Exhibit 10.6
REVOLVING CREDIT AGREEMENT
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Dated as of November 7, 1997
among
ANSWERTHINK CONSULTING GROUP, INC.
BANKBOSTON, N.A. and the other lending institutions
set forth on Schedule 1 hereto
and
BANKBOSTON, N.A., AS AGENT
TABLE OF CONTENTS
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1. DEFINITIONS AND RULES OF INTERPRETATION................................ 1
1.1. Definitions..................................................... 1
1.2. Rules of Interpretation......................................... 15
2. THE REVOLVING CREDIT FACILITY.......................................... 16
2.1. Commitment To Lend.............................................. 16
2.1.1. Commitment to Lend...................................... 16
2.1.2. Increase in Commitment and Total Commitment............. 16
2.2. Commitment Fee.................................................. 17
2.3. Reduction of Total Commitment................................... 17
2.4. The Revolving Credit Notes...................................... 17
2.5. Interest on Revolving Credit Loans.............................. 18
2.6. Requests for Revolving Credit Loans............................. 18
2.7. Conversion Options.............................................. 18
2.7.1. Conversion to Different Type of Revolving Credit Loan... 18
2.7.2. Continuation of Type of Revolving Credit Loan........... 19
2.7.3. LIBOR Rate Loans........................................ 19
2.8. Funds for Revolving Credit Loans................................ 19
2.8.1. Funding Procedures...................................... 19
2.8.2. Advances by Agent....................................... 20
3. REPAYMENT OF THE REVOLVING CREDIT LOANS................................ 20
3.1. Maturity........................................................ 20
3.2. Mandatory Repayments of Revolving Credit Loans.................. 20
3.3. Optional Repayments of Revolving Credit Loans................... 20
4. CERTAIN GENERAL PROVISIONS............................................. 21
4.1. Closing Fee .................................................... 21
4.2. Funds for Payments.............................................. 21
4.2.1. Payments to Agent....................................... 21
4.2.2. No Offset, etc.......................................... 21
4.3. Computations.................................................... 22
4.4. Inability to Determine LIBOR Rate............................... 22
4.5. Illegality...................................................... 22
4.6. Additional Costs, etc........................................... 23
4.7. Capital Adequacy................................................ 24
4.8. Certificate..................................................... 24
4.9. Indemnity....................................................... 24
4.10. Interest After Default......................................... 25
4.10.1. Overdue Amounts........................................ 25
4.10.2. Amounts Not Overdue.................................... 25
5. SECURITY AND GUARANTIES................................................ 25
5.1. Security of Borrower............................................ 25
5.2. Guaranties and Security of Subsidiaries......................... 25
6. REPRESENTATIONS AND WARRANTIES......................................... 25
6.1. Corporate Authority............................................. 26
6.1.1. Incorporation; Good Standing............................ 26
6.1.2. Authorization........................................... 26
6.1.3. Enforceability.......................................... 26
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6.2. Governmental Approvals.......................................... 26
6.3. Title to Properties; Leases..................................... 26
6.4. Financial Statements and Projections............................ 27
6.4.1. Fiscal Year............................................. 27
6.4.2. Financial Statements.................................... 27
6.4.3. Projections............................................. 27
6.5. No Material Changes, etc.; Solvency............................. 27
6.5.1. No Changes.............................................. 27
6.5.2. Solvency................................................ 28
6.6. Franchises, Patents, Copyrights, etc............................ 28
6.7. Litigation...................................................... 28
6.8. No Materially Adverse Contracts, etc............................ 28
6.9. Compliance With Other Instruments, Laws, etc.................... 28
6.10. Tax Status...................................................... 29
6.11. No Event of Default............................................. 29
6.12. Holding Company and Investment Company Acts..................... 29
6.13. Absence of Financing Statements, etc............................ 29
6.14. Perfection of Security Interest................................. 29
6.15. Certain Transactions............................................ 29
6.16. Employee Benefit Plans.......................................... 30
6.16.1. In General............................................. 30
6.16.2. Terminability of Welfare Plans......................... 30
6.16.3. Guaranteed Pension Plans............................... 30
6.16.4. Multiemployer Plans.................................... 31
6.17. Use of Proceeds................................................ 31
6.17.1. General................................................ 31
6.17.2. Regulations U and X.................................... 31
6.17.3. Ineligible Securities.................................. 31
6.18. Environmental Compliance....................................... 31
6.19. Subsidiaries, etc.............................................. 33
6.20. Bank Accounts.................................................. 33
6.21. Disclosure..................................................... 33
6.22. Chief Executive Offices........................................ 33
6.23. No Amendments to Certain Documents............................. 34
6.24. Insurance...................................................... 34
7. AFFIRMATIVE COVENANTS OF THE BORROWER.................................. 34
7.1. Punctual Payment................................................ 34
7.2. Maintenance of Office........................................... 34
7.3. Records and Accounts............................................ 34
7.4. Financial Statements, Certificates and Information.............. 35
7.5. Notices......................................................... 36
7.5.1. Defaults................................................ 36
7.5.2. Environmental Events.................................... 36
7.5.3. Notification of Claims Against Collateral............... 37
7.5.4. Notice of Litigation and Judgments...................... 37
7.6. Corporate Existence; Maintenance of Properties.................. 37
7.7. Insurance; Life Insurance....................................... 37
7.7.1. Insurance............................................... 37
7.7.2. Life Insurance.......................................... 38
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7.8. Taxes........................................................... 38
7.9. Inspection of Properties and Books, etc......................... 39
7.9.1. General................................................. 39
7.9.2. Collateral Audit........................................ 39
7.9.3. Communication with Accountants.......................... 39
7.10. Compliance with Laws, Contracts, Licenses, and Permits.......... 39
7.11. Employee Benefit Plans.......................................... 39
7.12. Use of Proceeds................................................. 40
7.13. Bank Accounts................................................... 40
7.14. New Guarantors.................................................. 40
7.15. Further Assurances.............................................. 40
7.16. Preferred Stock................................................. 40
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER............................. 40
8.1. Restrictions on Indebtedness.................................... 41
8.2. Restrictions on Liens........................................... 41
8.3. Restrictions on Investments..................................... 43
8.4. Restricted Payments; Distributions.............................. 44
8.5. Merger, Consolidation........................................... 44
8.5.1. Mergers and Acquisitions................................ 44
8.5.2. Disposition of Assets................................... 45
8.6. Sale and Leaseback.............................................. 45
8.7. Compliance with Environmental Laws.............................. 45
8.8. Fiscal Year..................................................... 45
8.9. Employee Benefit Plans.......................................... 45
8.10. Business Activities............................................ 46
8.11. Change in Terms of Employment Agreements....................... 46
8.12. Transactions with Affiliates................................... 46
8.13. Bank Accounts.................................................. 47
8.14. Upstream Limitations........................................... 47
8.15. Inconsistent Agreements........................................ 47
8.16. Charter Amendments............................................. 47
9. FINANCIAL COVENANTS OF THE BORROWER.................................... 47
9.1. Leverage Ratio.................................................. 47
9.2. Profitable Operations........................................... 47
9.3. Consolidated Operating Cash Flow to Total Debt Service.......... 48
9.4. Quick Ratio..................................................... 48
9.5. Capital Expenditures............................................ 48
10. CLOSING CONDITIONS.................................................... 48
10.1. Loan Documents etc.............................................. 48
10.1.1. Loan Documents......................................... 48
10.2. Certified Copies of Charter Documents........................... 48
10.3. Corporate Action................................................ 48
10.4. Incumbency Certificate.......................................... 48
10.5. Validity of Liens............................................... 49
10.6. Perfection Certificates and UCC Search Results.................. 49
10.7. Certificates of Insurance....................................... 49
10.8. Opinions of Counsel............................................. 49
10.9. Payment of Fees................................................. 49
10.10.Completion of Successful Financial Inquiry and Due Diligence.... 49
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10.11. Consents and Approvals......................................... 50
11. CONDITIONS TO ALL BORROWINGS............................................ 50
11.1. Representations True; No Event of Default...................... 50
11.2. No Legal Impediment............................................ 50
11.3. Governmental Regulation........................................ 50
11.4. Proceedings and Documents...................................... 50
11.5. Pro Forma Compliance........................................... 50
12. EVENTS OF DEFAULT; ACCELERATION; ETC.................................... 51
12.1. Events of Default and Acceleration............................. 51
12.2. Termination of Commitments..................................... 54
12.3. Remedies....................................................... 55
12.4. Distribution of Collateral Proceeds............................ 55
13. SETOFF.................................................................. 56
14. THE AGENT............................................................... 56
14.1. Authorization.................................................. 56
14.2. Employees and Agents........................................... 57
14.3. No Liability................................................... 57
14.4. No Representations............................................. 57
14.4.1. General............................................... 57
14.4.2. Closing Documentation, etc............................ 58
14.5. Payments....................................................... 58
14.5.1. Payments to Agent..................................... 58
14.5.2. Distribution by Agent................................. 58
14.5.3. Delinquent Banks...................................... 59
14.6. Holders of Notes............................................... 59
14.7. Indemnity...................................................... 59
14.8. Agent as Bank.................................................. 59
14.9. Resignation.................................................... 59
14.10. Notification of Defaults and Events of Default................. 60
14.11. Duties in the Case of Enforcement.............................. 60
15. EXPENSES AND INDEMNIFICATION............................................ 60
15.1. Expenses....................................................... 60
15.2. Indemnification................................................ 61
15.3. Survival....................................................... 62
16. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION........................... 62
16.1. Sharing of Information with Section 20 Subsidiary.............. 62
16.2. Confidentiality................................................ 62
16.3. Prior Notification............................................. 63
16.4. Other.......................................................... 63
17. SURVIVAL OF COVENANTS, ETC.............................................. 63
18. ASSIGNMENT AND PARTICIPATION............................................ 63
18.1. Conditions to Assignment by Banks.............................. 63
18.2. Certain Representations and Warranties; Limitations; Covenants. 64
18.3. Register....................................................... 65
18.4. New Revolving Credit Notes..................................... 65
18.5. Participations................................................. 66
18.6. Disclosure..................................................... 66
18.7. Assignee or Participant Affiliated with the Borrower........... 66
18.8. Miscellaneous Assignment Provisions............................ 67
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18.9. Assignment by Borrower........................................ 67
19. NOTICES, ETC.......................................................... 67
20. GOVERNING LAW......................................................... 68
21. HEADINGS.............................................................. 69
22. COUNTERPARTS.......................................................... 69
23. ENTIRE AGREEMENT, ETC................................................. 69
24. WAIVER OF JURY TRIAL.................................................. 69
25. CONSENTS, AMENDMENTS, WAIVERS, ETC.................................... 69
26. SEVERABILITY.......................................................... 70
REVOLVING CREDIT AGREEMENT
--------------------------
This REVOLVING CREDIT AGREEMENT is made as of November 7, 1997, by and
among ANSWERTHINK CONSULTING GROUP, INC. (the "Borrower"), a Florida corporation
having its principal place of business at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxx, Xxxxxxx 00000, and BANKBOSTON, N.A., a national banking association and
the other lending institutions listed on Schedule 1 and BANKBOSTON, N.A. as
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agent for itself and such other lending institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
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1.1. DEFINITIONS. The following terms shall have the meanings set forth in
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this (S)1 or elsewhere in the provisions of this Credit Agreement referred to
below:
Accounts Receivable. All rights of the Borrower or any of its Subsidiaries
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to payment for goods sold, leased or otherwise marketed in the ordinary course
of business and all rights of the Borrower or any of its Subsidiaries to payment
for services rendered in the ordinary course of business and all sums of money
or other proceeds due thereon pursuant to transactions with account debtors,
except for that portion of the sum of money or other proceeds due thereon that
relate to sales, use or property taxes in conjunction with such transactions,
recorded on books of account in accordance with generally accepted accounting
principles.
Adjustment Date. The first day of the month immediately following the
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month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to (S)7.4(d).
Affiliate. Any Person that would be considered to be an affiliate of the
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Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agent's Head Office. The Agent's head office located at 100 Federal
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Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Agent. BankBoston, N.A. acting as agent for the Banks.
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Agent's Special Counsel. Xxxxxxx Xxxx LLP or such other counsel as may be
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approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date
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through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Leverage Ratio, as determined for the
fiscal period ending on the fiscal quarter ended immediately preceding the
applicable Rate Adjustment Period.
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TIER LEVERAGE RATIO BASE RATE LOANS LIBOR RATE LOANS
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1 Less than 2.00:1.00 0.25% 2.25%
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2 Greater than or equal to 0.50% 2.50%
2.00:1.00 but less than or
equal to 2.50:1.00
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3 Greater than 2.50:1.00 but less 1.00% 3.00%
than or equal to 2.75:1.00
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4 Greater than 2.75:1.00 1.25% 3.25%
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Notwithstanding the foregoing, (a) for Revolving Credit Loans outstanding
during the period commencing on the Closing Date through the date immediately
preceding the first Adjustment Date to occur after the fiscal quarter ending
December 31, 1997, the Applicable Margin shall be the Applicable Margin set
forth in Tier 2 above, and (b) if the Borrower fails to deliver any Compliance
Certificate pursuant to (S)7.4(d) hereof then, for the period commencing on the
Adjustment Date to occur subsequent to such failure through the date immediately
following the date on which such Compliance Certificate is delivered, the
Applicable Margin shall be the highest Applicable Margin set forth above.
Assignment and Acceptance. See (S)18.1.
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Balance Sheet Date. September 30, 1997.
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BankBoston. BankBoston, N.A. in its individual capacity.
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Banks. BankBoston and the other lending institutions listed on Schedule 1
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hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to (S)18.
Base Rate. The higher of (a) the annual rate of interest announced from
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time to time by BankBoston at its head office in Boston, Massachusetts, as its
"base rate" and (b) one-half of one percent (1/2%) above the Federal Funds
Effective Rate. For the purposes of this definition, "Federal Funds Effective
Rate" shall mean, for any day, the rate per annum equal to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
---- ---- -----
reference to the Base Rate.
BKB. BankBoston, N.A. (f/k/a The First National Bank of Boston), a
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national banking association, in its individual capacity.
Borrower. As defined in the preamble hereto.
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Business Day. Any day on which banking institutions in Boston,
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Massachusetts, are open for the transaction of banking business and, in the case
of LIBOR Rate Loans, also a day which is a LIBOR Business Day.
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Capital Assets. Fixed assets, both tangible (such as land, buildings,
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fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
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include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid or indebtedness incurred by the
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Borrower or any of its Subsidiaries in connection with (a) the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles and (b) the lease of
any assets by the Borrower or any of its Subsidiaries as lessee under any
synthetic lease referred to in clause (f) of the definition of the term
"Indebtedness" to the extent that such assets would have been Capital Assets had
the synthetic lease been treated for accounting purposes as a Capitalized Lease.
Capitalized Leases. Leases under which the Borrower or any of its
----------- ------
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See (S)6.18.
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Closing Date. The first date on which the conditions set forth in (S)10
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have been satisfied and any Revolving Credit Loans are to be made.
Code. The Internal Revenue Code of 1986.
----
Collateral. All of the property, rights and interests of the Borrower and
----------
its Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
---------- -------- -
hereto as the amount of such Bank's commitment to make Revolving Credit Loans to
the Borrower, as the same may be reduced from time to time; or if such
commitment is terminated pursuant to the provisions hereof, zero. From the
Closing Date through the Commitment Increase Date, each Bank's Commitment shall
be the amount set forth on Schedule 1 hereto under the heading "Initial
----------
Commitment Amount" and after the Commitment Increase Date, each Bank's
Commitment shall be the amount set forth on Schedule 1 hereto under the heading
----------
"Increased Commitment Amount".
Commitment Increase Date. See (S)2.1.2 hereof.
------------------------
Commitment Percentage. With respect to each Bank, the percentage set forth
---------- ----------
on Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
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all of the Banks.
Compliance Certificate. See (S)7.4(d) hereof.
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Consolidated or consolidated. With reference to any term defined herein,
------------ ------------
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Current Liabilities. All liabilities of the Borrower and its
------------ ------- -----------
Subsidiaries on a consolidated basis maturing on demand or within one (1) year
from the date as of which Consolidated Current Liabilities are to be determined,
and such other liabilities as may properly be classified as current liabilities
in accordance with generally accepted accounting principles; provided, however,
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the Obligations under the Credit Agreement outstanding in the one year period
prior to the Revolving Credit Loan Maturity Date shall not be included as a
Consolidated Current Liability.
Consolidated Net Income (or Deficit). The consolidated net income (or
------------ --- ------ -----------
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
accepted accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income or expense; provided, however, for purposes of
calculating compliance with the financial covenants set forth in (S)9 hereof,
Consolidated Net Income shall not include (a) any non-cash writedowns of good
will and/or purchased research and development; and/or (b) compensation expenses
or additional goodwill amortization relating to the granting by the Borrower of
stock options and restricted stock.
Consolidated Operating Cash Flow. For any period, an amount equal to (a)
--------------------------------
EBITDA for such period, less (b) the sum of (i) cash payments for all income
----
taxes paid during such period, plus (ii) Capital Expenditures made during such
----
period to the extent permitted by (S)9, plus (iii) the portion of the costs of
----
software development required to be capitalized pursuant to FASB Statement No.
86; provided, however, until a period of four consecutive fiscal quarters has
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elapsed since the Closing Date, (b)(i) shall only include income taxes expensed
during such period.
Consolidated Quick Assets. All cash and Accounts Receivable (including,
-------------------------
without duplication, the unbilled portion of Accounts Receivable for services
rendered in the ordinary course of business) of the Borrower and its
Subsidiaries on a consolidated basis that, in accordance with generally accepted
accounting principles, are properly classified as current assets, provided that
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Accounts Receivable shall be included only if good and collectible as determined
by the Borrower in accordance with established practice consistently applied
and, with respect to such accounts receivable, only if payable and outstanding
not more than ninety (90) days after the date of the invoices for services
rendered or other transaction out of which any such account receivable arose;
and such notes and accounts receivable shall be taken at their face value less
reserves determined to be sufficient in accordance with generally accepted
accounting principles.
Consolidated Total Interest Expense. For any period, the aggregate amount
-----------------------------------
of interest expense, both expensed and capitalized, of the Borrower and its
Subsidiaries, determined on a consolidated basis in accordance with generally
accepted accounting principles, for such period on the aggregate amount of the
Borrower and its Subsidiaries Indebtedness, determined on a consolidated basis
in accordance with generally accepted accounting principles, and including
commitment fees, agency fees, facility fees, balance deficiency fees and similar
fees or expenses in connection with the borrowing of money.
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Conversion Request. A notice given by the Borrower to the Agent of the
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Borrower's election to convert or continue a Revolving Credit Loan in accordance
with (S)2.7.
Credit Agreement. This Revolving Credit Agreement, including the Schedules
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and Exhibits hereto.
Default. See (S)12.
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Distribution. The declaration or payment of any dividend on or in respect
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of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower; provided, however, that (a) distributions to
reimburse the sellers of Relational Technologies, Inc. ("RTI") for their tax
liabilities in connection with the merger of RTI with and into the Borrower, and
(b) the retirements of capital stock in connection with the conversion of the
Borrower's preferred stock into common stock shall not constitute
"Distributions" hereunder.
Dollars or $. Dollars in lawful currency of the United States of America.
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Domestic Lending Office. Initially, the office of each Bank designated as
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such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
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located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or is
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to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with (S)2.7.
EBITDA. With respect to the Borrower and its Subsidiaries for any fiscal
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period, an amount equal to Consolidated Net Income for such period, plus, to the
----
extent deducted in the calculation of Consolidated Net Income and without
duplication, (a) depreciation and amortization for such period; (b) income tax
expense for such period; and (c) Consolidated Total Interest Expense during such
period, and minus, to the extent added in computing Consolidated Net Income and
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without duplication, all income tax benefits for such period, all as determined
in accordance with generally accepted accounting principles.
Eligible Assignee. Any of (a) a commercial bank or finance company
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organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
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bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if, but only if, an
Event of Default has occurred and is
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continuing, any other bank, insurance company, commercial finance company or
other financial institution or other Person approved by the Agent, such approval
not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
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(S)3(3) of ERISA maintained or contributed to by the Borrower, other than a
Guaranteed Pension Plan or a Multiemployer Plan.
Employment Agreements. Collectively (a) each of the employment agreements
---------------------
dated on or prior to the Closing Date between the Borrower and certain of its
employees set forth on Schedule 1.1 hereto, which employment agreements shall be
in form and substance satisfactory to the Agent and (b) each employment
agreement dated after the Closing Date between the Borrower and certain of its
employees, which employment agreements shall be in form and substance
substantially similar to those employment agreements delivered to the Agent on
or prior to the Closing Date.
Environmental Laws. See (S)6.18(a).
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EPA. See (S)6.18(b).
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ERISA. The Employee Retirement Income Security Act of 1974.
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ERISA Affiliate. Any Person which is treated as a single employer with the
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Borrower under (S)414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
----------------------
Pension Plan within the meaning of (S)4043 of ERISA and the regulations
promulgated thereunder.
Eurocurrency Reserve Rate. For any day with respect to a LIBOR Rate Loan,
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the maximum rate (expressed as a decimal) at which any lender subject thereto
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency Liabilities" (as
that term is used in Regulation D), if such liabilities were outstanding. The
Eurocurrency Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Rate.
Event of Default. See (S)12.
----------------
Fee Letter. The fee letter dated or to be dated on or prior to the Closing
----------
Date between the Borrower and the Agent, in form and substance satisfactory to
the Agent.
generally accepted accounting principles. (a) When used in (S)9, whether
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directly or indirectly through reference to a capitalized term used therein,
means (i) principles that are consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, in
effect for the fiscal quarter ended on September 30, 1997, and (ii) to the
extent consistent with such principles, the accounting practice of the Borrower
reflected in its financial statements for the period ended on September 30,
1997, and (b) when used in general, other than as provided above, means
principles that are (i) consistent with the principles promulgated or adopted by
the Financial Accounting
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Standards Board and its predecessors, as in effect from time to time and (ii)
consistently applied with past financial statements of the Borrower adopting the
same principles. No "Accounting Changes" (as hereinafter defined) shall effect
financial covenants, standards or terms in this Credit Agreement; provided, that
the Borrower shall prepare footnotes to each Compliance Certificate and the
financial statements required to be delivered hereunder that show the
differences between the financial statements delivered hereunder (which reflect
such Accounting Changes) and the basis for calculating financial covenant
compliance and the Leverage Ratio set forth in computing the Applicable Margin
(in each case without reflecting such Accounting Changes). Accounting Changes
shall mean (a) changes in accounting principles required by generally accepted
accounting principles and implemented by the Borrower; (b) changes in accounting
principles recommended by the Borrower's certified public accountants and
implemented by the Borrower; and (c) changes in carrying value of the Borrower's
or any of its Subsidiaries' assets, liabilities or equity accounts resulting
from any adjustments that were applicable to, but not included in, any pro forma
calculations delivered to the Agent on or prior to the Closing Date. All such
adjustments resulting from expenditures made subsequent to the Closing Date
shall be treated as expenses in the period the expenditures are made.
Guaranteed Pension Plan. Any employee pension benefit plan within the
-----------------------
meaning of (S)3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guaranty. The Guaranty dated as of the date hereof made by each Subsidiary
--------
of the Borrower in favor of the Banks and the Agent pursuant to which each
Subsidiary of the Borrower guaranties to the Banks and the Agent the payment and
performance of the Obligations and in form and substance satisfactory to the
Banks and the Agent.
Xxxxxxx Acquisition. The acquisition by the Borrower on October 13, 1997
-------------------
of all of the outstanding shares of capital stock of The Xxxxxxx Group, Inc..
Hazardous Substances. See (S)6.18(b).
--------- ----------
Indebtedness. As to any Person and whether recourse is secured by or is
------------
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses, other
than notes issued in connection with any Permitted Acquisition representing
earn-out arrangements with the seller so long as such note would not be
required to be treated as a liability or debt pursuant to generally
accepted accounting principles,
(c) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person,
-8-
(d) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable and excluding accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith),
(e) every obligation of such Person under any Capitalized Lease,
(f) every obligation of such Person under any lease treated as an
operating lease under generally accepted accounting principles and as a
loan or financing for U.S. income tax purposes (a "synthetic lease");
provided, however, for purposes of this Credit Agreement synthetic leases
-------- -------
shall not include any lease arrangement entered into by the Borrower for
the lease of computer equipment so long as such arrangements are for
substantially the same purpose as those computer lease arrangements
existing on the Closing Date,
(g) all sales by such Person of (i) accounts or general intangibles
for money due or to become due, (ii) chattel paper, instruments or
documents creating or evidencing a right to payment of money or (iii) other
receivables (collectively "receivables"), whether pursuant to a purchase
facility or otherwise, other than in connection with the disposition of the
business operations of such Person relating thereto or a disposition of
defaulted receivables for collection and not as a financing arrangement,
and together with any obligation of such Person to pay any discount,
interest, fees, indemnities, penalties, recourse, expenses or other amounts
in connection therewith,
(h) every obligation of such Person (an "equity related purchase
obligation") to purchase, redeem, retire or otherwise acquire for value any
shares of capital stock of any class issued by such Person, any warrants,
options or other rights to acquire any such shares, or any rights measured
by the value of such shares, warrants, options or other rights; provided,
--------
however, those items which are covered in the proviso to the defined term
-------
"Restricted Payment" shall not constitute Indebtedness for purposes of this
paragraph (h),
(i) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or arrangement
(including, without limitation, caps, floors, collars and similar
agreements), the value of which is dependent upon interest rates, currency
exchange rates, commodities or other indices,
(j) every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to
the extent that such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except to the
extent that the terms of such Indebtedness provide that such Person is not
liable therefor and such terms are enforceable under applicable law,
(k) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of clauses
(a) through (j) (the "primary
-9-
obligation") of another Person (the "primary obligor"), in any manner,
whether directly or indirectly, and including, without limitation, any
obligation of such Person (i) to purchase or pay (or advance or supply
funds for the purchase of) any security for the payment of such primary
obligation, (ii) to purchase property, securities or services for the
purpose of assuring the payment of such primary obligation, or (iii) to
maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (v) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (w) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (x) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (y) any synthetic lease shall be the
stipulated loss value, termination value or other equivalent amount and (z) any
equity related purchase obligation shall be the maximum fixed redemption or
purchase price thereof inclusive of any accrued and unpaid dividends to be
comprised in such redemption or purchase price.
Ineligible Securities. Securities which may not be underwritten or dealt
---------------------
in by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1993 (12 U.S.C. (S)24, Seventh), as amended.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of the
---------------------
calendar quarter which includes the Drawdown Date thereof; and (b) as to any
LIBOR Rate Loan in respect of which the Interest Period is (i) three (3) months
or less, the last day of such Interest Period and (ii) more than three (3)
months, the date that is three (3) months from the first day of such Interest
Period and, in addition, the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a)
-------- ------
initially, the period commencing on the Drawdown Date of such Revolving Credit
Loan and ending on the last day of one of the periods set forth below, as
selected by the Borrower in a Loan Request (i) for any Base Rate Loan, the last
day of the calendar quarter; and (ii) for any LIBOR Rate Loan, 1, 2, 3, or 6
months; and (b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Revolving Credit Loan and ending on
the last day of one of the periods set forth above, as selected by the Borrower
in a Conversion Request; provided that all of the foregoing provisions relating
--------
to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest
Period shall be extended to the next succeeding LIBOR Business Day unless
the result of such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period shall end on
the immediately preceding LIBOR Business Day;
-10-
(b) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the
next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in (S)2.7,
the Borrower shall be deemed to have requested a conversion of the affected
LIBOR Rate Loan to a Base Rate Loan and the continuance of all Base Rate
Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto;
(d) any Interest Period that begins on the last LIBOR Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last LIBOR Business Day of a calendar month; and
(e) any Interest Period relating to any LIBOR Rate Loan that would
otherwise extend beyond the Revolving Credit Loan Maturity Date shall end
on the Revolving Credit Loan Maturity Date.
Investments. All expenditures made and all liabilities incurred
-----------
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Investors. Collectively, (a) Golder, Thoma, Xxxxxxx, Xxxxxx Fund V, L.P.,
---------
a Delaware limited partnership, (b) MG Capital Partners II, L.P., a Delaware
limited partnership and any other investment fund managed by Golder, Thoma,
Xxxxxxx, Xxxxxx Inc., (c) Gator Associates, Ltd., a Florida limited partnership
(including the general and limited partners thereof), (d) Xxxx Ventures, Ltd., a
British Virgin Islands corporation (including the shareholders thereof), (e) Xxx
Xxxxxxxxx, (e) Xxxxx Xxxxxx, (f) Xxxxx Xxxxxxx, (g) Xxxxxxx Xxxxxx, (h) Xxx
Xxxxx and (i) Xxxxx Xxxxx.
Leverage Ratio. As at any date of determination, the ratio of (a) Total
--------------
Funded Indebtedness of the Borrower and its Subsidiaries outstanding on such
date to (b) EBITDA of the Borrower and its Subsidiaries for the Reference Period
ended on such date.
LIBOR Business Day. Any day on which commercial banks are open for
------------------
international business (including dealings in Dollar deposits) in London or such
other
-11-
eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
LIBOR Lending Office. Initially, the office of each Bank designated as
--------------------
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
-------- -
that shall be making or maintaining LIBOR Rate Loans.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan, the
----- ----
rate of interest equal to (a) the rate determined by the Agent at which Dollar
deposits for such Interest Period are offered based on information presented on
Telerate Page 3750 as of 11:00 a.m. London time on the second LIBOR Business Day
prior to the first day of such Interest Period, divided by (b) a number equal to
1.00 minus the Eurocurrency Reserve Rate, if applicable.
LIBOR Rate Loans. Revolving Credit Loans bearing interest calculated by
----------------
reference to the LIBOR Rate.
Life Insurance Assignment. The assignment of the Life Insurance Policy
---- --------- ----------
made by the Borrower to the Agent and in form and substance satisfactory to the
Banks and the Agent.
Life Insurance Policy. The policy of life insurance issued to the Borrower
---------------------
covering the life of Xxx Xxxxxxxxx, in the face amount of $2,000,000.
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the Fee
---- ---------
Letter and the Security Documents.
Loan Request. See (S)2.6.
---- -------
Majority Banks. As of any date, the Banks holding at least fifty one
-------- -----
percent (51%) of the outstanding principal amount of the Revolving Credit Notes
on such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitutes at least fifty one percent (51%) of the Total
Commitment.
Multiemployer Plan. Any multiemployer plan within the meaning of (S)3(37)
------------- ----
of ERISA maintained or contributed to by the Borrower or any ERISA Affiliate.
Obligations. All indebtedness, obligations and liabilities of any of the
-----------
Borrower and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise, arising or incurred under this
Credit Agreement or any of the other Loan Documents or in respect of any of the
Revolving Credit Loans or any of the Revolving Credit Notes or other instruments
at any time evidencing any thereof.
outstanding. With respect to the Revolving Credit Loans, the aggregate
-----------
unpaid principal thereof as of any date of determination.
-12-
PBGC. The Pension Benefit Guaranty Corporation created by (S)4002 of ERISA
----
and any successor entity or entities having similar responsibilities.
Perfection Certificates. The Perfection Certificate as defined in the
---------- ------------
Security Agreements.
Permitted Liens. Liens, security interests and other encumbrances
--------- -----
permitted by (S)8.2.
Person. Any individual, corporation, partnership, trust, unincorporated
------
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Pro Forma March 31, 1998 Calculation. For purposes of calculating EBITDA
------------------------------------
for compliance with (S)9 hereof and for purposes of calculating the EBITDA
component of the Leverage Ratio in connection with the determination of the
Applicable Margin for any date prior to the fiscal quarter ending March 31,
1998, EBITDA shall be calculated based on the Borrower's pro forma first quarter
1998 EBITDA, as determined by the Borrower in good faith and which calculation
is acceptable to the Agent.
Rate Adjustment Period. See the definition of Applicable Margin.
----------------------
RCRA. See (S)6.18(a).
----
Real Estate. All real property at any time owned or leased (as lessee or
---- ------
sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Revolving Credit Note, or the continuation
------
of such grid, or any other similar record, including computer records,
maintained by any Bank with respect to any Revolving Credit Loan referred to in
such Revolving Credit Note.
Reference Bank. BankBoston, N.A.
--------- ----
Reference Period. The period of four (4) consecutive fiscal quarters of
----------------
the Borrower ending on the relevant date; provided, however, until four (4) full
-------- -------
fiscal quarters of the Borrower have elapsed after December 31, 1997, for any
covenant or test calculation to be made (a) prior to the fiscal quarter ending
March 31, 1998, the period consisting of the Pro Forma March 31, 1998
Calculation fiscal quarter multiplied by four; (b) after the fiscal quarter
ending March 31, 1998, the relevant amount applicable to such shorter period of
one, two or three full fiscal quarters elapsed since December 31, 1997, with the
relevant amount applicable to such shorter period annualized for the period by
multiplying such relevant amount by a fraction whose numerator is four (4) and
whose denominator is such actual number of elapsed full fiscal quarters.
Register. See (S)18.3.
--------
Restricted Payment. In relation to the Borrower and its Subsidiaries, any
------------------
(a) Distribution or (b) payment or prepayment by the Borrower or its
Subsidiaries to the Investors or to any other Affiliate of the Borrower, any of
its Subsidiaries or the Investors; provided, however, the term "Restricted
Payment" shall not include (i) the scheduled
-13-
redemption of the Borrower's existing preferred stock on April 22, 2004; (ii) so
long as no Default or Event of Default has occurred and is continuing or would
exist a result thereof, any redemption of such preferred stock in contemplation
of an initial public offering of the Borrower's common stock in accordance with
the terms of the Borrower's Articles of Incorporation (as in effect on the
Closing Date); (iii) the repurchase of capital stock of the Borrower from
employees upon the termination of employment or otherwise pursuant to any
executive management or employment agreements between the Borrower and such
employees; and (iv) retirements or cancellations of capital stock in connection
with conversions pursuant to existing equity arrangements of the Borrower.
Revolving Credit Loan Maturity Date. November 7, 2000.
-----------------------------------
Revolving Credit Loans. Revolving credit loans made or to be made by the
----------------------
Banks to the Borrower pursuant to (S)2.
Revolving Credit Notes. See (S)2.4.
----------------------
XXXX. See (S)6.18(a).
----
Section 20 Subsidiary. A Subsidiary of the bank holding company
---------------------
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Security Agreements. The several Security Agreements dated as of the date
-------- ----------
hereof between the Borrower and its Subsidiaries and the Agent and in form and
substance satisfactory to the Banks and the Agent.
Security Documents. The Guaranty, the Security Agreements, the Trademark
-------- ---------
Assignments, the Life Insurance Assignment, the Stock Pledge Agreement and all
other instruments and documents, including without limitation Uniform Commercial
Code financing statements, required to be executed or delivered pursuant to any
Security Document.
Stock Pledge Agreement. The Stock Pledge Agreement dated as of the date
----------------------
hereof between the Borrower and the Agent and in form and substance satisfactory
to the Banks and the Agent.
Subsidiary. Any corporation, association, trust, or other business entity
----------
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
Total Commitment. The sum of the Commitments of the Banks, as in effect
----- ----------
from time to time.
Total Debt Service. For any period, all scheduled mandatory payments of
------------------
principal of Indebtedness of the Borrower and its Subsidiaries made or required
to be made in such period plus the Consolidated Total Interest Expense of the
Borrower and its Subsidiaries for that period; provided, however, for purposes
of calculating compliance with (S)9.3 hereof, the scheduled mandatory payment in
March, 1999 of not more than $300,000 in principal on
-14-
any seller note issued in connection with the acquisition of Delphi Partners,
Inc. shall not be included in the calculation of Total Debt Service for such
period.
Total Funded Indebtedness. All Indebtedness of the Borrower and its
-------------------------
Subsidiaries for borrowed money (including without limitation, all guarantees by
such Person of Indebtedness of others for borrowed money), purchase money
Indebtedness and with respect to Capitalized Leases and synthetic leases (as
defined in clause (f) of the definition of "Indebtedness"), determined on a
consolidated basis in accordance with generally accepted accounting principles.
Trademark Assignments. The several Trademark Assignments dated as of the
--------- -----------
date hereof made by the Borrower and its Subsidiaries in favor of the Agent and
in form and substance satisfactory to the Banks and the Agent.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
----
LIBOR Rate Loan.
Voting Stock. Stock or similar interests, of any class or classes (however
------ -----
designated), the holders of which are at the time entitled, as such holders, to
vote for the election of a majority of the directors (or persons performing
similar functions) of the corporation, association, trust or other business
entity involved, whether or not the right so to vote exists by reason of the
happening of a contingency.
1.2. RULES OF INTERPRETATION.
-----------------------
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein, with the term "instrument" being that
defined under Article 9 of the Uniform Commercial Code.
-15-
(h) Reference to a particular "(S)" refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
2. THE REVOLVING CREDIT FACILITY.
-----------------------------
2.1. COMMITMENT TO LEND.
------------------
2.1.1. COMMITMENT TO LEND. Subject to the terms and conditions set
------------------
forth in this Credit Agreement, each of the Banks severally agrees to lend
to the Borrower and the Borrower may borrow, repay, and reborrow from time
to time between the Closing Date and the Revolving Credit Loan Maturity
Date upon notice by the Borrower to the Agent given in accordance with
(S)2.6, such sums as are requested by the Borrower up to a maximum
aggregate principal amount outstanding (after giving effect to all amounts
requested) at any one time equal to such Bank's Commitment, provided that
--------
the sum of the outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested) shall not at any time exceed the
Total Commitment. The Revolving Credit Loans shall be made pro rata in
--- ----
accordance with each Bank's Commitment Percentage. Each request for a
Revolving Credit Loan hereunder shall constitute a representation and
warranty by the Borrower that the conditions set forth in (S)10 and (S)11,
in the case of the initial Revolving Credit Loans to be made on the Closing
Date, and (S)11, in the case of all other Revolving Credit Loans, have been
satisfied on the date of such request.
2.1.2. INCREASE IN COMMITMENT AND TOTAL COMMITMENT. From the Closing
-------------------------------------------
Date until the Commitment Increase Date (as hereinafter defined), the
Commitment of each Bank and the Total Commitment shall be as set forth on
Schedule 1 attached hereto under the heading "Initial Commitment Amount";
----------
provided, however, five (5) Business Days following the date on which the
-------- -------
Borrower has demonstrated to the satisfaction of the Agent that (a) the
EBITDA of the Borrower and its Subsidiaries for the most recent period of
two consecutive fiscal quarters (treated as a single accounting period)
after the Closing Date exceeds $1,500,000 for each such quarter in such
period and (b) no Default or Event of Default has occurred and is
continuing under the Credit Agreement and the other Loan Documents (the
"Commitment Increase Date"), the Total Commitment shall be increased by
$10,000,000 (the "Increased Amount") and each Bank's Commitment shall be
increased by such Bank's Commitment Percentage of the Increased Amount. The
Agent shall notify each of the Banks at least two (2) Business Days prior
to the Commitment Increase Date that each Bank's Commitment and the Total
Commitment is being increased on the Commitment Increase Date.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
--------------
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of one-half of one percent (1/2%) per
annum on the average daily amount during each calendar quarter or portion
thereof from the date hereof to the Revolving Credit Loan Maturity Date by which
the Total Commitment exceeds the outstanding amount of Revolving Credit Loans
during such calendar quarter. The
-16-
commitment fee shall be payable quarterly in arrears on the first day of each
calendar quarter for the immediately preceding calendar quarter commencing on
the first such date following the date hereof, with a final payment on the
Revolving Credit Maturity Date or any earlier date on which the Commitments
shall terminate.
2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right at
-----------------------------
any time and from time to time upon five (5) Business Days prior written notice
to the Agent to reduce by $1,000,000 or an integral multiple thereof or
terminate entirely the unborrowed portion of the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance with their
--- ----
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this (S)2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction of the Commitments may be reinstated.
2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
--------------------------
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit A hereto (each a "Revolving Credit Note"), dated as of the Closing
------- -
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Record reflecting the making of such
Revolving Credit Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the Revolving Credit Loans set forth on such Bank's Record
shall be prima facie evidence of the principal amount thereof owing and unpaid
----- -----
to such Bank, but the failure to record, or any error in so recording, any such
amount on such Bank's Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided in
----------------------------------
(S)4.10,
(a) Each Base Rate Loan shall bear interest for the period commencing
with the Drawdown Date thereof and ending on the last day of the Interest
Period with respect thereto at the rate per annum equal to the Base Rate
plus the Applicable Margin.
----
(b) Each LIBOR Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the
LIBOR Rate determined for such Interest Period plus the Applicable Margin.
----
(c) The Borrower promises to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect thereto.
-17-
2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to the
-----------------------------------
Agent written notice in the form of Exhibit B hereto (or telephonic notice
------- -
confirmed in a writing in the form of Exhibit B hereto) of each Revolving Credit
------- -
Loan requested hereunder (a "Loan Request") no later than (a) 11:00 a.m. (Boston
time) on the day of the proposed Drawdown Date of any Base Rate Loan and (b)
three (3) LIBOR Business Days prior to the proposed Drawdown Date of any LIBOR
Rate Loan. Each such notice shall specify (i) the principal amount of the
Revolving Credit Loan requested, (ii) the proposed Drawdown Date of such
Revolving Credit Loan, (iii) the Interest Period for such Revolving Credit Loan
and (iv) the Type of such Revolving Credit Loan. Promptly upon receipt of any
such notice, the Agent shall notify each of the Banks thereof. Each such notice
shall be irrevocable and binding on the Borrower and shall obligate the Borrower
to accept the Revolving Credit Loan requested from the Banks on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate amount of
$500,000 or an integral multiple thereof.
2.7. CONVERSION OPTIONS.
------------------
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.
-----------------------------------------------------
The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type, provided
--------
that (a) with respect to any such conversion of a Revolving Credit Loan to
a Base Rate Loan, the Borrower shall give the Agent at least two (2)
Business Days prior written notice of such election; (b) with respect to
any such conversion of a LIBOR Rate Loan into a Revolving Credit Loan of
another Type, such conversion shall only be made on the last day of the
Interest Period with respect thereto; (c) with respect to any such
conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrower shall
give the Agent at least three (3) LIBOR Business Days prior written notice
of such election and (d) no Revolving Credit Loan may be converted into a
LIBOR Rate Loan when any Default or Event of Default has occurred and is
continuing. On the date on which such conversion is being made each Bank
shall take such action as is necessary to transfer its Commitment
Percentage of such Revolving Credit Loans to its Domestic Lending Office or
its LIBOR Lending Office, as the case may be. All or any part of
outstanding Revolving Credit Loans of any Type may be converted as provided
herein, provided that partial conversions shall be in an aggregate
--------
principal amount of $500,000 or a whole multiple thereof. Each Conversion
Request relating to the conversion of a Revolving Credit Loan to a LIBOR
Rate Loan shall be irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any
---------------------------------------------
Revolving Credit Loans of any Type may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrower with the notice provisions contained in (S)2.7.1; provided that
--------
no LIBOR Rate Loan may be continued as such when any Default or Event of
Default has occurred and is continuing, but shall be automatically
converted to a Base Rate Loan on the last day of the first Interest Period
relating thereto ending during the continuance of any Default or Event of
Default of which the officers of the Agent active upon the Borrower's
account have actual knowledge. In the event that the Borrower fails to
provide any such notice with respect to the continuation of any LIBOR Rate
Loan as such, then such LIBOR Rate Loan shall be automatically converted to
a Base Rate Loan on the last day of the first Interest Period relating
thereto. The Agent shall
-18-
notify the Banks promptly when any such automatic conversion contemplated
by this (S)2.7 is scheduled to occur.
2.7.3. LIBOR RATE LOANS. Any conversion to or from LIBOR Rate
----------------
Loans shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of all
LIBOR Rate Loans having the same Interest Period shall not be less than
$500,000 or a whole multiple of $250,000 in excess thereof.
2.8. FUNDS FOR REVOLVING CREDIT LOANS.
--------------------------------
2.8.1. FUNDING PROCEDURES. Not later than 11 o'clock a.m.
-------------------
(Boston time) on the proposed Drawdown Date of any Revolving Credit Loans,
each of the Banks will make available to the Agent, at the Agent's Head
Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit
Loans. Upon receipt from each Bank of such amount, and upon receipt of the
documents required by (S)(S)10 and 11 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Agent will make
available to the Borrower the aggregate amount of such Revolving Credit
Loans made available to the Agent by the Banks. The failure or refusal of
any Bank to make available to the Agent at the aforesaid time and place on
any Drawdown Date the amount of its Commitment Percentage of the requested
Revolving Credit Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Revolving Credit Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to the
-----------------
contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Revolving Credit Loans to be made on such
Drawdown Date, and the Agent may (but it shall not be required to), in
reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes available to the Agent such amount
on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (1) the average computed for the
period referred to in clause (c) below, of the weighted average interest
rate paid by the Agent for federal funds acquired by the Agent during each
day included in such period, times (b) the amount of such Bank's Commitment
-----
Percentage of such Revolving Credit Loans, times (c) a fraction, the
-----
numerator of which is the number of days that elapse from and including
such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans shall become
immediately available to the Agent, and the denominator of which is 365. A
statement of the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be prima facie evidence of the amount due
----- -----
and owing to the Agent by such Bank. If the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans is not made available
to the Agent by such Bank within three (3) Business Days following such
Drawdown Date, the Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per annum applicable
to the Revolving Credit Loans made on such Drawdown Date.
-19-
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
---------------------------------------
3.1. MATURITY. The Borrower promises to pay on the Revolving Credit Loan
--------
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the
----------------------------------------------
sum of the outstanding amount of the Revolving Credit Loans exceeds the Total
Commitment, then the Borrower shall immediately pay the amount of such excess to
the Agent for application to the Revolving Credit Loans.
3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall have
---------------------------------------------
the right, at its election, to repay the outstanding amount of the Revolving
Credit Loans, as a whole or in part, at any time without penalty or premium,
provided that the full or partial prepayment of the outstanding amount of any
--------
LIBOR Rate Loans pursuant to this (S)3.3 may be made only on the last day of the
Interest Period relating thereto. The Borrower shall give the Agent, no later
than 11:00 a.m., Boston time, on the day of the proposed repayment, written
notice of any proposed repayment pursuant to this (S)3.3 of Base Rate Loans, and
three (3) LIBOR Business Days notice of any proposed repayment pursuant to this
(S)3.3 of LIBOR Rate Loans, in each case, specifying the proposed date of
payment of Revolving Credit Loans and the principal amount to be paid. Each
such partial prepayment of the Revolving Credit Loans shall be in an integral
multiple of $100,000, shall be accompanied by the payment of accrued interest on
the principal repaid to the date of payment and shall be applied first to the
principal of Base Rate Loans and then to the principal of LIBOR Rate Loans.
Each partial prepayment shall be allocated among the Banks, in proportion, as
nearly as practicable, to the respective unpaid principal amount of each Bank's
Revolving Credit Note, with adjustments to the extent practicable to equalize
any prior repayments not exactly in proportion.
4. CERTAIN GENERAL PROVISIONS.
--------------------------
4.1. CLOSING FEE. The Borrower agrees to pay to the Agent for the Agent's
-----------
own account on the Closing Date a closing fee in the amount set forth in the Fee
Letter.
4.2. FUNDS FOR PAYMENTS.
------------------
4.2.1. PAYMENTS TO AGENT. All payments of principal, interest,
-----------------
commitment fees and any other amounts due hereunder or under any of the
other Loan Documents shall be made to the Agent, for the respective
accounts of the Banks and the Agent, at the Agent's Head Office or at such
other location in the Boston, Massachusetts, area that the Agent may from
time to time designate, in each case in immediately available funds.
4.2.2. NO OFFSET, ETC. All payments by the Borrower hereunder
--------------
and under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof
or taxing or other authority therein unless the Borrower is
-20-
compelled by law to make such deduction or withholding. If any such
obligation is imposed upon the Borrower with respect to any amount payable
by it hereunder or under any of the other Loan Documents, the Borrower will
pay to the Agent, for the account of the Banks or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as shall
be necessary to enable the Banks or the Agent to receive the same net
amount which the Banks or the Agent would have received on such due date
had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made
by the Borrower hereunder or under such other Loan Document.
4.3. COMPUTATIONS. All computations of interest on the Revolving Credit
------------
Loans consisting of Base Rate Loans shall be based on a 365-day year and paid
for the actual number of days elapsed. All computations of interest on the
Revolving Credit Loans consisting of LIBOR Rate Loans and of commitment or other
fees shall be based on a 360-day year and paid for the actual number of days
elapsed. Except as otherwise provided in the definition of the term "Interest
Period" with respect to LIBOR Rate Loans, whenever a payment hereunder or under
any of the other Loan Documents becomes due on a day that is not a Business Day,
the due date for such payment shall be extended to the next succeeding Business
Day, and interest shall accrue during such extension. The outstanding amount of
the Revolving Credit Loans as reflected on the Records from time to time shall
be considered correct and binding on the Borrower unless within five (5)
Business Days after receipt of any notice by the Agent or any of the Banks of
such outstanding amount, the Borrower shall notify the Agent or such Bank to the
contrary.
4.4. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to the
---------------------------------
commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent
shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the LIBOR Rate that would
otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan
during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to LIBOR Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR Rate
Loan will automatically, on the last day of the then current Interest Period
thereof, become a Base Rate Loan, and (c) the obligations of the Banks to make
LIBOR Rate Loans shall be suspended until the Agent or the Majority Banks
determine that the circumstances giving rise to such suspension no longer exist,
whereupon the Agent or, as the case may be, the Agent upon the instruction of
the Majority Banks, shall so notify the Borrower and the Banks.
4.5. ILLEGALITY. Notwithstanding any other provisions herein, if any
----------
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
LIBOR Rate Loans, such Bank shall forthwith give notice of such circumstances to
the Borrower and the other Banks and thereupon (a) the commitment of such Bank
to make LIBOR Rate Loans or convert Revolving Credit Loans of another Type to
LIBOR Rate Loans shall forthwith be suspended and (b) such Bank's Revolving
Credit Loans then outstanding as LIBOR Rate Loans, if any, shall be converted
automatically to Base Rate Loans on the last day of each Interest Period
-21-
applicable to such LIBOR Rate Loans or within such earlier period as may be
required by law. The Borrower hereby agrees promptly to pay the Agent for the
account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in making
any conversion in accordance with this (S)4.5, including any interest or fees
payable by such Bank to lenders of funds obtained by it in order to make or
maintain its LIBOR Rate Loans hereunder.
4.6. ADDITIONAL COSTS, ETC. If any present or future applicable law, which
---------------------
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank or
the Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, such Bank's Commitment or the
Revolving Credit Loans (other than taxes based upon or measured by the
income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Revolving Credit Loans or any other amounts payable to
any Bank or the Agent under this Credit Agreement or the other Loan
Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or commitments of an
office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, the Revolving Credit Loans, such Bank's Commitment, or any class
of loans or commitments of which any of the Revolving Credit Loans or such
Bank's Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding,
issuing, renewing, extending or maintaining any of the Revolving
Credit Loans or such Bank's Commitment, or
(ii) to reduce the amount of principal, interest or other
amount payable to such Bank or the Agent hereunder on account of such
Bank's Commitment or any of the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any payment or
to forego any interest or other sum payable hereunder, the amount of
which payment or foregone interest or other sum is calculated by
reference to the
-22-
gross amount of any sum receivable or deemed received by such Bank or
the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum.
4.7. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
----------------
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Revolving Credit Loans to a level below that which such Bank or
the Agent could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's or the Agent's then existing policies
with respect to capital adequacy and assuming full utilization of such entity's
capital) by any amount deemed by such Bank or (as the case may be) the Agent to
be material, then such Bank or the Agent may notify the Borrower of such fact.
To the extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate, the Borrower and such Bank shall thereafter attempt
to negotiate in good faith, within thirty (30) days of the day on which the
Borrower receives such notice, an adjustment payable hereunder that will
adequately compensate such Bank in light of these circumstances. If the Borrower
and such Bank are unable to agree to such adjustment within thirty (30) days of
the date on which the Borrower receives such notice, then commencing on the date
of such notice (but not earlier than the effective date of any such increased
capital requirement), the fees payable hereunder shall increase by an amount
that will, in such Bank's reasonable determination, provide adequate
compensation. Each Bank shall allocate such cost increases among its customers
in good faith and on an equitable basis.
4.8. CERTIFICATE. A certificate setting forth any additional amounts
-----------
payable pursuant to (S)4.6 or 4.7 and a brief explanation of such amounts which
are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
4.9. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold each
---------
Bank harmless from and against any loss, cost or expense that such Bank may
sustain or incur as a consequence of (a) default by the Borrower in payment of
the principal amount of or any interest on any LIBOR Rate Loans as and when due
and payable, including any such loss or expense arising from interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain its
LIBOR Rate Loans, (b) default by the Borrower in making a borrowing after the
Borrower has given (or is deemed to have given) a Loan Request or a Conversion
Request relating thereto in accordance with (S)2.6 or (S)2.7 or (c) the making
of any payment of a LIBOR Rate Loan or the making of any conversion of any such
Revolving Credit Loan to a Base Rate Loan on a day that is not the last day of
the
-23-
applicable Interest Period with respect thereto, including interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain any
such Revolving Credit Loans.
4.10. INTEREST AFTER DEFAULT.
----------------------
4.10.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
---------------
permitted by applicable law) interest on the Revolving Credit Loans and all
other overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest compounded monthly and payable on demand at a
rate per annum equal to two percent (2%) above the Base Rate until such
amount shall be paid in full (after as well as before judgment).
4.10.2. AMOUNTS NOT OVERDUE. During the continuance of a Default
-------------------
or an Event of Default the principal of the Revolving Credit Loans not
overdue shall, until such Default or Event of Default has been cured or
remedied or such Default or Event of Default has been waived by the
Majority Banks pursuant to (S)25, bear interest at a rate per annum equal
to the greater of (a) two percent (2%) above the rate of interest otherwise
applicable to such Revolving Credit Loans pursuant to (S)2.5 and (b) the
rate of interest applicable to overdue principal pursuant to (S)4.10.1.
5. SECURITY AND GUARANTIES.
-----------------------
5.1. SECURITY OF BORROWER. The Obligations shall be secured by a perfected
--------------------
first priority security interest (subject only to Permitted Liens entitled to
priority under applicable law) in all of the assets of the Borrower, whether now
owned or hereafter acquired, pursuant to the terms of the Security Documents to
which the Borrower is a party.
5.2. GUARANTIES AND SECURITY OF SUBSIDIARIES. The Obligations shall also be
---------------------------------------
guaranteed pursuant to the terms of the Guaranty. The obligations of the
Borrower's Subsidiaries under the Guaranty shall be in turn secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets of each such
Subsidiary, whether now owned or hereafter acquired, pursuant to the terms of
the Security Documents to which such Subsidiary is a party.
6. REPRESENTATIONS AND WARRANTIES.
------------------------------
The Borrower represents and warrants to the Banks and the Agent as follows:
-24-
6.1. CORPORATE AUTHORITY.
-------------------
6.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and
----------------------------
its Subsidiaries (a) is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation, (b) has all
requisite corporate power to own its property and conduct its business as
now conducted and as presently contemplated, and (c) is in good standing as
a foreign corporation and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure
to be so qualified would not have a materially adverse effect on the
business, assets or financial condition of the Borrower or its
Subsidiaries.
6.1.2. AUTHORIZATION. The execution, delivery and performance of
-------------
this Credit Agreement and the other Loan Documents to which the Borrower or
any of its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (a) are within the corporate authority of
such Person, (b) have been duly authorized by all necessary corporate
proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which
the Borrower or any of its Subsidiaries is subject or any judgment, order,
writ, injunction, license or permit applicable to the Borrower or any of
its Subsidiaries and (d) do not conflict with any provision of the
corporate charter or bylaws of, or any agreement or other instrument
binding upon, the Borrower or any of its Subsidiaries.
6.1.3. ENFORCEABILITY. The execution and delivery of this Credit
--------------
Agreement and the other Loan Documents to which the Borrower or any of its
Subsidiaries is or is to become a party will result in valid and legally
binding obligations of such Person enforceable against it in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement
of creditors' rights and except to the extent that availability of the
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be
brought.
6.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by the
----------------------
Borrower and any of its Subsidiaries of this Credit Agreement and the other Loan
Documents to which the Borrower or any of its Subsidiaries is or is to become a
party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained.
6.3. TITLE TO PROPERTIES; LEASES. Except as indicated on Schedule 6.3
--------------------------- -------- ---
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
6.4. FINANCIAL STATEMENTS AND PROJECTIONS.
------------------------------------
-25-
6.4.1. FISCAL YEAR. The Borrower and each of its Subsidiaries
-----------
has a fiscal year which is the twelve months ending on December 31 of each
calendar year.
6.4.2. FINANCIAL STATEMENTS. There has been furnished to each of
--------------------
the Banks a consolidated balance sheet of the Borrower and its Subsidiaries
as at September 30, 1997, in substantially the form set forth on Schedule
--------
6.4.2(a) hereof. Except as set forth on Schedule 6.4.2(b), such balance
-------- -------- --------
sheet has been prepared in accordance with generally accepted accounting
principles and such balance sheet fairly presents the financial condition
of the Borrower as at the close of business on the date thereof. In
addition, the Borrower has delivered to the Banks copies of all financial
statements of The Xxxxxxx Group, Inc. received by the Borrower in
connection with the Xxxxxxx Acquisition, and, to the best of the Borrower's
knowledge, the financial statements for the period ended September 30, 1997
present fairly the financial position of The Xxxxxxx Group, Inc. and its
Subsidiaries for the periods covered by such financial statements. There
are no contingent liabilities of the Borrower or any of its Subsidiaries as
of such date involving material amounts, known to the officers of the
Borrower not disclosed in said balance sheet and the related notes thereto.
6.4.3. PROJECTIONS. The Borrower has delivered to the Agent and
-----------
the Banks the projections of the annual operating budgets of the Borrower
and its Subsidiaries on a consolidated basis, balance sheets and cash flow
statements for the 1998 to 1999 fiscal years. Such projections have been
produced by the Borrower using a methodology which is acceptable to the
Agent. To the knowledge of the Borrower or any of its Subsidiaries, no
facts exist on the Closing Date that (individually or in the aggregate)
would result in any material change in any of such projections. Except as
set forth on Schedule 6.4.2(b) the projections are based upon reasonable
-----------------
estimates and assumptions, have been prepared on the basis of the
assumptions stated therein and reflect the reasonable estimates of the
Borrower and its Subsidiaries of the results of operations and other
information projected therein.
6.5. NO MATERIAL CHANGES, ETC.; SOLVENCY
-----------------------------------
6.5.1. NO CHANGES. Since the Balance Sheet Date there has
----------
occurred no materially adverse change in the consolidated financial
condition or results of operations of the Borrower and its Subsidiaries as
shown on or reflected in the consolidated balance sheet of the Borrower and
its Subsidiaries as at such date, other than changes in the ordinary course
of business that have not had any materially adverse effect either
individually or in the aggregate on the business or financial condition of
the Borrower or its Subsidiaries. Since April 23, 1997, the Borrower has
not made any Distribution.
6.5.2. SOLVENCY. The Borrower and its Subsidiaries, on a going-
--------
concern basis and on a consolidated and consolidating basis, both before
and after giving effect to the transactions contemplated by this Credit
Agreement and the other Loan Documents (a) are solvent, (b) have assets
having a fair value in excess of their liabilities, (c) have assets having
a fair value in excess of the amount required to pay their liabilities on
existing debts as such debts become absolute and matured, and (d) have, and
expect to continue to have, access to adequate capital for the conduct of
-26-
their business and the ability to pay their debts from time to time
incurred in connection with the operation of their business as such debts
mature.
6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and its
------------------------------------
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
6.7. LITIGATION. Except as set forth on Schedule 6.7 hereto, there are no
---------- ------------
actions, suits, proceedings or investigations of any kind pending or, to the
Borrower's knowledge, threatened against the Borrower or any of its Subsidiaries
before any court, tribunal or administrative agency or board that, if adversely
determined, might, either in any case or in the aggregate, materially adversely
affect the properties, assets, financial condition or business of the Borrower
and its Subsidiaries or materially impair the right of the Borrower and its
Subsidiaries, considered as a whole, to carry on business substantially as now
conducted by them, or result in any substantial liability not adequately covered
by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of the Borrower, or which question the validity of
this Credit Agreement or any of the other Loan Documents, or any action taken or
to be taken pursuant hereto or thereto.
6.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Except as set forth on Schedule
------------------------------------ --------
6.8 hereto, neither the Borrower nor any of its Subsidiaries is subject to any
---
charter, corporate or other legal restriction, or any judgment, decree, order,
rule or regulation that has or is expected in the future to have a materially
adverse effect on the business, assets or financial condition of the Borrower or
any of its Subsidiaries. Except as set forth on Schedule 6.8 hereto, neither the
------------
Borrower nor any of its Subsidiaries is a party to any contract or agreement
that has or is expected, in the judgment of the Borrower's officers, to have any
materially adverse effect on the business of the Borrower or any of its
Subsidiaries.
6.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower nor
--------------------------------------------
any of its Subsidiaries is in violation of any provision of its charter
documents, bylaws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of the Borrower or any of its Subsidiaries.
6.10. TAX STATUS. The Borrower and its Subsidiaries (a) have made or filed
----------
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which any of them is subject, (b) have paid all
taxes and other governmental assessments and charges shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith and by appropriate proceedings and (c) have set aside on their books
provisions reasonably adequate for the payment of all taxes for periods
subsequent to the periods to which such returns, reports or declarations apply.
There are no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of the Borrower know of no basis
for any such claim.
6.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred and
-------------------
is continuing.
-27-
6.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower nor
-------------------------------------------
any of its Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
6.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
------------------------------------
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry, or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or rights
thereunder.
6.14. PERFECTION OF SECURITY INTEREST. All filings, assignments, pledges
-------------------------------
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary or advisable, under applicable law, to
establish and perfect the Agent's security interest in the Collateral. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses, except for the Permitted
Liens. The Borrower or a Subsidiary of the Borrower party to one of the Security
Agreements is the owner of the Collateral free from any lien, security interest,
encumbrance and any other claim or demand, except for Permitted Liens.
6.15. CERTAIN TRANSACTIONS. Except for arm's length transactions pursuant
--------------------
to which the Borrower or any of its Subsidiaries makes payments in the ordinary
course of business upon terms no less favorable than the Borrower or such
Subsidiary could obtain from third parties, none of the officers, directors, or
employees of the Borrower or any of its Subsidiaries is presently a party to any
transaction with the Borrower or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
6.16. EMPLOYEE BENEFIT PLANS.
----------------------
6.16.1. IN GENERAL. Each Employee Benefit Plan and each
----------
Guaranteed Pension Plan has been maintained and operated in compliance in
all material respects with the provisions of ERISA and, to the extent
applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions and the bonding of
fiduciaries and other persons handling plan funds as required by (S)412 of
ERISA. The Borrower has heretofore delivered to the Agent the most recently
completed annual report, Form 5500, with all required attachments, and
actuarial statement required to be submitted under (S)103(d) of ERISA, with
respect to each Guaranteed Pension Plan.
6.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan,
------------------------------
which is an employee welfare benefit plan within the meaning of (S)3(1) or
(S)3(2)(B) of ERISA, provides benefit coverage subsequent to termination of
employment,
-28-
except as required by Title I, Part 6 of ERISA or the applicable state
insurance laws. The Borrower may terminate each such Plan at any time (or
at any time subsequent to the expiration of any applicable bargaining
agreement) in the discretion of the Borrower without liability to any
Person other than for claims arising prior to termination.
6.16.3. GUARANTEED PENSION PLANS. Each contribution required to
------------------------
be made to a Guaranteed Pension Plan, whether required to be made to avoid
the incurrence of an accumulated funding deficiency, the notice or lien
provisions of (S)302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan, and
neither the Borrower nor any ERISA Affiliate is obligated to or has posted
security in connection with an amendment to a Guaranteed Pension Plan
pursuant to (S)307 of ERISA or (S)401(a)(29) of the Code. No liability to
the PBGC (other than required insurance premiums, all of which have been
paid) has been incurred by the Borrower or any ERISA Affiliate with respect
to any Guaranteed Pension Plan and there has not been any ERISA Reportable
Event (other than an ERISA Reportable Event as to which the requirement of
30 days notice has been waived), or any other event or condition which
presents a material risk of termination of any Guaranteed Pension Plan by
the PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed for
that valuation, the aggregate benefit liabilities of all such Guaranteed
Pension Plans within the meaning of (S)4001 of ERISA did not exceed the
aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
6.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any ERISA
-------------------
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under (S)4201 of ERISA or as a
result of a sale of assets described in (S)4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer
Plan is in reorganization or insolvent under and within the meaning of
(S)4241 or (S)4245 of ERISA or is at risk of entering reorganization or
becoming insolvent, or that any Multiemployer Plan intends to terminate or
has been terminated under (S)4041A of ERISA.
6.17. USE OF PROCEEDS.
---------------
6.17.1. GENERAL. The proceeds of the Revolving Credit Loans shall
-------
be used for working capital and general corporate purposes (including
without limitation to fund Permitted Acquisitions).
6.17.2. REGULATIONS U AND X. No portion of any Revolving Credit
-------------------
Loan is to be used for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations U and X
of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts
221 and 224.
-29-
6.17.3. INELIGIBLE SECURITIES. No portion of the proceeds of any
---------------------
Revolving Credit Loans is to be used 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.
6.18. ENVIRONMENTAL COMPLIANCE. To the best of the Borrower's knowledge,
------------------------
except as disclosed on Schedule 6.18 hereto:
-------------
(a) none of the Borrower, its Subsidiaries or any operator of the
Real Estate or any operations thereon is in violation, or alleged
violation, of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation, those
arising under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 as amended ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986 ("XXXX"), the Federal Clean Water Act, the Federal Clean Air
Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which violation would have
a material adverse effect on the environment or the business, assets or
financial condition of the Borrower or any of its Subsidiaries;
(b) neither the Borrower nor any of its Subsidiaries has received
notice from any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party under CERCLA with respect to a site listed
on the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X; (ii) that
any hazardous waste, as defined by 42 U.S.C. (S)6903(5), any hazardous
substances as defined by 42 U.S.C. (S)9601(14), any pollutant or
contaminant as defined by 42 U.S.C. (S)9601(33) and any toxic substances,
oil or hazardous materials or other chemicals or substances regulated by
any Environmental Laws ("Hazardous Substances") which any one of them has
generated, transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or has
ordered that any Borrower or any of its Subsidiaries conduct a remedial
investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances;
(c) except as set forth on Schedule 6.18 attached hereto: (i) no
-------- ----
portion of the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with
applicable Environmental Laws or
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where a violation of such Environmental Laws would not have a material
adverse effect on the business, assets or financial condition of the
Borrower or any of its Subsidiaries; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on any
portion of the Real Estate; (ii) in the course of any activities conducted
by the Borrower, its Subsidiaries or operators of its properties, no
Hazardous Substances have been generated or are being used on the Real
Estate except in accordance with applicable Environmental Laws or where a
violation of such Environmental Laws would not have a material adverse
effect on the business, assets or financial condition of the Borrower or
any of its Subsidiaries; (iii) there have been no releases (i.e. any past
or present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which releases would have a
material adverse effect on the value of any of the Real Estate or adjacent
properties or the environment; (iv) to the best of the Borrower's
knowledge, there have been no releases on, upon, from or into any real
property in the vicinity of any of the Real Estate which, through soil or
groundwater contamination, may have come to be located on, and which would
have a material adverse effect on the value of, the Real Estate; and (v) in
addition, any Hazardous Substances that have been generated on any of the
Real Estate have been transported offsite only by carriers having an
identification number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required
under applicable Environmental Laws, which transporters and facilities have
been and are, to the best of the Borrower's knowledge, operating in
compliance with such permits and applicable Environmental Laws; and
(d) None of the Borrower and its Subsidiaries or any of the other
Real Estate is subject to any applicable environmental law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any
governmental agency or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the
transactions set forth herein and contemplated hereby, or as a condition to
the effectiveness of any other transactions contemplated hereby.
6.19. SUBSIDIARIES, ETC. Schedule 6.19(a) sets forth each Subsidiary of the
----------------- -------- -------
Borrower, and each Subsidiary of any Subsidiary. Except as set forth on Schedule
--------
6.19(b) hereto, neither the Borrower nor any Subsidiary of the Borrower is
-------
engaged in any joint venture or partnership with any other Person.
6.20. BANK ACCOUNTS. Schedule 6.20 sets forth the account numbers and
------------- -------- ----
location of all bank accounts of the Borrower or any of its Subsidiaries.
6.21. DISCLOSURE. None of this Credit Agreement or any of the other Loan
----------
Documents contains any untrue statement of a material fact or omits to state a
material fact (known to the Borrower or any of its Subsidiaries in the case of
any document or information not furnished by it or any of its Subsidiaries)
necessary in order to make the statements herein or therein not misleading.
There is no fact known to the Borrower or any of its Subsidiaries which
materially adversely affects, or which is reasonably likely in the future to
materially adversely affect, the business, assets, financial condition or
prospects of
-31-
the Borrower or any of its Subsidiaries, exclusive of effects resulting from
changes in general economic conditions, legal standards or regulatory
conditions.
6.22. CHIEF EXECUTIVE OFFICES. As of the date hereof, the Borrower's
-----------------------
principal place of business is at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000, at which location its books and records are kept.
6.23. NO AMENDMENTS TO CERTAIN DOCUMENTS. Each of the representations and
----------------------------------
warranties made by the Borrowers or any of its Subsidiaries in any of the Loan
Documents was true and correct in all material respects when made and continues
to be true and correct in all material respects on the date hereof, except to
the extent that any of such representations and warranties relate, by the
express terms thereof, solely to a date falling prior to the date hereof, and
except to the extent that any of such representations and warranties may have
been affected by the consummation of the transactions contemplated and permitted
or required by the Loan Documents.
6.24. INSURANCE. The Borrower and each of its Subsidiaries maintain with
---------
financially sound and reputable insurers insurance with respect to their
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices.
7. AFFIRMATIVE COVENANTS OF THE BORROWER.
-------------------------------------
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan or Revolving Credit Note is outstanding or any Bank has any obligation to
make any Revolving Credit Loans:
7.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or cause
----------------
to be paid the principal and interest on the Revolving Credit Loans and the
commitment fees and all other amounts provided for in this Credit Agreement and
the other Loan Documents to which the Borrower or any of its Subsidiaries is a
party, all in accordance with the terms of this Credit Agreement and such other
Loan Documents.
7.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief executive
---------------------
office in Miami, Florida, or at such other place in the United States of America
as the Borrower shall designate upon written notice to the Agent, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents may be given or made.
7.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each of
--------------------
its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles; (b) to the extent required by generally accepted
accounting principles, maintain adequate accounts and reserves for all taxes
(including income taxes), depreciation, depletion, obsolescence and amortization
of its properties and the properties of its Subsidiaries, contingencies, and
other reserves; and (c) within thirty (30) days from the Closing Date and at all
times thereafter engage a "Big Six" accounting firm or, if not a "Big Six"
accounting firm, such other independent certified public accountants
satisfactory to the Agent as the independent certified public accountants of the
Borrower and its Subsidiaries and will not permit more than thirty (30) days to
elapse between the cessation of such firm's (or any successor firm's) engagement
as the independent certified public accountants of the
-32-
Borrower and its Subsidiaries and the appointment in such capacity of a
successor firm as shall be satisfactory to the Agent.
7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower will
--------------------------------------------------
deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its Subsidiaries, each as
at the end of such year, and the related consolidated statement of income
and consolidated statement of cash flow and consolidating statement of
income for such year, each setting forth in comparative form the figures
for the previous fiscal year and all such consolidated and consolidating
statements to be in reasonable detail, prepared in accordance with
generally accepted accounting principles, and certified without
qualification by a "Big Six" accounting firm or by other independent
certified public accountants satisfactory to the Agent, together with a
written statement from such accountants to the effect that they have read a
copy of this Credit Agreement, and that, in making the examination
necessary to said certification, they have obtained no knowledge of any
Default or Event of Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they shall
disclose in such statement any such Default or Event of Default; provided
--------
that such accountants shall not be liable to the Banks for failure to
obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than (i) sixty
(60) days after the fiscal quarter ending December 31, 1997; and (iv)
forty-five (45) days after the end of each of the other fiscal quarters of
the Borrower, copies of the unaudited consolidated balance sheet of the
Borrower and its Subsidiaries and the unaudited consolidating balance sheet
of the Borrower and its Subsidiaries, each as at the end of such quarter,
and the related consolidated statement of income and consolidated statement
of cash flow and consolidating statement of income for the portion of the
Borrower's fiscal year then elapsed, all in reasonable detail and prepared
in accordance with generally accepted accounting principles, together with
a certification by the principal financial or accounting officer of the
Borrower that the information contained in such financial statements fairly
presents the financial position of the Borrower and its Subsidiaries on the
date thereof (subject to year-end adjustments);
(c) as soon as practicable, but in any event within thirty (30) days
after the end of each month in each fiscal year of the Borrower, unaudited
monthly consolidated financial statements of the Borrower and its
Subsidiaries for such month and unaudited monthly consolidating financial
statements of the Borrower and its Subsidiaries for such month, each
prepared in accordance with generally accepted accounting principles,
together with a certification by the principal financial or accounting
officer of the Borrower that the information contained in such financial
statements fairly presents the financial condition of the Borrower and its
Subsidiaries on the date thereof (subject to year-end adjustments);
-33-
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial or accounting officer of the Borrower in substantially
the form of Exhibit C hereto (the "Compliance Certificate") and setting
------- -
forth in reasonable detail computations evidencing compliance with the
covenants contained in (S)9 and (if applicable) reconciliations to reflect
changes in generally accepted accounting principles since the Balance Sheet
Date; provided, however, the Borrower shall not be required to deliver a
-------- -------
Compliance Certificate for the fiscal quarter ending December 31 of each
year until ninety (90) days after the end of such fiscal quarter;
(e) contemporaneously with the filing or mailing thereof, copies of
all material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of the Borrower;
(f) from time to time upon request of the Agent, projections of the
Borrower and its Subsidiaries updating those projections delivered to the
Banks and referred to in (S)6.4.3 or, if applicable, updating any later
such projections delivered in response to a request pursuant to this
(S)7.4(f);
(g) from time to time such other financial data and information
(including accountants' management letters) as the Agent or any Bank may
reasonably request; and
(h) by not later than November 30, 1997, a consolidated balance sheet
of the Borrower and its Subsidiaries as at October 31, 1997.
7.5. NOTICES.
-------
7.5.1. DEFAULTS. The Borrower will promptly notify the Agent and
--------
each of the Banks in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of
Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation to which or with respect to
which the Borrower or any of its Subsidiaries is a party or obligor,
whether as principal or surety, the Borrower shall forthwith give written
notice thereof to each of the Banks, describing the notice or action and
the nature of the claimed default.
7.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give notice
--------------------
to the Agent (a) of any violation of any Environmental Law that the
Borrower or any of its Subsidiaries reports in writing or is reportable by
such Person in writing (or for which any written report supplemental to any
oral report is made) to any federal, state or local environmental agency
and (b) upon becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any agency of
potential environmental liability, of any federal, state or local
environmental agency or board, that has the potential to materially affect
the assets, liabilities, financial conditions or operations of the Borrower
or any of its Subsidiaries, or the Agent's security interests pursuant to
the Security Documents.
-34-
7.5.3. NOTIFICATION OF CLAIMS AGAINST COLLATERAL. The Borrower
-----------------------------------------
will, immediately upon becoming aware thereof, notify the Agent and each of
the Banks in writing of any setoff, claims (including, with respect to the
Real Estate, environmental claims), withholdings or other defenses to which
any of the Collateral, or the Agent's rights with respect to the
Collateral, are subject.
7.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will, and
----------------------------------
will cause each of its Subsidiaries to, give notice to the Agent and each
of the Banks in writing within fifteen (15) days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Borrower or any of its Subsidiaries or to
which the Borrower or any of its Subsidiaries is or becomes a party
involving an uninsured claim against the Borrower or any of its
Subsidiaries that could reasonably be expected to have a materially adverse
effect on the Borrower or any of its Subsidiaries and stating the nature
and status of such litigation or proceedings. The Borrower will, and will
cause each of its Subsidiaries to, give notice to the Agent and each of the
Banks, in writing, in form and detail satisfactory to the Agent, within ten
(10) days of any judgment not covered by insurance, final or otherwise,
against the Borrower or any of its Subsidiaries in an amount in excess of
$1,000,000.
7.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
----------------------------------------------
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises and those of its
Subsidiaries and will not, and will not cause or permit any of its Subsidiaries
to, convert to a limited liability company. It (a) will cause all of its
properties and those of its Subsidiaries used or useful in the conduct of its
business or the business of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(b) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) will, and will cause
each of its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; provided that nothing in this
(S)7.6 shall prevent the Borrower from discontinuing the operation and
maintenance of any of its properties or those of its Subsidiaries if such
discontinuance is, in the judgment of the Borrower, desirable in the conduct of
its or their business and that do not in the aggregate materially adversely
affect the business of the Borrower and its Subsidiaries on a consolidated
basis.
7.7. INSURANCE; LIFE INSURANCE.
-------------------------
7.7.1. INSURANCE. The Borrower will, and will cause each of its
---------
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such
casualties and contingencies as shall be in accordance with the general
practices of businesses engaged in similar activities in similar geographic
areas and in amounts, containing such terms, in such forms and for such
periods as may be reasonable and prudent and in accordance with the terms
of the Security Agreements.
7.7.2 LIFE INSURANCE. The Borrower shall obtain the Life Insurance
--------------
Policy and deliver the Life Insurance Assignment within sixty (60) days of
the Closing
-35-
Date. In addition, the Borrower will pay all premiums when due on the Life
Insurance Policy and properly notify the Agent in writing of the death of
the individual covered by the Life Insurance Policy. In the event of the
death of such individual, if an Event of Default shall have occurred and be
continuing or, if no Event of Default shall have occurred and be continuing
but six months has elapsed from the receipt of such proceeds without a
Proceeds Request (as hereinafter defined) from the Borrower, the Borrower
agrees that the Agent may, upon three (3) Business Days prior written
notice to the Borrower, apply the proceeds of the Life Insurance Policy as
a mandatory prepayment of the amounts payable hereunder and the other Loan
Documents in such order of priority as is contemplated in (S)12.4, with the
Total Commitment (if not then terminated) being reduced by the amount
applied to the principal of the Revolving Credit Notes. In the event of the
death of such individual, so long as no Event of Default has occurred and
is continuing, at the request of the Borrower (which request shall not be
later than six (6) months after the death of the insured individual) (the
"Proceeds Request") the Agent shall deliver to the Borrower any proceeds
received by the Agent from the Life Insurance Policy so long as the
Borrower has demonstrated to the reasonable satisfaction of the Agent that
such proceeds will be applied by the Borrower to fund the search for and
employment of a replacement for the insured individual.
7.8. TAXES. The Borrower will, and will cause each of its Subsidiaries
-----
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
(other than taxes, assessments and other governmental charges imposed by foreign
jurisdictions that in the aggregate are not material to the business or assets
of the Borrower on an individual basis or of the Borrower and its Subsidiaries
on a consolidated basis) imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto in accordance with generally accepted
accounting principles; and provided further that the Borrower and each
-------- -------
Subsidiary of the Borrower will pay all such taxes, assessments, charges, levies
or claims forthwith upon the commencement of proceedings to foreclose any lien
that may have attached as security therefor.
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7.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
---------------------------------------
7.9.1. GENERAL. The Borrower shall permit the Banks, through the
-------
Agent or any of the Banks' other designated representatives, to visit and
inspect any of the properties of the Borrower or any of its Subsidiaries to
examine the books of account of the Borrower and its Subsidiaries (and to
make copies thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Borrower and its Subsidiaries with, and to be
advised as to the same by, its and their officers, all at such reasonable
times and intervals as the Agent or any Bank may reasonably request.
7.9.2. COLLATERAL AUDIT. No more frequently than once each
----------------
calendar year, or more frequently as determined by the Agent if an Event of
Default shall have occurred and be continuing, upon the request of the
Agent, the Borrower shall permit the Banks, the Agent or any of the Banks'
other designated representatives, to conduct a collateral audit and
inspection. All such audits and inspections shall be made at the expense of
the Borrower.
7.9.3. COMMUNICATION WITH ACCOUNTANTS. The Borrower authorizes the
------------------------------
Agent and, if accompanied by the Agent, the Banks to communicate directly
with the Borrower's independent certified public accountants and authorizes
such accountants to disclose to the Agent and the Banks any and all
financial statements and other supporting financial documents and schedules
including copies of any management letter with respect to the business,
financial condition and other affairs of the Borrower or any of its
Subsidiaries. The Borrower shall have the right to be present at all such
communications. At the request of the Agent, the Borrower shall deliver a
letter addressed to such accountants instructing them to comply with the
provisions of this (S)7.9.3.
7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
------------------------------------------------------
Borrower will, and will cause each of its Subsidiaries to, comply with (a) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, (b) the provisions of its charter documents and by-laws,
(c) all agreements and instruments by which it or any of its properties may be
bound and (d) all applicable decrees, orders, and judgments. If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower or any of its Subsidiaries may fulfill any of its obligations
hereunder or under any of the other Loan Documents to which the Borrower or such
Subsidiary is a party, the Borrower will, or (as the case may be) will cause
such Subsidiary to, immediately take or cause to be taken all reasonable steps
within the power of the Borrower or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
7.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon filing
----------------------
the same with the Department of Labor or Internal Revenue Service, furnish to
the Agent a copy of the most recent actuarial statement required to be submitted
under (S)103(d) of ERISA and Annual Report, Form 5500, with all required
attachments, in respect of each Guaranteed Pension Plan and (ii) promptly upon
receipt or dispatch, furnish to the Agent any notice, report or demand sent or
received in respect of a Guaranteed Pension Plan under (S)(S)302,
-37-
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under (S)(S)4041A, 4202, 4219, 4242, or 4245 of ERISA.
7.12. USE OF PROCEEDS. The Borrower will use the proceeds of the
---------------
Revolving Credit Loans solely for working capital and general corporate purposes
(including, without limitation, to finance all or any portion of Permitted
Acquisitions).
7.13. BANK ACCOUNTS. The Borrower will, and will cause each of its
-------------
Subsidiaries to, together with the employees, agents and other Persons acting on
behalf of the Borrower or such Subsidiary, receive and hold in trust for the
Agent and the Banks all payments constituting proceeds of Accounts Receivable or
other Collateral which come into their possession or under their control and,
upon the written request of the Agent, immediately upon receipt thereof, deposit
such payments in the form received, with any appropriate endorsements, in one of
the accounts designated as a central depository account on Schedule 6.20.
-------- ----
7.14. NEW GUARANTORS. In the event any Subsidiary is formed or acquired
--------------
after the date hereof, such Subsidiary shall, on the date of its formation or
acquisition, guarantee the Obligations and shall execute and deliver to the
Agent a joinder to the Guaranty in form and substance satisfactory to the Agent.
In addition, such new Subsidiary shall also be bound by the security provisions
of (S)6 hereof, shall execute and deliver to the Agent a Security Agreement to
the Agent and shall take all other action necessary to grant to the Agent for
the benefit of the Agent and the Banks a first priority perfected security
interest in all of its assets (subject only to Permitted Liens).
7.15. FURTHER ASSURANCES. The Borrower will, and will cause each of its
------------------
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
7.16. PREFERRED STOCK. The Borrower will, within thirty (30) days of the
---------------
Closing Date, enter into documentation with BKB or any of its affiliates which
shall be satisfactory to BKB to effect, at BKB's sole and absolute discretion,
the purchase by BKB of certain of the preferred capital stock of the Borrower at
a purchase price of $15.00 per share, up to an aggregate maximum investment of
$500,000.
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
------------------------------------------
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan or Revolving Credit Note is outstanding or any Bank has any obligation to
make any Revolving Credit Loans:
8.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
----------------------------
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any of
the Loan Documents;
-38-
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(c) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Borrower or
such Subsidiary or under any Capitalized Lease, provided that the aggregate
--------
principal amount of such Indebtedness of the Borrower and its Subsidiaries
shall not exceed the aggregate amount of $2,000,000 at any one time;
(d) Indebtedness existing on the date of this Credit Agreement
and listed and described on Schedule 8.1 hereto;
-------- ---
(e) Indebtedness of a Subsidiary of the Borrower to the Borrower
so long as such Subsidiary has guaranteed all the Obligations hereunder
pursuant to the Guaranty;
(f) in addition to those items set forth on Schedule 8.1,
------------
Indebtedness of the Borrower incurred in connection with the issuance of a
letter of credit for the account of the Borrower to be issued to a landlord
of the Borrower as substitution for a cash security deposit by the
Borrower, so long as the aggregate face amount of all such letters of
credit so issued does not exceed $250,000; and
(g) other unsecured Indebtedness not otherwise expressly
permitted pursuant to this (S)8.1 in an aggregate amount not to exceed
$500,000 at any time outstanding.
8.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
---------------------
any of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; (d) suffer to exist
for a period of more than thirty (30) days after the same shall have been
incurred any Indebtedness or claim or demand against it that if unpaid might by
law or upon bankruptcy or insolvency, or otherwise, be given any priority
whatsoever over its general creditors; (e) sell, assign, pledge or otherwise
transfer any "receivables" as defined in clause (g) of the definition of the
term "Indebtedness" with or without recourse; or (f) enter into or permit to
exist any arrangement or agreement, enforceable under applicable law, which
directly or indirectly prohibits the Borrower or any of its Subsidiaries from
creating or incurring any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest other than in favor of the Agent for the
benefit of the Banks and the Agent under the Loan Documents and other customary
anti-assignment provisions in leases and licensing agreements entered into by
the Borrower or such Subsidiary in the ordinary course of its business, provided
--------
that the Borrower or any of its Subsidiaries may create or incur or suffer to be
created or incurred or to exist:
-39-
(a) liens in favor of the Borrower on all or part of the assets
of Subsidiaries of the Borrower securing Indebtedness owing by Subsidiaries
of the Borrower to the Borrower;
(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations not
overdue;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) liens on properties in respect of judgments or awards that
have been in force for less than the applicable period for taking an appeal
so long as execution is not levied thereunder or in respect of which the
Borrower or such Subsidiary shall at the time in good faith be prosecuting
an appeal or proceeding for review and in respect of which a stay of
execution shall have been obtained pending such appeal or review;
(e) liens of carriers, warehousemen, mechanics and materialmen,
and other like liens on properties in existence less than 120 days from the
date of creation thereof in respect of obligations not overdue;
(f) encumbrances on Real Estate consisting of easements, rights
of way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Borrower or a Subsidiary of the Borrower is
a party, and other minor liens or encumbrances none of which in the opinion
of the Borrower interferes materially with the use of the property affected
in the ordinary conduct of the business of the Borrower and its
Subsidiaries, which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Borrower individually or
of the Borrower and its Subsidiaries on a consolidated basis;
(g) liens existing on the date hereof and listed on Schedule 8.2
------------
hereto;
(h) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof to
secure purchase money Indebtedness of the type and amount permitted by
(S)8.1(c), incurred in connection with the acquisition of such property,
which security interests or mortgages cover only the real or personal
property so acquired; and
(i) liens in favor of the Agent for the benefit of the Banks and
the Agent under the Loan Documents.
8.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
---------------------------
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of purchase
by the Borrower;
-40-
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total assets in
excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated
and the ratings for which are not less than "P 1" if rated by Xxxxx'x
Investors Services, Inc., and not less than "A 1" if rated by Standard and
Poor's Rating Group;
(d) Investments existing on the date hereof and listed on
Schedule 8.3 hereto;
-------- ---
(e) Investments with respect to Indebtedness permitted by
(S)8.1(e) so long as such entities remain Subsidiaries of the Borrower and
such Subsidiary is a party to the Guaranty;
(f) Investments consisting of the Guaranty or Investments by the
Borrower in Subsidiaries of the Borrower which are party to the Guaranty;
and
(g) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by (S)8.5.2;
provided, however, that, with the exception of demand deposits referred to in
-------- -------
(S)8.3(b), such Investments will be considered Investments permitted by this
(S)8.3 only if all actions have been taken to the satisfaction of the Agent to
provide to the Agent, for the benefit of the Banks and the Agent, a first
priority perfected security interest in all of such Investments free of all
encumbrances other than Permitted Liens.
8.4. RESTRICTED PAYMENTS; DISTRIBUTIONS. The Borrower and its
----------------------------------
Subsidiaries will not make any Restricted Payments; provided, however, the
Subsidiaries of the Borrower shall be permitted to make Distributions to the
Borrower or to any other Subsidiary which is party to the Guaranty.
8.5. MERGER, CONSOLIDATION.
---------------------
8.5.1 MERGERS AND ACQUISITIONS. The Borrower will not, and will
------------------------
not permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock
acquisition (other than the acquisition of assets in the ordinary course of
business consistent with past practices) except (a) the merger or
consolidation of one or more of the Subsidiaries of the Borrower with and
into the Borrower; (b) or the merger or consolidation of two or more
Subsidiaries of the Borrower; (c) the acquisition of the assets and/or
stock of Delphi Partners, Inc. (the "Delphi Acquisition"), provided (i) no
Default or Event of Default has occurred and is continuing, (ii) the
Borrower has delivered to the Agent all documents, instruments and
agreements to be entered into in connection therewith; and (iv) the
Borrower has demonstrated to the Agent compliance with (S)8.5.1(d)(iii) -
(iv) hereof; and (d) other asset or stock acquisitions of Persons in the
same or a similar line of business as the Borrower (a "Permitted
Acquisition", and, collectively with the Delphi Acquisition, the "Permitted
Acquisitions") where (i) the Borrower
-41-
has provided the Agent with five (5) Business Days prior written notice of
such Permitted Acquisition, which notice shall include a reasonably
detailed description of such Permitted Acquisition; (ii) the Borrower has
provided the Agent with all documents, instruments and agreements to be
entered into in connection with the Permitted Acquisition; (iii) the
business to be acquired would not subject the Agent or any of the Banks to
regulatory or third party approvals in connection with the exercise of its
rights and remedies under this Credit Agreement and the other Loan
Documents; (iv) the business and assets so acquired in such Permitted
Acquisition shall be acquired by the Borrower free and clear of all liens
(other than Permitted Liens) and all Indebtedness (other than Indebtedness
expressly permitted pursuant to (S)8.1 hereof); (v) the Borrower has taken
or caused to be taken all necessary actions to grant to the Agent a first
priority perfected lien in all assets and stock to be acquired in
connection with such Permitted Acquisition; (vi) the Borrower has
demonstrated to the satisfaction of the Agent, based on a pro forma
Compliance Certificate (which pro forma Compliance Certificate has been
prepared with a methodology consistent with that used in preparing the
projections delivered to the Agent and the Banks on the Closing Date),
compliance with (S)9 hereof of a pro forma basis both immediately prior to
and after giving effect to such Permitted Acquisition; (vii) the Borrower
is the survivor of any merger consummated in connection with such Permitted
Acquisition; and (viii) the Borrower has delivered to the Agent a
certificate of the chief financial officer of the Borrower to the effect
that (1) the Borrower will be solvent on a going-concern basis upon the
consummation of the Permitted Acquisition; (2) the pro forma Compliance
Certificate fairly presents the financial condition of the Borrower and its
Subsidiaries as of the date thereof and after giving effect to such
Permitted Acquisition and (3) no Default or Event of Default then exists or
would result after giving effect to the Permitted Acquisition.
In the event any new Subsidiary is formed or acquired as a result of
or in connection with any acquisition, the Loan Documents shall be amended
and/or supplemented as necessary to make the terms and conditions of the
Loan Documents applicable to such Subsidiary.
8.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will not
---------------------
permit any of its Subsidiaries to, become a party to or agree to or effect
any disposition of assets, other than the licensing of intellectual
property and the disposition of obsolete assets, in each case in the
ordinary course of business, consistent with past practices.
8.6. SALE AND LEASEBACK. Except for the sale and leaseback of up to
------------------
$1,500,000 in the aggregate of computer equipment currently owned by the
Borrower, the Borrower will not, and will not permit any of its Subsidiaries to,
enter into any arrangement, directly or indirectly, whereby the Borrower or any
Subsidiary of the Borrower shall sell or transfer any property owned by it in
order then or thereafter to lease such property or lease other property that the
Borrower or any Subsidiary of the Borrower intends to use for substantially the
same purpose as the property being sold or transferred.
8.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and will
----------------------------------
not permit any of its Subsidiaries to, (a) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances, (b) cause or permit to be located on any of the Real Estate any
underground tank or other underground storage
-42-
receptacle for Hazardous Substances, (c) generate any Hazardous Substances on
any of the Real Estate, (d) conduct any activity at any Real Estate or use any
Real Estate in any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threatened release of Hazardous Substances
on, upon or into the Real Estate or (e) otherwise conduct any activity at any
Real Estate or use any Real Estate in any manner that would violate any
Environmental Law or bring such Real Estate in violation of any Environmental
Law.
8.8. FISCAL YEAR. The Borrower will not, and will not permit any of its
-----------
Subsidiaries to, change the date of the end of their respective fiscal years
from that set forth in (S)6.4.1.
8.9. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
----------------------
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
(S)406 of ERISA or (S)4975 of the Code which could result in a material
liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in (S)302 of ERISA, whether or
not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner which,
could result in the imposition of a lien or encumbrance on the assets of
the Borrower or any of its Subsidiaries pursuant to (S)302(f) or (S)4068 of
ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring
the posting of security pursuant to (S)307 of ERISA or (S)401(a)(29) of the
Code; or
(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of (S)4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities.
8.10. BUSINESS ACTIVITIES. The Borrower will not, and will not permit any
-------------------
of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in related businesses.
8.11. CHANGE IN TERMS OF EMPLOYMENT AGREEMENTS. The Borrower will not,
----------------------------------------
and will not permit any of it Subsidiaries to, amend, supplement of modify, or
consent to any such amendment, supplement or modification to, any provisions of
the Employment Agreement pertaining to (a) any repurchase options by the
Borrower; (b) any rights of first refusal upon transfers of the capital stock of
the Borrower; (c) non competition and non solicitation requirements; (d)
confidentiality requirements by the employee; (e) ownership of inventions,
patents, developments and similar or related information; and (f) the
assignability by the Borrower of such agreements without the prior written
consent of the Agent, unless such amendment, supplement or modification is of an
immaterial and
-43-
ministerial nature and would not have a material adverse effect on the assets,
business or financial condition of the Borrower or such Subsidiary.
8.12. TRANSACTIONS WITH AFFILIATES. Except as otherwise expressly set
----------------------------
forth on Schedule 6.15 hereto, the Borrower will not, and will not permit any of
its Subsidiaries to, engage in any transaction with any Affiliate (other than
for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such Affiliate or, to the knowledge of the
Borrower, any corporation, partnership, trust or other entity in which any such
Affiliate has a substantial interest or is an officer, director, trustee or
partner, on terms more favorable to such Person than would have been obtainable
on an arm's-length basis in the ordinary course of business.
8.13. BANK ACCOUNTS. The Borrower will not, and will not permit any of
-------------
its Subsidiaries to, violate directly or indirectly any bank agency or lock box
agreement in favor of the Agent for the benefit of the Banks and the Agent with
respect to any bank account.
8.14. UPSTREAM LIMITATIONS. The Borrowers will not, and will not permit
--------------------
any of its Subsidiaries to, enter into any agreement, contract or arrangement
(other than the Credit Agreement and the other Loan Documents) restricting the
ability of any Subsidiary to pay or make dividends or distributions in cash or
kind, to make loans, advances or other payments of whatsoever nature or to make
transfers or distributions of all or any part of its assets (other than as
permitted by (S)8.2 hereof) to the Borrower or any of its Subsidiaries.
8.15. INCONSISTENT AGREEMENTS. The Borrower will not, and will not permit
-----------------------
any of its Subsidiaries to, enter into any agreement containing any provision
which would be violated or breached by the performance by the Borrower or any of
its Subsidiaries of their respective obligations hereunder or under any of the
Loan Documents.
8.16. CHARTER AMENDMENTS. The Borrower will not, nor will it permit any
------------------
of its Subsidiaries to, amend its certificate of incorporation or bylaws, or
similar organizational documents, except if such change is of an immaterial and
ministerial nature.
9. FINANCIAL COVENANTS OF THE BORROWER.
-----------------------------------
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan or Revolving Credit Note is outstanding or any Bank has any obligation to
make any Revolving Credit Loans:
9.1. LEVERAGE RATIO.
--------------
The Borrower will not permit the Leverage Ratio at any time in any fiscal
quarter ending during any period described in the table set forth below to
exceed the ratio set forth opposite such period in such table:
------------------------------------------------------------------------
PERIOD RATIO
------------------------------------------------------------------------
Closing Date - June 30, 1998 2.00:1.00
------------------------------------------------------------------------
any time thereafter 3.00:1.00
------------------------------------------------------------------------
-44-
9.2. PROFITABLE OPERATIONS. The Borrower will not permit (a) a
---------------------
Consolidated Net Deficit of (i) greater than $4,000,000 in the fiscal quarter
ended September 30, 1997 and (ii) greater than $750,000 in the fiscal quarter
ending December 31, 1997; and (b) Consolidated Net Income to be less than (i)
$750,000 in each fiscal quarter in the 1998 fiscal year; (ii) $1,800,000 at the
end of each fiscal quarter for the period of the immediately two preceding
fiscal quarters in the 1998 fiscal year; (iii) $1,000,000 in each fiscal quarter
in each fiscal year thereafter; and (iv) $2,500,000 at the end of each fiscal
quarter for the period of the immediately two preceding fiscal quarters in each
fiscal year thereafter.
9.3. CONSOLIDATED OPERATING CASH FLOW TO TOTAL DEBT SERVICE. The
------------------------------------------------------
Borrower will not permit the ratio of Consolidated Operating Cash Flow to the
Total Debt Service for any fiscal quarter ending on or after March 31, 1998 to
be less than 3.00:1.00 for such fiscal quarter.
9.4. QUICK RATIO. The Borrower will not permit the ratio of Consolidated
-----------
Quick Assets to Consolidated Current Liabilities to be less than 2.00:1.00 at
any time.
9.5. CAPITAL EXPENDITURES. The Borrower will not make, or permit any
--------------------
Subsidiary of the Borrower to make, Capital Expenditures (a) in the 1997 fiscal
year that exceed, in the aggregate, $3,000,000 for such fiscal year; and (b) in
any fiscal year thereafter that exceed, in the aggregate, $2,000,000 for such
fiscal year.
10. CLOSING CONDITIONS.
------------------
The obligations of the Banks to make the initial Revolving Credit Loans
shall be subject to the satisfaction of the following conditions precedent:
10.1. LOAN DOCUMENTS ETC.
------------------
10.1.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been
--------------
duly executed and delivered by the respective parties thereto, shall be in
full force and effect and shall be in form and substance satisfactory to
each of the Banks. Each Bank shall have received a fully executed copy of
each such document.
10.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Banks shall have
-------------------------------------
received from the Borrower and each of its Subsidiaries, a copy, certified by a
duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (a) its charter or other incorporation documents as in effect
on such date of certification, and (b) its by-laws as in effect on such date.
10.3. CORPORATE ACTION. All corporate action necessary for the valid
----------------
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Banks shall have been provided to each of the Banks.
10.4. INCUMBENCY CERTIFICATE. Each of the Banks shall have received from
----------------------
the Borrower and each of its Subsidiaries an incumbency certificate, dated as of
the Closing Date, signed by a duly authorized officer of the Borrower or such
Subsidiary, and giving the name and bearing a specimen signature of each
individual who shall be authorized: (a) to
-45-
sign, in the name and on behalf of each of the Borrower of such Subsidiary, each
of the Loan Documents to which the Borrower or such Subsidiary is or is to
become a party; (b) in the case of the Borrower, to make Loan Requests and
Conversion Requests; and (c) to give notices and to take other action on its
behalf under the Loan Documents.
10.5. VALIDITY OF LIENS. The Security Documents shall be effective to
-----------------
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
the Collateral. All filings, recordings, deliveries of instruments and other
actions necessary or desirable in the opinion of the Agent to protect and
preserve such security interests shall have been duly effected. The Agent shall
have received evidence thereof in form and substance satisfactory to the Agent.
10.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Agent shall have
----------------------------------------------
received from each of the Borrower and its Subsidiaries a completed and fully
executed Perfection Certificate and the results of UCC searches with respect to
its Collateral, indicating no liens other than Permitted Liens and otherwise in
form and substance satisfactory to the Agent.
10.7. CERTIFICATES OF INSURANCE. The Agent shall have received (a) a
-------------------------
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of the Security Agreements and (b) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
10.8. OPINIONS OF COUNSEL. Each of the Banks and the Agent shall have
-------------------
received a favorable opinion addressed to the Banks and the Agent, dated as of
the Closing Date, in form and substance satisfactory to the Banks and the Agent,
from :
(a) Xxxxx & Xxxxxxx LLP, counsel to the Borrower and its
Subsidiaries; and
(b) Greenberg, Traurig, Hoffman, Lipoff, Xxxxx & Quentel, P.A., local
counsel to the Borrower and its Subsidiaries with respect to the
incorporation and Security Documents involving the laws of the State of
Florida.
10.9. PAYMENT OF FEES. The Borrower shall have paid to the Banks or the
---------------
Agent, as appropriate, the closing fees pursuant to (S)4.1.
10.10. COMPLETION OF SUCCESSFUL FINANCIAL INQUIRY AND DUE DILIGENCE. The
------------------------------------------------------------
Agent shall be reasonably satisfied (a) that all financial statements of the
Borrower and its Subsidiaries provided to the Agent prior to the Closing Date
accurately set forth the financial condition of the Borrower and its
Subsidiaries for the period covered thereby; (b) with the results of its due
diligence conducted in connection with the Xxxxxxx Acquisition and the
transaction; (c) with the results of a commercial financial audit by its field
examiners; and (d) with the results of the most recent management letter
delivered to the Agent.
10.11. CONSENTS AND APPROVALS. The Agent shall have received evidence that
----------------------
all consents and approvals necessary to complete the transactions contemplated
hereby have been obtained.
-46-
11. CONDITIONS TO ALL BORROWINGS.
----------------------------
The obligations of the Banks to make any Revolving Credit Loan, whether on
or after the Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:
11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
-----------------------------------------
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Revolving Credit Loan, with the same
effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit Agreement
and the other Loan Documents and changes occurring in the ordinary course of
business that singly or in the aggregate are not materially adverse, and to the
extent that such representations and warranties relate expressly to an earlier
date) and no Default or Event of Default shall have occurred and be continuing.
11.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
-------------------
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Revolving Credit
Loan.
11.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
-----------------------
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
11.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
-------------------------
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
11.5. PRO FORMA COMPLIANCE. The Agent shall have received either (a) an
--------------------
updated pro forma Compliance Certificate demonstrating compliance with the
Leverage Ratio covenant set forth in (S)9.1 hereof on a pro forma basis both
--- -----
before and after giving effect to the making of the Revolving Credit Loan being
requested by the Borrower or (b) to the extent there are no changes to the
Compliance Certificate previously delivered to the Agent, a certification from
the Borrower that the Compliance Certificate as previously delivered continues
to demonstrate compliance with the Leverage Ratio covenant set forth in (S)9.1
hereof on a pro forma basis both before and after giving effect to the making of
--- -----
the Revolving Credit Loan being requested by the Borrower.
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
------------------------------------
12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
----------------------------------
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
-47-
(a) the Borrower shall fail to pay any principal of the Revolving
Credit Loans when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Revolving
Credit Loans, the commitment fee or other sums due hereunder or under any
of the other Loan Documents, when the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity
or at any other date fixed for payment and such failure shall continue for
three (3) Business Days;
(c) the Borrower shall fail to comply with any of its covenants
contained in (S)(S)7.1, 7.4, 7.5.1, 7.9, 7.14, 8 or 9;
(d) the Borrower or any of its Subsidiaries shall fail to perform any
term, covenant or agreement contained herein or in any of the other Loan
Documents (other than those specified elsewhere in this (S)12.1) for thirty
(30) days after written notice of such failure has been given to the
Borrower by the Agent;
(e) any representation or warranty of the Borrower or any of its
Subsidiaries in this Credit Agreement or any of the other Loan Documents or
in any other document or instrument delivered pursuant to or in connection
with this Credit Agreement shall prove to have been false in any material
respect upon the date when made or deemed to have been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to pay at
maturity, or within any applicable period of grace, any obligation for
borrowed money or credit received or in respect of any Capitalized Leases,
in an amount in excess of $250,000 in the aggregate, or fail to observe or
perform any material term, covenant or agreement contained in any agreement
by which it is bound, evidencing or securing borrowed money or credit
received or in respect of any Capitalized Leases for such period of time as
would permit (assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued thereunder to
accelerate the maturity thereof;
(g) the Borrower or any of its Subsidiaries shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of the Borrower or any of its Subsidiaries or of any
substantial part of the assets of the Borrower or any of its Subsidiaries
or shall commence any case or other proceeding relating to the Borrower or
any of its Subsidiaries under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law
of any jurisdiction, now or hereafter in effect, or shall take any action
to authorize or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other proceeding
shall be commenced against the Borrower or any of its Subsidiaries and the
Borrower or any of its Subsidiaries shall indicate its approval thereof,
consent thereto or acquiescence therein or such petition or application
shall not have been dismissed within forty-five (45) days following the
filing thereof;
-48-
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any of
its Subsidiaries bankrupt or insolvent, or approving a petition in any such
case or other proceeding, or a decree or order for relief is entered in
respect of the Borrower or any Subsidiary of the Borrower in an involuntary
case under federal bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against the Borrower or any of its Subsidiaries that, with other
outstanding final judgments, undischarged, against the Borrower or any of
its Subsidiaries exceeds in the aggregate $1,000,000, or the Borrower shall
pay an uninsured judgment or enter into one or more settlements of any
litigation with the aggregate judgment and/or settlement amounts not
otherwise covered by insurance of more than $1,000,000 in the aggregate;
(j) if any of the loan documents shall be canceled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or liens
in a substantial portion of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security Documents, in
each case otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks, or any
action at law, suit or in equity or other legal proceeding to cancel,
revoke or rescind any of the loan documents shall be commenced by or on
behalf of the Borrower or any of its Subsidiaries party thereto or any of
their respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(k) the Borrower or any ERISA Affiliate incurs any liability to the
PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an
aggregate amount exceeding $500,000, or the Borrower or any ERISA Affiliate
is assessed withdrawal liability pursuant to Title IV of ERISA by a
Multiemployer Plan requiring aggregate annual payments exceeding $500,000,
or any of the following occurs with respect to a Guaranteed Pension Plan:
(i) an ERISA Reportable Event, or a failure to make a required installment
or other payment (within the meaning of (S)302(f)(1) of ERISA), provided
--------
that the Agent determines in its reasonable discretion that such event (A)
could be expected to result in liability of the Borrower or any of its
Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate
amount exceeding $500,000 and (B) could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC, for the
appointment by the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan or for the imposition of a lien in
favor of such Guaranteed Pension Plan; or (ii) the appointment by a United
States District Court of a trustee to administer such Guaranteed Pension
Plan; or (iii) the institution by the PBGC of proceedings to terminate such
Guaranteed Pension Plan;
(l) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory
-49-
agency from conducting any material part of its business and such order
shall continue in effect for more than thirty (30) days;
(m) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral if such Collateral is not insured, or any
strike, lockout, labor dispute, embargo, condemnation, act of God or public
enemy, or other casualty, which in any such case causes, for more than
fifteen (15) consecutive days, the cessation or substantial curtailment of
revenue producing activities at any facility of the Borrower or any of its
Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a material adverse effect on the
business or financial condition of the Borrower or such Subsidiary;
(n) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by
the Borrower or any of its Subsidiaries if such loss, suspension,
revocation or failure to renew would have a material adverse effect on the
business or financial condition of the Borrower or such Subsidiary;
(o) the Borrower or any of its Subsidiaries shall be indicted for a
state or federal crime, or any civil or criminal action shall otherwise
have been brought or threatened against the Borrower or any of its
Subsidiaries, a punishment for which in any such case could include the
forfeiture of any assets of the Borrower or such Subsidiary having a fair
market value in excess of $1,000,000;
(p) the Borrower shall at any time, legally or beneficially own less
than 100% of the capital stock of each Subsidiary, as adjusted pursuant to
any stock split, stock dividend or recapitalization or reclassification of
the capital of such Subsidiary; or
(q) prior to the initial public offering of the capital stock of the
Borrower (the "IPO"), the Investors shall at any time, legally or
beneficially own less than fifty percent (50%) of the capital stock of the
Borrower, as adjusted pursuant to any stock split, stock dividend or
recapitalization or reclassification of the capital of the Borrower and
subsequent to the IPO, any person or group of persons (within the meaning
of Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of
twenty percent (20%) or more of the outstanding shares of the common stock
of the Borrower, or during any period of twelve consecutive calendar
months, individuals who were directors of the Borrower on the first day of
such period shall cease to constitute a majority of the board of directors
of the Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
shall, upon the request of the Majority Banks, by notice in writing to the
Borrower declare all amounts owing with respect to this Credit Agreement, the
Revolving Credit Notes and the other Loan Documents to be, and they shall
thereupon forthwith become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that in the event of any Event of Default
--------
specified in (S)13.1(g) or 13.1(h), all such amounts shall become immediately
due and payable automatically and without any requirement of notice from the
Agent or any Bank.
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12.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
--------------------------
Default specified in (S)13.1(g) or (S)13.1(h) shall occur, any unused portion of
the credit hereunder shall forthwith terminate and each of the Banks shall be
relieved of all obligations to make Revolving Credit Loans to the Borrower. If
any other Event of Default shall have occurred and be continuing, or if on any
Drawdown Date the conditions precedent to the making of the Revolving Credit
Loans to be made on such Drawdown Date are not satisfied, the Agent may and,
upon the request of the Majority Banks, shall, by notice to the Borrower,
terminate the unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate immediately
and each of the Banks shall be relieved of all further obligations to make
Revolving Credit Loans. No termination of the credit hereunder shall relieve the
Borrower of any of the Obligations or any of its existing obligations to any of
the Banks arising under other agreements or instruments.
12.3. REMEDIES. In case any one or more of the Events of Default shall
--------
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to (S)13.1, each
Bank, if owed any amount with respect to the Revolving Credit Loans, may, with
the consent of the Majority Banks but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
-- -----
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Note is intended to be exclusive of any other
remedy and each and every remedy shall be cumulative and shall be in addition to
every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or any other provision of law.
12.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that the Agent
-----------------------------------
receives proceeds from the Life Insurance Policy contemplated by (S)7.7.2 or in
the event that, following the occurrence or during the continuance of any
Default or Event of Default, the Agent or any Bank, as the case may be, receives
any monies in connection with the enforcement of any the security documents, or
otherwise with respect to the realization upon any of the Collateral, such
monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the Agent under
this Credit Agreement or any of the other loan documents or in respect of
the collateral and supports the provision of adequate indemnity to the
Agent against all taxes or liens which by law shall have, or may have,
priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Banks may determine; provided, however, that distributions
-------- -------
shall be made with respect to each type of Obligation owing to the Banks,
such as interest, principal, fees and expenses, among the Banks pro rata;
--- ----
and provided, further, that
-------- -------
-51-
the Agent may in its discretion make proper allowance to take into account
any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent of
all of the Obligations, to the payment of any obligations required to be
paid pursuant to (S)9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower
or to such other Persons as are entitled thereto.
13. SETOFF.
------
Regardless of the adequacy of any collateral, during the continuance of any
Event of Default, any deposits or other sums credited by or due from any of the
Banks to the Borrower and any securities or other property of the Borrower in
the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Revolving Credit Notes held by such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all such
Revolving Credit Notes held by such Bank, and (b) if such Bank shall receive
from the Borrower, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the claim evidenced by the
Revolving Credit Notes held by such Bank by proceedings against the Borrower at
law or in equity or by proof thereof in bankruptcy, reorganization, liquidation,
receivership or similar proceedings, or otherwise, and shall retain and apply to
the payment of the Revolving Credit Note or Revolving Credit Notes held by such
Bank any amount in excess of its ratable portion of the payments received by all
of the Banks with respect to the Revolving Credit Notes held by all of the
Banks, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, pro tanto
--- -----
assignment of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Revolving Credit Notes held by its proportionate
payment as contemplated by this Credit Agreement; provided that if all or any
--------
part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
14. THE AGENT.
---------
14.1. AUTHORIZATION.
-------------
(a) The Agent is authorized to take such action on behalf of each
of the Banks and to exercise all such powers as are hereunder and under any
of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein or
--------
therein shall be implied to have been assumed by the Agent.
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(b) The relationship between the Agent and each of the Banks is
that of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other fiduciary
relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder
and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the
Banks and the Agent with respect to all collateral security and guaranties
contemplated by the Loan Documents. Such actions include the designation
of the Agent as "secured party", "mortgagee" or the like on all financing
statements and other documents and instruments, whether recorded or
otherwise, relating to the attachment, perfection, priority or enforcement
of any security interests, mortgages or deeds of trust in collateral
security intended to secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the Agent.
14.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and execute
--------------------
its duties by or through employees or agents and shall be entitled to take, and
to rely on, advice of counsel concerning all matters pertaining to its rights
and duties under this Credit Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.
14.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
------------
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
14.4. NO REPRESENTATIONS.
------------------
14.4.1. GENERAL. The Agent shall not be responsible for the
-------
execution or validity or enforceability of this Credit Agreement, the
Revolving Credit Notes, any of the other Loan Documents or any instrument
at any time constituting, or intended to constitute, collateral security
for the Revolving Credit Notes, or for the value of any such collateral
security or for the validity, enforceability or collectability of any such
amounts owing with respect to the Revolving Credit Notes, or for any
recitals or statements, warranties or representations made herein or in any
of the other Loan Documents or in any certificate or instrument hereafter
furnished to it by or on behalf of the Borrower or any of its Subsidiaries,
or be bound to ascertain or inquire as to the performance or observance of
any of the terms, conditions, covenants or agreements herein or in any
instrument at any time constituting, or intended to constitute, collateral
security for the Revolving Credit Notes or to inspect any of the
-53-
properties, books or records of the Borrower or any of its Subsidiaries.
The Agent shall not be bound to ascertain whether any notice, consent,
waiver or request delivered to it by the Borrower or any holder of any of
the Notes shall have been duly authorized or is true, accurate and
complete. The Agent has not made nor does it now make any representations
or warranties, express or implied, nor does it assume any liability to the
Banks, with respect to the credit worthiness or financial conditions of the
Borrower or any of its Subsidiaries. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank, and
based upon such information and documents as it has deemed appropriate,
made its own credit analysis and decision to enter into this Credit
Agreement.
14.4.2. CLOSING DOCUMENTATION, ETC. For purposes of determining
---------------------------
compliance with the conditions set forth in (S)10, each Bank that has
executed this Credit Agreement shall be deemed to have consented to,
approved or accepted, or to be satisfied with, each document and matter
either sent, or made available, by the Agent or any of its affiliates to
such Bank for consent, approval, acceptance or satisfaction, or required
thereunder to be to be consent to or approved by or acceptable or
satisfactory to such Bank, unless an officer of the Agent or any of its
affiliates active upon the Borrower's account shall have received notice
from such Bank prior to the Closing Date specifying such Bank's objection
thereto and such objection shall not have been withdrawn by notice to the
Agent or any of its affiliates to such effect on or prior to the Closing
Date.
14.5 PAYMENTS.
--------
14.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the Agent
-----------------
hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees promptly to
distribute to each Bank such Bank's pro rata share of payments received by
--- ----
the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
14.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent the
---------------------
distribution of any amount received by it in such capacity hereunder, under
the Revolving Credit Notes or under any of the other Loan Documents might
involve it in liability, it may refrain from making distribution until its
right to make distribution shall have been adjudicated by a court of
competent jurisdiction. If a court of competent jurisdiction shall adjudge
that any amount received and distributed by the Agent is to be repaid, each
Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as
shall be determined by such court.
14.5.3. DELINQUENT BANKS. Notwithstanding anything to the contrary
----------------
contained in this Credit Agreement or any of the other Loan Documents, any
Bank that fails (a) to make available to the Agent its pro rata share of
--- ----
any Revolving Credit Loan or (b) to comply with the provisions of (S)13
with respect to making dispositions and arrangements with the other Banks,
where such Bank's share of any payment received, whether by setoff or
otherwise, is in excess of its pro rata share of such payments due and
--- ----
payable to all of the Banks, in each case as, when and to
-54-
the full extent required by the provisions of this Credit Agreement, shall
be deemed delinquent (a "Delinquent Bank") and shall be deemed a Delinquent
Bank until such time as such delinquency is satisfied. A Delinquent Bank
shall be deemed to have assigned any and all payments due to it from the
Borrower, whether on account of outstanding Revolving Credit Loans,
interest, fees or otherwise, to the remaining nondelinquent Banks for
application to, and reduction of, their respective pro rata shares of all
--- ----
outstanding Revolving Credit Loans. The Delinquent Bank hereby authorizes
the Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective pro rata shares of all outstanding Revolving
--- ----
Credit Loans. A Delinquent Bank shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned
payments to all outstanding Revolving Credit Loans of the nondelinquent
Banks, the Banks' respective pro rata shares of all outstanding Revolving
Credit Loans have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
14.6. HOLDERS OF NOTES. The Agent may deem and treat the payee of any
----------------
Revolving Credit Note as the absolute owner or purchaser thereof for all
purposes hereof until it shall have been furnished in writing with a different
name by such payee or by a subsequent holder, assignee or transferee.
14.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
---------
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower as required by (S)15), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Revolving Credit Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent's willful misconduct or gross negligence.
14.8. AGENT AS BANK. In its individual capacity, BKB shall have the same
-------------
obligations and the same rights, powers and privileges in respect to its
Commitment and the Revolving Credit Loans made by it, and as the holder of any
of the Revolving Credit Notes, as it would have were it not also the Agent.
14.9. RESIGNATION. The Agent may resign at any time by giving sixty (60)
-----------
days prior written notice thereof to the Banks and the Borrower; provided,
however, notwithstanding the foregoing, BkB agrees that so long as its
Commitment Percentage is 51% or greater, it will not resign as the Agent
hereunder without the Borrower's prior written consent. Upon any such
resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and
-55-
the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
----------------------------------------------
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this (S)14.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.
14.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
---------------------------------
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
--------
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
15. EXPENSES AND INDEMNIFICATION.
----------------------------
15.1. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
--------
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, syndication, administration or interpretation of the Loan
Documents and other instruments mentioned herein, each closing hereunder, any
amendments, modifications, approvals, consents or waivers hereto or hereunder,
or the cancellation of any Loan Document upon payment in full in cash of all of
the Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation, (d) the fees, expenses and disbursements of the Agent or any
of its affiliates incurred by the Agent or such affiliate in connection with the
preparation, syndication, administration or interpretation of the Loan Documents
and other instruments mentioned herein, (e) any fees, costs, expenses and bank
charges, including bank charges for returned checks, incurred by the Agent in
establishing, maintaining or handling agency accounts, lock box accounts and
other accounts for the collection of any of the Collateral; (f) all reasonable
out-of-pocket expenses (including without limitation reasonable attorneys' fees
and costs, which attorneys may be employees of any Bank or the Agent, and
reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by any Bank or the Agent in
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connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or any of its Subsidiaries or the
administration thereof after the occurrence of a Default or Event of Default and
(ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Bank's or the Agent's relationship with the
Borrower or any of its Subsidiaries and (g) all reasonable fees, expenses and
disbursements of any Bank or the Agent incurred in connection with UCC searches
or UCC filings.
15.2. INDEMNIFICATION. The Borrower agrees to indemnify and hold harmless
---------------
the Agent, its affiliates and the Banks from and against any and all claims,
actions and suits whether groundless or otherwise, and from and against any and
all liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents or the
transactions contemplated hereby including, without limitation, (a) any actual
or proposed use by the Borrower or any of its Subsidiaries of the proceeds of
any of the Revolving Credit Loans, (b) the reversal or withdrawal of any
provisional credits granted by the Agent upon the transfer of funds from lock
box, bank agency or concentration accounts or in connection with the provisional
honoring of checks or other items, (c) any actual or alleged infringement of any
patent, copyright, trademark, service xxxx or similar right of the Borrower or
any of its Subsidiaries comprised in the Collateral, (d) the Borrower or any of
its Subsidiaries entering into or performing this Credit Agreement or any of the
other Loan Documents or (e) with respect to the Borrower and its Subsidiaries
and their respective properties and assets, the violation of any Environmental
Law, the presence, disposal, escape, seepage, leakage, spillage, discharge,
emission, release or threatened release of any Hazardous Substances or any
action, suit, proceeding or investigation brought or threatened with respect to
any Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Banks and the Agent and its affiliates shall be entitled to select
their own counsel and, in addition to the foregoing indemnity, the Borrower
agrees to pay promptly the reasonable fees and expenses of such counsel. If, and
to the extent that the obligations of the Borrower under this (S)15.2 are
unenforceable for any reason, the Borrower hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law.
15.3. SURVIVAL. The covenants contained in this (S)15 shall survive
--------
payment or satisfaction in full of all other Obligations.
16. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
---------------------------------------------
16.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The Borrower
-------------------------------------------------
acknowledges that from time to time financial advisory, investment banking and
other services may be offered or provided to the Borrower or one or more of its
Subsidiaries, in connection with this Credit Agreement or otherwise, by a
Section 20 Subsidiary. The Borrower, for itself and each of its Subsidiaries,
hereby authorizes (a) such Section 20 Subsidiary to share with the Agent and
each Bank any information delivered to such Section 20 Subsidiary by the
Borrower or any of its Subsidiaries, and (b) the Agent and each Bank to share
with such Section 20 Subsidiary any information delivered to the Agent or such
Bank by the Borrower or any of its Subsidiaries pursuant to this Credit
Agreement, or in
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connection with the decision of such Bank to enter into this Credit Agreement;
it being understood, in each case, that any such Section 20 Subsidiary receiving
such information shall be bound by the confidentiality provisions of this Credit
Agreement. Such authorization shall survive the payment and satisfaction in full
of all of Obligations.
16.2. CONFIDENTIALITY. Each of the Banks and the Agent agrees, on behalf
---------------
of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Credit Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
--------
(a) after such information shall have become public other than through a
violation of this (S)16, (b) to the extent required by statute, rule, regulation
or judicial process, (c) to counsel for any of the Banks or the Agent, (d) to
bank examiners or any other regulatory authority having jurisdiction over any
Bank or the Agent, or to auditors or accountants in respect of such regulatory
matters, (e) to the Agent, any Bank or any Section 20 Subsidiary, (f) in
connection with any litigation to which any one or more of the Banks, the Agent
or any Section 20 Subsidiary is a party, or in connection with the enforcement
of rights or remedies hereunder or under any other Loan Document, (g) to a
Subsidiary or affiliate of such Bank as provided in (S)16.1 or (h) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant agrees to be bound by the provisions of (S)18.6. Each
Bank and the Agent agrees to indemnify the Borrower from and against any and all
claims, actions and suits and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of such Bank's or
the Agent's gross negligence or willful misconduct in complying with its
obligations under this (S)16.2.
16.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
------------------
law or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such non-
public information by any governmental agency or representative thereof (other
than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
16.4. OTHER. In no event shall any Bank or the Agent be obligated or
-----
required to return any materials furnished to it or any Section 20 Subsidiary by
the Borrower or any of its Subsidiaries. The obligations of each Bank under this
(S)16 shall supersede and replace the obligations of such Bank under any
confidentiality letter in respect of this financing signed and delivered by such
Bank to the Borrower prior to the date hereof and shall be binding upon any
assignee of, or purchaser of any participation in, any interest in any of the
Revolving Credit Loans from any Bank.
17. SURVIVAL OF COVENANTS, ETC.
--------------------------
All covenants, agreements, representations and warranties made herein, in
the Revolving Credit Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by
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the Banks of any of the Revolving Credit Loans as herein contemplated, and shall
continue in full force and effect so long as any Letter of Credit or any amount
due under this Credit Agreement or the Revolving Credits or any of the other
Loan Documents remains outstanding or any Bank has any obligation to make any
Revolving Credit Loans, and for such further time as may be otherwise expressly
specified in this Credit Agreement. All representations and warranties made or
contained in any certificate or other paper delivered to any Bank or the Agent
at any time by or on behalf of the Borrower or any of its Subsidiaries pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower or such Subsidiary
hereunder.
18. ASSIGNMENT AND PARTICIPATION.
----------------------------
18.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein, each
---------------------------------
Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Revolving Credit Loans at the time owing to it, the Revolving Credits held
by it); provided that (a) each of the Agent and, unless a Default or Event of
--------
Default shall have occurred and be continuing, the Borrower shall have given its
prior written consent to such assignment, which consent, in the case of the
Borrower, will not be unreasonably withheld, (b) each such assignment shall be
of a constant, and not a varying, percentage of all the assigning Bank's rights
and obligations under this Credit Agreement, (c) each assignment shall be in an
amount that is a whole multiple of $2,500,000, (d) so long as no Default or
Event of Default has occurred and is continuing, BKB shall at all times retain a
Commitment Percentage of not less than 51%, and (e) the parties to such
assignment shall execute and deliver to the Agent, for recording in the Register
(as hereinafter defined), an Assignment and Acceptance, substantially in the
form of Exhibit D hereto (an "Assignment and Acceptance"), together with any
---------
Revolving Credit Notes subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (i) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder, and (ii) the assigning Bank
shall, to the extent provided in such assignment and upon payment to the Agent
of the registration fee referred to in (S)18.3, be released from its obligations
under this Credit Agreement.
18.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
--------------------------------------------------------------
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
this Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any security interest or
mortgage,
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(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower and its Subsidiaries or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance or
observance by the Borrower and its Subsidiaries or any other Person
primarily or secondarily liable in respect of any of the Obligations of any
of their obligations under this Credit Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in (S)6.4 and (S)7.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Bank, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Credit
Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably
incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Bank; and
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
18.3. REGISTER. The Agent shall maintain a copy of each Assignment and
--------
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to the
Banks from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and from time to
time upon reasonable prior notice. Upon each such recordation, the assigning
Bank agrees to pay to the Agent a registration fee in the sum of $3,000.
18.4. NEW REVOLVING CREDIT NOTES. Upon its receipt of an Assignment and
--------------------------
Acceptance executed by the parties to such assignment, together with each
Revolving Credit subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give prompt notice
thereof to the Borrower and the Banks (other than the assigning Bank). Within
five (5) Business Days after receipt of such notice, the
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Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for each surrendered Revolving Credit Note, a new Revolving Credit Note
to the order of such Eligible Assignee in an amount equal to the amount assumed
by such Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained some portion of its obligations hereunder, a new
Revolving Credit Note to the order of the assigning Bank in an amount equal to
the amount retained by it hereunder. Such new Revolving Credit Notes shall
provide that they are replacements for the surrendered Revolving Credit Notes,
shall be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Revolving Credit Notes, shall be dated the effective
date of such in Assignment and Acceptance and shall otherwise be substantially
the form of the assigned Revolving Credit Notes. Within five (5) days of
issuance of any new Revolving Credit Notes pursuant to this (S)18.4, the
Borrower shall deliver an opinion of counsel, addressed to the Banks and the
Agent, relating to the due authorization, execution and delivery of such new
Revolving Credit Notes and the legality, validity and binding effect thereof, in
form and substance satisfactory to the Banks. The surrendered Revolving Credit
Notes shall be canceled and returned to the Borrower.
18.5. PARTICIPATIONS. Each Bank may sell participations to one or more
--------------
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
--------
that (a) each such participation shall be in an amount of not less than
$2,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Revolving Credit Loans, extend the term
or increase the amount of the Commitment of such Bank as it relates to such
participant, reduce the amount of any commitment fees to which such participant
is entitled or extend any regularly scheduled payment date for principal or
interest.
18.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
----------
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
--------
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
18.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
----------------------------------------------------
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to (S)12.1 or (S)12.2, and
the determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Revolving Credit Loans. If any Bank sells a
participating interest in any of the Revolving Credit Loans to a participant,
and such participant is the Borrower or an Affiliate of the Borrower, then such
transferor Bank shall
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promptly notify the Agent of the sale of such participation. A transferor Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to (S)12.1 or (S)12.2 to the
extent that such participation is beneficially owned by the Borrower or any
Affiliate of the Borrower, and the determination of the Majority Banks shall for
all purposes of this Credit Agreement and the other Loan Documents be made
without regard to the interest of such transferor Bank in the Revolving Credit
Loans. The provisions of this (S)18.7 shall not apply to an assignee Bank or
participant which is also a Bank on the Closing Date or to an assignee Bank or
participant which has disclosed to the other Banks that it is an Affiliate of
the Borrower and which, following such disclosure, has been excepted from the
provisions of this (S)18.7 in a writing signed by the Majority Banks determined
without regard to the interest of such assignee Bank or transferor Bank, to the
extent of such participation, in Revolving Credit Loans.
18.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall retain
-----------------------------------
its rights to be indemnified pursuant to (S)15 with respect to any claims or
actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. If any Reference Bank
transfers all of its interest, rights and obligations under this Credit
Agreement, the Agent shall, in consultation with the Borrower and with the
consent of the Borrower and the Majority Banks, appoint another Bank to act as a
Reference Bank hereunder. Anything contained in this (S)18 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Revolving Credit Notes) to any of the twelve Federal Reserve Banks organized
under (S)4 of the Federal Reserve Act, 12 U.S.C. (S)341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
18.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
----------------------
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
19. NOTICES, ETC.
------------
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Revolving Credit Notes shall be in writing and shall be
delivered in hand, mailed by United States registered or certified first class
mail, postage prepaid, sent by overnight courier, or sent by telegraph,
telecopy, facsimile or telex and confirmed by delivery via courier or postal
service, addressed as follows:
(a) if to the Borrower, at 0000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxx 00000, Attention: Xxxx X. Xxxxxxx, Executive Vice President, with
a copy to X. Xxxxx Xxxx, Esq., Xxxxx & Xxxxxxx L.L.P., Columbia Square, 000
Xxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, XX 00000-0000 or at such other
address for notice as the Borrower shall last have furnished in writing to
the Person giving the notice,;
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(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, XXX, Attention: Xxx X. Massimo, Vice President, or such other
address for notice as the Agent shall last have furnished in writing to the
Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule 1
-------- -
hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (a) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(b) if sent by registered or certified first-class mail, postage prepaid, on the
third Business Day following the mailing thereof.
20. GOVERNING LAW.
-------------
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN (S)19. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
21. HEADINGS.
--------
The captions in this Credit Agreement are for convenience of reference only
and shall not define or limit the provisions hereof.
22. COUNTERPARTS.
------------
This Credit Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when
executed and delivered shall be an original, and all of which together shall
constitute one instrument. In proving this Credit Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
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23. ENTIRE AGREEMENT, ETC.
---------------------
The Loan Documents and any other documents executed in connection herewith
or therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Credit Agreement nor any term
hereof may be changed, waived, discharged or terminated, except as provided in
(S)25.
24. WAIVER OF JURY TRIAL.
--------------------
The Borrower hereby waives its right to a jury trial with respect to any
action or claim arising out of any dispute in connection with this Credit
Agreement, the Revolving Credit Notes or any of the other Loan Documents, any
rights or obligations hereunder or thereunder or the performance of which rights
and obligations. Except as prohibited by law, the Borrower hereby waives any
right it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Borrower (a)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
25. CONSENTS, AMENDMENTS, WAIVERS, ETC.
----------------------------------
Any consent or approval required or permitted by this Credit Agreement to
be given by the Banks may be given, and any term of this Credit Agreement, the
other Loan Documents or any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower or any of its
Subsidiaries of any terms of this Credit Agreement, the other Loan Documents or
such other instrument or the continuance of any Default or Event of Default may
be waived (either generally or in a particular instance and either retroactively
or prospectively) with, but only with, the written consent of the Borrower and
the written consent of the Majority Banks. Notwithstanding the foregoing, the
rate of interest on the Revolving Credit Notes (other than interest accruing
pursuant to (S)4.10.2 following the effective date of any waiver by the Majority
Banks of the Default or Event of Default relating thereto), the amount of the
Commitments of the Banks (except as expressly provided in (S)2.1.2 hereof), and
the amount of commitment fee hereunder may not be changed without the written
consent of the Borrower and the written consent of each Bank affected thereby;
the Revolving Credit Loan Maturity Date may not be postponed without the written
consent of each Bank affected thereby; this (S)25 and the definition of Majority
Banks may not be amended, without the written consent of all of the Banks; and
(S)14 may not be amended without the written consent of the Agent. No waiver
shall extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of dealing or delay or omission on the part
of the Agent or any Bank in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand upon the
Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
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26. SEVERABILITY.
------------
The provisions of this Credit Agreement are severable and if any one clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
ANSWERTHINK CONSULTING GROUP, INC.
By: /s/ Xxx X. Xxxxxxxxx
---------------------------------------
Name: Xxx X. Xxxxxxxxx
Title: President
BANKBOSTON, N.A., individually and as Agent
By: /s/ Xxx X. Massimo
---------------------------------------
Name: Xxx X. Massimo
Title: Vice President
The Exhibits and Schedules to this Revolving Credit Agreement are not included
with this Registration Statement on Form S-1. AnswerThink will provide these
exhibits and schedules upon the request of the Securities and Exchange
Commission.
