5.1.5. Visitation Rights. . . . . . . . . . . . . . . . . . . . . 47
Section 5.1.6. Keeping of Records and Books of Account. . . . . . . . . . 47
Section 5.1.7. Maintenance of Properties, etc. . . . . . . . . . . . . . 47
Section 5.1.8. Post-Closing Items . . . . . . . . . . . . . . . . . . . . 48
Section 5.1.9. Other Documents, etc. . . . . . . . . . . . . . . . . . . 48
Section 5.1.10. Minimum Debt Service Coverage Ratio. . . . . . . . . . . . 48
Section 5.1.10.(A). Minimum Interest Coverage. . . . . . . . . . . . . . . 48
Section 5.1.11. Maximum Leverage Ratio . . . . . . . . . . . . . . . . . . 48
Section 5.1.13. Officer's Certificates and Requests. . . . . . . . . . . . 48
Section 5.1.14. Depository . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 5.1.15. Chief Executive Officer. . . . . . . . . . . . . . . . . . 48
Section 5.1.16. Notice of Purchase of Real Estate and Leases . . . . . . . 49
Section 5.1.17. Additional Assurances. . . . . . . . . . . . . . . . . . . 49
Section 5.1.18. Appraisals . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.1.19. Environmental Compliance . . . . . . . . . . . . . . . . . 49
Section 5.1.20. Remediation. . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.1.21. Site Assessments . . . . . . . . . . . . . . . . . . . . . 49
Section 5.1.22. Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 5.1.23. Trademarks, Copyrights, etc. . . . . . . . . . . . . . . . 50
Section 5.1.24. Maintenance of Escrow. . . . . . . . . . . . . . . . . . . 50
SECTION 5.2. NEGATIVE COVENANTS OF THE BORROWER. . . . . . . . . . . . . . 50
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Section 5.2.1. Liens, etc. . . . . . . . . . . . . . . . . . . . . . . . 50
Section 5.2.2. Assumptions, Guaranties, etc. of Indebtedness of Other
Persons. . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 5.2.3. Dissolution, Merger, etc. . . . . . . . . . . . . . . . . 52
Section 5.2.4. Change in Nature of Business . . . . . . . . . . . . . . . 52
Section 5.2.5. Ownership. . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.2.6. Sale and Leaseback . . . . . . . . . . . . . . . . . . . . 52
Section 5.2.7. Sale of Accounts, etc. . . . . . . . . . . . . . . . . . . 52
Section 5.2.8. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . 52
Section 5.2.9. Other Agreements . . . . . . . . . . . . . . . . . . . . . 53
Section 5.2.10. Payment or Prepayment of Equity or Subordinated Debt . . . 53
Section 5.2.11. Dividends, Payments and Distributions. . . . . . . . . . . 53
Section 5.2.12. Investments in or to Other Persons . . . . . . . . . . . . 54
Section 5.2.13. Transactions with Affiliates . . . . . . . . . . . . . . . 55
Section 5.2.14. Change of Fiscal Year. . . . . . . . . . . . . . . . . . . 55
Section 5.2.15. Subordination of Claims. . . . . . . . . . . . . . . . . . 55
Section 5.2.16. Compliance with ERISA. . . . . . . . . . . . . . . . . . . 55
Section 5.2.17. Capital Expenditures . . . . . . . . . . . . . . . . . . . 55
Section 5.2.18. Hazardous Waste. . . . . . . . . . . . . . . . . . . . . . 56
Section 5.2.19 Other Restrictions on Liens or Dividends . . . . . . . . . 56
Section 5.2.20 Limitation on Creation of Subsidiaries, etc. . . . . . . . 56
Section 5.2.21. Subsidiary Merger, etc. . . . . . . . . . . . . . . . . . 56
SECTION 5.3. REPORTING REQUIREMENTS. . . . . . . . . . . . . . . . . . . . 56
ARTICLE 6. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 6.1. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 7. REMEDIES OF LENDERS . . . . . . . . . . . . . . . . . . . . . . . . 60
ARTICLE 8. AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.1. APPOINTMENT . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.2. POWERS; GENERAL IMMUNITY. . . . . . . . . . . . . . . . . . . 61
Section 8.2.1. Duties Specified . . . . . . . . . . . . . . . . . . . . . 61
Section 8.2.2. No Responsibility for Certain Matters. . . . . . . . . . . 62
Section 8.2.3. Exculpatory Provisions . . . . . . . . . . . . . . . . . . 62
Section 8.2.4. Agent Entitled to Act as Lender. . . . . . . . . . . . . . 62
SECTION 8.3. REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS . . . . . . . . . . . . . . . . 63
SECTION 8.4. RIGHT TO INDEMNITY. . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.5. PAYEE OF NOTE TREATED AS OWNER. . . . . . . . . . . . . . . . 63
SECTION 8.6. RESIGNATION BY AGENT. . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.7. SUCCESSOR AGENT . . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.1. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. . . . . . . . 64
SECTION 9.2. RIGHTS AND REMEDIES CUMULATIVE. . . . . . . . . . . . . . . . 65
SECTION 9.3. DELAY OR OMISSION NOT WAIVER. . . . . . . . . . . . . . . . . 65
SECTION 9.5. AMENDMENTS, ETC. . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 9.6. ADDRESSES FOR NOTICES, ETC. . . . . . . . . . . . . . . . . . 66
SECTION 9.7. COSTS, EXPENSES AND TAXES . . . . . . . . . . . . . . . . . . 68
SECTION 9.8. PARTICIPATIONS. . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 9.9. BINDING EFFECT; ASSIGNMENT. . . . . . . . . . . . . . . . . . 68
SECTION 9.10. ACTUAL KNOWLEDGE. . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 9.11. SUBSTITUTIONS AND ASSIGNMENTS . . . . . . . . . . . . . . . . 69
SECTION 9.12. PAYMENTS PRO RATA . . . . . . . . . . . . . . . . . . . . . . 71
iii
SECTION 9.13. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 9.14. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.15. SEVERABILITY OF PROVISIONS. . . . . . . . . . . . . . . . . . 73
SECTION 9.16. HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 9.17. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . 73
SCHEDULE OF EXHIBITS
EXHIBIT 1.1 EQUITY INVESTMENTS, OWNERSHIP INTERESTS AND SUBSIDIARIES
EXHIBIT 1.2 RELATED TRANSACTION DOCUMENTS
EXHIBIT 1.4 FORM OF INTEREST RATE ELECTION
EXHIBIT 1.5 FORM OF REVOLVING CREDIT NOTE
EXHIBIT 1.6 FORM OF TERM NOTE
EXHIBIT 1.8 PERMITTED ENCUMBRANCES
EXHIBIT 1.9 PRO RATA SHARES - AGENT'S AND LENDERS' NOTICE ADDRESSES AND
WIRE TRANSFER INSTRUCTIONS
EXHIBIT 1.10 FORM OF REQUEST
EXHIBIT 1.12 PROJECTIONS
EXHIBIT 3.1.1.8 PERMITTED INDEBTEDNESS AND CAPITALIZED LEASES
EXHIBIT 3.1.1.10 FORM OF COMPLIANCE CERTIFICATE
EXHIBIT 4.1.1 ORGANIZATION AND EXISTENCE
EXHIBIT 4.1.2 AUTHORIZATIONS AND ABSENCE OF DEFAULTS
EXHIBIT 4.1.3 CONSENTS
EXHIBIT 4.1.6 LITIGATION
EXHIBIT 4.1.8 ADVERSE AGREEMENTS
EXHIBIT 4.1.9 TAXES
EXHIBIT 4.1.11 REAL PROPERTY
EXHIBIT 4.1.16 LICENSES, REGISTRATIONS, COMPLIANCE WITH LAWS, ETC.
EXHIBIT 4.1.19 COPYRIGHTS
EXHIBIT 4.1.20 HAZARDOUS WASTE
EXHIBIT 4.1.21 MATERIAL AGREEMENTS
EXHIBIT 4.1.22 PATENTS, TRADEMARKS AND OTHER PROPERTY RIGHTS
EXHIBIT 5.2.2.4 GUARANTIES
EXHIBIT 5.2.13 TRANSACTIONS WITH AFFILIATES
EXHIBIT 9.11.1 FORM OF SUBSTITUTION AGREEMENT
iv
LOAN AGREEMENT
October 2, 1998
VIEWLOGIC SYSTEMS, INC., a Delaware corporation with a principal place
of business at 000 Xxxxxx Xxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000-0000
(hereinafter the "Borrower"), FLEET NATIONAL BANK, a national banking
association organized under the laws of the United States and having a head
office at Xxx Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, as agent,
(hereinafter sometimes the "Agent," as Agent for itself and each of the other
Lenders who now and/or hereafter become parties to this Agreement pursuant to
the terms of SECTION 9.11 hereof, sometimes "Fleet," and sometimes in its
capacity as a Lender "Lender"), and such Lenders, hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND ACCOUNTING AND OTHER TERMS
SECTION 1.1. CERTAIN DEFINED TERMS. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms
defined):
"ADJUSTED LIBOR RATE" means, with respect to any Libor Loan to be made
by the Lenders for the Interest Period applicable to such Libor Loan, the
rate per annum (rounded upward, if necessary, to the nearest 1/32 of one
percent) as determined on the basis of the offered rates for deposits in
Dollars, for a period of time and for an amount comparable to such Libor
Loan which appears on the Telerate page 3750 as of 11:00 a.m. London time on
the day that is two Business Days preceding the first day of such Libor Loan;
provided, however, if the rate described above does not appear on the
Telerate System on any applicable Interest Adjustment Date, the Adjusted
Libor Rate shall be the rate (rounded upwards as described above, if
necessary) for deposits in Dollars for a period and for an amount comparable
to such Libor Loan on the Reuters Page "LIBO" (or such other page as may
replace the LIBO Page on that service for the purpose of displaying such
rates), as of 11:00 a.m. (London Time), on the day that is two Business Days
prior to the beginning of such Interest Period.
If both the Telerate and Reuters system are unavailable, then the rate
for that date will be determined on the basis of the offered rates for
deposits in Dollars for a period of time and for an amount comparable to such
Libor Loan which are offered to each Reference Lender by four first-class
banks in the London interbank market at approximately 11:00 a.m. London time,
on the day that is two Business Days preceding the first day of such Libor
Loan as selected by the Lender. The principal London office of each of the
four first-class London banks will be requested to provide a quotation of its
Dollar deposit offered rate. If at least two such quotations are provided,
the rate for that date will be the arithmetic mean of the quotations. If
fewer than two quotations are provided as requested, the rate for that date
will be determined on the basis of the rates quoted for loans in Dollars to
leading European banks for a period of time comparable to such Libor Loan
offered by major banks in New York City at approximately 11:00 a.m. New York
City time, on the day that its two Business Days preceding the first day of
such Libor Loan. In the event that the Reference Lenders are unable to
obtain any such quotation as provided
above, it will be deemed that the Adjusted Libor Rate pursuant to a Libor
Loan cannot be determined.
In the event that the Board of Governors of the Federal Reserve System
shall impose a "Reserve Percentage" with respect to Libor deposits of any
Reference Lender then, to the extent that the rate determined in the
foregoing paragraph does not include a provision for such Reserve Percentage,
for any period during which such Reserve Percentage shall apply, the Adjusted
Libor Rate shall be equal to the amount determined above divided by an amount
equal to 1 minus the Reserve Percentage. If any Reference Lender fails to
provide its offered quotation to the Agent, the Adjusted Libor Rate shall be
determined on the basis of the offered quotation of the other Reference
Lender. The Adjusted Libor Rate shall be adjusted automatically on and as of
the effective date of any change in the Libor Rate Reserve Percentage.
"ADVANCE" and "ADVANCES" means the funding by any Lender of all or a
portion of the Loans in accordance with this Agreement.
"AFFILIATE" means singly and collectively, any Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, the Borrower. For purposes of this
definition, a Person shall be deemed to be "controlled by" the Borrower if
the Borrower possesses, directly or indirectly, power either to (i) vote 10%
or more of the securities having ordinary voting power for the election of
directors of such Person or (ii) direct or cause the direction of the
management and policies of such Person whether by contract or otherwise, and
the legal representative, successor or assign of any such Person.
"AGENT" means Fleet or any other Person which is at the time in question
serving as the agent under the terms of Article 8 hereof and the other
Financing Documents.
"AGREEMENT" means this loan agreement, as the same may from time to time
be amended.
"A.M." means a time from and including 12 o'clock midnight to and
excluding 12 o'clock noon on any Business Day using Eastern Standard
(Daylight Savings) time.
2
APPLICABLE MARGIN means as of any date, for the period commencing on
the Closing Date and ending on the fifth Business Day after the Borrower
delivers its financial statements to the Agent for the fiscal quarter ending
April 3, 1999 (the "INITIAL PERIOD"), (i) with respect to Libor Loans, two
percent (2%), (ii) with respect to Prime Rate Loans one-half of one percent
(1/2%), and thereafter, the applicable per annum percentage set forth below:
LEVEL LEVERAGE RATIO PRIME RATE LOANS LIBOR LOANS
I Greater than 2:1 1% 2.75%
II Greater than 1:1 and less .50% 2%
than or equal to 2:1
III 1:1 or less .00% 1%
Any change in the Applicable Margin required pursuant to the foregoing shall
become effective on the fifth Business Day after the Agent receives the
Borrower's financial statements for the Borrower's fiscal quarter or
year-end, as the case may be. In the event that the financial statements
required to be delivered pursuant to SECTION 5.3.2 or 5.3.3 are not delivered
when due, are delivered thereafter and an interest rate adjustment is
required, such adjustment shall be retroactively effective to the date on
which the financial statements in question should have been delivered to the
Agent in accordance with SECTION 5.3.2 or 5.3.3, as the case may be, and (i)
the Borrower shall pay any amount owing by the Borrower as a result thereof
upon written demand from the Agent or (ii) if any amount is owing to the
Borrower as a result of such adjustment, such amount shall be credited
against interest accruing on the Loans then outstanding ratably among the
Lenders. In the event that the Applicable Margin which is calculated based
on the Borrower's unaudited financial statements for the any fiscal quarter
of any fiscal year of the Borrower delivered pursuant to Section 5.3.3 is
different from the Applicable Margin which is calculated based on the
Borrower's audited financial statements delivered pursuant to Section 5.3.2
for such year, then the Applicable Margin shall be adjusted retroactively,
and (i) if any amount is owing to the Lenders as a result of such adjustment,
the Borrower shall pay such amount upon demand by the Agent to the Agent for
the ratable benefit of the Lenders, or (ii) if any amount is owing to the
Borrower as a result of such adjustment, such amount shall be credited
against interest accruing on the Loans then outstanding ratably among the
Lenders, PROVIDED THAT in the event of a dispute as to the appropriate fiscal
quarter as to which any adjustment should be allocated, the decision of the
independent accountants of the Borrower shall be made in accordance with GAAP
and shall
3
be binding upon the Agent, the Lenders and the Borrower absent manifest
error. If the amount of any credit due to Borrower as a result of such
adjustment exceeds the aggregate amount of interest accruing on the Loans in
all remaining periods during which Loans are outstanding, the Lenders shall
reimburse Borrower for the amount of such credit which remains unapplied to
pay interest within ten (10) Business Days after all Loans have been paid in
full and the Commitments are terminated. The Agent shall send the Borrower
written notification (each a "Notice of Interest Rate Change") of each change
in the Applicable Margin in accordance with the Agent's customary procedures
as in effect from time to time, but the failure to send such notice shall
have no effect on the effectiveness or applicability of the foregoing
provisions of this definition or Borrower's obligations with respect to
payment and calculation of interest on the Loans.
Each Notice of Interest Rate Change shall be deemed correct and accepted
by the Borrower unless within thirty (30) days after the date of any such
Notice of Interest Rate Change, written notice to the contrary is received by
the Agent from the Borrower. In the event that no interest rate adjustment
is made by the Agent in accordance with the foregoing, or no Notice of
Interest Rate Change is received by the Borrower, any claim for an interest
rate adjustment under this provision must be made by the Borrower by written
statement of the Borrower's claim providing in reasonable detail the
Borrower's calculations of the interest rate adjustments being requested
delivered to the Agent no later than the earlier of (i) with respect to
adjustments based on the Borrower's unaudited financial statements, the
earlier of (A) thirty (30) days after the date such statements are delivered
to the Agent, and (B) seventy-five (75) days after the last day of each
Borrower fiscal quarter, and (ii) with respect to adjustments based on the
Borrower's audited financial statements, (A) thirty (30) days after the date
such statements are delivered and (B) one hundred and twenty (120) days after
the last day of each Borrower fiscal year end.
"AUTHORIZED REPRESENTATIVE" means such senior personnel of the Borrower
as shall be duly authorized and designated in writing by the Borrower to
execute documents, instruments and agreements on its behalf and to perform
the functions of Authorized Representative under any of the Financing
Documents.
"BORROWED MONEY" means any obligation to repay Indebtedness for money
borrowed, any Indebtedness evidenced by notes, bonds, debentures, guaranties
or similar obligations including without limitation the Loans and any
obligation to pay money under a conditional sale or other title retention
agreement, the net aggregate rentals payable under any Capitalized Lease
Obligation, any reimbursement obligation for any letter of credit and any
obligations in respect of banker's and other acceptances or similar
obligations.
"BORROWER" has the meaning assigned in the first paragraph of this
Agreement.
"BUDGET" has the meaning assigned to such term in SECTION 5.3.6.
"BUSINESS CONDITION" means the financial condition, business, assets,
liabilities and operations of a Person.
4
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day on which banks in Boston, Massachusetts or New
York, New York are not authorized or required by applicable law to close;
and (ii) with respect to all notices and determinations in connection with,
and payments of principal and interest on, Libor Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by
and between banks in Dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" means all expenditures paid or incurred by the
Borrower or any Subsidiary in respect of (i) the acquisition, construction,
improvement or replacement of land, buildings, machinery, equipment, any
other fixed assets or leaseholds and (ii) to the extent related to and not
included in (i) above, materials, contract labor and direct labor, which
expenditures have been or should be, in accordance with GAAP, capitalized on
the books of the Borrower or such Subsidiary. Where a fixed asset is
acquired by a lease which is required to be capitalized pursuant to Statement
of Financial Accounting Standards number 13 or any successor thereto, the
amount required to be capitalized in accordance therewith shall be considered
to be an expenditure in the year such asset is first leased.
"CAPITALIZED LEASE OBLIGATIONS" means all lease obligations which have
been or should be, in accordance with GAAP, capitalized on the books of the
lessee.
"CAPITALIZED SOFTWARE DEVELOPMENT COSTS" means the Borrower's and any
Subsidiaries' costs of software development which are capitalized on the
financial statements and books and records of the Person incurring such costs.
"CASH EQUIVALENT INVESTMENTS" means any Investment in (i) direct
obligations of the United States or any agency, authority or instrumentality
thereof, or obligations guaranteed by the United States or any agency,
authority or instrumentality thereof, whether or not supported by the full
faith and credit of, a right to borrow from or the ability to be purchased by
the United States; (ii) commercial paper rated in the highest grade by a
nationally recognized statistical rating agency or which, if not rated, is
issued or guaranteed by any issuer with outstanding long-term debt rated A or
better by any nationally recognized statistical rating agency; (iii) demand
and time deposits with, and certificates of deposit and bankers acceptances
issued by, any office of the Agent, any Lender or any other bank or trust
company which is organized under the laws of the United States or any state
thereof and has capital, surplus and undivided profits aggregating at least
$500,000,000, the outstanding long-term debt of which or of the holding
company of which it is a subsidiary is rated A or better by any nationally
recognized statistical rating agency; (iv) any short-term note which has a
rating of MIG-2 or better by Xxxxx'x Investors Service Inc. or a comparable
rating from any other nationally recognized statistical rating agency; (v)
any municipal bond or other governmental obligation (including without
limitation any industrial revenue bond or project note) which is rated A or
better by any nationally recognized statistical rating agency; (vi) any other
obligation of any issuer, the outstanding long-term debt of which is rated A
or better by any nationally recognized statistical rating agency; (vii) any
repurchase agreement with any financial institution described in clause (iii)
above, relating to any of the foregoing instruments and fully collateralized
by such instruments; (viii) shares of any open-end diversified investment
company that has its assets invested only in investments of the types
described in clause (i) through (vii) above at the time of
5
purchase and which maintains a constant net asset value per share; and (ix)
shares of any open-end diversified investment company registered under the
Investment Company Act of 1940, as amended, which maintains a constant net
asset value per share in accordance with regulations of the Securities &
Exchange Commission, has aggregate net assets of not less than $50,000,000 on
the date of purchase and either derives at least 95% of its gross income from
interest on or gains from the sale of investments of the type described in
clauses (i) through (vii), above or has at least 85% of the weighted average
value of its assets invested in investments of such types; provided that the
purchase of any shares in any particular investment company shall be limited
to an aggregate amount owned at any one time of $500,000. Each Cash
Equivalent Investment shall have a maturity of less than one year at the time
of purchase; provided that the maturity of any repurchase agreement shall be
deemed to be the repurchase date and not the maturity of the subject security
and that the maturity of any variable or floating rate note subject to
prepayment at the option of the holder shall be the period remaining
(including any notce period remaining) before the holder is entitled to
prepayment.
"CHANGE OF CONTROL" means, (x) at any time prior to the completion of an
Initial Public Offering, any change in the ownership of the Borrower such
that the Sprout Group, ceases to own and control, in the aggregate, at least
51.0% of the voting securities of Borrower. For purposes of this
calculation, Class A-1 Preferred Stock shall be treated as voting securities
and (y) at any time after the completion of an Initial Public Offering, any
one of the following events:
(i) any "person" or "group" (each as used in Sections 13(d)(3) and
14(d)(2) of the Securities Exchange Act of 1934, as amended from time to
time), other than the Sprout Group, either (A) becomes the "beneficial
owner" (as defined in Rule 13d-3 of the Exchange Act), directly or
indirectly, of voting capital stock of the Borrower (or securities
convertible into or exchangeable for such voting capital stock)
representing 32% or more of the combined voting power of all voting
capital stock of the Borrower (on a fully diluted basis) or (B)
otherwise has the ability, directly or indirectly, to elect a majority
of the board of directors of the Borrower; or
(ii) during any period of up to 24 consecutive months, commencing on the
Closing Date, individuals who at the beginning of such 24-month period
were directors of the Borrower, or who were nominated for election as
directors by the board of directors of Borrower (or the nominating
committee thereof), shall cease for any reason (other than (A) the
death, disability or retirement of a director or (B) the death,
disability or retirement of an officer of the Borrower that is serving
as a director at such time so long as another officer of the Borrower
replaces such Person as a director) to constitute a majority of the
board of directors of the Borrower.
"CLOSING DATE" means the date on which all of the conditions precedent
set forth in SECTION 3.1 of this Agreement have been satisfied and the Term
Loan is funded in accordance with this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
6
"COMMITMENT" means the Lenders' several commitments to make or maintain
the Loans as set forth in SECTION 2.1 hereof in the maximum outstanding
amount of each Lender's Pro Rata Share of $24,000,000 less the reductions set
forth in SECTION 2.1 and less any reductions and prepayments or repayments of
the Term Loan as set forth in SECTION 2.6.
"COMMONLY CONTROLLED ENTITY" means a Person, whether or not
incorporated, which is under common control with the Borrower within the
meaning of section 414(b) or (c) of the Code.
"DEBT SERVICE COVERAGE RATIO" means as at the date of any determination
thereof, the ratio of (i) EBITDA MINUS the sum of Capital Expenditures and
taxes paid and currently payable for the rolling four Borrower fiscal quarter
period consisting of the Borrower fiscal quarter then ending and the three
immediately preceding Borrower fiscal quarters,to (ii) Total Debt Service
measured as follows: (i) for the first Borrower fiscal quarter ending after
the Closing Date, Total Debt Service for the immediately preceding fiscal
quarter TIMES FOUR (4); (ii) for the second Borrower fiscal quarter ending
after the Closing Date, Total Debt Service for the immediately preceding two
fiscal quarters TIMES TWO (2); (iii) for the third Borrower fiscal quarter
ending after the Closing Date, Total Debt Service for the immediately
preceding three fiscal quarters DIVIDED BY .75; AND FOR EACH BORROWER FISCAL
QUARTER ENDING THEREAFTER, for the rolling four Borrower fiscal quarter
period consisting of the Borrower fiscal quarter then ending and the three
immediately preceding Borrower fiscal quarters.
"DEFAULT" means an event or condition which with the giving of notice or
lapse of time or both would become an Event of Default.
"DEFAULT RATE" has the meaning set forth in Section 2.2.1 hereof.
"DISCHARGED RIGHTS AND OBLIGATIONS" shall have the meaning assigned to
such term in SECTION 9.11.4.
"DOLLARS" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means, for any fiscal period, Net Income PLUS, to the extent
accounted for in Net Income, Interest Expense, taxes, depreciation,
amortization and any other noncash charges or any non-recurring extraordinary
costs incurred by the Borrower and any Subsidiaries prior to January 2, 1999
in connection with closing the Loans and the Related Transactions, for such
period determined on an accrual and consolidated basis in accordance with
GAAP, PLUS, without duplication, any non-cash foreign exchange adjustment
included in the Borrower's profit and loss statement for the fiscal quarter
ending October 3, 1998, PROVIDED THAT such adjustment does not reduce the
Borrower's total equity as reflected on its balance sheet, LESS, Capitalized
Software Development Costs.
"EFFECTIVE PRIME" means the Prime Rate plus the Applicable Margin.
7
"EQUITY" means the Investments in Dollars by the New Stockholders in the
Borrower, made on or prior to the date of this Agreement in the aggregate
amount of not less than $32,000,000 as set forth in EXHIBIT 1.1.
"EQUITY DOCUMENTS" means, collectively, all documents entered into by
the Borrower, the Old Stockholder and/or any of the New Stockholders in
connection with the investment of the Equity.
"ERISA" means the Employee Retirement Income Security Act of 1974 as
amended from time to time.
"EVENTS OF DEFAULT" has the meaning assigned to that term in SECTION 6.1
of this Agreement.
"EXCESS CASH FLOW" means, for any fiscal year of the Borrower, EBITDA
for such fiscal year, MINUS the sum of (i) the amount equal to the payments
included in Total Debt Service paid during such fiscal year, (ii) to the
extent not included in Total Debt Service, all Capital Expenditures permitted
under Section 5.2.17 and paid during such fiscal year, (iii) voluntary
principal prepayments of the Term Loans made during such fiscal year, (iv)
taxes payable during such fiscal year and (v) plus or minus changes in
working capital during such fiscal year.
"EXHIBIT" means, when followed by a letter, the exhibit attached to this
Agreement bearing that letter and by such reference fully incorporated in
this Agreement.
"FACILITY FEE" means, the fee payable by the Borrower in accordance with
SECTION 2.2.2 and the Fee Letter.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/16th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York, PROVIDED that (i) if such
day is not a Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next succeeding Business Day as so
published, and (ii) if no such rate is so published on such next succeeding
Business Day, the Federal Funds Rate for such day shall be the average rate
quoted to the Agent on such day on such transactions as determined by the
Agent in its discretion exercised in good faith.
"FEE LETTER" means that certain side letter of even date with this
Agreement between the Borrower and the Agent regarding certain fees payable
by the Borrower.
"FINANCING DOCUMENTS" means, collectively, this Agreement, each Note,
the Security Documents, the Fee Letter, the Post-Closing Letter, any Letter
of Credit, any Letter of Credit Agreement, any agreement with any Lender
providing any interest rate protection arrangement and each other agreement,
instrument or document now or hereafter executed in connection herewith or
therewith.
8
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America.
"HAZARDOUS MATERIAL" shall mean any substance or material defined or
designated as a hazardous or toxic waste, hazardous or toxic material,
hazardous or toxic substance, or other similar term, by any United States
federal, state or local environmental statute, regulation or ordinance.
"INDEBTEDNESS" means, without duplication for any Person, (i) all
indebtedness or other obligations of said Person for Borrowed Money or for
the deferred purchase price of property or services, including, without
limitation, all reimbursement obligations of said Person with respect to
standby and/or documentary letters of credit (ii) the indebtedness or other
obligations of any other Person ("Other Person") for Borrowed Money or for
the deferred purchase price of property or services, the payment or
collection of which said Person has guaranteed (except by reason of
endorsement for deposit or collection in the ordinary course of business) or
in respect of which said Person is liable, contingently or otherwise, whether
by way of agreement to purchase or lease, to provide funds for payment, to
supply funds to purchase, sell or lease property or services primarily to
assure a creditor of such Other Person against loss or otherwise to invest in
or make a loan to the Other Person, or otherwise to assure a creditor of such
Other Person against loss, (iii) all indebtedness or other obligations of any
Person for Borrowed Money or for the deferred purchase price of property or
services secured by (or for which the holder of such indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien upon or
in any property owned by said Person, whether or not said Person has assumed
or become liable for the payment of such indebtedness or obligations, (iv)
Capitalized Lease Obligations of said Person and (v) obligations of such
Person, in the notional amount, under contracts pursuant to which such Person
has agreed to purchase interest rate protection or swap interest rate
obligations.
"INELIGIBLE SECURITIES" means Securities which may not be underwritten
or dealt in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1993 (12 U.S.C. Section 24, Seventh), as amended.
"INITIAL PUBLIC OFFERING" means the filing by the Borrower of a Form S-1
or any other form of registration statement then available for registration
with the Securities and Exchange Commission or otherwise conducting an
initial public offering of any class of the Borrower's or any Subsidiary's
securities.
"INTELLECTUAL PROPERTY ACQUISITION" means the purchase by Borrower,
funded in part with the initial proceeds of $18,000,000 from the Loans
provided by Lenders at the Closing, of certain intellectual property assets
from Synopsis.
"INTEREST ADJUSTMENT DATE" means (i) as to any Prime Rate Loan to be
converted to a Libor Loan the Business Day elected by the Borrower in its
applicable Interest Rate Election, but being not less than three (3) Business
Days after the receipt by the Agent before 12:00 o'clock P.M. on a Business
Day of an Interest Rate Election electing the Libor Rate as the interest rate
on
9
such Loan; and (ii) as to any Libor Loan, the last Business Day of the
Interest Period pertaining to such Libor Loan.
"INTEREST EXPENSE" means, with respect to any fiscal quarter, the
aggregate amount required to be accrued by the Borrower and any Subsidiaries
in such fiscal quarter for interest, fees (excluding, however, the Facility
Fee being paid to the Agent on the Closing Date), charges and expenses,
however characterized, on its Indebtedness, including, without limitation,
all such interest, fees, charges and expenses required to be accrued with
respect to Indebtedness under the Financing Documents, all determined in
accordance with GAAP.
"INTEREST PERIOD" means:
With respect to each Libor Loan:
(i) initially, the period commencing on the date of such Libor
Loan and ending one, two, three or six or such greater number of months
thereafter as may be acceptable to all of the Lenders and as the
Borrower may elect in the applicable Interest Rate Election and subject
to SECTION 2.9; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such Libor Loan and
ending one, two, three or six or such greater number of months
thereafter as may be acceptable to all of the Lenders and as the
Borrower may elect in the applicable Interest Rate Election and subject
to SECTION 2.9;
PROVIDED THAT clauses (i) and (ii) of this definition are subject to the
following:
(A) any Interest Period (other than an Interest Period determined
pursuant to clause (C) below) which would otherwise end on a day which is not
a Business Day shall be extended to the next succeeding Business Day unless
such Business Day falls in another calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day;
(B) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall, subject
to clause (C) below, end on the last Business Day of a calendar month; and
(C) for the Term Loan, no Interest Period shall end after the Term Loan
Repayment Date and for the Revolving Credit Loan, no Interest Period shall
end after the Revolving Credit Repayment Date; and
(D) with respect to all Libor Loans, no more than three Interest
Periods may be in effect at any time.
"INTEREST RATE ELECTION" means the Borrower's irrevocable telecopied or
telephonic notice of election, which shall be promptly confirmed by a written
notice of election that Effective
10
Prime or the Libor Rate shall apply to all or any portion of the Loans, which
shall, subject to this Agreement, be effective on the next Interest
Adjustment Date, such telecopied or telephonic notice and written
confirmation thereof to be in the form of EXHIBIT 1.4 and to be received by
the Agent prior to 12:00 o'clock P.M. on a Business Day and at least three
(3) Business Days prior to an Interest Adjustment Date in the case of a Libor
Loan, and by 12:00 p.m. on an Interest Adjustment Date in the case of a Prime
Rate Loan or four (4) Business Days in the case of an Interest Rate Election
as to which the consent of the Lenders is required), each such Interest Rate
Election, subject to the terms of this Agreement to apply to the Advance or
the Loan referred to in such Interest Rate Election or to effect a change in
the interest rate on the applicable portion of the Loans then outstanding, as
applicable, with respect to which such Interest Rate Election was made, such
change to occur on the Interest Adjustment Date next succeeding receipt of
such Interest Rate Election by the Agent. Any Interest Rate Election
received by the Agent after 12 o'clock P.M. on a Business Day shall be
deemed, for all purposes of this Agreement to have been received prior to 12
o'clock P.M. on the next succeeding Business Day.
"INVESTMENT" means any investment in any Person whether by means of a
purchase of capital stock, notes, bonds, debentures or other evidences of
Indebtedness and/or by means of a capital or partnership contribution, loan,
deposit, advance or other means, excluding amounts due from customers for
services or products delivered or sold in the ordinary course of business.
"LENDER" means Fleet, or any financial institution which hereafter
becomes a party hereto pursuant to the terms of SECTION 9.10, each in their
individual capacity, and "Lenders" means Fleet and each of such financial
institutions.
"LEVERAGE RATIO" means the ratio of (i) total Indebtedness for Borrowed
Money of the Borrower and its Subsidiaries on a consolidated basis as of the
last day of such fiscal quarter to (ii) EBITDA for the rolling four Borrower
fiscal quarter period consisting of such fiscal quarter and the three
immediately preceding Borrower fiscal quarters.
"LETTER OF CREDIT" means an irrevocable stand-by or commercial letter of
credit issued by the Agent for the account of the Borrower pursuant to a
Letter of Credit Agreement subject to and in accordance with this Agreement.
"LETTER OF CREDIT AGREEMENT" means an application and agreement for
stand-by or commercial letter of credit in such form as may at any time be
customarily required by the Agent for its issuance of stand-by or commercial
letters of credit.
"LIBOR LOAN" means any portion of any Loan bearing interest at the Libor
Rate.
"LIBOR RATE" means, for any Interest Period, the Adjusted Libor Rate in
effect on the first day of such Interest Period (subject to adjustment as
provided in the definition of Adjusted Libor Rate) plus the Applicable Margin
for Libor Loans from time to time in effect.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other) or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including without limitation any conditional sale or other title
11
retention agreement and any Capitalized Lease Obligation) having
substantially the same economic effect as any of the foregoing and the filing
of any financing statement under the applicable Uniform Commercial Code or
comparable law of any jurisdiction in respect of any of the foregoing.
"LOANS" and "LOAN" means at any time the outstanding principal amount of
Indebtedness owed to the Lenders or to any Lender, as the context may require
pursuant to this Agreement.
"MAJORITY LENDERS" means Lenders holding an aggregate Pro Rata Share of
the outstanding principal balance of the Loans in an amount equal to or in
excess of 51.0% of the total outstanding principal balance of the Loans and
if there is no outstanding principal balance of the Loans, Lenders having at
least 51.0% of the Commitment.
"MANAGEMENT" means the individuals who are "executive officers" (as
defined in Rule 16a-1 under the Securities Exchange Act of 1934, as amended)
of Borrower including, but not limited to, Xxxxxxx Xxxxxx and Xxxxxxx Xxxxxx.
"MATERIAL ADVERSE EFFECT" means material adverse effect on (i) the
ability of the Borrower, or the Borrower and any Subsidiaries taken as a
whole, to fulfill any of their respective obligations under any of the
Financing Documents, or (ii) the Business Condition of the Borrower, or the
Borrower and any Subsidiaries taken as a whole.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET INCOME" means, for any fiscal period, the net after tax income
(loss) of the Borrower and any Subsidiaries for such period determined on an
accrual and consolidated basis in accordance with GAAP.
"NEW STOCKHOLDERS" means the Sprout Group and the individual members of
Management.
"NOTE" means any promissory note of the Borrower payable to the order of
a Lender and substantially in the form of EXHIBIT 1.5 or EXHIBIT 1.6 and
evidencing all or a portion of the Loan and "Notes" means all of the Notes,
collectively.
"OBLIGATIONS" mean any and all Indebtedness, obligations and liabilities
of Borrower and/or any Subsidiaries under any of the Financing Documents to
any one or more of the Lenders and/or the Agent of every kind and
description, absolute or contingent, due or to become due, whether for
payment or performance, now existing or hereafter arising, including,
without limitation, all Loans, interest, taxes, fees, charges, and expenses
under the Financing Documents and attorneys' fees chargeable to the Borrower
and/or any Subsidiaries or incurred by any of the Lenders and/or the Agent
under any of the Financing Documents.
"OFFICER'S CERTIFICATE" means a certificate signed by an Authorized
Representative and delivered to the Agent on behalf of the Lenders.
12
"OLD STOCKHOLDER" means Synopsys.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to subtitle A of Title IV of ERISA.
"P.M." means a time from and including 12 o'clock noon on any Business
Day to the end of such Business Day using Eastern Standard (Daylight Savings)
time.
"PERMITTED ENCUMBRANCES" means each Lien granted pursuant to any of the
Security Documents, those Liens, security interests and defects in title
permitted under SECTION 5.2.1 and those Liens listed on EXHIBIT 1.8 hereto.
"PERSON" means an individual, corporation, partnership, limited
liability company, joint venture, trust, or unincorporated organization, or a
government or any agency or political subdivision thereof.
"PLAN" means an employee benefit plan as defined in Section 3(3) of
ERISA maintained for employees of the Borrower or any Commonly Controlled
Entity.
"POST-CLOSING LETTER" means that certain letter agreement between the
Borrower and the Agent dated the Closing Date and listing certain
post-closing actions to be completed by the Borrower.
"PREMISES" has the meaning assigned to such term in SECTION 4.1.20.1.
"PRIME RATE" means the higher of (i) the floating rate of interest per
annum designated from time to time by the Agent as being its "prime rate" of
interest, such interest rate to be adjusted on the effective date of any
change thereof by the Agent, it being understood that such rate of interest
may not be the lowest rate of interest from time to time charged by the Agent
and (ii) the Federal Funds Rate plus one-half percent (.50%), such interest
rate to be adjusted on the effective date of any change thereof by the
Federal Reserve Bank of New York.
"PRIME RATE LOAN(S)" means any portion of the Loans bearing interest at
Effective Prime.
"PROJECTIONS" means the Borrower's written projections of Borrower's
ONE-year future performance on a consolidated basis delivered to the Agent
prior to the Closing and attached to this Agreement as EXHIBIT 1.12.
"PRO RATA SHARE" means (i) with respect to the Commitment, each Lender's
percentage share of the Commitment as set forth immediately opposite such
Lender's name on EXHIBIT 1.9, and (ii) with respect to the Loans, each
Lender's percentage share of the aggregate outstanding principal balance of
the Loans and "Pro Rata Shares" means such percentage shares of the Lenders.
13
"REFERENCE LENDER(S)" means the Agent unless the Agent resigns said
responsibility, at which time and thereafter such term means one or two
Lenders selected by the Agent in its discretion from time to time as a
reference lender for purposes of determining the Adjusted Libor Rate.
"RELATED TRANSACTIONS" means the Borrower's receipt of the Equity, the
Borrower's purchase of certain technology and intellectual property from the
Old Stockholder, the Borrower's payment of a dividend to the Old Stockholder,
the Borrower's issuance of capital stock to the New Stockholders, the
completion of the conditions precedent to the Borrower's receipt of the
Equity as set forth in the Related Transaction Documents and any other
transactions described in the Related Transaction Documents, all on the
Closing Date but immediately subsequent to the initial funding of the Loans
under this Loan Agreement.
"RELATED TRANSACTION DOCUMENTS" means the documents listed on EXHIBIT
1.2.
"REPORTABLE EVENT" shall have the meaning assigned to that term in
Section 4043 of ERISA for which the requirement of 30 days' notice to the
PBGC has not been waived by the PBGC.
"REQUEST" means a written request for the Loans in the form of EXHIBIT
1.10, received by the Agent on behalf of the Lenders from the Borrower in
accordance with this Agreement, specifying the date on which the Borrower
desires such Loans and the disbursement instructions of the Borrower with
respect thereto.
"REVOLVING CREDIT LOAN" means the revolving credit loans to be made by
the Lenders to the Borrower from time to time in the maximum outstanding
principal amount of the Revolving Credit Loan Commitment, all subject and
pursuant to SECTION 2.1.0.
"REVOLVING CREDIT LOAN COMMITMENT" means the Lenders' several
commitments to make Revolving Credit Loans to the Borrower in accordance with
SECTION 2.1.0 and this Agreement and in the maximum outstanding amount of
each Lender's Pro Rata Share of $6,000,000, as such amount may be reduced
pursuant to SECTION 2.6.4.
"REVOLVING CREDIT NOTE" means each revolving credit note of the
Borrower, payable to the order of a Lender in the form of EXHIBIT 1.5 hereto
evidencing the Indebtedness of the Borrower to such Lender with respect to
the Revolving Credit Loan.
"REVOLVING CREDIT REPAYMENT DATE" means the earlier to occur of (i)
September 30, 2003 and (ii) earlier date on which the Revolving Credit Loan
becomes due and payable pursuant to the terms hereof.
"SECTION" means, when followed by a number, the section or subsection of
this Agreement bearing that number.
14
"SECTION 20 SUBSIDIARY" means a subsidiary of the bank holding company
controlling any Lender, which subsidiary has been granted authority by the
Federal Reserve Board to underwrite and deal in certain Ineligible Securities.
"SECURITY DOCUMENTS" means any and all documents, instruments and
agreements now or hereafter providing security for the Loans and any other
Indebtedness of the Borrower or any Subsidiary to any of the Lenders and/or
the Agent, including without limitation the following documents, instruments
and agreements between the Agent and the Borrower or any Subsidiary: any
mortgages on and collateral assignments of real property interests (fee,
leasehold and easement) of the Borrower and any Subsidiary granting Liens
thereon; landlord lien waivers and consents as may be reasonably requested by
the Agent; security agreements granting first Liens on all Borrower's and any
Subsidiary's fixtures and tangible and intangible personal property; pledge
of 14,000,000 shares of the Borrower's capital stock owned by the Sprout
Group; collateral assignments of Borrower's and any Subsidiary's contracts,
licenses, permits, easements and leases; collateral assignments of Borrower's
and any Subsidiary's copyrights; conditional assignments of Borrower's and
any Subsidiary's trademarks and patents; any Subordination Agreement; the
software escrow agreement referred to in SECTION 5.1.24; any guaranty by a
Subsidiary; any pledge of the capital stock of any Subsidiary; casualty and
liability insurance policies providing coverage to the Agent for the benefit
of the Lenders; UCC-1 financing statements or similar filings perfecting the
above-referenced security interests, pledges and assignments, all as
executed, delivered to and accepted by the Agent on or prior to the Closing
Date or subsequent to the Closing Date as may be required by this Agreement,
as any of the foregoing may be amended in writing by the Agent and any other
party or parties thereto.
"SELLING LENDER" shall have the meaning assigned to such term in SECTION
9.11.1.
"SINGLE EMPLOYER PLAN" means any Plan as defined in Section 4001(a)(15)
of ERISA.
"SOLVENT" as applied to any Person at any date shall mean that on and as
of such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including, without limitation,
contingent liabilities of such Person, (b) the present fair salable value of
the assets of such Person is not less than the amount that will be required
to pay the probable liability of such Person on its debts as they become
absolute and matured, (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability
to pay as such debts and liabilities mature and (d) such Person is not
engaged in business or a transaction, and is not about to engage in business
or a transaction, for which such Person's property would constitute an
unreasonably small capital. The amount of contingent liabilities on and as
of any date shall be computed as the amount that, in the light of all the
facts and circumstances existing on and as of such date, represents the
amount that can reasonably be expected to become an actual or matured
liability. For purposes of this definition, "PERSON" shall mean, where so
required by the context in which the term "Solvent" appears, such Person and
its Subsidiaries taken as a whole.
"SPROUT GROUP" means the group of equity investors in Borrower
identified on EXHIBIT 1.1 hereto.
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"STOCKHOLDER" means, collectively, the Old Stockholder and the New
Stockholders.
"SUBSIDIARY" means any corporation or entity other than the Borrower of
which more than 50% of the outstanding capital stock or voting interests or
rights having ordinary voting power to elect a majority of the board of
directors or other managers of such entity (irrespective of whether or not at
the time capital stock or voting interests or rights of any other class or
classes of such Person shall or might have voting power upon the occurrence
of any contingency) is at the time directly or indirectly owned by the
Borrower or by the Borrower and/or one or more Subsidiaries or the management
of which corporation or entity is under control of the Borrower and/or any
other Subsidiary, directly or indirectly through one or more Persons and any
other Person which, under GAAP, should at any time for financial reporting
purposes be consolidated or combined with the Borrower and/or any other
Subsidiary.
"SUBSTITUTED LENDER" has the meaning set forth in SECTION 9.11 hereof.
"SUBSTITUTION AGREEMENT" has the meaning assigned to such term in
SECTION 9.11.1.
"SYNOPSIS" means Synopsis, Inc.
"TERM LOAN" means the term loan in the aggregate principal amount of
$18,000,000 to be made or maintained by the Lenders pursuant to SECTION 2.1.1
hereof.
"TERM NOTE" means a term note of the Borrower payable to the order of a
Lender in the form of EXHIBIT 1.6 hereto evidencing the Indebtedness of the
Borrower to such Lender with respect to the Term Loan.
"TERM LOAN REPAYMENT DATE" means the earlier to occur of (i)
September 30, 2003 and (ii) such earlier date on which the Term Loan becomes
due and payable pursuant to the terms hereof.
"TOTAL DEBT SERVICE" means, at any date of determination, the sum of (i)
interest expense and (ii) scheduled and mandatory principal payments for the
fiscal period in question due on account of any Indebtedness of the Borrower,
but excluding any mandatory payments of principal required pursuant to
SECTIONS 2.6.1.2, 2.6.1.3, 2.6.1.4 and 2.6.1.5.
"UNUSED FEES" has the meaning assigned to such term in SECTION 2.2.2.
SECTION 1.2. ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, calculations of
amounts for the purposes of calculating any financial covenants or ratios
hereunder shall be made in accordance with GAAP applied on a basis consistent
with those used in the Borrower's financial statements referred to in SECTION
4.1.5 (other than departures therefrom not material in their impact), and all
financial data submitted pursuant to this Agreement shall be prepared in
accordance with GAAP (except, in the case of unaudited financial statements,
the absence of footnotes and that such statements are subject to changes
resulting from year-end adjustments made in accordance with GAAP).
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SECTION 1.3. OTHER TERMS. References to "Articles", "Sections",
"subsections" and "Exhibits" shall be to Sections, subsections and Exhibits
and of this Agreement unless otherwise specifically provided. In this
Agreement, "hereof," "herein," "hereto," "hereunder" and the like mean and
refer to this Agreement as a whole and not merely to the specific section,
paragraph or clause in which the respective word appears; words importing any
gender include the other genders; references to "writing" include printing,
typing, lithography and other means of reproducing words in a tangible
visible form; the words "including," "includes" and "include" shall be deemed
to be followed by the words "without limitation"; references to agreements
and other contractual instruments shall be deemed to include subsequent
amendments, assignments, and other modifications thereto, but only to the
extent such amendments, assignments and other modifications are not
prohibited by the terms of this Agreement or any other Financing Document;
references to Persons include their respective permitted successors and
assigns or, in the case of governmental Persons, Persons succeeding to the
relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of same and any successor
statutes and regulations.
ARTICLE 2.
AMOUNT AND TERMS OF THE LOANS
SECTION 2.1. THE LOANS.
SECTION 2.1.0. THE REVOLVING CREDIT LOANS. Each of the Lenders
severally agrees, subject to the terms and conditions of this Agreement, to
make Advances of Revolving Credit Loans to the Borrower from time to time
after receipt by the Agent from time to time before the Revolving Credit
Repayment Date of, and at the times provided for in, a Request and an
Interest Rate Election from the Borrower in accordance with this Agreement,
during the period commencing on the Closing Date and ending on the Business
Day immediately preceding the Revolving Credit Repayment Date, in an
aggregate principal amount at any one time outstanding not to exceed such
Lender's Pro Rata Share of the Revolving Credit Loan Commitment less such
Lender's Pro Rata Share of the aggregate outstanding stated amount of any
Letters of Credit or Letter of Credit Agreements and any unreimbursed amounts
drawn thereunder. The outstanding principal balance of the Revolving Credit
Loans shall be repaid on the Revolving Credit Repayment Date.
Promptly after receipt of a Request and Interest Rate Election, Agent
shall notify each Lender by telephone, telex or telecopy of the proposed
borrowing. Subject to the immediately preceding paragraph, each Lender agrees
that after its receipt of notification from Agent of Agent's receipt of a
Request and Interest Rate Election, such Lender shall send its Pro Rata Share
(or such portion thereof as may be necessary to provide Agent with such Pro
Rata Share in Dollars and in immediately available funds, without
consideration or use of any contra accounts of any Lender) of the requested
Loan by wire transfer to Agent so that Agent receives such Pro Rata Share in
Dollars and in immediately available funds not later than 12:00 P.M. (Boston,
Massachusetts time) on the first day of the Interest Period for any such
requested Libor Loan and on the Business Day for such Advance set forth in
Borrower's Request for any such requested
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Prime Rate Loan, and Agent shall advance funds to the Borrower by depositing
such funds in Borrower's account with the Agent upon Agent's receipt of such
Pro Rata Shares in the amount of the Pro Rata Shares of such Loan in Agent's
possession. Unless Agent shall have been notified by any Lender (which
notice may be telephonic if confirmed promptly in writing) prior to the
first day of the Interest Period in respect of any Loan which such Lender is
obligated to make under this Agreement, that such Lender does not intend to
make available to Agent such Lender's Pro Rata Share of such Loan on such
date, Agent may assume that such Lender has made such amount available to
Agent on such date and Agent in its sole discretion may, but shall not be
obligated to, make available to the Borrower a corresponding amount on such
date. If such corresponding amount is not in fact made available to Agent by
such Lender, Agent shall be entitled to recover such corresponding amount
from such Lender promptly upon demand by Agent together with interest
thereon, for each day from such date until the date such amount is paid to
Agent, at the Federal Funds Rate for three (3) Business Days and thereafter
at the interest rate on the Loan in question. If such Lender does not pay
such corresponding amount forthwith upon Agent's demand therefor, Agent shall
promptly notify the Borrower and the Borrower shall promptly pay such
corresponding amount to Agent. Nothing contained in this Section shall be
deemed to relieve any Lender from its obligation to fulfill its obligations
hereunder or to prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
Throughout the term of the Revolving Credit Loans, the Revolving Credit
Loan Commitment may, in Fleet's discretion, be made available to the Borrower
prior to the Revolving Credit Repayment Date by issuance of Letters of Credit
having an expiration date prior to the earlier to occur of (a) the first
anniversary date of the date of issuance of any such Letter of Credit or (b)
three (3) Business Days prior to the Revolving Credit Repayment Date,
reasonably promptly after submission by the Borrower to the Agent of a Letter
of Credit Agreement, duly completed and executed by the Borrower and
otherwise in form and substance satisfactory to Fleet. The Borrower shall
pay upon demand by the Agent such usual and customary fees and costs as Fleet
may from time to time establish for issuance, transfer, amendment and
negotiation of each Letter of Credit and shall pay to the Agent for Fleet's
account upon issuance of any Letter of Credit an annual Letter of Credit fee
in an amount equal to an amount determined by Fleet based on Fleet's usual
and customary fees charged for Letters of Credit similar to such Letter of
Credit. In the event that the Borrower shall fail to reimburse Fleet under
any Letter of Credit or Letter of Credit Agreement, and any outstanding
Indebtedness of the Borrower relating thereto, Fleet shall promptly notify
the Agent, and the Agent shall, in turn, promptly notify each Lender of the
unreimbursed amount together with accrued interest thereon, and each Lender
agrees to purchase, and it shall be deemed to have purchased, a participation
in such Letter of Credit or Letter of Credit Agreement and such indebtedness
in an amount equal to its Pro Rata Share of the unpaid amount together with
unpaid interest thereon. Upon one (1) Business Day's notice from the Agent,
each Lender shall deliver to the Agent an amount equal to its respective
participation in same day funds, at the place and on the date and by the time
notified by the Agent. The obligation of each Lender to deliver to the Agent
an amount equal to its respective participation pursuant to the foregoing
sentence shall be absolute and unconditional and such remittance shall be
made notwithstanding the occurrence or continuation of an Event of Default or
the failure to satisfy any condition set forth in Article III of this
Agreement.
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SECTION 2.1.1. TERM LOANS. Each of the Lenders severally agrees,
subject to the terms and conditions of this Agreement, to make a Term Loan to
the Borrower in the amount of its respective Pro Rata Share of $18,000,000.
Borrower shall pay on the last day of each fiscal quarter commencing January
2, 1999 the amount set forth below as the quarterly payment amount for the
fiscal year in question:
Fiscal Year Quarterly Payment Amount
1999 $500,000
2000 $750,000
2001 $875,000
2002 $1,000,000
2003 $1,375,000
SECTION 2.2. INTEREST AND FEES ON THE LOANS.
SECTION 2.2.1. INTEREST; DEFAULT RATE OF INTEREST; SUSPENSION OF
LIBOR LOANS; ETC. Interest shall accrue on the Loans at Effective Prime or
the Libor Rate for each of the Loans' Interest Periods in accordance with the
Borrower's Interest Rate Elections for the Loans subject to and in accordance
with the terms and conditions of this Agreement and the Note(s); provided
that if a Default or an Event of Default exists and is continuing, no
Interest Rate Election electing the Libor Rate shall be effective and all
Loans shall bear interest, payable on demand, at Effective Prime PLUS, so
long as an Event of Default exists and is continuing, two percent (2%) above
the Applicable Margin (the "DEFAULT RATE"); all of the foregoing being
applicable until such Default or Event of Default is cured or waived and, as
to availability of Libor Loans, an Interest Rate Election electing the Libor
Rate for such Loan or portion thereof which is effective in accordance with
this Agreement is submitted to the Agent; and provided further that the
Borrower shall submit Interest Rate Elections so that on any date on which
under SECTION 2.1.1 a regularly scheduled payment of principal of the Term
Loans is to be made, at least the amount of the Term Loans to be so repaid is
bearing interest at Effective Prime and/or such payment date is an Interest
Adjustment Date for outstanding Libor Loans in such amount of the Term Loans.
The Borrower shall pay such interest to the Agent for the pro rata account
of each Lender in arrears on the Loans (including without limitation Libor
Loans) outstanding from time to time after the Closing Date, such payments to
be made, with respect to Libor Loans with Interest Periods of three months or
less on each Interest Adjustment Date for such Loans, and with respect to
Libor Loans with Interest Periods of more than three months and with respect
to Prime Rate Loans, quarterly on the last Business Day of each calendar
quarter of each year. In the event no Interest Rate Election has been made
by the Borrower with respect to any Loan or Advance (or an Interest Rate
Election shall have expired without an effective substitute Interest Rate
Election), Effective Prime shall be the rate applicable to such Loan or
Advance. All provisions of each Note and any other agreements between the
Borrower and the Lenders are expressly subject to the condition that in no
event, whether by reason of acceleration of maturity of the Indebtedness
evidenced by any Note or otherwise, shall the amount paid or agreed to be
paid to the Lenders which is deemed interest under applicable law exceed the
maximum permitted rate of interest under applicable law (the "MAXIMUM
PERMITTED RATE"), which shall mean the law in effect on the date of this
Agreement, except that if there is a change in such law which results in a
higher Maximum Permitted Rate, then each Note shall be governed by such
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amended law from and after its effective date. In the event that fulfillment
of any provision of any Note, or this Agreement or any document, instrument
or agreement providing security for any Note results in the rate of interest
charged under any Note being in excess of the Maximum Permitted Rate, the
obligation to be fulfilled shall automatically be reduced to eliminate such
excess. If, notwithstanding the foregoing, any Lender receives an amount
which under applicable law would cause the interest rate under any Note to
exceed the Maximum Permitted Rate, the portion thereof which would be
excessive shall automatically be deemed a prepayment of and be applied to the
unpaid principal balance of such Note to the extent of then outstanding Prime
Rate Loans and not a payment of interest and to the extent said excessive
portion exceeds the outstanding principal amount of Prime Rate Loans, said
excessive portion shall be repaid to the Borrower.
SECTION 2.2.2. FEES. On the Closing Date the Borrower shall pay
the Facility Fee to the Agent for the account of Fleet. In addition, on the
last Business Day of each March, June, September and December commencing
December 31, 1998 and continuing through the earlier of (i) the Revolving
Credit Repayment Date and (ii) the date that all amounts owed hereunder have
been paid and all Commitments to make Revolving Credit Loans have terminated,
the Borrower shall pay to the Agent for the pro rata account of each Lender,
a fee (the "Unused Fee") in an amount equal to .50% per annum of the amount,
if any, by which the average actual daily amount of the Revolving Credit Loan
Commitment for the quarterly period just ended (or in the case of the first
such payment, the period from the Closing Date to the date such payment is
due) exceeds the sum of the average of the actual daily outstanding principal
balances of the Revolving Credit Loans PLUS the average of the actual daily
aggregate amount of the outstanding stated amount of any Letter of Credit or
Letter of Credit Agreement, and any unreimbursed amounts thereunder.
SECTION 2.2.3. INCREASED COSTS - CAPITAL. If, after the date
hereof, any Lender shall have reasonably determined that the adoption after
the date hereof of any applicable law, governmental rule, regulation or order
regarding capital adequacy of banks or bank holding companies, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender or
such Lender's holding company with any policy, guideline, directive or
request regarding capital adequacy (whether or not having the force of law
and whether or not failure to comply therewith would be unlawful) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on the capital of such Lender or such Lender's
holding company as a consequence of the obligations hereunder of such Lender
to a level below that which such Lender could have achieved but for such
adoption, change or compliance (taking into consideration the policies of
such Lender or such Lender's holding company with respect to capital adequacy
immediately before such adoption, change or compliance and assuming that the
capital of such Lender or such Lender's holding company was fully utilized
prior to such adoption, change or compliance) by an amount reasonably deemed
by such Lender to be material, then such Lender shall notify the Agent and
the Borrower thereof and the Borrower shall pay to the Agent for the account
of such Lender from time to time as specified by such Lender such additional
amounts as shall be sufficient to compensate such Lender for such reduced
return, each such payment to be made by the Borrower within ten (10) Business
Days after each demand by such Lender;
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provided that the Borrower shall have no liability to pay such costs accruing
from and after the 60th day prior to the date of each such demand. A
certificate in reasonable detail of one of the officers of such Lender
describing the event giving rise to such reduction and setting forth the
amount to be paid to such Lender hereunder and a computation of such amount
shall accompany any such demand and shall, in the absence of manifest error,
be presumptively correct. In determining such amount, such Lender shall act
reasonably and will use any reasonable averaging and attribution methods. If
the Borrower shall, as a result of the requirements of this SECTION 2.2.3
above, be required to pay any Lender the additional costs referred to above
and the Borrower, in its sole discretion, shall deem such additional amounts
to be material, the Borrower shall have the right to substitute another bank
satisfactory to the Agent for such Lender which has certified the additional
costs to the Borrower, and the Agent shall use reasonable efforts at no cost
to the Agent to assist the Borrower to locate such substitute bank. Any such
substitution shall take place in accordance with SECTION 9.11 and shall
otherwise be on terms and conditions reasonably satisfactory to the Agent,
and until such time as such substitution shall be consummated, the Borrower
shall continue to pay such additional costs. Upon any such substitution, the
Borrower shall pay or cause to be paid to the Lender that is being replaced,
all principal, interest (to the date of such substitution) and other amounts
owing hereunder to such Lender and such Lender will be released from
liability hereunder.
SECTION 2.3. NOTATIONS. At the time of (i) the making of each
Advance evidenced by any Note, (ii) each change in the interest rate under
any Note effected as a result of an Interest Rate Election; and (iii) each
payment or prepayment of any Note, each Lender may enter upon its records an
appropriate notation evidencing (a) such Lender's Pro Rata Share of the Loans
and (b) the interest rate and Interest Adjustment Date applicable thereto or
(c) such payment or prepayment (voluntary or involuntary) of principal and
(d) in the case of payments or prepayments (voluntary or involuntary) of
principal, the portion of the applicable Loan which was paid or prepaid. No
failure to make any such notation shall affect the Borrower's unconditional
obligations to repay the Loans and all interest, fees and other sums due in
connection with this Agreement and/or any Note in full, nor shall any such
failure, standing alone, constitute grounds for disproving a payment of
principal by the Borrower. However, in the absence of manifest error, such
notations and each Lender's records containing such notations shall
constitute presumptive evidence of the facts stated therein, including,
without limitation, the outstanding amount of such Lender's Pro Rata Share of
the Loans and all amounts due and owing to such Lender at any time. Any such
notations and such Lender's records containing such notations may be
introduced in evidence in any judicial or administrative proceeding relating
to this Agreement, the Loans or any Note.
SECTION 2.4. COMPUTATION OF INTEREST. Interest due under this
Agreement and any Note shall be computed on the basis of a year of 360 days
for the actual number of days elapsed.
SECTION 2.5. TIME OF PAYMENTS AND PREPAYMENTS IN IMMEDIATELY
AVAILABLE FUNDS.
SECTION 2.5.1. TIME. All payments and prepayments of principal,
fees, interest and any other amounts owed from time to time under this
Agreement and/or under each Note shall be made to the Agent for the pro rata
account of each Lender at the address referred to in SECTION 9.6 in Dollars
and in immediately available funds prior to 12:00 o'clock P.M. on the
21
Business Day that such payment is due, provided that the Borrower hereby
authorizes and instructs the Agent to charge against the Borrower's accounts
with the Agent on each date on which a payment is due hereunder and/or under
any Note and on any subsequent date if and to the extent any such payment is
not made when due an amount up to the principal, interest and fees due and
payable to the Lenders, the Agent or any Lender hereunder and/or under any
Note and such charge shall be deemed payment hereunder and under the Note(s)
in question to the extent that immediately available funds are then in such
accounts. The Agent shall use reasonable efforts in accordance with the
Agent's customary procedures to give subsequent notice of any such charge to
the Borrower, but the failure to give such notice shall not affect the
validity of any such charge. To the extent that immediately available funds
are then in such accounts, the failure of the Agent to charge any such
account or the failure of the Agent to charge any such account prior to 12
o'clock P.M. shall not be basis for an Event of Default under SECTION 6.1.1
and any amount due on the Loans on such date shall be deemed paid; provided
that the Agent shall have the right to charge any such account on any
subsequent date for such unpaid payment and an Event of Default shall exist
if sufficient immediately available funds are not in such accounts on the
date the Agent so charges such account after the expiration of any applicable
cure period. In the event of any charge against the Borrower's accounts by
the Agent pursuant to the immediately preceding sentence, the Agent shall use
reasonable efforts to provide notice to the Borrower of such charge in
accordance with the Agent's customary procedures, but the failure to provide
such notice shall not in any way be a basis for any liability of the Agent
nor shall such failure adversely affect the validity and effectiveness of any
such action by the Agent. Any such payment or prepayment which is received by
the Agent in Dollars and in immediately available funds after 12 o'clock P.M.
on a Business Day shall be deemed received for all purposes of this Agreement
on the next succeeding Business Day unless the failure by Agent to receive
such funds prior to 12 o'clock P.M. is due to Agent's failure to charge the
account of Borrower prior to 12 o'clock P.M., except that solely for the
purpose of determining whether a Default or Event of Default has occurred
under SECTION 6.1.1, any such payment or prepayment, if received by the Agent
prior to the close of the Agent's business on a Business Day, shall be
deemed received on such Business Day. All payments of principal, interest,
fees and any other amounts which are owing to any or all of the Lenders or
the Agent hereunder and/or under any of the Notes that are received by the
Agent in immediately available Dollars prior to 12:00 o'clock P.M. on any
Business Day shall, to the extent owing to the Lenders other than the Agent,
be sent by wire transfer by the Agent to any such other Lenders (in each
case, without deduction for any claim, defense or offset of any type) before
3:00 o'clock P.M. on the same Business Day. Each such wire transfer shall be
addressed to each Lender in accordance with the wire instructions set forth
in EXHIBIT 1.9 hereto. The amount of each payment wired by the Agent to each
such Lender shall be such amount as shall be necessary to provide such Lender
with its Pro Rata Share of such payment (without consideration or use of any
contra accounts of any Lender), or with such other amount as may be owing to
such Lender in accordance with this Agreement (in each case, without
deduction for any claim, defense or offset of any type). Each such wire
transfer shall be sent by the Agent only after the Agent has received
immediately available Dollars from or on behalf of the Borrower and each such
wire transfer shall provide each Lender receiving same with immediately
available Dollars on receipt by such Lender. Any such payments of
immediately available Dollars received by the Agent after 12:00 o'clock P.M.
and before 3:00 o'clock P.M. on any Business Day shall be forwarded in the
same manner by the Agent to such Lender(s) as soon as practicable on said
Business Day, and if any such payments of immediately
22
available Dollars are received by the Agent after 3:00 o'clock P.M. on a
Business Day, the Agent shall so forward same to such Lender(s) before 10:00
o'clock A.M. on the immediately succeeding Business Day.
SECTION 2.5.2. SETOFF, ETC. Regardless of the adequacy of any
collateral for any of the Obligations, upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized at any
time and from time to time, without notice to the Borrower (any such notice
being expressly waived by the Borrower), to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held and any other Indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any and all of the
Obligations due and owing by the Borrower. Each such Lender agrees to
promptly notify the Borrower and the Agent after any such setoff and
application; provided that the failure to give such notice shall not affect
the validity of such setoff and application. Promptly following any notice
of setoff received by the Agent from a Lender pursuant to the foregoing, the
Agent shall notify each other Lender thereof. The rights of each Lender
under this SECTION 2.5.2 are in addition to all other rights and remedies
(including, without limitation, other rights of setoff) which such Lender may
have and are subject to SECTION 9.12.
SECTION 2.5.3. UNCONDITIONAL OBLIGATIONS AND NO DEDUCTIONS. The
Borrower's obligation to make all payments provided for in this Agreement and
the other Financing Documents when due shall be unconditional. Each such
payment shall be made when due without deduction for any claim, defense or
offset of any type, including without limitation any withholdings and other
deductions on account of income or other taxes and regardless of whether any
claims, defenses or offsets of any type exist.
SECTION 2.5.3.2. (a) Any and all payments by the Borrower to
or for the account of any Lender or the Agent hereunder or under any other
Financing Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding,
in the case of each Lender and the Agent, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction under the laws of which
such Lender (or its applicable lending office) or the Agent (as the case may
be) is organized or any political subdivision thereof, (all such non-excluded
taxes, duties, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
under this Agreement or any other Financing Document to any Lender or the
Agent,(i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this SECTION 2.5.3.2) such Lender or the Agent receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law, and (iv) the Borrower shall
furnish to the Agent, at its address referred to in SECTION 9.6 hereof, the
original or a certified copy of a receipt evidencing payment thereof.
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(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this
Agreement or any other Financing Document or from the execution or delivery
of, or otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this SECTION 2.5.3.2) paid by such Lender or the Agent (as the
case may be) and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and
on or prior to the date on which it becomes a Lender in the case of each
other Lender, and from time to time thereafter if requested in writing by the
Borrower or the Agent (but only so long as such Lender remains lawfully able
to do so), shall provide the Borrower and the Agent with (i) a properly
completed Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that
such Lender is entitled to benefits under an income tax treaty to which the
United States is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant to
this Agreement is effectively connected with the conduct of a trade or
business in the United States, (ii) a properly completed Internal Revenue
Service Form W-8 or W-9, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is exempt from
United States backup withholding, and (iii) any other form or certificate
required by any taxing authority (including any certificate required by
Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Financing Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Agent with the appropriate form pursuant to Section
2.5.3.2(d) hereof (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to
indemnification under SECTION 2.5.3.2(a) OR 2.5.3.2(b) hereof with respect to
Taxes imposed by the United States; provided, however, that should a Lender,
which is otherwise exempt from or subject to a reduced rate of withholding
tax, become subject to Taxes because of its failure to deliver a form
required hereunder, the Borrower shall take such steps as such Lender shall
reasonably request and at such Lender's cost to assist such Lender to recover
such Taxes.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 2.5.3.2, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its applicable
lending office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender. Alternatively, in the event of
such an additional cost, the Borrower shall have the right to substitute
another bank satisfactory to the
24
Agent, and the Agent and such Lender shall use reasonable efforts at no cost
to the Agent and such Lender to assist the Borrower to locate and effect the
substitution in favor of such substitute bank. Any such substitution shall
take place in accordance with SECTION 9.11 and shall otherwise be on terms
and conditions reasonably satisfactory to the Agent, and until such time as
such substitution shall be consummated, the Borrower shall continue to pay
such additional costs. Upon any such substitution, the Borrower shall pay or
cause to be paid to the Lender that is being replaced, all principal,
interest (to the date of such substitution) and other amounts owing hereunder
to such Lender and such Lender will be released from liability hereunder.
(g) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent the original or a certified copy of a
receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained
in this SECTION 2.5.3.2 shall survive until the first anniversary of the
Repayment Date.
(i) If the Borrower makes any additional payment to any Lender pursuant
to this SECTION 2.5.3.2 in respect of any Taxes, and such Lender determines
that it has received (i) a refund of such Taxes, or (ii) a credit against,
relief or remission for, or a reduction in the amount of, any tax or other
governmental charge as a result of any deduction or credit for any Taxes with
respect to which it has received payments under this SECTION 2.5.3.2, such
Lender shall, to the extent that it can do so without prejudice to the
retention of such refund, credit, relief, remission or reduction, pay to the
Borrower such amount as shall be reasonably determined by such Lender to be
solely attributable to the deduction or withholding of such Taxes. If such
Lender later determines that it was not entitled to such refund, credit,
relief, remission or reduction to the full extent of any payment made
pursuant to the first sentence of this SECTION 2.5.3.2(i), the Borrower shall
upon demand of such Lender promptly repay the amount of such overpayment.
Nothing in this SECTION 2.5.3.2(i) shall be construed as requiring such
Lender to conduct its business or to arrange or alter in any respect its tax
or financial affairs so that it is entitled to receive such a refund, credit
or reduction or as allowing any Person to inspect any records, including tax
returns, of such Lender.
SECTION 2.6. PREPAYMENT AND CERTAIN PAYMENTS.
SECTION 2.6.1. MANDATORY PAYMENTS.
SECTION 2.6.1.1. In addition to each other principal payment
required hereunder, the outstanding principal balances of the Term Loans
shall be repaid on the Term Loan Repayment Date and the outstanding principal
balances of the Revolving Credit Loans shall be repaid on the Revolving
Credit Repayment Date.
SECTION 2.6.1.2. On or before the 90th day after the end of
each fiscal year of the Borrower commencing with the fiscal year ending
September 30, 1999 if at the end of any such fiscal year the Leverage Ratio
is at any time greater than 2.0:1, the Borrower shall prepay to
25
the Agent for the accounts of the Lenders in accordance with their Pro Rata
Shares an amount of the outstanding principal balances of the Term Loans
equal to (i) fifty percent (50%) of the amount, if any, of Excess Cash Flow
for such fiscal year. Such prepayments shall be in addition to any and all
other mandatory and voluntary prepayments required or permitted hereunder and
shall be applied to the principal installments of the Term Loans in the
inverse order of their maturities.
SECTION 2.6.1.3. In the event that the Borrower or any
Subsidiary is entitled to receive, collectively, proceeds from any casualty
insurance policies maintained by any of them on account of any interest of
the Borrower and/or any Subsidiary in any property, which proceeds are in an
amount in excess of $250,000 with respect to any occurrence or related
series of occurrences in any 12-month period, such proceeds shall be received
by the Agent and, to the extent that such proceeds result from a casualty to
property of the Borrower and/or any Subsidiary, so long as no Default or
Event of Default exists and is continuing and the Borrower elects to repair,
replace or restore such property, such proceeds shall be released to the
Borrower subject to reasonable procedures and conditions established by the
Agent to the extent necessary to so repair, replace or restore such property
within 3 months (or as soon as reasonably practicable if such restoration,
replacement or repair is not susceptible to being completed within 3 months)
from the date of receipt of such proceeds by the Agent and to the extent such
proceeds are not so used or do not result from such a casualty, the Borrower
shall make a prepayment of the Term Loans for the accounts of the Lenders in
accordance with their Pro Rata Shares upon written notice from the Agent
given within ten (10) Business Days following the determination that a
prepayment is due hereunder. All such payments shall be applied to the
principal installments of the Term Loans in the inverse order of their
maturities.
SECTION 2.6.1.4. In the event that the Borrower and/or any
Subsidiary sells, assigns or otherwise transfers title to any assets
(tangible or intangible) other than in the ordinary course of its business
for aggregate net cash proceeds in excess of $100,000 in any fiscal year or
in excess of $500,000 in the aggregate since the Closing Date, the Borrower
and/or such Subsidiary shall remit 100% of the net cash proceeds of any sale,
assignment or other transfer which are in excess of such amounts to the Agent
for the accounts of the Lenders in accordance with their Pro Rata Shares to
be applied to the principal installments of the Term Loans in the inverse
order of their maturities within 90 days of the date of Borrower's or any
Subsidiary's receipt of such net cash proceeds; provided, however, that
Borrower may sell any asset (tangible or intangible) which is obsolete,
worn-out or no longer used or useful, or to be used, in Borrower's business
and Borrower may use the proceeds of such sale to purchase other assets
(tangible or intangible) which are, or will be, useful or necessary in the
operation of Borrower's business and if, and to the extent, so used, the
Borrower will not be required to make a prepayment hereunder.
SECTION 2.6.1.5. In the event that the Borrower and/or any
Subsidiary files a Form S-1 or any other form of registration statement then
available for registration with the Securities and Exchange Commission (other
than an offering on Form S-8 in respect of employee stock options) or
otherwise conducts an Initial Public Offering of any class of the Borrower's
or any Subsidiary's securities, the Borrower and/or such Subsidiary upon
receipt of the net aggregate cash consideration from the sale of any such
registered securities shall prepay to the Agent for the accounts of the
Lenders in accordance with their Pro Rata Shares the lesser of (i)
26
the net proceeds of such offering and (ii) the amount necessary to reduce the
total of the outstanding principal balance of the Term Loans, PLUS the
outstanding principal balance of the Revolving Credit Loan, PLUS the unused
portion of the Revolving Credit Loan Commitment to an amount that is equal to
or less than the product of (A) EBITDA for the rolling four Borrower fiscal
quarter period consisting of the most recent Borrower fiscal quarter then
ended and the Borrower's three immediately preceding fiscal quarters TIMES
(B) two (2). Any such prepayment shall be applied to the installments of the
Term Loans in the inverse order of their maturities.
SECTION 2.6.1.6. If at any time the aggregate principal
amount of the Revolving Credit Loans plus the aggregate stated amount of any
outstanding Letters of Credit and unreimbursed amounts thereunder shall
exceed the Revolving Credit Loan Commitment, the Borrower shall immediately
pay to the Agent in immediately available Dollars the amount of such excess.
SECTION 2.6.1.7. In the event that any payment or prepayment
of a Libor Loan under this SECTION 2.6.1 is received on a date other than
the last day of an Interest Period, and after applying such payment or
prepayment to any portion of the Term Loans consisting of a Prime Rate Loan,
such payment or prepayment shall be held by the Agent in a separate account
and be pledged to the Agent as collateral for the Obligations of the
Borrower arising in connection with the Financing Documents until the last
day of the then current Interest Period, at which time the Agent shall apply
such payment or prepayment, for the account of the Lenders in accordance
with their Pro Rata Shares, to the outstanding Libor Loans, for which such
day is an Interest Adjustment Date.
SECTION 2.6.2. VOLUNTARY PREPAYMENTS. All or any portion of the
unpaid principal balance of the Loans (other than portions of any Loans
constituting Libor Loans) may be prepaid at any time, without premium or
penalty (other than amounts due under Section 2.9.5,) by giving the Agent at
least 3 days' prior written notice of such prepayment and by a payment to
the Agent for the accounts of the Lenders in accordance with their Pro Rata
Shares of such prepayment in immediately available Dollars by the Borrower;
provided that each such partial payment or prepayment of principal of the
Loans shall be in a principal amount of at least $400,000 or an integral
multiple of $100,000 in excess thereof and provided further that each such
prepayment of the Term Loans shall be applied to the principal installments
of the Term Loans in the inverse order of their maturities.
SECTION 2.6.3. PREPAYMENT OF LIBOR LOANS. Notwithstanding
anything to the contrary contained in any Note or in any other agreement
executed in connection herewith or therewith, the Borrower shall be permitted
to prepay any portion of the Loans constituting Libor Loans only in
accordance with SECTION 2.9 hereof.
SECTION 2.6.4. PERMANENT REDUCTION OF COMMITMENT. At the
Borrower's option the Commitment and the Revolving Credit Loan Commitment may
be permanently and irrevocably reduced in whole or in part by an amount of at
least $400,000 and to the extent in excess thereof in integral multiples of
$100,000 at any time; provided that (i) the Borrower gives the Agent written
notice of the exercise of such option at least three (3) Business Days prior
to the effective date thereof, (ii) the aggregate outstanding balance of the
Loans, if any, does not
27
exceed the Commitment and the aggregate outstanding balance of the Revolving
Credit Loans, plus the aggregate outstanding amount of any Letters of Credit
or Letter of Credit Agreement and any unreimbursed drawn amounts thereunder,
if any, does not exceed the Revolving Credit Loan Commitment, both as so
reduced in any such case on the effective date of such reduction and (iii)
the Borrower is not, and after giving effect to such reduction, would not be
in violation of SECTION 2.6.3. Any such reduction shall concurrently reduce
the Dollar amount of each Lender's Pro Rata Share of the Commitment and the
Revolving Credit Loan Commitment.
SECTION 2.7. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment to
be made hereunder or under any Note shall be stated to be due on a day other
than a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of payment of fees, if any, and interest under this Agreement and
under such Note.
SECTION 2.8. USE OF PROCEEDS. (a) The Borrower shall use the
proceeds of the Term Loans to fund all or a portion of the Intellectual
Property Acquisition and to pay costs incurred by the Borrower in connection
with the closing of the Loans, including without limitation, the Facility Fee
and costs incurred in connection with the Related Transactions and shall use
the proceeds of the Revolving Credit Loans for Borrower's working capital
needs and for Investments permitted by SECTION 5.2.12. The Borrower shall
obtain any Letters of Credit solely for working capital and general corporate
purposes.
(b) No portion of the proceeds of any Loans is to be used,
and no portion of any Letter of Credit is to be obtained, for the purpose of
(a) knowingly purchasing, or providing credit support for the purchase of,
Ineligible Securities from a Section 20 Subsidiary during any period in which
such Section 20 Subsidiary makes a market in such Ineligible Securities, (b)
knowingly purchasing, or providing credit support for the purchase of, during
the underwriting or placement period, any Ineligible Securities being
underwritten or privately placed by a Section 20 Subsidiary, or (c) making,
or providing credit support for the making of, payments of principal or
interest on Ineligible Securities underwritten or privately placed by a
Section 20 Subsidiary and issued by or for the benefit of the Borrower or any
Subsidiary or other Affiliate of the Borrower.
SECTION 2.9. SPECIAL LIBOR LOAN PROVISIONS. The Libor Loans shall be
subject to and governed by the following terms and conditions:
SECTION 2.9.1. REQUESTS. Each Request accompanied by an Interest
Rate Election selecting the Libor Rate must be received by the Agent in
accordance with the definition of Interest Rate Election.
SECTION 2.9.2. LIBOR LOANS UNAVAILABLE. Notwithstanding any other
provision of this Agreement, if, prior to or on the date on which all or any
portion of the Loans is to be made as or converted into a Libor Loan, any of
the Lenders (or the Agent with respect to (ii) below) shall reasonably
determine (which determination shall be conclusive and binding on the
Borrower), that
28
(i) Dollar deposits in the relevant amounts and for the relevant
Interest Period are not offered to such Lender in the London interbank
market,
(ii) by reason of circumstances affecting the London interbank
market, adequate and reasonable means do not exist for ascertaining the
Adjusted Libor Rate, or
(iii) the Adjusted Libor Rate shall no longer represent the
effective cost to such Lender for Dollar deposits in the London
interbank market for reasons other than the fact, standing alone, that
the Adjusted Libor Rate is based on an averaging of rates determined by
the Agent and that such Lender's rate may exceed such average,
such Lender may elect not to accept any Interest Rate Election electing a
Libor Loan and such Lender shall notify the Agent by telephone or telex
thereof, stating the reasons therefor, not later than the close of business
on the second Business Day prior to the date on which such Libor Loan is to
be made. The Agent shall promptly give notice of such determination and the
reason therefor to the Borrower, and all or such portion of the Loans, as the
case may be, which are subject to any of SECTION 2.9.2 (i), (ii) through
(iii) as a result of such Lender's determination shall be made as or
converted into, as the case may be, Prime Rate Loans and such Lender shall
have no further obligation to make Libor Loans, until further written notice
to the contrary is given by the Agent to the Borrower. If such circumstances
subsequently change so that such Lender shall no longer be so affected, such
Lender's obligation to make or maintain its Pro Rata Share of all or any
portion of the Loans as Libor Loans shall be reinstated when such Lender
obtains actual knowledge of such change of circumstances and promptly after
obtaining such actual knowledge such Lender shall forward written notice
thereof to the Agent. After receipt of such notice, the Agent shall promptly
forward written notice thereof to the Borrower. Upon or after receipt by the
Borrower of such written notice, the Borrower may submit an Interest Rate
Election in accordance with this Agreement electing an Interest Period ending
no later than the Interest Adjustment Date for the then current Interest
Period for the other Lenders' Pro Rata Shares of Libor Loans and electing the
Libor Rate for such Lenders' or Lender's Pro Rata Share(s) of the Loans as to
which such Lender's or Lenders' obligation(s) to make or maintain its or
their Pro Rata Share(s) of the Loans as Libor Loans was suspended and such
Pro Rata Share(s) shall be converted to Libor Loans in accordance with this
Agreement. During any period throughout which any of the Lenders has or have
no obligation to make or maintain its or their Pro Rata Share(s) of the Loans
as Libor Loans, no Interest Rate Elections electing the Libor Rate shall be
effective with regard to the Loans to the extent of the Pro Rata Share(s) of
such Lender(s), but shall be effective as to the other Lenders.
SECTION 2.9.3. LIBOR LENDING UNLAWFUL. In the event that any
change in applicable laws or regulations (including the introduction of any
new applicable law or regulation) or in the interpretation thereof (whether
or not having the force of law) by any governmental or other regulatory
authority charged with the administration thereof, shall make it unlawful for
any of the Lenders to make or continue to maintain its Pro Rata Share of all
or any portion of the Loans as Libor Loans, each such Lender shall promptly
notify the Agent by telephone or telex thereof, and of the reasons therefor,
and the obligation of such Lender to make or maintain its Pro Rata Share of
the Loans or such portion thereof as Libor Loans shall, upon the happening of
such event, terminate and the Agent shall, by telephonic notice to the
Borrower,
29
declare that such obligation has so terminated with respect to such Lender,
and such Pro Rata Share of the Loans or any portion thereof to the extent
then maintained as Libor Loans, shall, on the last day on which such Lender
can lawfully continue to maintain such Pro Rata Share of the Loans or any
portion thereof as Libor Loans, automatically convert into Prime Rate Loans
without additional cost to the Borrower. If circumstances subsequently
change so that such Lender shall no longer be so affected, such Lender's
obligation to make or maintain its Pro Rata Share of all or any portion of
the Loans as Libor Loans shall be reinstated when such Lender obtains actual
knowledge of such change of circumstances, and promptly after obtaining such
actual knowledge such Lender shall forward written notice thereof to the
Agent. After receipt of such notice, the Agent shall promptly forward
written notice thereof the Borrower. Upon or after receipt by the Borrower
of such written notice, the Borrower may submit an Interest Rate Election in
accordance with this Agreement electing an Interest Period ending no later
than the Interest Adjustment Date for the then current Interest Period for
the other Lenders' Pro Rata Shares of Libor Loans and electing the Libor Rate
for such Lenders' or Lender's Pro Rata Share(s) of the Loans as to which such
Lender's or Lenders' obligation(s) to make or maintain its or their Pro Rata
Share(s) of the Loans as Libor Loans was suspended and such Pro Rata Share(s)
shall be converted to Libor Loans in accordance with this Agreement. During
any period throughout which any of the Lenders has or have no obligation to
make or maintain its or their Pro Rata Share(s) of the Loans as Libor Loans,
no Interest Rate Elections electing the Libor Rate shall be effective with
regard to the Loans to the extent of the Pro Rata Share(s) of such Lender(s),
but shall be effective as to the other Lenders.
SECTION 2.9.4. ADDITIONAL COSTS ON LIBOR LOANS. The Borrower
further agrees to pay to the Agent for the account of the applicable Lender
or Lenders such amounts as will compensate any of the Lenders for any
increase in the cost to such Lender of making or maintaining (or of its
obligation to make or maintain) all or any portion of its Pro Rata Share of
the Loans as Libor Loans and for any reduction in the amount of any sum
receivable by such Lender under this Agreement in respect of making or
maintaining all or any portion of such Lender's Pro Rata Share of the Loans
as Libor Loans, in either case, from time to time by reason of:
(i) any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by,
such Lender, under or pursuant to any law, treaty, rule, regulation
(including, without limitation, any Regulations of the Board of
Governors of the Federal Reserve System) or requirement in effect on or
after the date hereof, any interpretation thereof by any governmental
authority charged with administration thereof or by any central bank or
other fiscal or monetary authority or other authority, or any
requirement imposed by any central bank or such other authority whether
or not having the force of law but excluding any amount included in any
Reserve Percentage (as defined in the definition of Adjusted Libor
Rate); or
(ii) any change in (including the introduction of any new)
applicable law, treaty, rule, regulation or requirement or in the
interpretation thereof by any official authority, or the imposition of
any requirement of any central bank, whether or not having the force of
law, which shall subject such Lender to any tax (other than taxes on net
income imposed on such Lender), levy, impost, charge, fee, duty,
deduction or withholding of any kind
30
whatsoever or change the taxation of such Lender with respect to making
or maintaining all or any portion of its Pro Rata Share of the Loans as
Libor Loans and the interest thereon (other than any change which
affects, and to the extent that it affects, the taxation of net income
of such Lender); provided, that with respect to any withholding the
foregoing shall not apply to any withholding tax described in sections
1441, 1442 or 3406 of the Code, or any succeeding provision of any
legislation that amends, supplements or replaces any such section, or to
any tax, levy, impost, duty, charge, fee, deduction or withholding that
results from any noncompliance by a Lender with any federal, state or
foreign law or from any failure by a Lender to file or furnish any
report, return, statement or form the filing or furnishing of which
would not have an adverse effect on such Lender and would eliminate such
tax, impost, duty, deduction or withholding;
In any such event, such Lender shall promptly notify the Agent thereof, and
of the reasons therefor, and the Agent shall promptly notify the Borrower
thereof in writing stating the reasons provided to the Agent by such Lender
therefor and the additional amounts required to fully compensate such Lender
for such increased or new cost or reduced amount as reasonably determined by
such Lender. Such additional amounts shall be payable on each date on which
interest is to be paid hereunder or, if there is no outstanding principal
amount under any of the Notes, within ten (10) Business Days after the
Borrower's receipt of said notice. Such Lender's certificate as to any such
increased or new cost or reduced amount (including calculations, in
reasonable detail, showing how such Lender computed such cost or reduction)
shall be submitted by the Agent to the Borrower and shall, in the absence of
manifest error, be presumptively correct. In determining any such amount, the
Lender(s) may use any reasonable averaging and attribution methods.
Notwithstanding anything to the contrary set forth above, the Borrower shall
not be obligated to pay any amounts pursuant to this SECTION 2.9.4 as a
result of any requirement or change referenced above with respect to any
period prior to the one hundred and eightieth (180th) day prior to the date
on which the Borrower is first notified thereof (other than any amounts which
relate to any such requirement or change which is adopted with retroactive
effect in which case the Borrower shall be obligated to pay all such amounts
accrued from the date as of which such requirement or change is retroactively
effective).
SECTION 2.9.5. LIBOR FUNDING LOSSES. In the event that any payment
or prepayment of a Libor Loan is received on a date other than the last day
of an Interest Period, such payment or prepayment shall, at the request of
the Borrower, be held by the Agent in a separate interest bearing account and
be pledged to the Agent as collateral for the obligations of the Borrower
arising in connection with this Agreement, the Notes and the other Financing
Documents until the end of the then current Interest Period, at which time
the Agent shall apply such payment or prepayment, for the accounts of the
Lenders in accordance with their Pro Rata Shares, to the outstanding Libor
Loans. Notwithstanding the foregoing, in the event Borrower does not request
the Agent to hold prepayment funds as described in the preceding sentence,
and any of the Lenders shall incur any loss or expense (including, without
limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund or
maintain all or any portion of the Loans as Libor Loans) as a result of:
31
(i) payment or prepayment by the Borrower of all or any portion of
any Libor Loan on a date other than the Interest Adjustment Date for such
Libor Loan, for any reason; provided, however that this clause shall not be
deemed to grant the Borrower any right to convert a Libor Loan to a Prime
Rate Loan prior to the end of any Interest Period or to imply such right;
(ii) conversion of all or any portion of any Libor Loan on a day
other than the last day of an Interest Period applicable to such Loan to a
Prime Rate Loan for any reason including, without limitation, acceleration
of the Loans upon or after an Event of Default, any Interest Rate Election
or any other cause whether voluntary or involuntary and whether or not
referred to or described in this Agreement, other than any such conversion
resulting solely from application of SECTIONS 2.9.2 or 2.9.3 by any Lender;
or
(iii) any failure by the Borrower to borrow the Loans as Libor Loans
on the date specified in any Interest Rate Election selecting the Libor
Rate, other than any such failure resulting solely from application of
SECTIONS 2.9.2 or 2.9.3 by any Lender;
such Lender shall promptly notify the Agent thereof, and of the reasons
therefor. Upon the request of the Agent, the Borrower shall pay directly to the
Agent for the account of such Lender such amount as will (in the reasonable
determination of such Lender, which shall be conclusive in the absence of
manifest error) reimburse such Lender for such loss or expense. Each Lender
shall furnish to the Borrower, upon written request from the Borrower received
by the Agent, a written statement setting forth the computation of any such
amounts payable to such Lender under this SECTION 2.9.5.
SECTION 2.9.6. BANKING PRACTICES. Each Lender agrees that upon the
occurrence of any of the events described in SECTIONS 2.2.3 and/or 2.9.2, 2.9.4
or 2.9.5, such Lender will exercise all reasonable efforts to take such
reasonable actions at no expense to such Lender (other than reasonable expenses
which are covered by the Borrower's advance deposit of funds with such Lender
for such purpose, or if such Lender agrees, which the Borrower has agreed to pay
or reimburse to such Lender in full upon demand), in accordance with such
Lender's usual banking practices in such situations and subject to any statutory
or regulatory requirements applicable to such Lender, as such Lender may take
without the consent or participation of any other Person to, in the case of an
event described in SECTIONS 2.2.3 and/or 2.9.4 or 2.9.5, mitigate the cost of
such events to the Borrower and, in the case of an event described in SECTIONS
2.9.2(i), (ii) or (iii), to seek Dollar deposits in any other interbank Libor
market in which such Lender regularly participates and in which the applicable
determination(s) described in SECTIONS 2.9.2(i), (ii) or (iii), as the case may
be, does not apply.
SECTION 2.9.7. BORROWER'S OPTIONS ON UNAVAILABILITY OR INCREASED COST
OF LIBOR LOANS. In the event of any conversion of all or any portion of any
Lender's Pro Rata Share of any Libor Loans to a Prime Rate Loan for reasons
beyond the Borrower's control or in the event that any Lender's Pro Rata Share
of all or any portion of the Libor Loans becomes subject, under SECTIONS 2.9.4
or 2.9.5, to additional costs, the Borrower shall have the option, subject to
the other terms and conditions of this Agreement, to convert such Lender's Pro
Rata Share to a Prime Rate Loan by making Interest Rate Elections for Interest
Periods which (i) end on the Interest
32
Adjustment Date for such Libor Loan or (ii) end on Business Days occurring
prior to such Interest Adjustment Date, in which case, at the end of the last
of such Interest Periods any such Libor Rate Loan shall automatically convert
to a Prime Rate Loan and the Borrower shall have no further right to make an
Interest Rate Election with respect to such Prime Rate Loan other than an
Interest Rate Election which is effective on the Interest Adjustment Date for
such Libor Loan. The Borrower's options set forth in this SECTION 2.9.7 may
be exercised, if and only if the Borrower pays, concurrently with delivery to
the Agent of each such Interest Rate Election and thereafter in accordance
with SECTIONS 2.9.4, 2.9.5 and 2.9.6 all amounts provided for therein to the
Agent in accordance with this Agreement.
If the Borrower shall, as a result of the requirements of SECTION
2.9.4 above, be required to pay any Lender the additional costs referred to
therein, but not be required to pay such additional costs to the other Lender or
Lenders and the Borrower, in its sole discretion, shall deem such additional
amounts to be material or in the event that Libor Loans from a Lender are
unavailable to the Borrower as a result solely of the provisions of SECTIONS
2.9.2, 2.9.3 or 2.9.4, but are available from the other Lender or Lenders, the
Borrower shall have the right to substitute another bank satisfactory to the
Agent for such Lender which is entitled to such additional costs or which is
relieved from making Libor Loans and the Agent shall use reasonable efforts
(with all reasonable costs of such efforts by the Agent to be borne by the
Borrower) to assist the Borrower to locate such substitute bank. Any such
substitution shall take place in accordance with SECTION 9.11 and otherwise be
on terms and conditions reasonably satisfactory to the Agent, and until such
time as such substitution shall be consummated, the Borrower shall continue to
pay such additional costs and comply with the above-referenced Sections. Upon
any such substitution, the Borrower shall pay or cause to be paid to the Lender
that is being replaced, all principal, interest (to the date of such
substitution) and other amounts owing hereunder to such Lender and such Lender
will be released from liability hereunder.
SECTION 2.9.8. ASSUMPTIONS CONCERNING FUNDING OF LIBOR LOANS. The
calculation of all amounts payable to the Lenders under this SECTION 2.9 shall
be made as though each Lender actually funded its relevant Libor Loans through
the purchase of a deposit in the London interbank market bearing interest at the
Libor Rate in an amount equal to that Libor Loan and having a maturity
comparable to the relevant Interest Period and through the transfer of such
deposit from an offshore office of such Lender to a domestic office of such
Lender in the United States of America; provided, however, that each Lender may
fund each of its Libor Loans in any manner it sees fit and the foregoing
assumption shall be utilized solely for the calculation of amounts payable under
this SECTION 2.9.
SECTION 2.10. INTEREST RATE PROTECTION. On or before the Closing Date,
the Borrower shall enter into an interest rate protection arrangement covering
not less than $9,000,000 of the Term Loan. Such interest rate protection
arrangement may consist of any one or a combination of the following: (i) the
purchase of an interest rate swap arrangement from a financial institution
reasonably acceptable to the Majority Lenders covering such Loans effectively
converting the Borrower's interest payment obligations with respect to such
portion of the Term Loans to a fixed rate per annum satisfactory to the Majority
Lenders for a term expiring not earlier than the second anniversary of the
Closing Date or (ii) the purchase of an interest rate cap from a financial
institution reasonably acceptable to the Majority Lenders covering such Loans at
a cap rate per
33
annum satisfactory to the Majority Lenders for a term expiring not earlier
than the second anniversary of the Closing Date. The other terms and
conditions of any such interest rate swap or interest rate cap shall be
reasonably satisfactory to the Majority Lenders.
ARTICLE 3.
CONDITIONS OF LENDING
SECTION 3.1. CONDITIONS PRECEDENT TO THE COMMITMENT AND TO ALL LOANS.
SECTION 3.1.1. THE COMMITMENT AND INITIAL LOANS. The Commitment and
the obligation of the Lenders to make the initial Advances of the Loans and/or
to issue any Letter of Credit or Letter of Credit Agreement are subject to
performance by the Borrower of all of its obligations under this Agreement and
to the satisfaction of the conditions precedent that all legal matters incident
to the transactions contemplated hereby or incidental to the Loans shall be
reasonably satisfactory to counsel for the Agent and that the Lenders shall have
received on or before the Closing Date all of the following, each dated the
Closing Date or another date acceptable to the Lenders and each to be in form
and substance reasonably satisfactory to the Agent or if any of the following is
not a deliverable, the satisfaction of such condition in form and substance
reasonably satisfactory to the Agent:
SECTION 3.1.1.1. The Financing Documents, including, without
limitation, those hereinafter set forth and the Borrower's and any Subsidiary's
certificate of incorporation or other organizational documents, by-laws and each
agreement or instrument relating thereto.
SECTION 3.1.1.2. Certificate of the secretary, clerk or similar
officer of the Borrower and each Subsidiary certifying as to the resolutions of
the shareholders or board of directors of the Borrower and each Subsidiary
authorizing and approving each of the Financing Documents to which the Borrower
and each Subsidiary is a party and other matters contemplated hereby and
certifying as to the names and signatures of the Authorized Representative(s) of
the Borrower and each Subsidiary authorized to sign each Financing Document to
be executed and delivered by or on behalf of the Borrower and each Subsidiary.
The Agent and the Lenders may conclusively rely on each such certificate until
the Agent shall receive a further certificate canceling or amending the prior
certificate and submitting the signatures of the Authorized Representative(s)
named in such further certificate.
SECTION 3.1.1.3. Favorable opinions of (i) Xxxx and Xxxx LLP,
counsel for the Borrower, and (ii) the Assistant General Counsel of Xxxxxxxxx,
Lufkin & Xxxxxxxx, Securities Corporation, counsel to the Sprout Group, each in
form and substance reasonably satisfactory to the Agent.
SECTION 3.1.1.4. An Officer's Certificate stating that:
34
SECTION 3.1.1.4.1. The representations and warranties
contained in SECTION 4.1 and/or contained in any of the other Financing
Documents are correct on and as of the Closing Date as though made on and as of
such date; and
SECTION 3.1.1.4.2. No Default or Event of Default has
occurred and is continuing, or would result from the making of the Loans.
SECTION 3.1.1.5. Certificates of good standing or legal
existence of the secretaries of state (or equivalent officials) of the states
(or jurisdictions) of organization and qualification of and covering the
Borrower and any domestic Subsidiaries dated reasonably near the Closing Date.
SECTION 3.1.1.6. Evidence that (i) the ownership interests in
the Borrower are as set forth in EXHIBIT 1.1, (ii) documentation required for
the New Stockholders to invest the Equity in the Borrower on the Closing Date,
as set forth on EXHIBIT 1.1, has been finalized, and (iii) that except for the
completion of the Intellectual Property Acquisition, [the funding of the Equity
transaction by Borrower and the New Stockholders], the distribution of a special
dividend by Borrower to Old Stockholder in an amount not to exceed $32,000,000,
and receipt and application of certain proceeds of the Loans, all pre-funding
actions required for the Related Transactions have been completed in accordance
with the Related Transaction Documents without any waiver or amendment of any
term or condition contained therein without the prior written approval of the
Lenders, and in compliance with any applicable laws and necessary governmental
authority approvals.
SECTION 3.1.1.7. A Request and an Interest Rate Election.
SECTION 3.1.1.8. All documents, instruments and agreements
necessary to terminate, cancel and discharge the documents, instruments and
agreements evidencing or securing any and all existing Indebtedness of the
Borrower and any Subsidiary and Liens securing such Indebtedness other than
Permitted Encumbrances.
SECTION 3.1.1.9. Payment to the Agent and the Lenders of the
fees specified in this Agreement or the Fee Letter as being payable on the
Closing Date and all reasonable out-of-pocket costs and expenses incurred by the
Agent and Fleet in connection with the transactions contemplated hereby,
including, but not limited to, reasonable outside legal expenses and any
accounting fees, auditing fees, appraisal fees, and other fees associated with
any independent analyses of the Borrower and any Subsidiary and evidence that
all other reasonable fees and costs payable by the Borrower in connection with
the transactions contemplated by the Financing Documents and completed on the
Closing Date have been paid in full.
SECTION 3.1.1.10. An Officer's Certificate in the form of
EXHIBIT 3.1.1.10, duly completed and reflecting, INTER ALIA, compliance by the
Borrower as of the opening of business on the first Business Day after the
Closing Date but based on the Borrower's financial information as of the last
day of the Borrower's most recent fiscal quarter, adjusted to give effect to the
Loans made on the Closing Date and completion of all documentation and other
35
pre-funding preparations for the Related Transactions on or prior to the
Closing Date, with the financial covenants provided for herein.
SECTION 3.1.1.11. Such other information about the Borrower, any
Subsidiaries and/or their Business Condition as the Lenders may reasonably
request.
SECTION 3.1.1.12. True copies of, and/or true copies of any
revisions to, the financial statements, the Projections, the pro forma Closing
Date financial statements giving effect to the Loans, the Equity to be received
on or prior to the Closing Date and completion of all documentation and other
pre-funding preparations for the other Related Transactions on or prior to the
Closing Date, and other information provided pursuant to SECTION 4.1.5 and
certification by the Borrower of the Projections.
SECTION 3.1.1.13. Certificates of fire, business interruption,
liability and extended coverage insurance policies, each such policy to name the
Agent as mortgagee and loss payee and, on all liability policies, as additional
insured.
SECTION 3.1.1.14. True descriptions of any pending or threatened
litigation against or by Borrower or any Subsidiary.
SECTION 3.1.1.15. Evidence that all necessary material third
party consents to the Related Transactions and the Loans have been obtained and
remain in effect without the imposition of any terms or condition not reasonably
acceptable to the Lenders and all required filings with any governmental
authority have been duly completed.
SECTION 3.1.1.16. Evidence that all necessary material third
party consents to the Related Transactions and the Loans have been obtained and
remain in effect without the imposition of any conditions or terms not
reasonably acceptable to the Lenders, and all required filings with any
governmental authority have been duly completed and any applicable waiting
periods shall have expired.
SECTION 3.1.1.17. The financial statements described in SECTION
4.1.5 together with the Borrower's pro forma Closing Date balance sheet. Such
financial statements shall be accompanied by an Officer's Certificate of the
chief financial officer of the Borrower to the effect that (i) the
representations of the Borrower set forth in SECTION 4.1.14 are accurate as of
the Closing Date and (ii) that no Material Adverse Effect has occurred since the
date of the Borrower's most recent financial statements delivered to the Lenders
except as set forth or reflected in the financial statements described in
SECTION 4.1.5 or otherwise disclosed in writing and acceptable to the Agent.
SECTION 3.1.1.18. True copies of (i) the Equity Documents, (ii)
all other documents, instruments and agreements relating to the Borrower's
capital structure and (iii) the Related Transaction Documents.
SECTION 3.1.1.19. The fact that the representations and
warranties of the Borrower contained in Article 4, INFRA, and in each of the
other Financing Documents are true
36
and correct in all material respects on and as of the Closing Date except as
altered hereafter by actions not prohibited hereunder. The Borrower's
delivery of each Note and Letter of Credit Agreement to the Lenders and of
each Request to the Agent shall be deemed to be a representation and warranty
by the Borrower as of the date thereof to such effect.
SECTION 3.1.1.20. That there has been no enactment of any law or
regulation by any governmental authority which would make it (i) unlawful, (ii)
prevent, (iii) restrain or (iv) impose conditions which the Lenders determine to
be materially adverse, in any respect as to the foregoing, to the making of the
Loans and/or the completion of the Related Transactions.
SECTION 3.1.1.21. The Security Documents, after the completion
of any required filings or recordations, will grant to the Agent perfected,
first priority security interests or mortgages, as the case may be, with respect
to the collateral identified therein and the Agent shall received the favorable
opinions of counsel referred to in SECTION 3.1.1.3 above with respect to such
perfection. The Agent shall also have received such searches, landlord
consents, access agreements and/or title insurance commitments as reasonably
requested by the Agent, all in form and substance reasonably satisfactory to the
Agent and/or its counsel. Without limiting the generality of the foregoing, the
Agent shall be reasonably satisfied with the terms and conditions of all real
property leases in which the Borrower and any Subsidiary has a leasehold
interest, including the terms of such leaseholds and the assumability of the
lessee's obligations thereunder upon the transfer of or foreclosure upon of the
Borrower's or any Subsidiary's leasehold interest.
SECTION 3.1.1.22. There shall exist no action, suit,
investigation, litigation or proceeding pending or threatened in any court or
before any arbitrator or governmental or regulatory agency or authority which if
adversely determined would reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.1.1.23. All information and materials supplied to the
Agent prior to the date hereof shall be true and correct in all material
aspects; and no additional information shall have come to the attention of the
Agent or the Lenders that is inconsistent in any material respect with the
information and materials supplied to the Agent prior to the date hereof or that
would reasonably be expected to have a Material Adverse Effect.
SECTION 3.1.1.24. The Agent shall be satisfied with the results
of its and the New Stockholders' due diligence examination of the Borrower,
including without limitation, discussions with Borrower's management and certain
customers selected by the Agent and visits to Borrower's facilities and review
of other business and financial information about the Borrower as may be
requested from time to time by the Agent.
SECTION 3.1.2. THE COMMITMENT AND THE LOANS. The Commitment and the
obligation of each Lender to make or maintain its Pro Rata Share of any Advance
or Loan and/or to issue any Letter of Credit or Letter of Credit Agreement are
subject to performance by the Borrower of all its obligations under this
Agreement and to the satisfaction of the following further conditions precedent:
37
(a) The fact that, immediately prior to and upon the making of each
Loan, no Event of Default or Default shall have occurred and be continuing;
(b) The fact that the representations and warranties of the Borrower
contained in Article 4, INFRA and in each of the other Financing Documents, are
true and correct in all material respects on and as of the date of each Advance
or Loan except as altered hereafter by actions consented to or not prohibited
hereunder and except for those which state that they are made as of a specified
date. The Borrower's delivery of each Request to the Agent shall be deemed to
be a representation and warranty by the Borrower as of the date of such Advance
or Loan as to the facts specified in SECTIONS 3.1.2(a) and (b);
(c) Receipt by Agent on or prior to the Business Day specified in the
definition of Interest Rate Election of a written Request stating the amount
requested for the Loan or Advance in question and an Interest Rate Election for
such Loan or Advance, all signed by a duly authorized officer of the Borrower on
behalf of the Borrower;
(d) That there exists no law or regulation by any governmental
authority having jurisdiction over the Agent or any of the Lenders which would
make it unlawful in any respect for such Lender to make its Pro Rata Share of
the Loan or Advance, including, without limitation, Regulations U, T, and X of
the Board of Governors of the Federal Reserve System; and
(e) No Material Adverse Effect has occurred.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
SECTION 4.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants to the Agent and the Lenders that, after giving
effect to the Loans and the application of the proceeds thereof (which
representations and warranties shall survive the making of the Loans) as
follows:
SECTION 4.1.1. ORGANIZATION AND EXISTENCE. The Borrower and any
Subsidiary is a corporation, duly organized, validly existing and in good
standing under the laws of the state (or applicable jurisdiction) of its
incorporation or organization and is duly qualified to do business in all
jurisdictions in which such qualification is required, all as noted on EXHIBIT
4.1.1, except where failure to so qualify would not have a Material Adverse
Effect, and has all requisite power and authority to conduct its business, to
own its properties and to execute and deliver, and to perform all of its
obligations under the Financing Documents.
SECTION 4.1.2. AUTHORIZATION AND ABSENCE OF DEFAULTS. Except as
described on EXHIBIT 4.1.2, the execution, delivery to the Agent and/or the
Lenders and performance by the Borrower and any Subsidiary of the Financing
Documents and Related Transaction Documents to which it is a party have been
duly authorized by all necessary corporate and governmental
38
action and do not and will not (i) require any consent or approval of the
shareholders or board of directors of the Borrower or any Subsidiary which
has not been obtained, (ii) violate any provision of any law, rule,
regulation (including, without limitation, Regulations U and X of the board
of governors of the federal reserve system), order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Borrower and/or any Subsidiary and/or the articles of
organization or by-laws, as applicable, of the Borrower and/or any
Subsidiary, (iii) result in a material breach of or constitute a material
default under any indenture or loan or credit agreement or any other material
agreement, lease or instrument to which the Borrower and/or any Subsidiary is
or are a party or parties or by which it or they or its or their properties
may be bound or affected; or (iv) result in, or require, the creation or
imposition of any Lien on any of the Borrower's and/or any Subsidiary's
respective properties or revenues other than Liens granted to the Agent by
any of the Financing Documents securing the Obligations. The Borrower and
any Subsidiary are in compliance with all such applicable laws, rules,
regulations, orders, writs, judgments, injunctions, decrees, determinations
or awards or any such indentures, other agreements, leases or instruments,
except where the failure to be in compliance does not have a Material Adverse
Effect.
SECTION 4.1.3. ACQUISITION OF CONSENTS. Except as noted on EXHIBIT
4.1.3, no authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, other than those which
have been obtained, is or will be necessary to the valid execution and delivery
to the Agent and/or the Lenders or performance by the Borrower or any Subsidiary
of any Financing Documents and each of the foregoing which has been obtained is
in full force and effect except where the failure to obtain such authorizations,
consents, approvals, licenses, exemptions or filings would not have a Material
Adverse Effect.
SECTION 4.1.4. VALIDITY AND ENFORCEABILITY. Each of the Financing
Documents to which the Borrower or any Subsidiary is a party when delivered
hereunder will constitute the legal, valid and binding obligations of each of
the Borrower and any Subsidiary which is or are a party thereto enforceable
against the Borrower, and any Subsidiary which is or are a party thereto in
accordance with their respective terms except as the enforceability thereof may
be limited by the effect of general principles of equity and bankruptcy and
similar laws affecting the rights and remedies of creditors generally.
SECTION 4.1.5. FINANCIAL INFORMATION. The following information with
respect to the Borrower has heretofore been furnished to the Agent:
SECTION 4.1.5.1. Audited annual financial statements of
Viewlogic Systems, Inc. prior to its acquisition by Synopsis ("Old Viewlogic")
for the period ended December 31, 1996 and unaudited financial statements for
the period ended September 30, 1997;
SECTION 4.1.5.2. Interim, consolidated balance sheets of the
Borrower and any Subsidiaries as of the end of the most recent fiscal quarter
prior to the Closing for which such statements are available and the related
statements of income, such balance sheets and statements have been prepared and
certified by an Authorized Representative in an Officer's
39
Certificate as having been prepared in accordance with GAAP except for
footnotes and year-end adjustments;
SECTION 4.1.5.3. The Projections.
SECTION 4.1.5.4. The pro forma balance sheet of the Borrower as
of the Closing Date provided pursuant to SECTION 3.1.1.12.
Each of the financial statements referred to above in
SECTION 4.1.5.1 and 4.1.5.2 was prepared in accordance with GAAP (subject, in
the case of interim statements, to the absence of footnotes and normal year-end
adjustments) applied on a consistent basis, except as stated therein. To the
best of the Borrower's knowledge, each of the financial statements referred to
above in SECTIONS 4.1.5.1, 4.1.5.2 and 4.1.5.4 fairly presents the financial
condition or pro forma financial condition, as the case may be, of the Person
being reported on at such dates and is complete and correct in all material
respects and no Material Adverse Effect has occurred since the date thereof.
The Projections were prepared by the Borrower in good faith.
SECTION 4.1.6. NO LITIGATION. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower and/or any Subsidiary or any of their properties before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which if determined adversely to the
Borrower and/or any Subsidiary would draw into question the legal existence of
the Borrower and/or any such Subsidiary and/or the validity, authorization
and/or enforceability of any of the Financing Documents and/or any provision
thereof and/or would reasonably be expected to have a Material Adverse Effect
except those matters, if any, described on EXHIBIT 4.1.6 none of which, in
Borrower's good faith opinion, will (i) have such Material Adverse Effect or
(ii) draw into question (a) the legal existence of the Borrower and/or any such
Subsidiary or (b) the validity, authorization and/or enforceability of any of
the Financing Documents and/or any provision thereof.
SECTION 4.1.7. REGULATION U. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying "margin
stock" within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System (12 CFR Part 221) ("Regulation U"), and does not own and
has no present intention of acquiring any such margin stock or a "margin
security" within the meaning of Regulation U. None of the proceeds of the Loans
will be used directly or indirectly by the Borrower for the purpose of
purchasing or carrying, or for the purpose of reducing or retiring any
Indebtedness which was originally incurred to purchase or carry, any such margin
security or margin stock or for any other purpose which might constitute the
transaction contemplated hereby a "purpose credit" within the meaning of
Regulation U, or cause this Agreement to violate any other regulation of the
Board of Governors of the Federal Reserve System or the Securities and Exchange
Act of 1934, as amended, or any rules or regulations promulgated under either
said statute.
SECTION 4.1.8. ABSENCE OF ADVERSE AGREEMENTS. Neither the Borrower
nor any Subsidiary is a party to any indenture, loan or credit agreement or any
lease or other agreement
40
or instrument or subject to any corporate or partnership restriction which
would have a Material Adverse Effect.
SECTION 4.1.9. TAXES. The Borrower and each Subsidiary has filed all
tax returns (federal, state and local) required to be filed and paid all taxes
shown thereon to be due, including interest and penalties, except for those
taxes, if any, which are being contested in good faith and by appropriate
proceedings, and for which proper reserve or other provision has been made in
accordance with GAAP and except where any failure to file or pay would not have
a Material Adverse Effect on the Borrower or any Subsidiary and except as
described in EXHIBIT 4.1.9.
SECTION 4.1.10. ERISA. Borrower and any Commonly Controlled
Entity do not maintain or contribute to any Plan which is not in substantial
compliance with ERISA, or any Single Employer Plan which has incurred any
accumulated funding deficiency within the meaning of sections 412 and 418 of
the Code or which has applied for or obtained a waiver from the Internal
Revenue Service of any minimum funding requirement under section 412 of the
Code. Borrower and any Commonly Controlled Entity have not incurred any
liability to the PBGC in connection with any Plan covering any employees of
Borrower or any Commonly Controlled Entity in amount exceeding Fifty Thousand
Dollars ($50,000) in the aggregate or ceased operations at any facility or
withdrawn from any Plan in a manner which could subject any of them to
liability under sections 4062(e), 4063 or 4064 of ERISA in amount exceeding
Fifty Thousand Dollars ($50,000) in the aggregate, and know of no facts or
circumstance which might give rise to any liability of Borrower or any
Commonly Controlled Entity to the PBGC under Title IV of ERISA in amount
exceeding Fifty Thousand Dollars ($50,000) in the aggregate. Borrower and
any Commonly Controlled Entity have not incurred any withdrawal liability in
amount exceeding Fifty Thousand Dollars ($50,000) in the aggregate (including
but not limited to any contingent or secondary withdrawal liability) within
the meaning of sections 4201 and 4202 of ERISA, to any Multiemployer Plan,
and no event has occurred, and there exists no condition or set of
circumstances known to the Borrower, which presents a risk of the occurrence
of any withdrawal from or the partition, termination, reorganization or
insolvency of any Multiemployer Plan which could result in any liability to a
Multiemployer Plan in amount exceeding Fifty Thousand Dollars ($50,000) in
the aggregate.
Except for payments for which the minimum funding requirement has
been waived under section 412 of the Code, full payment has been made of all
amounts which Borrower and any Commonly Controlled Entity are required to have
paid as contributions to any Plan under applicable law or under any plan or any
agreement relating to any Plan to which Borrower or any Commonly Controlled
Entity is a party. Borrower and each Commonly Controlled Entity have made
adequate provision for reserves to meet contributions that have not been made
because they are not yet due under the terms of any Plan or related agreements.
Neither Borrower nor any Commonly Controlled Entity has any knowledge,
nor do any of them have any reason to believe, that any Reportable Event which
could result in a liability or liabilities of Fifty Thousand Dollars ($50,000)
or more in the aggregate has occurred with respect to any Plan.
41
Neither Borrower nor any Commonly Controlled Entity maintain,
contributes to, or is required to make or accrue a contribution or has within
any of the six preceding years maintained, contributed to or been required to
make or accrue a contribution to any Plan subject to regulation under Title IV
of ERISA, any Plan that is subject to the minimum funding requirements of
Section 412 of the Code or Section 302 of ERISA, or any Multiemployer Plan.
SECTION 4.1.11. OWNERSHIP OF PROPERTIES.
SECTION 4.1.11.1. Except for Permitted Encumbrances, Borrower
and any Subsidiary has good title to all of its properties and assets free and
clear of all restrictions and Liens of any kind other than those which could
not reasonably be expected to have a Material Adverse Effect or a material
adverse effect on the validity, authorization and/or enforceability of the
Financing Documents and/or any provision thereof.
SECTION 4.1.11.2. EXHIBIT 4.1.11 accurately and completely lists
the location of all real property owned or leased by Borrower or any Subsidiary
organized under to the laws of any state in the United States. Borrower and
each such Subsidiary enjoys quiet possession under all material leases of real
property to which it is a party as a lessee, and all of such leases are valid,
subsisting and, to Borrower's knowledge, in full force and effect.
SECTION 4.1.11.3. Except as set forth in EXHIBIT 4.1.11, all of
the material properties used in the conduct of the Borrower's and each
Subsidiary's business (i) are in good repair, working order and condition
(reasonable wear and tear excepted) and reasonably suitable for use in the
operation of Borrower's, and each Subsidiary's business; and (ii) to Borrower's
knowledge are currently operated and maintained, in all material respects, in
accordance with the requirements of applicable governmental authorities.
SECTION 4.1.12. ACCURACY OF REPRESENTATIONS AND WARRANTIES. None of
Borrower's representations or warranties set forth in this Agreement or in any
document or certificate furnished pursuant to this Agreement or in connection
with the transactions contemplated hereby contains any untrue statement of a
material fact or omits to state a material fact necessary to make any statement
of fact contained herein or therein, in light of the circumstances under which
it was made, not misleading; except that unless provided otherwise any such
document or certificate which is dated speaks as of the date stated and not the
present.
SECTION 4.1.13. NO INVESTMENT COMPANY. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended, which is required to register thereunder.
SECTION 4.1.14. SOLVENCY, ETC. After giving effect to the
consummation of each Loan outstanding and to be made under this Agreement as of
the time this representation and warranty is given, the Borrower (a) will be
able to pay its debts as they become due, (b) will have funds and capital
sufficient to carry on its business and all businesses in which it is about to
engage, and (c) will own property in the aggregate having a value both at fair
valuation and at
42
fair saleable value in the ordinary course of the Borrower's business greater
than the amount required to pay its Indebtedness, including for this purpose
its probable liabilities associated with unliquidated and disputed claims.
The Borrower will not be rendered insolvent by the execution and delivery of
this Agreement and the consummation of any transactions contemplated herein.
SECTION 4.1.15. OWNERSHIP INTERESTS. The schedule of ownership
interests in the Borrower and any Subsidiaries set forth in EXHIBIT 1.1 will be
true, accurate and complete as of the closing of the Related Transactions, and
the Investments to be made for all ownership interests disclosed therein will,
in fact, have been fully paid in immediately available Dollars after giving
effect to the closing of the Related Transactions. After giving effect to the
closing of the Related Transactions, the certificate of incorporation, bylaws
and any other charter or similar governing documents of Borrower will provide
that, prior to an Initial Public Offering, a simple majority of the shares of
capital stock entitled to vote will have the power to approve any merger or sale
of all or substantially all of the assets of Borrower.
SECTION 4.1.16. LICENSES, REGISTRATIONS, COMPLIANCE WITH LAWS, ETC.
EXHIBIT 4.1.16 accurately and completely describes all permits, governmental
licenses, registrations and approvals, material to carrying out of Borrower's
and each of the Subsidiaries' businesses as presently conducted and as required
by law or the rules and regulations of any federal, foreign governmental, state,
county or local association, corporation or governmental agency, body,
instrumentality or commission having jurisdiction over the Borrower or any of
the Subsidiaries, including but not limited to the United States Environmental
Protection Agency, the United States Department of Labor, the United States
Occupational Safety and Health Administration, the United States Equal
Employment Opportunity Commission, the Federal Trade Commission and the United
States Department of Justice and analogous and related state and foreign
agencies. All existing authorizations, licenses and permits material to the
conduct of Borrower's business are in full force and effect, are duly issued in
the name of, or validly assigned to the Borrower or a Subsidiary and the
Borrower or a Subsidiary has full power and authority to operate thereunder.
There is no material violation or material failure of compliance or, to
Borrower's knowledge, allegation of such violation or failure of compliance on
the part of the Borrower or any Subsidiary with any of the foregoing permits,
licenses, registrations, approvals, rules or regulations and there is no action,
proceeding or investigation pending or to the knowledge of the Borrower
threatened nor has the Borrower or any Subsidiary received any notice of such
which could reasonably be expected to result in the termination or suspension of
any such permit, license, registration or approval which in any case could have
a Material Adverse Effect.
SECTION 4.1.17. PRINCIPAL PLACE OF BUSINESS; BOOKS AND RECORDS. The
Borrower's chief executive offices are located at Borrower's addresses set forth
in SECTION 9.6. All of the Borrower's books and records are kept at one or more
of its addresses set forth in SECTION 9.6 or in EXHIBIT A to the Security
Agreement of even date herewith executed by the Borrower in favor of the Agent.
SECTION 4.1.18. SUBSIDIARIES. The Borrower has only the Subsidiaries
identified on EXHIBIT 1.1.
43
SECTION 4.1.19. COPYRIGHT. Except as set forth in EXHIBIT 4.1.19 the
Borrower has not violated in any material respect any of the provisions of the
Copyright Revision Act of 1976, 17 U.S.C. 101, ET SEQ. The Borrower has filed
all registration statements, notices and statements of account and all necessary
supplements and adjustment schedules thereto with the United States Copyright
Office and has made all payments to the United States Copyright Office to obtain
and maintain those copyrights which it has registered with the United States
Copyright Office. EXHIBIT 4.1.19 accurately and completely sets forth all
registered copyrights held by the Borrower or any of the Subsidiaries and
contains exceptions to the representations contained in this SECTION 4.1.19. To
the knowledge of Borrower, no inquiries regarding any such filings have been
received by the Copyright Office.
SECTION 4.1.20. ENVIRONMENTAL COMPLIANCE. Neither the Borrower nor,
to the knowledge of the Borrower, any other Person:
SECTION 4.1.20.1. has caused, permitted, or suffered to exist
any Hazardous Material to be spilled, placed, held, located or disposed of on,
under, or about, any of the facilities owned, leased or used by the Borrower
(the "Premises"), or from the Premises into the atmosphere, any body of water,
any wetlands, or on any other real property which would reasonably be expected
to result in a material liability of Borrower, nor to Borrower's knowledge does
any Hazardous Material exist on, under or about the Premises other than as
disclosed on EXHIBIT 4.1.20, or in respect of Hazardous Material used or
disposed of in compliance with law;
SECTION 4.1.20.2. has any knowledge that any of the Premises has
ever been used (whether by the Borrower or, to the knowledge of the Borrower, by
any other Person) as a treatment, storage or disposal (whether permanent or
temporary) site for any Hazardous Waste as defined in 42 U.S.C.A. 6901, ET SEQ.
(the Resource Recovery and Conservation Act); and
SECTION 4.1.20.3. except as disclosed to the Agent, has any
knowledge of any notice of violation, Lien or other notice issued by any
governmental agency with respect to the environmental condition of the Premises
or any other property owned, leased or operated by the Borrower, or any other
property which was included in the property description of the Premises or such
other real property within the preceding three years which could reasonably be
expected to result in a material liability of Borrower.
SECTION 4.1.21. MATERIAL AGREEMENTS, ETC. EXHIBIT 4.1.21 attached
hereto accurately and completely lists all material agreements to which the
Borrower or any of the Subsidiaries are a party including without limitation all
material software licenses, and all material construction, engineering,
consulting, employment, management, operating and related agreements, if any,
which are presently in effect for which the termination prior to the stated term
thereof would reasonably be expected to have a Material Adverse Effect. All of
the material agreements to which Borrower or any Subsidiary is a party, are
legally valid and binding with respect to the Borrower and its Subsidiaries,
and, to Borrower's knowledge, in full force and effect and neither the Borrower,
any of the Subsidiaries nor, to Borrower's knowledge, any other
44
parties thereto are in material default thereunder except for any defaults
which could not individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
SECTION 4.1.22. PATENTS, TRADEMARKS AND OTHER PROPERTY RIGHTS.
EXHIBIT 4.1.22 attached hereto contains a complete and accurate schedule of all
registered trademarks, registered copyrights and patents of the Borrower and/or
any of the Subsidiaries, and pending applications therefor, and all other
intellectual property in which the Borrower and/or any of the Subsidiaries has
any rights and which is material to the conduct of Borrower's business, other
than "off-the shelf" software which is generally available to the general public
at retail. Except as set forth in EXHIBIT 4.1.22, the Borrower and any
Subsidiaries own, possess, or have licenses to use all the patents, trademarks,
service marks, trade names, copyrights and non-governmental licenses, and all
rights with respect to the foregoing, reasonably necessary for the conduct of
their respective businesses as now conducted, without, to the Borrower's
knowledge any conflict with the rights of others with respect thereto.
SECTION 4.1.23. RELATED TRANSACTIONS . The Borrower has, on or prior
to the date hereof, delivered to the Lenders true copies of the Related
Transaction Documents, and each and every amendment or modification thereto and,
except for receipt and application of certain proceeds of the Loans, all
document preparation and other activities required to complete the Related
Transactions (other than the funding of the investment in the Equity by the New
Stockholders, the Intellectual Property Acquisition, and the payment of the
dividend to Synopsis in an amount not to exceed $32,000,000) have been completed
in accordance with the Related Transaction Documents, without any waiver or
amendment of any term or condition contained therein without the prior written
approval of the Lenders, and in compliance with any applicable laws and
necessary governmental authority approvals.
.
SECTION 4.1.24. MATERIAL ADVERSE EFFECT. No Material Adverse Effect
has occurred and there exists no action, suit, investigation, litigation or
proceeding pending or threatened in writing in any court or before any
arbitrator or governmental or regulatory agency or authority that could
reasonably be expected to result in a Material Adverse Effect.
SECTION 4.1.25. YEAR 2000. Based on the Borrower's familiarity with
its and its Subsidiaries computer applications, , and based on the Borrower's
familiarity with its and its Subsidiaries' material suppliers, vendors and
customers, the Borrower is not aware of any "Year 2000 Problem" (that is, the
risk that computer applications used by any Person may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to,
on and after December 31, 1999) that will result in a Material Adverse Effect.
ARTICLE 5.
COVENANTS OF THE BORROWER
SECTION 5.1. AFFIRMATIVE COVENANTS OF THE BORROWER OTHER THAN REPORTING
REQUIREMENTS. From the date hereof and thereafter for so long as there is
Indebtedness of the Borrower to any Lender and/or the Agent under any of the
Financing Documents or any part of
45
the Commitment is in effect, the Borrower will, with respect to itself and,
unless noted otherwise below, with respect to each of its Subsidiaries,
ensure that each Subsidiary will, unless the Majority Lenders shall otherwise
consent in writing:
SECTION 5.1.1. PAYMENT OF TAXES, ETC. Pay and discharge all taxes
and assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties attach thereto, and all lawful claims for the same which, if
unpaid, might become a Lien upon any of its properties, provided that (unless
and until foreclosure, restraint, sale or any similar proceeding is pending and
is not stayed, discharged or bonded within 30 days after commencement) the
Borrower shall not be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings and for
which proper reserve or other provision has been made in accordance with GAAP,
unless failure to pay could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.1.2. MAINTENANCE OF INSURANCE. Maintain insurance in
accordance with the Security Documents including, without limitation, casualty,
liability and business interruption insurance reasonably acceptable to the
Majority Lenders and, to the extent not covered by any of the Security
Documents, with responsible and reputable insurance companies or associations
in such amounts and covering such risks as is usually carried by companies
engaged in similar businesses and owning similar properties and in accordance
with the requirements of any governmental agency having jurisdiction over the
Borrower and/or any Subsidiary. The Borrower shall provide the Lenders with
such evidence as the Agent may reasonably request from time to time as to the
maintenance of all such insurance. Maintain on the tangible insurable
collateral under any of the Security Documents insurance against loss by fire,
hazards included within the term "extended coverage", and such other hazards,
casualties and contingencies as the Agent may from time to time require, in an
amount equal to the greater of (i) $8,000,000 OR (ii) one hundred percent (100%)
of the replacement cost of the collateral under any of the Security Documents
and business interruption insurance in the amount of at least $8,000,000 All
policies of such insurance and all renewals thereof shall be in form and
substance reasonably acceptable to Agent, shall be made payable in case of loss
to the Agent as loss payee and mortgagee and shall contain an endorsement
requiring thirty (30) days prior written notice to the Agent prior to
cancellation or change in the coverage, scope or amount of any such policies.
Borrower shall also keep in full force and effect a policy of public liability
insurance against claims of bodily injury, death or property damage occurring in
any building providing combined single limit coverage of $1,000,000 for bodily
injury and property damage per occurrence and $2,000,000 in the aggregate.
Borrower shall increase the limits of such liability insurance to such higher
amounts as the Agent may from time to time reasonably require. Certificates of
all such insurance shall be delivered to the Agent concurrently with the
execution and delivery of this Agreement, and thereafter all renewal or
replacement certificates shall be delivered to the Agent not less than thirty
(30) days prior to the expiration date of the policy to be renewed or replaced,
accompanied by evidence satisfactory to the Agent that all premiums payable with
respect to such policies have been paid by Borrower. Borrower shall have the
right of free choice in the selection of the agent or the insurer through or by
which the insurance required hereunder is to be placed; provided, however, said
insurer has at all times a general policyholders' rating of A or A+ in Best's
latest rating guide. Furthermore, upon the
46
occurrence of an Event of Default, the Agent shall have the right and, is
hereby constituted and appointed the true and lawful attorney irrevocable of
Borrower, in the name and stead of Borrower, but in the uncontrolled
discretion of said attorney, (i) to adjust, xxx for, compromise and collect
any amounts due under such insurance policies in the event of loss and (ii)
to give releases for any and all amounts received in settlement of losses
under such policies; and the same shall, subject to SECTION 2.6.1.3 of this
Agreement, at the option of the Agent, be applied, after first deducting the
costs of collection, on account of any Indebtedness the payment of which is
secured by any of the Financing Documents, whether or not then due, or,
notwithstanding the claims of any subsequent lien or, be used or paid over to
Borrower in accordance with reasonable procedures established by the Agent
for use in repairing or replacing any damaged or destroyed collateral under
any of the Security Documents.
SECTION 5.1.3. PRESERVATION OF EXISTENCE, ETC. Preserve and maintain
in full force and effect its legal existence, and all material rights,
franchises and privileges in the jurisdiction of its organization, preserve and
maintain (except for sales of licenses or other scopes of use granted in the
ordinary course of Borrower's business consistent with past practice and
transactions permitted under Section 5.2.3) all material licenses, governmental
approvals, trademarks, patents, trade secrets, copyrights and trade names owned
or possessed by it and which are necessary or, in the reasonable business
judgment of the Borrower, desirable in view of its business and operations or
the ownership of its properties and qualify or remain qualified as a foreign
corporation in each jurisdiction in which such qualification is necessary or, in
its reasonable business judgment, desirable in view of its business and
operations and ownership of its properties except where the failure to so
qualify will not have a Material Adverse Effect.
SECTION 5.1.4. COMPLIANCE WITH LAWS, ETC. Comply in all material
respects with the requirements of all present and future applicable laws, rules,
regulations and orders of any governmental authority having jurisdiction over it
and/or its business including, without limitation, regulations of the United
States Copyright Office and the Copyright Royalty Tribunal, except where the
failure to comply would not have a Material Adverse Effect.
SECTION 5.1.5. VISITATION RIGHTS. Permit, at reasonable intervals
during normal business hours and upon the giving of reasonable notice, the
Agent, the Lenders and any agents or representatives thereof, to examine and
make copies of (at Borrower's cost and expense) and abstracts from the records
and books of account of, and visit the properties of the Borrower and any
Subsidiary to discuss the affairs, finances and accounts of the Borrower or any
Subsidiary with any of its officers or management level employees and/or any
independent certified public accountant of the Borrower and/or any Subsidiary.
SECTION 5.1.6. KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Keep
adequate records and books of account, in which complete entries will be made in
accordance with GAAP and with applicable requirements of any governmental
authority having jurisdiction over the Borrower and/or any Subsidiary in
question, reflecting all financial transactions.
SECTION 5.1.7. MAINTENANCE OF PROPERTIES, ETC. Except as explicitly
permitted by this Agreement, maintain and preserve all of its properties
necessary or useful in the proper
47
conduct of its business, in good working order and condition, ordinary wear
and tear excepted, and in accordance with each of the Security Documents.
SECTION 5.1.8. POST-CLOSING ITEMS. Complete in a timely fashion all
actions required in the Post-Closing Letter.
SECTION 5.1.9. OTHER DOCUMENTS, ETC. Except as otherwise required by
this Agreement, pay, perform and fulfill all of its obligations and covenants
under each material document, instrument or agreement to which it is a party
including, without limitation, the Related Transaction Documents; provided that
so long as the Borrower or any Subsidiary is contesting any claimed default by
it or them under any of the foregoing by proper proceedings conducted in good
faith and for which any proper reserve or other provision in accordance with and
to the extent required by GAAP has been made, such default shall not be deemed a
violation of this covenant, provided further that it shall not be a default of
this covenant if such default under another document, instrument or agreement
would not reasonably be expected to create a Material Adverse Effect.
SECTION 5.1.10. MINIMUM DEBT SERVICE COVERAGE RATIO. Maintain at the
end of each fiscal quarter of the Borrower a Debt Service Coverage Ratio of not
less than 1.25:1.0.
SECTION 5.1.11. MINIMUM INTEREST COVERAGE. Maintain a ratio of
EBITDA to Interest Expense of not less than 3:1, such ratio to be measured at
each Borrower fiscal quarter end after the Closing for the rolling four Borrower
fiscal quarter period consisting of the Borrower fiscal quarter then ending and
the three immediately preceding Borrower fiscal quarters.
SECTION 5.1.12. MAXIMUM LEVERAGE RATIO . Maintain at the end of each
fiscal quarter of the Borrower in each period set forth below a Leverage Ratio
of not greater than the ratio set forth below opposite such period:
Fiscal Quarters Ending Maximum Ratio
01/02/99 through 10/2/99 2.50:1
1/1/00through 9/30/00 2.25:1
12/31/00 and thereafter 2.00:1
SECTION 5.1.13. OFFICER'S CERTIFICATES AND REQUESTS. Provide each
Officer's Certificate required under this Agreement and each Request so that the
statements contained therein are accurate and complete in all material respects.
SECTION 5.1.14. DEPOSITORY. Use the Agent as a principal depository
of Borrower's funds.
SECTION 5.1.15. CHIEF EXECUTIVE OFFICER. Maintain Xxxxxxx Xxxxxx as
chief executive officer of the Borrower and as the Person with principal
executive, operating and management responsibility for the Borrower's business
and maintain Xxxxxxx Xxxxxx as a senior
48
executive officer with technology oversight and research and development
responsibility for Borrower's business.
SECTION 5.1.16. [INTENTIONALLY OMITTED.].
SECTION 5.1.17. ADDITIONAL ASSURANCES. From time to time hereafter,
execute and deliver or cause to be executed and delivered, such additional
instruments, certificates and documents, and take all such actions, as the Agent
shall reasonably request for the purpose of implementing or effectuating the
provisions of the Financing Documents, and upon the exercise by the Agent of any
power, right, privilege or remedy pursuant to the Financing Documents which
requires any consent, approval, registration, qualification or authorization of
any governmental authority or instrumentality, exercise and deliver all
applications, certifications, instruments and other documents and papers that
the Agent may be so required to obtain.
SECTION 5.1.18. APPRAISALS. Permit the Agent and its agents, at any
time and in the sole discretion of the Agent or at the request of the Majority
Lenders, to conduct appraisals of the Borrower's business, the cost of which
shall be borne by the Borrower.
SECTION 5.1.19. ENVIRONMENTAL COMPLIANCE. Comply in all material
respects with the requirements of all federal, state, and local environmental
laws, except where the failure to so comply could not be reasonably expected to
have a Material Adverse Effect; notify the Lenders promptly in the event of any
spill of Hazardous Material materially affecting the Premises occupied by the
Borrower from time to time; forward to the Lenders promptly any written notices
relating to such matters received from any governmental agency; and pay promptly
when due any uncontested fine or assessment against the Premises.
SECTION 5.1.20. REMEDIATION. Promptly contain and remove any
Hazardous Material found on the Premises in compliance with applicable laws and
at the Borrower's expense, subject, however, to the right of the Agent, at the
Agent's option but at the Borrower's expense, to have an environmental engineer
or other representative review the work being done.
SECTION 5.1.21. SITE ASSESSMENTS. Promptly upon the request of the
Agent, based upon the Agent's reasonable belief that a material Hazardous Waste
or other environmental problem exists with respect to any Premises, provide the
Agent with a Phase I environmental site assessment report and, if Agent finds a
reasonable basis for further assessment in such Phase I assessment, a Phase II
environmental site assessment report, or an update of any existing report, all
in scope, form and content and performed by such company as may be reasonably
satisfactory to the Agent.
SECTION 5.1.22. INDEMNITY. Indemnify, defend, and hold the Agent and
the Lenders harmless from and against any claim, cost, damage (including without
limitation consequential damages), expense (including without limitation
reasonable attorneys' fees and expenses), loss, liability, or judgment now or
hereafter arising as a result of any claim for environmental cleanup costs, any
resulting damage to the environment and any other environmental claims against
the Borrower, any Subsidiary, the Lenders and/or the Agent arising out of the
transactions contemplated by this Agreement, or any of the Premises. The
provisions
49
of this Section shall continue in effect and shall survive (among other
events), until the applicable statute of limitations has expired, any
termination of this Agreement, foreclosure, a deed in lieu transaction,
payment and satisfaction of the Obligations of Borrower, and release of any
collateral for the Loans.
SECTION 5.1.23. TRADEMARKS, COPYRIGHTS, ETC. Concurrently with the
acquisition of any registered trademark, registered tradename, registered
copyright, patent or service xxxx collaterally assign and grant a first
priority perfected Lien thereon to the Agent pursuant to documents in form and
substance reasonably satisfactory to the Agent.
SECTION 5.1.24. MAINTENANCE OF ESCROW. Comply with all of the terms
and conditions of a software escrow agreement to be entered into among Borrower,
Agent and the escrow agent thereunder, which will, at the election of Agent, be
based on the existing software escrow arrangements of Borrower (if any) or on a
form of software escrow agreement and with a software escrow agent reasonably
acceptable to Agent, providing copies of Borrower's source code to Agent for the
benefit of the Lenders upon the occurrence of an Event of Default. Borrower's
compliance with such software escrow agreement will, include, without
limitation, the payment of all amounts due thereunder and the requirement to
deposit modifications, updates, new releases or documentation related to
previously deposited materials.
SECTION 5.2. NEGATIVE COVENANTS OF THE BORROWER. From the date hereof and
thereafter for so long as there is Indebtedness of the Borrower to any Lender
and/or the Agent under any of the Financing Documents or any part of the
Commitment is in effect, the Borrower will not, with respect to itself and,
unless noted otherwise below, with respect to each of the Subsidiaries, will
ensure that each such Subsidiary will not, without the prior written consent of
the Majority Lenders:
SECTION 5.2.1. LIENS, ETC. Create, incur, assume or suffer to exist
any Lien of any nature, upon or with respect to any of its properties, now owned
or hereafter acquired, or assign as collateral or otherwise convey as
collateral, any right to receive income, except that the foregoing restrictions
shall not apply to any Liens:
SECTION 5.2.1.1. For taxes, assessments or governmental charges
or levies on property if the same shall not at the time be delinquent or
thereafter can be paid without penalty or interest, or (if foreclosure,
distraint, sale or other similar proceedings shall not have been commenced or if
commenced not stayed, bonded or discharged within 30 days after commencement)
are being contested in good faith and by appropriate proceedings diligently
conducted and for which proper reserve or other provision has been made in
accordance with and to the extent required by GAAP;
SECTION 5.2.1.2. Imposed by law, such as landlords', carriers',
warehousemen's and mechanics' liens, bankers' set off rights and other similar
Liens arising in the ordinary course of business for sums not yet due or being
contested in good faith and by appropriate proceedings diligently conducted and
for which proper reserve or other provision has been made in accordance with and
to the extent required by GAAP;
50
SECTION 5.2.1.3. Arising in the ordinary course of business out
of pledges or deposits under worker's compensation laws, unemployment insurance,
old age pensions, or other social security or retirement benefits, or similar
legislation;
SECTION 5.2.1.4. Arising from or upon any judgment or award,
provided that such judgment or award is being contested in good faith by proper
appeal proceedings and only so long as execution thereon shall be stayed;
SECTION 5.2.1.5. Those set forth on EXHIBIT 1.8 provided that
any lien claimed by Sanwa Business Credit Corporation on account of an existing
UCC-1 financing statement shall not secure Indebtedness in excess of $335,000
and Borrower shall not incur any Indebtedness to, or enter into any agreement
with Sanwa Business Credit Corporation after the Closing Date;
SECTION 5.2.1.6. Those now or hereafter granted pursuant to the
Security Documents or otherwise now or hereafter granted to the Agent for the
benefit of the Lenders as collateral for the Loans and/or Borrower's other
Obligations arising in connection with or under any of the Financing Documents;
SECTION 5.2.1.7. Deposits to secure the performance of bids,
trade contracts (other than for Borrowed Money), leases, statutory obligations,
surety bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of the Borrower's or any Subsidiary's business;
SECTION 5.2.1.8. Easements, rights of way, restrictions and
other similar encumbrances incurred in the ordinary course of business which, in
the aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of business by any Borrower or any
Subsidiary;
SECTION 5.2.1.9. Liens securing Indebtedness permitted to exist
under SECTION 5.2.8.3; provided that the Lien securing any such Indebtedness is
limited to the item of property purchased or leased in each case;
SECTION 5.2.1.10. UCC-1 financing statements filed solely for
notice or precautionary purposes by lessors under operating leases which do not
secure Indebtedness and which are limited to the items of equipment leased
pursuant to the lease in question; and
SECTION 5.2.1.11. UCC-1 financing statements in connection with
sales of revenue streams from product leases without recourse to the Borrower.
SECTION 5.2.2. ASSUMPTIONS, GUARANTIES, ETC. OF INDEBTEDNESS OF OTHER
PERSONS. Assume, guarantee, endorse or otherwise become directly or
contingently liable in connection with any obligation or Indebtedness of any
other Person, except:
51
SECTION 5.2.2.1. Guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business;
SECTION 5.2.2.2. Guaranties, not to exceed $500,000in the
aggregate, of real and personal property leases of Subsidiaries.
SECTION 5.2.2.3. Assumptions, guaranties, endorsements and
contingent liabilities within the definition of Indebtedness and permitted by
SECTION 5.2.8; and
SECTION 5.2.2.4. Those set forth on EXHIBIT 5.2.2.4.
SECTION 5.2.3., DISSOLUTION, MERGER, ETC. Dissolve, liquidate, wind
up, merge or consolidate or combine with another Person, except as permitted
under Section 5.2.21, or sell, assign, lease or otherwise dispose of (whether in
one transaction or in a series of transactions) any material assets (tangible or
intangible), whether now owned or hereafter acquired, other than (a) in the
ordinary course of business, (b) assets which, in the rolling four fiscal
quarters most recently ended, generated less than fifteen percent (15%) of
Borrower's Net Income and (c) rights to receive payment from customers.
SECTION 5.2.4. CHANGE IN NATURE OF BUSINESS. Make any material
change in the nature of its business.
SECTION 5.2.5. OWNERSHIP. Cause or permit the occurrence of any
Change of Control.
SECTION 5.2.6. SALE AND LEASEBACK. Enter into any sale and leaseback
arrangement with any lender or investor, or enter into any leases except in the
normal course of business at reasonable rents comparable to those paid for
similar leasehold interests in the area.
SECTION 5.2.7. SALE OF ACCOUNTS, ETC. Sell, assign, discount or
dispose in any way of any accounts receivable, promissory notes or trade
acceptances held by the Borrower or any Subsidiary, with or without recourse,
except in the ordinary course of the Borrower's or any Subsidiary's business.
SECTION 5.2.8. INDEBTEDNESS. Incur, create, become or be liable
directly or indirectly in any manner with respect to or permit to exist any
Indebtedness except:
SECTION 5.2.8.1. Indebtedness under the Financing Documents;
SECTION 5.2.8.2. Indebtedness with respect to trade payable
obligations and other normal accruals and customer deposits in the ordinary
course of business not yet due and payable in accordance with customary trade
terms or with respect to which the Borrower or any Subsidiary is contesting in
good faith the amount or validity thereof by appropriate proceedings and then
only to the extent such person has set aside on its books adequate reserves
therefor in accordance with and to the extent required by GAAP;
52
SECTION 5.2.8.3. Indebtedness with respect to Capitalized Lease
Obligations and purchase money Indebtedness with respect to real or personal
property in an aggregate amount outstanding at any time not to exceed
$3,500,000; provided that the amount of any purchase money Indebtedness does not
exceed 90% of the lesser of the cost or fair market value of the asset purchased
with the proceeds of such Indebtedness;
SECTION 5.2.8.4. Unsecured Indebtedness in an aggregate amount
outstanding at any time not to exceed $250,000, provided that Borrower may incur
an additional $750,000 (for a total of $1,000,000) only if such additional
amount is expressly subordinated to the Loans;
SECTION 5.2.8.5. Indebtedness listed on EXHIBIT 3.1.1.8;
SECTION 5.2.8.6. Indebtedness owing by the Borrower to any
Subsidiary or by any Subsidiary to the Borrower or any other Subsidiary;
provided, however, that any Indebtedness owing by the Borrower or any Subsidiary
to an Affiliate be subordinated to the Obligations on terms and conditions
satisfactory to the Majority Lenders.
SECTION 5.2.8.7. Indebtedness permitted by SECTION 5.2.2.
SECTION 5.2.8.8. Indebtedness outstanding as a refinancing of
Indebtedness permitted under another clause of this SECTION 5.2.8 other than
SECTION 5.2.8.2; provided that such Indebtedness as refinanced continues to
qualify as permitted Indebtedness under the clause of this SECTION 5.2.8 under
which the refinanced Indebtedness was permitted under this SECTION 5.2.8.
SECTION 5.2.8.9. Indebtedness permitted to be secured by a Lien
under Section 5.2.1.
SECTION 5.2.9. OTHER AGREEMENTS. Amend any of the terms or
conditions of any of the Related Transaction Documents,its certificate of
incorporation, bylaws (or comparable applicable charter or governance document),
to require stockholder approval to authorize a merger or sale of all or
substantially all the assets of the Borrower by more than a simple majority of
the shares of capital stock entitled to vote or amend any subordination
agreement or any indenture, agreement, document, note or other instrument
evidencing, securing or relating to any other Indebtedness permitted under
SECTION 5.2.8 in a manner materially adverse to the Agent or any of the
Lenders,.
SECTION 5.2.10. PAYMENT OR PREPAYMENT OF EQUITY OR SUBORDINATED
DEBT. Make any payment or prepayment of any principal of or interest on or
any payment, prepayment, redemption, defeasance, sinking fund payment, other
repayment of principal or capital or deposit for the purpose of any of the
foregoing on or in connection with the Subordinated Debt, the Equity or any
other equity or ownership interests in the Borrower.
SECTION 5.2.11. DIVIDENDS, PAYMENTS AND DISTRIBUTIONS. Declare or
pay any dividends, management fees or like fees or make any other distribution
of cash or property or
53
both to any of the Stockholders other than compensation for services
rendered to the Borrower and/or any Subsidiary or use any of its assets for
payment, purchase, conversion, redemption, retention, acquisition or
retirement of any beneficial interest in the Borrower or set aside or reserve
assets for sinking or like funds for any of the foregoing purposes, make any
other distribution by reduction of capital or otherwise in respect of any
beneficial interest in the Borrower or permit any Subsidiary which is not a
wholly-owned Subsidiary so to do; provided, however, that (i) in any fiscal
year after the Closing which has been immediately preceded by two full fiscal
years in which Borrower had at least $10,000,000 of Net Income, Borrower may
declare and pay a dividend in an aggregate amount not to exceed fifty percent
(50%) of the Net Income for the immediately preceding year, if and only to
the extent that both before and after such declaration and payment, no Event
of Default shall exist and be continuing and no circumstances shall exist
which, with notice or the passage of time, would constitute an Event of
Default; ; (ii) Borrower may repurchase from any employee of Borrower or
Subsidiary whose employment with Borrower or such Subsidiary ceases any
shares of the capital stock of Borrower which were issued to such employee by
Borrower as restricted stock or pursuant to the exercise of a stock option,
and (iii) Borrower may declare and pay a one time dividend of up to
$32,000,000 to Synopsis in connection with the Related Transactions; provided
further however, that in the event of a Initial Public Offering, and subject
at all times to the Borrower's compliance with the provisions of SECTION
2.6.1.5, the Borrower shall be permitted to redeem or convert shares of the
Borrower's preferred stock and/or declare and pay dividends thereon in
accordance with the Equity Documents. Notwithstanding anything to the
contrary set forth in this Agreement, the New Stockholders may at any time
convert their shares of the Borrower's Series A Voting and Series A-1
Non-Voting preferred stock in accordance with the provisions of the
Certificate of Designations therefor.
SECTION 5.2.12. INVESTMENTS IN OR TO OTHER PERSONS. Make or commit
to make any Investment in or to any other Person (including, without limitation,
any Subsidiary) other than (i) advances to employees for business expenses not
to exceed $10,000 in the aggregate outstanding for any one employee and not to
exceed $100,000 in the aggregate outstanding at any one time to all such
employees, (ii) other employee loans not to exceed $100,000 in the aggregate
outstanding at any one time to all such employees, (iii) Cash Equivalent
Investments, (iv) Indebtedness permitted under Section 5.2.8.6 (v) Investments
in accounts, contract rights and chattel paper (as defined in the Uniform
Commercial Code) and notes receivable, arising or acquired in the ordinary
course of business, (vi) full recourse promissory notes of officers and key
employees of Borrower made by such individuals to Borrower in consideration for
the issuance by Borrower of shares of restricted stock, which stock has been or
will be pledged to Borrower to secure such notes, and (vii) Investments (A) in
acquisitions of all or any part of the assets of or ownership interests in
another Person (other than a Subsidiary), provided that the cash consideration
paid by Borrower for such acquisition(s) does not exceed $250,000 in the
aggregate in any fiscal year and the minimum percentage ownership interests set
forth in the definition of "Change of Control" are maintained or (B) in
Subsidiaries, in the form of capital contribution or otherwise, provided that
the cash consideration paid for or contributed to such Subsidiaries does not
exceed $1,000,000 in the aggregate over the period from the Closing Date to the
Revolving Credit Repayment Date and the Borrower and such Subsidiaries shall
have executed and delivered to the Agent such guaranties, security agreements,
pledges and other instruments or documents reasonably requested by Agent to add
the assets of such Subsidiary or
54
Borrower's ownership interest in it, or both to the collateral provided to
the Lenders for the Loans hereunder, and, in the case of (A) and (B),
provided that before and after making such Investment no Event of Default
shall have occurred and be continuing and there shall be no circumstances
which, with notice or the passage of time, would constitute an Event of
Default; and (viii) $97,000 investment in Transcendent Design, Inc.
SECTION 5.2.13. TRANSACTIONS WITH AffiliateS. Except as contemplated
by the Equity Documents and Related Transaction Documents or as set forth on
EXHIBIT 5.2.13, engage in any transaction or enter into any agreement with an
Affiliate, or in the case of Affiliates or Subsidiaries, with the Borrower or
another Affiliate or Subsidiary, except in the ordinary course of business, as
permitted by any other provision of this Agreement and then only on terms no
less favorable to Borrower than those that would be obtainable an arm's length
basis.
SECTION 5.2.14. CHANGE OF FISCAL YEAR. Change its accounting
policies, reporting practices or its fiscal year from those in effect on the
Closing Date.
SECTION 5.2.15. SUBORDINATION OF CLAIMS. Subordinate any present or
future claim against or obligation of another Person, except as ordered in a
bankruptcy or similar creditors' remedy proceeding of such other Person.
SECTION 5.2.16. COMPLIANCE WITH ERISA. With respect to Borrower and
any Commonly Controlled Entity (a) withdraw from or cease to have an obligation
to contribute to, any Multiemployer Plan so as to result in any material
liability of the Borrower or any Commonly Controlled Entity to PBGC or to any
Multiemployer Plan, (b) engage in any "prohibited transaction" (as defined in
Section 4975 of the Code) involving any Plan which would result in a material
liability of the Borrower or any Commonly Controlled Entity for an excise tax or
civil penalty in connection therewith, (c) except for any deficiency caused by a
waiver of the minimum funding requirement under sections 412 and/or 418 of the
Code, as described above, incur or suffer to exist any material "accumulated
funding deficiency" (as defined in section 302 of ERISA and section 412 of the
Code) of the Borrower or any Commonly Controlled Entity, whether or not waived,
involving any Single Employer Plan, (d) incur or suffer to exist any Reportable
Event or the appointment of a trustee or institution of proceedings for
appointment of a trustee for any Single Employer Plan if, in the case of a
Reportable Event, such event continues unremedied for ten (10) days after notice
of such Reportable Event pursuant to sections 4043(a), (c) or (d) of ERISA is
given, if in the reasonable opinion of the Majority Lenders any of the foregoing
is likely to result in a material liability of the Borrower or any Commonly
Controlled Entity, (e) permit the assets held under any Plan to be insufficient
to protect all accrued benefits, (f) allow or suffer to exist any event or
condition, which presents a material risk of incurring a material liability of
the Borrower or any Commonly Controlled Entity to PBGC by reason of termination
of any such Plan or (g) cause or permit any Plan maintained by Borrower and/or
any Commonly Controlled Entity to be out of compliance with ERISA. For purposes
of this SECTION 5.2.16 "material liability" shall be deemed to mean any
liability of Fifty Thousand Dollars ($50,000) or more in the aggregate.
SECTION 5.2.17. CAPITAL EXPENDITURES. Incur Capital Expenditures in
excess of $2,500,000 during the fiscal year ending on October 2, 1999 or in
excess of $3,000,000 in any
55
fiscal year thereafter. Subject to the foregoing, the Borrower shall make
its Capital Expenditures substantially in accordance with and for the
purposes outlined in the Budget for the Borrower fiscal year in question.
SECTION 5.2.18. HAZARDOUS WASTE. Become involved, or permit, to the
extent reasonably possible after the exercise by the Borrower of reasonable due
diligence and preventive efforts, any tenant of its real property to become
involved, in any operations at such real property generating, storing,
disposing, or handling Hazardous Material or any other activity that could lead
to the imposition on the Borrower or the Agent or any Lender, or any such real
property of any material liability or Lien under any environmental laws.
SECTION 5.2.19. OTHER RESTRICTIONS ON LIENS OR DIVIDENDS. Enter into
any agreement or otherwise agree to or grant any restriction substantially
similar to the provisions of SECTION 5.2.1 hereof or which would otherwise have
the effect of prohibiting, restricting, impeding or interfering with the
creation subsequent to the Closing Date of Liens to secure the Obligations.
SECTION 5.2.20. LIMITATION ON CREATION OF SUBSIDIARIES, ETC.. Except
as permitted under Section 5.2.12, establish, create or acquire any Subsidiary
or become the general partner in any general partnership.
SECTION 5.2.21. SUBSIDIARY MERGER, ETC. Borrower will not permit any
Subsidiary to consummate any merger or consolidation with any other Person,
provided that any wholly-owned Subsidiary may be merged into Borrower or into
another wholly-owned Subsidiary if (i) Borrower or such other wholly-owned
Subsidiary is the surviving Person of such merger and is Solvent (both at the
time of and immediately after giving effect thereto), (ii) Borrower or such
other wholly-owned Subsidiary shall deliver to the Agent such opinions,
confirmations and other agreements and instruments as the majority of the
Lenders shall have reasonably requested, and (iii) both at the time of and
immediately after giving effect to such transaction, no Event of Default shall
have occurred and be continuing and no circumstances shall exist which, with
notice or the passage of time, would constitute an Event of Default. The
transactions permitted by this SECTION 5.2.21 shall not have the effect of
releasing Borrower or any other party to any of the Financing Documents from any
Obligation.
SECTION 5.3. REPORTING REQUIREMENTS. From the date hereof and thereafter
for so long as the Borrower is indebted to any Lender and/or the Agent under any
of the Financing Documents, the Borrower will, unless the Majority Lenders shall
otherwise consent in writing, furnish or cause to be furnished to the Agent for
distribution to the Lenders:
SECTION 5.3.1. As soon as possible and in any event upon acquiring
knowledge of an Event of Default or Default, continuing on the date of such
statement, the written statement of an Authorized Representative setting forth
details of such Event of Default or Default and the actions which the Borrower
has taken and proposes to take with respect thereto;
SECTION 5.3.2. As soon as practicable after the end of each Borrower
fiscal year and in any event within 90 days after the end of each such fiscal
year, consolidated balance
56
sheets of the Borrower and any Subsidiaries as at the end of such year, and
the related consolidated statements of income and cash flows or shareholders'
equity of the Borrower and any Subsidiaries setting forth in each case the
corresponding figures for the preceding fiscal year, such statements to be
certified by a firm of independent certified public accountants selected by
Borrower and reasonably acceptable to the Majority Lenders, to be accompanied
by a true copy of said auditors' management letter, if one was provided to
the Borrower, and to contain a statement to the effect that such accountants
have examined SECTIONS 5.1.10 through 5.1.12 and 5.2.17 and that as of the
date of such financial statements no Default or Event of Default exists on
account of Borrower's failure to have been in compliance therewith on the
date of such statement;
SECTION 5.3.3. As soon as is practicable after the end of each fiscal
month of each Borrower fiscal year and in any event within 21 days thereafter,
consolidated balance sheets of the Borrower and any Subsidiaries as of the end
of such period and the related consolidated statements of income and cash flows
and shareholders' equity of the Borrower and any Subsidiaries, subject to
changes resulting from year-end adjustments, together, subject to SECTION 5.3.7,
with a comparison to the Budget for the applicable period, such balance sheets
and statements to be prepared and certified by an Authorized Representative in
an Officer's Certificate as having been prepared in accordance with GAAP except
for footnotes and year-end adjustments, and to be in form reasonably
satisfactory to the Agent;
SECTION 5.3.4. Simultaneously with the furnishing of each of the
year-end consolidated financial statements of the Borrower and any Subsidiaries
to be delivered pursuant to SECTION 5.3.2 and each of the consolidated quarterly
statements of the Borrower and the Subsidiaries to be delivered pursuant to
SECTION 5.3.3 an Officer's Certificate of an Authorized Representative which
shall contain a statement in the form of EXHIBIT 3.1.1.10 to the effect that no
Event of Default or Default has occurred, without having been waived in writing,
or if there shall have been an Event of Default not previously waived in writing
pursuant to the provisions hereof, or a Default, such Officer's Certificate
shall disclose the nature thereof and the actions the Borrower has taken and
prepare to take with respect thereto. Each such Officer's Certificate shall
also contain a calculation of and certify to the accuracy of the amounts
required to be calculated in the financial covenants of the Borrower contained
in this Agreement and described in EXHIBIT 3.1.1.10;
SECTION 5.3.5. Promptly after the commencement thereof, notice of all
material actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower and/or any Subsidiary;
SECTION 5.3.6. On or before October 31 of each fiscal year of the
Borrower, an updated proposed budget, prepared on a quarterly basis, and updated
financial projections for the Borrower and any Subsidiaries on a consolidated
basis (together, the "Budget") for such fiscal year, setting forth in reasonable
detail the projected results of operations of the Borrower and any Subsidiaries
on a consolidated quarterly basis, detailed Capital Expenditures plan and
stating underlying assumptions and accompanied by a written statement of an
Authorized Representative certifying as to the approval of such Budget by
Borrower's board of directors.
57
SECTION 5.3.7. Such other information respecting the Business
Condition of the Borrower or any Subsidiaries as the Agent or any Lender may
from time to time reasonably request including, but not limited to,
consolidating financial statements;
SECTION 5.3.8. Written notice of the fact and of the details of any
sale or transfer of any ownership interest in the Borrower or any Subsidiary
given promptly after the Borrower acquires knowledge thereof; provided, however,
that this clause shall not be deemed to constitute or imply any consent to any
such sale or transfer;
SECTION 5.3.9. Prompt written notice of loss of any key personnel or
any Material Adverse Effect and an explanation thereof and of the actions the
Borrower and/or such Subsidiary propose to take with respect thereto; and
SECTION 5.3.10. Written notice of the following events, as soon as
possible and in any event within 15 days after the Borrower knows or has reason
to know thereof: (i) the occurrence or expected occurrence of any Reportable
Event with respect to any Plan, or (ii) the institution of proceedings or the
taking or expected taking of any other action by PBGC or the Borrower or any
Commonly Controlled Entity to terminate, withdraw or partially withdraw from
any Plan and, with respect to any Multiemployer Plan, the Reorganization (as
defined in Section 4241 of ERISA) or Insolvency (as defined in Section 4245 of
ERISA) of such Multiemployer Plan and in addition to such notice, deliver to the
Agent whichever of the following may be applicable: (a) an Officer's
Certificate setting forth details as to such Reportable Event and the action
that the Borrower or Commonly Controlled Entity proposes to take with respect
thereto, together with a copy of any notice of such Reportable Event that may be
required to be filed with PBGC, or b) any notice delivered by PBGC evidencing
its intent to institute such proceedings or any notice to PBGC that such Plan is
to be terminated, as the case may be.
ARTICLE 6.
EVENTS OF DEFAULT
SECTION 6.1. EVENTS OF DEFAULT. The Borrower shall be in default under
each of the Financing Documents, upon the occurrence of any one or more of the
following events ("Events of Default"):
SECTION 6.1.1. If the Borrower shall fail to make due and punctual
payment of any principal, fees, interest and/or other amounts payable under this
Agreement as provided in any Note and/or in this Agreement when the same is due
and payable except that it shall not be an Event of Default if any interest,
fees and/or other amounts (excluding principal) is paid within 5 Business Days
after it is due and payable, whether at the due date thereof or at a date fixed
for prepayment or if the Borrower shall fail to make any such payment of fees,
interest, principal and/or any other amount under this Agreement and/or under
any Note on the date when such payment becomes due and payable by acceleration;
58
SECTION 6.1.2. If the Borrower or any Subsidiary shall make an
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall admit in writing its inability to pay its
debts as they become due or shall file a voluntary petition in bankruptcy, or
shall file any petition or answer seeking any reorganization, arrangement,
composition, adjustment, liquidation, dissolution or similar relief under the
present or any future federal bankruptcy laws or other applicable federal, state
or other statute, law or regulation, or shall seek or consent to or acquiesce in
the appointment of any trustee, receiver or liquidator of it or of all or any
substantial part of its properties, or if partnership or corporate action shall
be taken for the purpose of effecting any of the foregoing; or
SECTION 6.1.3. To the extent not described in SECTION 6.1.2, (i) if
the Borrower or any Subsidiary shall be the subject of a bankruptcy proceeding,
or (ii) if any proceeding against any of them seeking any reorganization,
arrangement, composition, adjustment, liquidation, dissolution, or similar
relief under the present or any future federal bankruptcy law or other
applicable federal, foreign, state or other statute, law or regulation shall be
commenced, or (iii) if any trustee, receiver or liquidator of any of them or of
all or any substantial part of any or all of their properties shall be appointed
without their consent or acquiescence; provided that in any of the cases
described above in this SECTION 6.1.3, such proceeding or appointment shall not
be an Event of Default if the Borrower or the Subsidiary in question shall cause
such proceeding or appointment to be discharged, vacated, dismissed or stayed
within sixty (60) days after commencement thereof; or
SECTION 6.1.4. If final judgment or judgments aggregating more than
$500,000 shall be rendered against the Borrower or any Subsidiary and shall
remain undischarged, unstayed or unpaid for an aggregate of thirty (30) days
(whether or not consecutive) after entry thereof; or
SECTION 6.1.5. If the Borrower or any Subsidiary shall default (after
giving effect to any applicable grace period) in the due and punctual payment of
the principal of or interest on any Indebtedness exceeding in the aggregate
$1,000,000 (other than the Loans), or if any default shall have occurred and be
continuing after any applicable grace period under any mortgage, note or other
agreement evidencing, securing or providing for the creation of such
Indebtedness, which results in the acceleration of such Indebtedness or which
permits, or with the giving of notice would permit, any holder or holders of any
such Indebtedness to accelerate the stated maturity thereof; or
SECTION 6.1.6. If there shall be a default in the performance of the
Borrower's obligations under SECTION 5.1.3 (insofar as such Section requires the
preservation of the corporate existence of the Borrower), any of SECTIONS 5.1.10
through 5.1.13 or SECTIONS 5.2.1, 5.2.3, 5.2.8 OR 5.2.11 of this Agreement; or
SECTION 6.1.7. If there shall be any Default in the performance of
any covenant or condition contained in this Agreement or in any of the other
Financing Documents to be observed or performed pursuant to the terms hereof or
any Financing Document, as the case may be, or to the extent such Default would
have a Material Adverse Effect, by the Borrower under
59
any of the Related Transaction Documents, other than a covenant or condition
referred to in any other subsection of this SECTION 6.1 and such Default
shall continue unremedied or unwaived, (i) in the case of any covenant or
condition contained in SECTIONS 5.2 OR 5.3, for fifteen (15) Business Days,
or (ii) in the case of any other covenant or condition for which no other
grace period is provided, for thirty (30) days, or (iii) in the case of any
other covenant or condition for which another grace period is provided, for
such grace period, or (iv) if any of the representations and warranties made
or deemed made by the Borrower to the Agent and/or any Lender pursuant to any
of the Financing Documents proves to have been false or misleading in any
material respect when made and such falseness or misleading representation
or warranty would be reasonably likely to have a material adverse effect on
the Agent or any Lender or their rights and remedies or a Material Adverse
Effect; or
SECTION 6.1.8. If there shall be any attachment of any deposits or
other property of the Borrower and/or any Subsidiary in the possession of any
Lender or any attachment of any other property of the Borrower and/or any
Subsidiary in an amount exceeding $1,000,000, which shall not be discharged,
vacated or stayed within thirty (30) days of the date of such attachment; or
SECTION 6.1.9. Any certification of the financial statements,
furnished to the Agent pursuant to SECTION 5.3.2, shall contain any
qualification; provided, however, that such qualifications will not be deemed an
Event of Default if in each case (i) such certification shall state that the
examination of the financial statements covered thereby was conducted in
accordance with generally accepted auditing standards, including but not limited
to all such tests of the accounting records as are considered necessary in the
circumstances by the independent certified public accountants preparing such
statements, (ii) such financial statements were prepared in accordance with GAAP
and (iii) such qualification does not involve the "going concern" status of the
entity being reported upon.
ARTICLE 7.
REMEDIES OF LENDERS
Upon the occurrence and during the continuance of any one or more of the
Events of Default, the Agent, at the request of the Majority Lenders, shall, by
written notice to the Borrower, declare the obligation of the Lenders to make or
maintain the Loans to be terminated, whereupon the same and the Commitment shall
forthwith terminate, and the Agent, at the request of the Majority Lenders,
shall, by notice to the Borrower, declare the entire unpaid principal amount of
each Note and all fees and interest accrued and unpaid thereon and/or under this
Agreement, and/or any of the other Financing Documents and any and all other
Indebtedness under this Agreement, each Note and/or any of the other Financing
Documents to the Agent and/or any of the Lenders and/or to any holder of all or
any portion of each Note to be forthwith due and payable, whereupon each Note,
and all such accrued fees and interest and other such Indebtedness shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that upon the occurrence of an Event of Default
under SECTIONS 6.1.2 or 6.1.3,
60
all of the unpaid principal amount of each Note, all fees and interest
accrued and unpaid thereon and/or under this Agreement and/or under any of
the other Financing Documents and any and all other such Indebtedness of the
Borrower to any of the Lenders and/or to any such holder shall thereupon be
due and payable in full without any need for the Agent and/or any Lender to
make any such declaration or take any action and the Lenders' obligations to
make the Loans shall simultaneously terminate. The Agent shall, in
accordance with the votes of the Majority Lenders, exercise all remedies on
behalf of and for the account of each Lender and on behalf of its respective
Pro Rata Share of the Loans, its Note and Indebtedness of the Borrower owing
to it or any of the foregoing, including, without limitation, all remedies
available under or as a result of this Agreement, the Notes or any of the
other Financing Documents or any other document, instrument or agreement now
or hereafter securing any Note without any such exercise being deemed to
modify in any way the fact that each Lender shall be deemed a separate
creditor of the Borrower to the extent of its Note and Pro Rata Share of the
Loans and any other amounts payable to such Lender under this Agreement
and/or any of the other Financing Documents and the Agent shall be deemed a
separate creditor of the Borrower to the extent of any amounts owed by the
Borrower to the Agent.
ARTICLE 8.
AGENT
SECTION 8.1. APPOINTMENT. The Agent is hereby appointed as administrative
and collateral agent, hereunder and each Lender hereby authorizes the Agent to
act under the Financing Documents as its Agent hereunder and thereunder,
respectively. The Agent agrees to act as such upon the express conditions
contained in this Article 8. The provisions of this Article 8 are solely for
the benefit of the Agent, and, except as expressly provided in SECTION 8.6,
neither the Borrower nor any third party shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement and the other Financing Documents to which the Agent
is a party, the Agent shall act solely as Agent of the Lenders and does not
assume nor shall the Agent be deemed to have assumed any obligation towards or
relationship of agency or trust with or for the Borrower, any of the
Stockholders, any Affiliate or any Subsidiary.
SECTION 8.2. POWERS; GENERAL IMMUNITY.
SECTION 8.2.1. DUTIES SPECIFIED. Each Lender irrevocably authorizes
the Agent to take such action on such Lender's behalf, including, without
limitation, to execute and deliver the Financing Documents to which the Agent is
a party and to exercise such powers hereunder and under the Financing Documents
and other instruments and agreements referred to herein as are specifically
delegated to the Agent by the terms hereof and thereof, together with such
powers as are reasonably incidental thereto. The Agent shall have only those
duties and responsibilities
61
which are expressly specified in this Agreement or in any of the Financing
Documents and may perform such duties by or through its agents or employees.
The duties of the Agent shall be mechanical and administrative in nature; and
the Agent shall not have by reason of this Agreement or any of the Financing
Documents a fiduciary relationship in respect of any Lender; and nothing in
this Agreement or any of the Security Documents, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement or any of the Financing Documents or
the other instruments and agreements referred to herein except as expressly
set forth herein or therein.
SECTION 8.2.2. NO RESPONSIBILITY FOR CERTAIN MATTERS. The Agent
shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of any of
the Financing Documents or any other document, instrument or agreement now or
hereafter executed in connection herewith or therewith, or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith by or on behalf of the Borrower, any of the Affiliates, and/or any
Subsidiary to the Agent or any Lender, or be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default.
SECTION 8.2.3. EXCULPATORY PROVISIONS. Neither the Agent nor any of
its officers, directors, employees or agents shall be liable to any Lender for
any action taken or omitted hereunder or under any of the Financing Documents,
or in connection herewith or therewith unless caused by its or their gross
negligence or willful misconduct. If the Agent shall request instructions from
Lenders with respect to any action (including the failure to take an action) in
connection with any of the Financing Documents, the Agent shall be entitled to
refrain from taking such action unless and until the Agent, shall have received
instructions from the Majority Lenders (or all of the Lenders if the action
requires their consent). 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 Borrower, any
of the Affiliates, and/or any Subsidiary), 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 under any of the Financing Documents or the
other instruments and agreements referred to herein in accordance with the
instructions of the Majority Lenders (or all of the Lenders if the action
requires their consent). The Agent shall be entitled to refrain from exercising
any power, discretion or authority vested in it under any of the Financing
Documents or the other instruments and agreements referred to herein unless and
until it has obtained the instructions of the Majority Lenders (or all of the
Lenders if the action requires their consent).
SECTION 8.2.4. 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, Fleet in its individual capacity as a
Lender hereunder. With respect to its participation in
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the Loans and the Commitment, Fleet shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
performing the duties and functions delegated to it hereunder, and the term
"Lender" or "Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Fleet 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
Borrower, any of the Stockholder, or any Affiliate or Subsidiary as if it
were not performing the duties specified herein, and may accept fees and
other consideration from the Borrower and/or any of such other Persons for
services in connection with this Agreement and otherwise without having to
account for the same to Lenders.
SECTION 8.3. REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR
APPRAISAL OF CREDITWORTHINESS. Each Lender represents and warrants that it has
made its own independent investigation of the financial condition and affairs of
the Borrower, the Stockholder and any Subsidiaries of any of them in connection
with the making of the Loans hereunder and has made and shall continue to make
its own appraisal of the creditworthiness of the Borrower, the Stockholder and
the 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 any Loan or any time or times thereafter (except for information
received by the Agent under SECTION 5.3 hereof which the Agent will promptly
forward to the Lenders), and the Agent shall further not have any responsibility
with respect to the accuracy of or the completeness of the information provided
to any of the Lenders.
SECTION 8.4. RIGHT TO INDEMNITY. Each Lender severally agrees to
indemnify the Agent proportionately to its Pro Rata Share of the Loans, to
the extent the Agent shall not have been reimbursed by or on behalf of the
Borrower, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including,
without limitation, 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 performing its duties hereunder or in any way relating
to or arising out of this Agreement and/or any of the other Financing
Documents; PROVIDED that 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 the 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.
SECTION 8.5. PAYEE OF NOTE TREATED AS OWNER. The Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Agent. Any request, authority or consent of any person or entity
who, at the time of making such request or giving such authority or consent, is
the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of that Note or of any Note or Notes issued in exchange
for such Note.
SECTION 8.6. RESIGNATION BY AGENT.
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SECTION 8.6.1. The Agent may resign from the performance of all
its functions and duties under the Financing Documents at any time by giving
30 days' prior written notice to the Borrower and each of the Lenders. Such
resignation shall take effect upon the acceptance by a successor Agent, of
appointment pursuant to SECTIONS 8.6.2 and 8.6.3 below or as otherwise
provided below.
SECTION 8.6.2. Upon any such notice of resignation, the Majority
Lenders shall appoint a successor Agent, who shall be a Lender and, so long
as no Default or Event of Default exists and is continuing, who shall be
reasonably satisfactory to the Borrower and in any event shall be an
incorporated bank or trust company with a combined surplus and undivided
capital of at least Five Hundred Million Dollars ($500,000,000).
SECTION 8.6.3. If a successor Agent shall not have been so
appointed within said 30 day period, the resigning Agent, with the consent of
the Borrower, which shall not be unreasonably withheld or delayed, shall then
appoint a successor Agent, who shall be a Lender and who shall serve as the
Agent, until such time, if any, as the Majority Lenders, and so long as no
Default or Event of Default exists and is continuing, with the consent of the
Borrower, which shall not be unreasonably withheld or delayed, appoint a
successor Agent as provided above.
SECTION 8.6.4. If no successor Agent has been appointed pursuant
to SECTIONS 8.6.2 or 8.6.3 by the 40th day after the date such notice of
resignation was given by the resigning Agent, the Majority Lenders shall
promptly thereafter appoint a successor Agent (without regard to the
requirements of SECTIONS 8.6.2 or 8.6.3). The resigning Agent's resignation
shall become effective upon such successor Agent's acceptance of its
appointment, and such successor Agent shall thereafter perform all the duties
of the Agent under the Financing Documents.
SECTION 8.7. SUCCESSOR AGENT. Upon the acceptance of any appointment
as the 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 Agent and the retiring Agent, shall be
discharged from its duties and obligations as the Agent under the Financing
Documents. After any retiring Agent's resignation hereunder as the Agent the
provisions of this Article 8 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under the Financing
Documents.
ARTICLE 9.
MISCELLANEOUS
SECTION 9.1. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
SECTION 9.1.1. Except to the extent prohibited by applicable law,
the Borrower irrevocably:
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SECTION 9.1.1.1. agrees that any suit, action, or other legal
proceeding arising out of any of the Financing Documents or any of the Loans
may be brought in the courts of record of The Commonwealth of Massachusetts
or any other state(s) in which a portion of the Borrower's or any Subsidiary's
assets sufficient for personal jurisdiction are located or the courts of the
United States located in The Commonwealth of Massachusetts or any other
state(s) in which a portion of the Borrower's or any Subsidiary's assets
sufficient for personal jurisdiction are located;
SECTION 9.1.1.2. consents to the jurisdiction of each such
court in any such suit, action or proceeding; and
SECTION 9.1.1.3. waives any objection which it may have to
the laying of venue of such suit, action or proceeding in any of such courts.
For such time as any of the Indebtedness of the Borrower to any Lender
and/or the Agent shall be unpaid in whole or in part and/or the Commitment is
in effect, the Borrower irrevocably designates the registered agent or agent
for service of process of the Borrower as reflected in the records of the
Secretary of State of The Commonwealth of Massachusetts as its registered
agent, and, in the absence thereof, the Secretary of State of The
Commonwealth of Massachusetts as its agent to accept and acknowledge on its
behalf service of any and all process in any such suit, action or proceeding
brought in any such court and agrees and consents that any such service of
process upon such agent and written notice of such service to the Borrower by
registered or certified mail shall be taken and held to be valid personal
service upon the Borrower regardless of where the Borrower shall then be
doing business and that any such service of process shall be of the same
force and validity as if service were made upon it according to the laws
governing the validity and requirements of such service in each such state
and waives any claim of lack of personal service or other error by reason of
any such service. Any notice, process, pleadings or other papers served
upon the aforesaid designated agent shall, within three (3) Business Days
after such service, be sent by the method provided therefor under SECTION 9.6
to the Borrower at its address set forth in this Agreement. EACH OF THE
PARTIES HERETO HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF ANY
DISPUTE BETWEEN THE BORROWER AND THE AGENT AND/OR THE LENDERS WITH RESPECT TO
THE FINANCING DOCUMENTS AND/OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY.
SECTION 9.2. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy
conferred upon or reserved to the Agent and/or the Lenders in any of the
Financing Documents is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given under any of
the Financing Documents or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy under any of
the Financing Documents, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 9.3. DELAY OR OMISSION NOT WAIVER. No delay in exercising or
failure to exercise by the Agent and/or the Lenders of any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event
65
of Default or an acquiescence therein. Every right and remedy given by any
of the Financing Documents or by law to the Agent and/or any of the Lenders
may be exercised from time to time, and as often as may be deemed expedient,
by the Agent and/or any of the Lenders.
SECTION 9.4. WAIVER OF STAY OR EXTENSION LAWS. The Borrower covenants
(to the extent that it may lawfully do so) that it will not at any time
insist upon, or plead or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted, now or at any
time hereafter in force, which may affect the covenants or the performance of
any of the Financing Documents; and the Borrower (to the extent that it may
lawfully do so) hereby expressly waives all benefit and advantage of any such
law and covenants that it will not hinder; delay or impede the execution of
any power herein granted to the Agent and/or any of the Lenders, but will
suffer and permit the execution of every such power as though no such law had
been enacted, except to the extent the Agent or any Lender is guilty of
willful misconduct or gross negligence.
SECTION 9.5. AMENDMENTS, ETC. No amendment, modification, termination,
or waiver of any provision of any of the Financing Documents nor consent to
any departure by the Borrower therefrom shall in any event be effective
unless the same shall be in a written notice given to the Borrower by the
Agent and consented to in writing by the Majority Lenders (or by the Agent
acting alone if any specific provision of this Agreement provides that the
Agent, acting alone, may grant such amendment, modification, termination,
waiver or departure) and the Agent shall give any such notice if the Majority
Lenders so consent or direct the Agent to do so; provided, however, that any
such amendment, modification, termination, waiver or consent shall require a
written notice given to the Borrower by the Agent and consented to in writing
by all of the Lenders if the effect thereof is to (i) change any of the
provisions affecting the interest rate on the Loans, (ii) extend or modify
the Commitment, (iii) discharge or release the Borrower from its obligation
to repay all principal due under the Loans or release any collateral or
guaranty for the Loans, (iv) change any Lender's Pro Rata Share of the
Commitment or the Loans, (v) modify this SECTION 9.5, (vi) change the
definition of Majority Lenders, (vii) extend any scheduled due date for
payment of principal, interest or fees or (viii) permit the Borrower to
assign any of its rights under or interest in this Agreement, and then such
waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. Any amendment or modification of this
Agreement must be signed by the Borrower, the Agent and at least all of the
Lenders consenting thereto who shall then hold the Pro Rata Shares of the
Loans required for such amendment or modification under this SECTION 9.5 and
the Agent shall sign any such amendment if such Lenders so consent or direct
the Agent to do so provided that any Lender dissenting therefrom shall be
given an opportunity to sign any such amendment or modification. Any
amendment of any of the Security Documents must be signed by each of the
parties thereto. No notice to or demand on the Borrower and no consent,
waiver or departure from the terms of this Agreement granted by the Agent
and/or the Lenders in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
SECTION 9.6. ADDRESSES FOR NOTICES, ETC. All notices, requests,
demands and other communications provided for hereunder (other than those
which, under the terms of this Agreement, may be given by telephone, which
shall be effective when received verbally) shall be in writing (including
telecopied communication) and mailed (provided that in the case of items
66
referred to in the next-to-last sentence of SECTION 9.1 and the items set
forth below as requiring a copy to legal counsel for the Borrower, the Agent
or a Lender, such items shall be mailed by overnight courier for delivery the
next Business Day), telecopied or delivered to the applicable party at the
addresses indicated below:
If to the Borrower:
Viewlogic Systems, Inc.
000 Xxxxxx Xxxx Xxxx Xxxx
Xxxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxx, President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to (if given pursuant to any of SECTIONS 5.3.1, 5.3.5,
5.3.9, 5.3.10 and 5.3.11):
Xxxx and Xxxx LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000 Attention: Xxxx X. Xxxxxxxx, Esquire
Telephone (000) 000-0000
Telecopy: (000) 000-0000
If to Agent:
Fleet National Bank
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxx, Vice President
High Technology Group, MA OF DO7A
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to (if given pursuant to any of SECTIONS 5.3.1, 5.3.5,
5.3.9, 5.3.10 and 5.3.11)
Xxxxxxxx, Xxxxx & Xxxxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxx III, Esquire
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to any other Lender, to the address set forth on EXHIBIT 1.9.
or, as to each party, at such other address as shall be designated by such
party in a written notice to each other party complying as to the delivery
with the terms of this Section. All such notices, requests, demands and
other communications shall be effective when received. Requests,
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certificates, other items provided pursuant to SECTION 5.3 and other routine
mailings or notices need not be accompanied by a copy to legal counsel for
the Lenders or the Borrower.
SECTION 9.7. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on
demand the reasonable fees and out-of-pocket expenses of Messrs. Xxxxxxxx,
Xxxxx & Xxxxxx, counsel for the Agent and of any local counsel retained by
the Agent in connection with the preparation, execution, delivery,
syndication and administration of the Financing Documents and the Loans. The
Borrower agrees to pay on demand all reasonable costs and expenses (including
without limitation reasonable attorneys' fees) incurred by the Agent and/or
any Lender, upon or after the occurrence and during the continuance of any
Default or Event of Default, if any, in connection with the enforcement of
any of the Financing Documents and any amendments, waivers, or consents with
respect thereto. In addition, the Borrower shall pay on demand any and all
stamp and other taxes and fees payable or determined to be payable in
connection with the execution and delivery of the Financing Documents, and
agrees to save the Lenders and the Agent harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes or fees, except those resulting from the Lenders'
or Agent's gross negligence or willful misconduct.
SECTION 9.8. PARTICIPATIONS. Subject to compliance with the proviso in
the first sentence of SECTION 9.11, any Lender may sell participations in all
or part of the Loans made by it and/or its Pro Rata Share of the Commitment
or any other interest herein to a financial institution having at least
$500,000,000 of assets, in which event the participant shall not have any
rights under any of the Financing Documents (the participant's rights against
such Lender in respect of that participation to be those set forth in the
Agreement executed by such Lender in favor of the participant relating
thereto) and all amounts payable by the Borrower hereunder or thereunder
shall be determined as if such Lender had not sold such participation. Such
Lender may furnish any information concerning the Borrower and any Subsidiary
in the possession of such Lender from time to time to participants (including
prospective participants); provided that such Lender and any participant
comply with the proviso in SECTIONS 9.11.7 and 9.11.8 as if any such
participant was a Substituted Lender.
SECTION 9.9. BINDING EFFECT; ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Agent and the
Lenders and their respective successors and assigns, except that the Borrower
shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Agent and the Lenders. This
Agreement and all covenants, representations and warranties made herein
and/or in any of the other Financing Documents shall survive the making of
the Loans, the execution and delivery of the Financing Documents and shall
continue in effect so long as any amounts payable under or in connection with
any of the Financing Documents or any other Indebtedness of the Borrower to
the Agent and/or any Lender remains unpaid or the Commitment remains
outstanding; provided, however, that SECTIONS 2.2.3 and 9.7 shall, except to
the extent agreed to in a pay-off letter by the Agent and the Lenders in
their complete discretion, survive and remain in full force and effect for 90
days following repayment in full of all amounts payable under or in
connection with all of the Financing Documents and any other such
Indebtedness.
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SECTION 9.10. ACTUAL KNOWLEDGE. For purposes of this Agreement,
neither the Agent nor any Lender shall be deemed to have actual knowledge of
any fact or state of facts unless the senior loan officer or any other
officer responsible for the Borrower's account established pursuant to this
Agreement at the Agent or such Lender, shall, in fact, have actual knowledge
of such fact or state of facts or unless written notice of such fact shall
have been received by the Agent or such Lender in accordance with SECTION 9.6.
SECTION 9.11. SUBSTITUTIONS AND ASSIGNMENTS. Upon the request of any
Lender, the Agent and such Lender may assign all or any portion of its Pro
Rata Share of the Commitment and the Loans to a Federal Reserve Bank and may,
subject to the terms and conditions hereinafter set forth, take the actions
set forth below to substitute one or more financial institutions having at
least $500,000,000 in assets (a "Substituted Lender") as a Lender or Lenders
hereunder having an amount of the Loans as specified in the relevant
Substitution Agreement executed in connection therewith; provided that no
Lender, Selling Lender or Substituted Lender shall have a Pro Rata Share of
the Commitment and the Loans in the aggregate of less than $5,000,000 and
Fleet and/or its affiliates shall retain for their own account at least 50%
of the Term Loan and 50% of the Revolving Credit Loan Commitment.
SECTION 9.11.1. In connection with any such substitution the
Substituted Lender and the Agent shall enter into a Substitution Agreement in
the form of EXHIBIT 9.11.1 hereto (a "Substitution Agreement") pursuant to
which such Substituted Lender shall be substituted for the Lender requesting
the substitution in question (any such Lender being hereinafter referred to
as a "Selling Lender") to the extent of the reduction in the Selling Lender's
portion of the Loans specified therein. In addition, such Substituted Lender
shall assume such of the obligations of each Selling Lender under the
Financing Documents as may be specified in such Substitution Agreement and
this Agreement shall be amended by execution and delivery of each
Substitution Agreement to include such Substituted Lender as a Lender for all
purposes under the Financing Documents and to substitute for the then
existing EXHIBIT 1.9 to this Agreement a new EXHIBIT 1.9 in the form of
Schedule A to such Substitution Agreement setting forth the portion of the
Loans belonging to each Lender following execution thereof. The Agent and
each Substituted Lender shall countersign and accept delivery of each
Substitution Agreement.
SECTION 9.11.2. Without prejudice to any other provision of this
Agreement, each Substituted Lender shall, by its execution of a Substitution
Agreement, agree that neither the Agent nor any Lender is any way responsible
for or makes any representation or warranty as to: (a) the accuracy and/or
completeness of any information supplied to such Substituted Lender in
connection therewith, (b) the financial condition, creditworthiness, affairs,
status or nature of the Borrower, any of the Affiliates and/or any of the
Subsidiaries or the observance by the Borrower, or any other party of any of
its obligations under this Agreement or any of the other Financing Documents
or (c) the legality, validity, effectiveness, adequacy or enforceability of
any of the Financing Documents.
SECTION 9.11.3. The Agent shall be entitled to rely on any
Substitution Agreement delivered to it pursuant to this SECTION 9.11 which is
complete and regular on its face as to its contents and appears to be signed
on behalf of the Substituted Lender which is a party thereto, and the Agent
shall have no liability or responsibility to any party as a consequence of
relying
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thereon and acting in accordance with and countersigning any such
Substitution Agreement. The effective date of each Substitution Agreement
shall be the date specified as such therein and each Lender prior to such
effective date shall, for all purposes hereunder, be deemed to have and
possess all of their respective rights and obligations hereunder up to 12:00
o'clock Noon on the effective date thereof.
SECTION 9.11.4. Upon delivery to the Agent of any Substitution
Agreement pursuant to and in accordance with this SECTION 9.11 and acceptance
thereof by the Agent (which delivery shall be evidenced and accepted
exclusively and conclusively by the Agent's countersignature thereon pursuant
to the terms hereof without which such Substitution Agreement shall be
ineffective): (i) except as provided hereunder and in SECTION 9.11.5, the
respective rights of each Selling Lender and the Borrower against each other
under the Financing Documents with respect to the portion of the Loans being
assigned or delegated shall be terminated and each Selling Lender and the
Borrower shall each be released from all further obligations to the other
hereunder with respect thereto (all such rights and obligations to be so
terminated or released being referred to in this SECTION 9.11 as "Discharged
Rights and Obligations"); and (ii) the Borrower and the Substituted Lender
shall each acquire rights against each other and assume obligations towards
each other which differ from the Discharged Rights and Obligations only in
so far as the Borrower and the Substituted Lender have assumed and/or
acquired the same in place of the Selling Lender in question; and (iii) the
Agent, the Substituted Lender and the other Lenders shall acquire the same
rights and assume the same obligations between themselves as they would have
acquired and assumed had such Substituted Lender been an original party to
this Agreement as a Lender possessing the Discharged Rights and Obligations
acquired and/or assumed by it in consequence of the delivery of such
Substitution Agreement to the Agent.
SECTION 9.11.5. Discharged Rights and Obligations shall not
include, and there shall be no termination or release pursuant to this
SECTION 9.11 of (i) any rights or obligations arising pursuant to any of the
Financing Documents in respect of the period or in respect of payments
hereunder made during the period prior to the effective date of the relevant
Substitution Agreement or, (ii) any rights or obligations relating to the
payment of any amount which has fallen due and not been paid hereunder prior
to such effective date or rights or obligations for the payment of interest,
damages or other amounts becoming due hereunder as a result of such
nonpayment.
SECTION 9.11.6. With respect to any substitution of a Substituted
Lender taking place after the Closing Date, the Borrower shall issue to such
Substituted Lender and to such Selling Lender, new Notes reflecting the
inclusion of such Substituted Lender as a Lender and the reduction in the
respective Loans of such Selling Lender, such new Notes to be issued against
receipt by the Borrower of the existing Notes of such Lender. The Selling
Lender or the Substituted Lender shall pay to the Agent for its own account
an assignment fee in the amount of $3,000 for each assignment hereunder,
which shall be payable at or before the effective date of the assignment.
SECTION 9.11.7. Each Lender may furnish to any financial
institution having at least $500,000,000 in assets which such Lender proposes
to make a Substituted Lender or to a
70
Substituted Lender any information concerning such Lender, the Borrower,
Stockholders and any Subsidiary in the possession of that Lender from time to
time; provided that any Lender providing any confidential information about
the Borrower, any of the Stockholders and/or any Subsidiary to any such
financial institution shall first obtain such financial institution's
agreement to keep confidential any such confidential information.
SECTION 9.11.8. (a) Each of the Lenders agrees, subject to
SECTION 9.11.7., that it will use its best efforts not to disclose without
the prior consent of the Borrower any information with respect to the
Borrower or any of its Subsidiaries which is furnished pursuant to this
Agreement; PROVIDED, that any Lender may disclose any such information (a) as
has become generally available to the public or has become properly available
to such Lender on a non-confidential basis, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board, the Federal Deposit Insurance
Corporation, the NAIC or similar organizations (whether in the United States
or elsewhere) or their successors, (c) as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to
such Lender, and (e) to any prospective transferee in connection with any
contemplated transfer of any of the Loans or any interest therein by such
Lender; PROVIDED, that such prospective transferee agrees to be bound by the
provisions in this SECTION 9.11.8 to the same extent as such Lender.
(b) The Borrower hereby acknowledges and agrees that
each Lender may share with its auditors, counsel, other professional advisors
and any of its Affiliates any information related to the Borrower or any of
its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its
Subsidiaries), provided that Lender shall have made such Persons aware of
Section 9.10.8 and such Persons shall have agreed to be subject to the
provisions of this SECTION 9.11.8 to the same extent as such Lender.
SECTION 9.12. PAYMENTS PRO RATA. The Agent agrees that promptly after
its receipt of each payment from or on behalf of the Borrower in respect of
any obligations of the Borrower hereunder it shall distribute such payment
to the Lenders pro rata based upon their respective Pro Rata Shares, if any,
of the obligations with respect to which such payment was received. Each of
the Lenders agrees that, if it should receive any amount hereunder (whether
by voluntary payment, by realization upon security, by the exercise of the
right of setoff under SECTION 2.5.2 or otherwise or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the
Financing Documents, or otherwise), which is applicable to the payment of the
Obligations of a sum which with respect to the related sum or sums received
by other Lenders is in a greater proportion than the total amount of such
Obligation then owed and due to such Lender bears to the total amount of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, except for any amounts received pursuant to SECTION 2.2.3, then such
Lender receiving such excess payment shall purchase for cash without recourse
or warranty from the other Lenders an interest in the Obligations of the
Borrower to such Lenders in such amount as shall result in a proportional
participation by all the Lenders in such amount; provided further, however,
that if all or any portion of such excess amount is thereafter recovered from
such
71
Lender, such purchase shall be rescinded and the purchase price restored to
the extent of such recovery, but without interest.
SECTION 9.13. INDEMNIFICATION. The Borrower irrevocably agrees to and
does hereby indemnify and hold harmless Agent and each of the Lenders, their
agents or employees and each Person, if any, who controls any of the Agent
and the Lenders within the meaning of Section 15 of the Securities Act of
1933, as amended, and each and all and any of them (the "Indemnified
Parties"), against any and all losses, claims, actions, causes of action,
damages or liabilities (including any amount paid in settlement of any
action, commenced or threatened and any amount described in SECTION 8.4)
(collectively, the "Damages"), joint or several, to which they, or any of
them, may become subject under statutory law or at common law, and to
reimburse the Indemnified Parties for any legal or other out-of-pocket
expenses reasonably incurred by it or them in connection with investigating,
preparing for or defending against any of the Indemnified Parties, insofar as
such losses, claims, damages, liabilities or actions arise out of or are
related to any act or omission of the Borrower and/or any Subsidiary with
respect to any of (i) the Related Transactions, (ii) any of the Financing
Documents, (iii) any of Loans, (iv) any use made or proposed to be made with
the proceeds of the Loans, (v) any acquisition or proposed acquisition or any
other similar business combination or proposed business combination by the
Borrower and/or any of its Subsidiaries and/or its Affiliates (other than the
Sprout Group not related to the Related Transactions) (whether by acquisition
or exchange of capital stock or other securities or by acquisition of all or
substantially all of the assets of any Person), (vi) any offering of
securities by the Borrower and/or any Subsidiary after the date hereof and/or
in connection with the Securities and Exchange Act of 1933 and/or (vii) any
failure to comply with any applicable federal, state or foreign governmental
law, rule, regulation, order or decree, including without limitation, any
Damages which arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact with respect to matters relative to any
of the foregoing contained in any document distributed in connection
therewith, or the omission or alleged omission to state in any of the
foregoing a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, but
excluding any Damages to the extent arising from or due to, as determined in
a final nonappealable judgment by a court of competent jurisdiction, the
gross negligence or willful misconduct of any of the Indemnified Parties;
provided, however, that notwithstanding the foregoing, no Indemnified Party
shall have any liability (whether direct or indirect, in contract or tort of
otherwise to the Borrower, any Affiliates or any Subsidiaries or to their
respective security holders or creditors except for direct (as opposed to
consequential damages) determined in a final nonappealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified
Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or proceeding to which the indemnity described in
this paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, any
Affiliates or any Subsidiary or to their respective security holders or
creditors or an Indemnified Party or an Indemnified Party is otherwise a
party thereto and whether or not the Related Transaction and the transactions
contemplated by the Financing Documents are consummated.
Promptly upon receipt of notice of the commencement of any action, or
information as to any threatened action against any of the Indemnified
Parties in respect of which indemnity or reimbursement may be sought from the
Borrower on account of the agreement contained in this
72
SECTION 9.13, notice shall be given to the Borrower in writing of the
commencement or threatening thereof, together with a copy of all papers
served, but the omission so to notify the Borrower of any such action shall
not release the Borrower from any liability which it may have to such
Indemnified Parties unless, and only to the extent that, such omission
materially prejudiced Borrower's ability to defend against such action.
In case any such action shall be brought against any of the Indemnified
Parties, the Borrower shall be entitled to participate in (and, to the extent
that it shall wish, to select counsel and to direct) the defense thereof at
its own expense. Any of the Indemnified Parties shall have the right to
employ its or their own counsel in any case, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless the
employment of such counsel shall have been authorized in writing by the
Borrower in connection with the defense of such action or the Borrower shall
not have employed counsel to have charge of the defense of such action or
such Indemnified Party shall have received an opinion from an independent
counsel that there may be defenses available to it which are different from
or additional to those available to the Borrower (in which case the Borrower
shall not have the right to direct the defense of such action on behalf of
such Indemnified Party), in any of which events the same shall be borne by
the Borrower. If any Indemnified Party settles any claim or action with
respect to which the Borrower has agreed to indemnify such Indemnified Party
pursuant to the terms hereof, the Borrower shall have no liability pursuant
to this SECTION 9.13 to such Indemnified Party with respect to such claim or
action unless the Borrower shall have consented in writing to the terms of
such settlement.
The provisions of SECTION 9.13 shall be effective only to the fullest
extent permitted by law. The provisions of this SECTION 9.13 shall continue
in effect and shall survive (among other events), until the applicable
statute of limitations has expired, any termination of this Agreement,
foreclosure, a deed in lieu transaction, payment and satisfaction of the
Obligations of Borrower, and release of any collateral for the Loans.
SECTION 9.13. GOVERNING LAW. This Agreement and each Note shall be
governed by, and construed in accordance with, the laws of The Commonwealth
of Massachusetts without regard to such state's conflict of laws rules.
SECTION 9.15. SEVERABILITY OF PROVISIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 9.16. HEADINGS. Article and Section headings in this Agreement
are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
SECTION 9.17. COUNTERPARTS. This Agreement may be executed and
delivered in any number of counterparts each of which shall be deemed an
original, and this Agreement shall be effective when at least one counterpart
hereof has been executed by each of the parties hereto.
73
[THIS SPACE INTENTIONALLY LEFT BLANK]
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument by their respective officers thereunto duly
authorized, as of the date first written above.
In the presence of: VIEWLOGIC SYSTEMS, INC.
/s/ Eligible By: /s/ XXXXX X. X'XXXXX
------------ -----------------------------
Xxxxx X. X'Xxxxx
Vice President and
Chief Financial Officer
In the presence of: FLEET NATIONAL BANK, as Agent for the
Lenders and as a Lender
/s/ Eligible By: /s/ Xxxxx Xxxxx
------------ -----------------------------
Xxxxx Xxxxx
Vice President
75
EXHIBIT 1.4 - FORM OF INTEREST RATE ELECTION
FLEET NATIONAL BANK Date:
XXX XXXXXXX XXXXXX
XXXXXX, XX 00000
ATTN: XXXXX XXXXXXXXX
TELECOPY: (000) 000-0000
Re: Interest Rate Election
Gentlemen:
Reference is made to that certain Loan Agreement, dated as of October 2,
1998 by and among the undersigned, you, and the Lenders, (the "Loan
Agreement"). Capitalized terms used herein shall have the same meaning as in
the Loan Agreement.
The undersigned hereby elects, pursuant to the Loan Agreement, that the
[Libor Rate or Effective Prime] shall be the interest rate applicable to that
certain [outstanding] Loan [requested pursuant to the Request attached hereto
in the principal amount of _____________ and no/100 Dollars ($__________ ).
[The Interest Adjustment Date for said Loan is _______ __, 19__.]
The undersigned hereby elects an Interest Period for such Loan of _____
months. [Complete only if electing Adjusted Libor Rate].
The undersigned hereby certifies to the Lenders that as of the date
hereof:
A. No Event of Default and no Default has occurred and is continuing;
and
B. The representations and warranties of the Borrower contained in
Article 4 of the Loan Agreement and/or in any of the other Financing
Documents are true and correct in all material respects except as altered by
actions permitted under the Loan Agreement.
VIEWLOGIC SYSTEMS, INC.
By:________________________________
Name:___________________________
Title:__________________________
cc: FLEET NATIONAL BANK
MAIL STOP: MA OF XX0X
XXX XXXXXXX XXXXXX
XXXXXX, XX 00000
ATTN: XXXXX XXXXX, VICE PRESIDENT
2
EXHIBIT 1.5 - FORM OF REVOLVING CREDIT NOTE
REVOLVING CREDIT NOTE
[Insert Maximum Amount of _______ __, 19__
Lender's pro Rata Share of
revolving credit loan
Commitment]
FOR VALUE RECEIVED, VIEWLOGIC SYSTEMS, INC., a Delaware corporation with
a business address of 000 Xxxxxx Xxxx Xxxx Xxxx, Xxxxxxxx, XX 00000-0000
(hereinafter referred to as the "Borrower"), promises to pay to the order of
[insert name of Lender], [a national banking association organized and existing
under the laws of the United States of America] [a ________ banking corporation
____________] (the "Lender"), at the Lender's head office located at [insert
address] or to FLEET NATIONAL BANK or any successor agent under the Loan
Agreement (defined below) (the "Agent") in accordance with the Loan Agreement
(defined below), the lesser of (i) the principal sum of [insert Lender's Pro
Rata Share of the Revolving Credit Loan Commitment] ($__________.00), or (ii)
the aggregate unpaid principal amount of all advances of funds under the
Revolving Credit Loan made by the Lender to the Borrower or by the Lender
through the Agent to the Borrower pursuant to that certain Loan Agreement dated
as of the date hereof by and among the Borrower, the Agent, the other Lenders
party thereto and the Lender, as the same may be amended (the "Loan Agreement").
The Borrower shall pay in full all unpaid principal, interest, fees and
other amounts due under this Note on the Revolving Credit Repayment Date.
The Borrower promises to pay to the order of the Lender interest before
and after maturity on the principal amount of this Note outstanding from time
to time from the date hereof until payment in full of all principal,
interest, fees and other sums due under this Note in accordance with the Loan
Agreement.
Upon the occurrence and during the continuance of any Event of Default
each Prime Rate Loan evidenced by this Note, shall bear interest, payable on
demand, at a floating interest rate per annum equal to two percent (2.0%)
above Effective Prime and each Libor Loan evidenced by this Note shall bear
interest at the Libor Rate plus two percent (2.0%). In addition, in the
event that the Borrower fails to pay any amount of principal or interest
hereof within ten (10) days after such payment is due, the Borrower shall pay
to the Lender upon demand by the Agent or the Lender, a late charge in an
amount equal to five percent (5%) of such amount of principal or interest.
Principal, interest, fees and other sums are payable in immediately
available Dollars to the Agent at its address set forth in the Loan Agreement
or as otherwise directed in writing from the Agent to the Borrower.
This Note is one of the Revolving Credit Notes referred to in, and is
entitled to the benefits of, the Loan Agreement. The applicable terms and
provisions of the Loan Agreement are incorporated herein by reference as if
fully set forth herein. In the event of any conflict between any provision
of this Note and any provision(s) of the Loan Agreement, such provision(s) of
the Loan Agreement shall control. Each capitalized term used in this Note
and not expressly defined in this Note shall have the meaning ascribed to
such term in the Loan Agreement. The Loan Agreement, among other things,
contains provisions for acceleration of the maturity of this Note upon the
happening of certain stated events and also for prepayments on account of
principal of this Note prior to the maturity of this Note upon the terms and
conditions specified in the Loan Agreement.
This Note is secured by the Security Documents.
If this Note shall not be paid when due and shall be placed by the
holder hereof in the hands of an attorney for collection, through legal
proceedings or otherwise, the Borrower will pay reasonable attorneys' fees to
the holder hereof together with reasonable costs and expenses of collection.
All provisions of this Note and any other agreements between the
Borrower and the Lender are expressly subject to the condition that in no
event, whether by reason of acceleration of maturity of the Indebtedness
evidenced by this Note or otherwise, shall the amount paid or agreed to be
paid to the Lender which is deemed interest under applicable law exceed the
maximum permitted rate of interest under applicable law (the "Maximum
Permitted Rate"), which shall mean the law in effect on the date of this
Note, except that if there is a change in such law which results in a higher
Maximum Permitted Rate, then this Note shall be governed by such amended law
from and after its effective date. In the event that fulfillment of any
provision of this Note, or the Loan Agreement or any document, instrument or
agreement providing security for this Note results in the rate of interest
charged hereunder being in excess of the Maximum Permitted Rate, the
obligation to be fulfilled shall automatically be reduced to eliminate such
excess. If, notwithstanding the foregoing, the Lender receives an amount
which under applicable law would cause the interest rate hereunder to exceed
the Maximum Permitted Rate, the portion thereof which would be excessive
shall automatically be deemed a prepayment of and be applied to the unpaid
principal balance of this Note to the extent of then outstanding Prime Rate
Loans and not a payment of interest and to the extent said excessive portion
exceeds the outstanding principal amount of Prime Rate Loans, said excessive
portion shall be repaid to the Borrower.
The Borrower expressly waives presentment, notice of acceleration and
intent to accelerate, demand for payment and protest and notice of protest
and nonpayment.
2
This Note shall for all purposes be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts without regard
to such state's conflict of laws rules.
Executed as a sealed instrument as of the date first above written.
In the presence of: VIEWLOGIC SYSTEMS, INC.
_________________________ By:________________________________
Name:___________________________
Title:__________________________
3
EXHIBIT 1.6 - FORM OF TERM NOTE
TERM NOTE
[Insert Amount of _______ __, 19__
Lender's Pro rata Share of Term
Loan Commitment]
FOR VALUE RECEIVED, VIEWLOGIC SYSTEMS, INC., a Delaware corporation,
with a principal business address at 000 Xxxxxx Xxxx Xxxx Xxxx, Xxxxxxxx, XX
00000-0000 (hereinafter referred to as the "Borrower") promises to pay the
principal sum of [insert Lender's Pro Rata Share of the Term Loan]
($_________.00) to the order of [insert name of Lender], [a national banking
association organized and existing under the laws of the United States of
America] [a _________ corporation] (the "Lender"), at the Lender's head
office located at [insert address] or to FLEET NATIONAL BANK or any successor
Agent under the Loan Agreement (defined below), as Agent for the Lender (the
"Agent"), in accordance with that certain Loan Agreement dated as of the date
hereof by and among the Borrower, the Agent, the other Lenders party thereto
and the Lender, as amended from time to time (the "Loan Agreement").
The Borrower promises to pay to the order of the Lender interest before
and after maturity on the principal amount of this Note outstanding from time
to time from the date hereof until payment in full of all principal,
interest, fees and other sums due under this Note in accordance with the
terms of the Loan Agreement.
The Borrower shall make payments of principal, interest, fees and other
amounts in accordance with the Loan Agreement and shall pay in full all
unpaid principal, interest, fees and other amounts due under this Note on the
Term Loan Repayment Date.
This Note is secured by the Security Documents.
Upon the occurrence and during the continuance of any Event of Default
each Prime Rate Loan evidenced by this Note shall bear interest, payable on
demand, at a floating interest rate per annum equal to two percent (2.0%)
above Effective Prime and each Libor Loan evidenced by this Note shall bear
interest at the Libor Rate plus two percent (2.0%). In addition, in the
event that the Borrower fails to pay any amount of principal or interest
hereof within ten (10) days after such payment is due, the Borrower shall
pay to the Lender upon demand by the Agent or the Lender, a late charge in an
amount equal to five percent (5%) of such amount of principal or interest.
Principal, interest, fees and other sums are payable in immediately
available Dollars to the Agent at its address set forth in the Loan Agreement
or as otherwise directed in writing from the Agent to the Borrower.
This Note is one of the Term Notes referred to in, and is entitled to
the benefits of, the Loan Agreement. The applicable terms and provisions of
the Loan Agreement are incorporated herein by reference as if fully set forth
herein. In the event of any conflict between any provisions of this Note and
any provision(s) of the Loan Agreement, such provision(s) of the Loan
Agreement shall control. Each capitalized term used in this Note and not
expressly defined in this Note shall have the meaning ascribed to such term
in the Loan Agreement. The Loan Agreement, among other things, contains
provisions for acceleration of the maturity of this Note upon the happening
of certain stated events and also for prepayments on account of principal of
this Note prior to the maturity of this Note upon the terms and conditions
specified in the Loan Agreement.
If this Note shall not be paid when due and shall be placed by the
holder hereof in the hands of an attorney for collection, through legal
proceedings or otherwise, the Borrower will pay reasonable attorneys' fees to
the holder hereof together with reasonable costs and expenses of collection.
All provisions of this Note and any other agreements between the
Borrower and the Lender are expressly subject to the condition that in no
event, whether by reason of acceleration of maturity of the Indebtedness
evidenced by this Note or otherwise, shall the amount paid or agreed to be
paid to the Lender which is deemed interest under applicable law exceed the
maximum permitted rate of interest under applicable law (the "Maximum
Permitted Rate"), which shall mean the law in effect on the date of this
Note, except that if there is a change in such law which results in a higher
Maximum Permitted Rate, then this Note shall be governed by such amended law
from and after its effective date. In the event that fulfillment of any
provision of this Note, or the Loan Agreement or any document, instrument or
agreement providing security for this Note results in the rate of interest
charged hereunder being in excess of the Maximum Permitted Rate, the
obligation to be fulfilled shall automatically be reduced to eliminate such
excess. If, notwithstanding the foregoing, the Lender receives an amount
which under applicable law would cause the interest rate under this Note to
exceed the Maximum Permitted Rate, the portion thereof which would be
excessive shall automatically be deemed a prepayment of and be applied to the
unpaid principal balance of this Note to the extent of then outstanding Prime
Rate Loans and not a payment of interest and to the extent said excessive
portion exceeds the outstanding principal amount of Prime Rate Loans, said
excessive portion shall be repaid to the Borrower.
The Borrower expressly waives presentment, notice of acceleration and
intent to accelerate, demand for payment and protest and notice of protest
and nonpayment.
This Note shall for all purposes be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts without regard
to such state's conflict of laws rules.
2
Executed as a sealed instrument as of the date first above written.
In the presence of: VIEWLOGIC SYSTEMS, INC.
_________________________ By:________________________________
Name:___________________________
Title:__________________________
3
EXHIBIT 1.9 - PRO RATA SHARES
AGENT'S AND LENDERS'
NOTICE ADDRESSES AND WIRE TRANSFER INSTRUCTIONS
NAME OF AGENT, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS:
FLEET NATIONAL BANK
ATTN: XXXXX XXXXX, VICE PRESIDENT
MAILSTOP MA OF XX0X
XXX XXXXXXX XXXXXX
XXXXXX, XX 00000
WIRE TRANSFER INSTRUCTIONS:
FLEET NATIONAL BANK
ABA #: 000000000
Account: COMMERCIAL LOAN SERVICES
ATTN: AGENT BANK MA
Account #: 0000000 G/L
Re: Viewlogic Systems, Inc.
NAME OF LENDER, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS: PRO RATA SHARE
FLEET NATIONAL BANK 100%
ATTN: XXXXX XXXXX, VICE PRESIDENT
MAILSTOP MA OF XX0X
XXX XXXXXXX XXXXXX
XXXXXX, XX 00000
WIRE TRANSFER INSTRUCTIONS:
FLEET NATIONAL BANK
ABA #: 000000000
Account: COMMERCIAL LOAN SERVICES
ATTN: AGENT BANK MA
Account #: 0000000 G/L
Re: Viewlogic Systems, Inc.
2
EXHIBIT 1.10 - FORM OF REQUEST
Date:
FLEET NATIONAL BANK
XXX XXXXXXX XXXXXX
XXXXXX, XXXXXXXXXXXXX 00000
ATTN: XXXXX XXXXXXXXX
TELECOPY: (000) 000-0000
RE: Request for Loan
Gentlemen:
Reference is made to that certain Loan Agreement dated as of October 2,
1998 by and among the undersigned, you and the Lenders (the "Loan
Agreement"). Capitalized terms used herein shall have the same meaning as in
the Loan Agreement.
The undersigned hereby requests a [Term] [Revolving Credit] Loan from
the Lenders pursuant to the Loan Agreement in the amount of _____________ and
no/100 Dollars ($__________.00) at the interest rate set forth in the
Interest Rate Election pertaining to such Loan.
The undersigned requests that each Lender fund its Pro Rata Share of
such Loan on ________ __, 19__ and such date is in accordance with the terms
and conditions of the Loan Agreement.
The undersigned hereby certifies to the Lenders that as of the date
hereof:
(a) no Event of Default and no Default has occurred and is continuing;
and
(b) the representations and warranties of the Borrower contained in
Article 4 of the Loan Agreement and/or contained in any of the other
Financing Documents are true and correct in all material respects except as
altered by actions not prohibited under the Loan Agreement.
VIEWLOGIC SYSTEMS, INC.
By:________________________________
Name:___________________________
Title:__________________________
cc:
FLEET NATIONAL BANK
ATTN: XXXXX XXXXX, VICE PRESIDENT
MAILSTOP MA OF XX0X
XXX XXXXXXX XXXXXX
XXXXXX, XX 00000
EXHIBIT 3.1.1.10 - FORM OF COMPLIANCE CERTIFICATE
COMPLIANCE CERTIFICATE
FLEET NATIONAL BANK
ATTN: XXXXX XXXXX, VICE PRESIDENT
MAILSTOP: MA OF XX0X
XXX XXXXXXX XXXXXX
XXXXXX, XX 00000
Re: Compliance Certificate Required by SECTIONS 3.1.1.10 or 5.3.4 of the
Loan Agreement dated as of October 2, 1998 by and among you as Agent,
the undersigned and certain Lenders, as same may have been amended
(the "Loan Agreement")
Gentlemen:
This certificate is submitted by the undersigned (hereinafter the
"Borrower") pursuant to SECTIONS 3.1.1.10 or 5.3.4 of the Loan Agreement.
Capitalized terms used herein have the same meaning as in the Loan Agreement.
The Borrower hereby certifies to the Agent and the Lenders that the
following information is true, accurate and complete as of ,
19 .
1. Minimum Debt Service Coverage Ratio (Section 5.1.10)
(i) Net Income (or Net Loss) . . . . . . . . . . . . . . . . . . .$__________
(ii) Interest Expense . . . . . . . . . . . . . . . . . . . . . . .$__________
(iii) Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .$__________
(iv) Depreciation . . . . . . . . . . . . . . . . . . . . . . . . .$__________
(v) Amortization . . . . . . . . . . . . . . . . . . . . . . . . .$__________
(vi) Any other non cash charges . . . . . . . . . . . . . . . . . .$__________
(vii) Any other non-recurring extraordinary costs. . . . . . . . . .$__________
(viii) Any non-cash foreign exchange adjustment . . . . . . . . . . .$__________
(ix) Capitalized Software Development Costs . . . . . . . . . . . .$__________
(x) EBITDA [Line (i) plus the sum of Lines (ii) + (iii) . . . . .$__________
(iv) + (v) + (vi) + (vii) + (viii) minus Line (ix)] . . . . .$__________
(xi) EBITA for prior three quarters . . . . . . . . . . . . . . . .$__________
(xii) EBITA for last four rolling quarters [Line (x) plus Line
(xi)]. . . . . . . . . . . . . . . . . . . . . . . . . . . . .$__________
(xii) Capital Expenditures . . . . . . . . . . . . . . . . . . . . .$__________
(xiv) Taxes paid and currently payable for last four quarters. . . .$__________
(xv) Total Debt Service time four . . . . . . . . . . . . . . . . .$__________
(xvi) Ratio: [Line (xii) minus the sum of (Lines (xiii) +
(xiv)) divided by Line (xv)] . . . . . . . . . . . . . . . . . :1.00
----------
(xvii) Minimum Permitted by Agreement . . . . . . . . . . . . . . . . :1.00
----------
2. Minimum Interest Coverage Ratio (Section 5.1.11)
(i) EBIDA [Line 1.(xii)] . . . . . . . . . . . . . . . . . . . . .$__________
(ii) Interest Expense . . . . . . . . . . . . . . . . . . . . . . .$__________
(iii) Ratio: [Line (i) divided by Line (ii)] . . . . . . . . . . . . :1.00
-----------
(iv) Minimum Permitted by Agreement . . . . . . . . . . . . . . . . :1.00
-----------
3. Maximum Leverage Ratio (Section 5.1.12)
(i) Total Indebtedness for Borrowed Money. . . . . . . . . . . . .$__________
(ii) EBITDA [Line 1.(xii)]. . . . . . . . . . . . . . . . . . . . .$__________
(iii) Ratio: [Line (i) divided by Line (ii)] . . . . . . . . . . . . :1.00
-----------
(iv) Maximum Permitted by Agreement . . . . . . . . . . . . . . . . :1.00
-----------
The Borrower further certifies to the Lenders that as of the date hereof
no Event of Default or Default has occurred without having been waived in
writing.
VIEWLOGIC SYSTEMS, INC.
By:________________________________
Name:___________________________
Title:__________________________
2
EXHIBIT 4.1.11 - REAL PROPERTY
EXHIBIT 9.11.1 - FORM OF SUBSTITUTION AGREEMENT
Form of Substitution Agreement
Agreement made and entered into as of _____ day of ___________, 19__ by and
between ______________________, a ___________ having a principal place of
business at _______________________ (the "Substituted Lender") and FLEET
NATIONAL BANK, acting as Agent for itself in its individual capacity and for the
Borrower, [INSERT NAME(S) OF SELLING LENDER(S)] and the other Lenders which are
parties to the Loan Agreement (defined below) (the "Agent").
1. This Agreement relates to a Loan Agreement (the "Loan Agreement")
dated October ___, 1998, as same may have been or be amended, made
between Viewlogic Systems, Inc., a Delaware corporation (the
"Borrower") and the Lenders which are parties thereto and FLEET
NATIONAL BANK acting as Agent for the Lenders thereunder, upon and
subject to the terms of which the Lenders have agreed to make
available to the Borrower the Loans in an aggregate principal amount
up to $24,000,000. Terms defined in the Loan Agreement shall, unless
otherwise defined herein, have the same meanings herein.
2. The Substituted Lender hereby agrees to become a Lender pursuant to
the terms of SECTION 9.11 of the Loan Agreement having a Pro Rata
Share of the Loans and the Commitment in the amount set forth opposite
the Substituted Lender's name on SCHEDULE A hereto and to fund its Pro
Rata Share of any outstanding Loans in which it is purchasing a Pro
Rata Share by wire transfer to the Selling Lender in accordance with
Schedule A hereto on [insert proposed effective date].
3. [INSERT NAME OF SELLING LENDER] hereby agrees that, effective as the
effective date of this Agreement, its Pro Rata Share of the Loans and
the Commitment shall be reduced to the Pro Rata Share set forth
opposite its name on SCHEDULE A hereto.
4. The Substituted Lender hereby agrees (i) that its address for notices
for the purposes of SECTION 9.6 of the Loan Agreement shall be the
address set forth opposite its name on SCHEDULE A hereto and (ii) that
the instructions for wire transfers of funds to the Agent and for wire
transfers of funds to the Substituted Lender are as set forth on
Schedule A hereto.
5. The Substituted Lender hereby requests the Agent to accept, on behalf
of the Borrower and the Lenders, this Agreement as a Substitution
Agreement delivered to the Agent pursuant to and for the purposes of
SECTION 9.11 of the Loan
Agreement so as to take effect in accordance with the terms hereof
and thereof on [insert proposed effective date].
6. The Substituted Lender hereby acknowledges (a) receipt of a copy of
the Loan Agreement and the Security Documents together with such other
documents and information as it has required in connection herewith,
(b) the provisions of SECTION 9.11 of the Loan Agreement as they apply
in connection with its execution hereof and the transactions and
matters to occur in consequence hereof, and (c) the correctness of the
details specified in SCHEDULE A hereto.
7. The Substituted Lender hereby undertakes with each of the other
parties to the Loan Agreement that it will perform in accordance with
their respective terms all those obligations which by the terms of the
Loan Agreement will be assumed by it upon and after delivery of this
Substitution Agreement to the Agent, and agrees to be bound by the
provisions of the Loan Agreement as though it were an original
signatory thereto.
8. This Agreement and the rights and obligations of the parties hereunder
shall be governed by, and construed in accordance with the laws of []
without regard to such state's conflict of laws rules.
[ ]
By:_______________________________
Name:
Title:
FLEET NATIONAL BANK, as Agent for itself
in its individual capacity and as agent
for the Borrower, [INSERT NAME(S) OF
SELLING LENDER(S)] and any other
Lenders
By:_______________________________
2
SCHEDULE A
NAME OF AGENT, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS:
FLEET NATIONAL BANK
ATTN: XXXXX XXXXX, VICE PRESIDENT
MAILSTOP MA OF XX0X
XXX XXXXXXX XXXXXX
XXXXXX, XX 00000
WIRE TRANSFER INSTRUCTIONS:
FLEET NATIONAL BANK
ABA #: 000000000
Account: COMMERCIAL LOAN SERVICES
ATTN: AGENT BANK MA
Account #: 0000000 G/L
Re: Viewlogic Systems, Inc.
NAME OF LENDER, ADDRESS FOR NOTICES
AND WIRE TRANSFER INSTRUCTIONS: PRO RATA SHARE
FLEET NATIONAL BANK 100%
Attn: Xxxxx Xxxxx, Vice President
MAILSTOP MA OF XX0X
XXX XXXXXXX XXXXXX
XXXXXX, XX 00000
WIRE TRANSFER INSTRUCTIONS:
FLEET NATIONAL BANK
ABA #: 000000000
Account: COMMERCIAL LOAN SERVICES
ATTN: AGENT BANK MA
Account #: 0000000 G/L
Re: Viewlogic Systems, Inc.
