1
Exhibit 10(c)
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REVOLVING CREDIT
AND
SECURITY AGREEMENT
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PNC BANK, NATIONAL ASSOCIATION
(AS LENDER AND AS AGENT)
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WITH
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FRONTSTEP, INC.
SYMIX COMPUTER SYSTEMS, INC.,
SYMIX COMPUTER SYSTEMS DELAWARE, INC.,
FRONTSTEP, INC.,
BRIGHTWHITE SOLUTIONS, INC. AND
SYMIX COMPUTER SYSTEMS (CANADA), INC.
(AS BORROWERS)
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DECEMBER 19, 2000
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TABLE OF CONTENTS
I. DEFINITIONS............................................................................................2
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1.1 Accounting Terms.............................................................................2
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1.2 General Terms................................................................................2
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1.3 Uniform Commercial Code Terms...............................................................15
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1.4 Certain Matters of Construction.............................................................15
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II. ADVANCES, PAYMENTS....................................................................................15
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(a) Revolving Advances.........................................................................15
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(b) Individual Revolving Advances.........................................................16
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(c) Discretionary Rights..................................................................16
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2.2 Procedure for Revolving Advances Borrowing..................................................16
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2.3 Disbursement of Advance Proceeds............................................................18
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2.4 Maximum Advances............................................................................18
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2.5 Repayment of Advances.......................................................................18
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2.6 Repayment of Excess Advances................................................................19
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2.7 Statement of Account........................................................................19
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2.8 Additional Payments.........................................................................19
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2.9 Manner of Borrowing and Payment.............................................................19
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2.10 Mandatory Prepayments.......................................................................21
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2.11 Use of Proceeds.............................................................................21
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2.12 Defaulting Lender...........................................................................21
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III. INTEREST AND FEES.....................................................................................22
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3.1 Interest....................................................................................22
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3.2 Fees........................................................................................23
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3.3 Computation of Interest and Fees............................................................23
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3.4 Maximum Charges.............................................................................23
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3.5 Increased Costs.............................................................................23
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3.6 Basis For Determining Interest Rate Inadequate or Unfair....................................24
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3.7 Capital Adequacy............................................................................24
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IV. COLLATERAL: GENERAL TERMS............................................................................25
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4.1 Security Interest in the Collateral.........................................................25
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4.2 Perfection of Security Interest.............................................................25
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4.3 Disposition of Collateral...................................................................26
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4.4 Preservation of Collateral..................................................................26
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4.5 Ownership of Collateral.....................................................................26
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4.6 Defense of Agent's and Lenders' Interests...................................................26
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4.7 Books and Records...........................................................................27
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4.8 Financial Disclosure........................................................................27
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4.9 Compliance with Laws........................................................................27
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4.10 Inspection of Premises......................................................................27
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4.11 Insurance...................................................................................28
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4.12 Failure to Pay Insurance....................................................................28
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4.13 Payment of Taxes............................................................................29
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4.14 Payment of Leasehold Obligations............................................................29
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4.15 Receivables.................................................................................29
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(a) Nature of Receivables.................................................................29
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(b) Solvency of Customers.................................................................29
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(c) Locations of Borrower.................................................................29
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(d) Collection of Receivables.............................................................30
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(e) Notification of Assignment of Receivables.............................................30
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(g) No Liability..........................................................................31
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(h) Establishment of a Lockbox Account, Dominion Account..................................31
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(i) Adjustments...........................................................................31
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4.16 Maintenance of Equipment....................................................................31
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4.17 Exculpation of Liability....................................................................32
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4.18 Environmental Matters.......................................................................32
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4.19 Financing Statements........................................................................33
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V. REPRESENTATIONS AND WARRANTIES........................................................................33
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5.1 Authority...................................................................................33
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5.2 Formation and Qualification.................................................................34
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5.3 Survival of Representations and Warranties..................................................34
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5.4 Tax Returns.................................................................................34
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5.5 Financial Statements........................................................................34
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5.6 Corporate Name..............................................................................35
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5.7 O.S.H.A. and Environmental Compliance.......................................................35
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5.8 Solvency; No Litigation, Violation, Indebtedness or Default.................................35
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5.9 Patents, Trademarks, Copyrights and Licenses................................................36
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5.10 Licenses and Permits........................................................................37
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5.11 Default of Indebtedness.....................................................................37
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5.12 No Default..................................................................................37
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5.13 No Burdensome Restrictions..................................................................37
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5.14 No Labor Disputes...........................................................................37
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5.15 Margin Regulations..........................................................................38
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5.16 Investment Company Act......................................................................38
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5.17 Disclosure..................................................................................38
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5.18 Swaps.......................................................................................38
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5.19 Conflicting Agreements......................................................................38
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5.20 Application of Certain Laws and Regulations.................................................38
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5.21 Business and Property of Borrower...........................................................38
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VI. AFFIRMATIVE COVENANTS.................................................................................39
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6.1 Payment of Fees.............................................................................39
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6.2 Conduct of Business and Maintenance of Existence and Assets.................................39
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6.3 Violations..................................................................................39
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6.4 Government Receivables......................................................................39
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6.5 Execution of Supplemental Instruments.......................................................39
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6.6 Payment of Indebtedness.....................................................................39
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6.7 Standards of Financial Statements...........................................................40
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6.8 Minimum Net Worth...........................................................................40
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VII. NEGATIVE COVENANTS....................................................................................40
7.1 Merger, Consolidation, Acquisition and Sale of Assets.......................................40
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7.2 Creation of Liens...........................................................................41
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7.3 Guarantees..................................................................................41
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7.4 Investments.................................................................................41
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7.5 Loans.......................................................................................41
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7.6 Capital Expenditures........................................................................41
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7.7 Dividends...................................................................................41
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7.8 Indebtedness................................................................................42
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7.9 Nature of Business..........................................................................42
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7.10 Transactions with Affiliates................................................................42
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7.11 Leases......................................................................................42
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7.12 Subsidiaries................................................................................42
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7.13 Fiscal Year and Accounting Changes..........................................................42
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7.14 Pledge of Credit............................................................................43
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7.15 Amendment of Articles of Incorporation, By-Laws.............................................43
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7.16 Compliance with ERISA.......................................................................43
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7.17 Prepayment of Indebtedness..................................................................43
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7.18 Subordinated Debt...........................................................................43
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VIII. CONDITIONS PRECEDENT..................................................................................43
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8.1 Conditions to Initial Advances..............................................................43
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(a) Note..................................................................................44
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(b) Filings, Registrations and Recordings.................................................44
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(c) Corporate Proceedings of Borrowers....................................................44
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(d) Incumbency Certificates of Borrowers..................................................44
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(e) Certificates..........................................................................44
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(f) Good Standing Certificates............................................................44
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(g) Legal Opinion.........................................................................44
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(h) No Litigation.........................................................................45
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(i) Financial Condition Certificates......................................................45
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(j) Collateral Examination................................................................45
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(k) Fees..................................................................................45
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(l) Insurance.............................................................................45
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(m) Payment Instructions..................................................................45
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(n) Lockbox and Blocked Accounts..........................................................45
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(o) Consents..............................................................................45
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(p) No Adverse Material Change............................................................45
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(q) Contract Review.......................................................................46
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(r) Closing Certificate...................................................................46
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(s) Borrowing Base........................................................................46
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(t) Undrawn Availability and Reserve......................................................46
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(w) Other.................................................................................46
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8.2 Conditions to Each Advance..................................................................46
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(a) Representations and Warranties........................................................46
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(b) No Default............................................................................47
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(c) Maximum Advances......................................................................47
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IX. INFORMATION AS TO BORROWERS...........................................................................47
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9.1 Disclosure of Material Matters..............................................................47
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9.2 Schedules...................................................................................47
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9.3 Litigation..................................................................................47
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9.4 Material Occurrences........................................................................47
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9.5 Government Receivables......................................................................48
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9.6 Annual Financial Statements.................................................................48
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9.7 Quarterly Financial Statements..............................................................49
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9.8 Other Reports...............................................................................49
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9.9 Additional Information......................................................................49
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9.10 Projected Operating Budget..................................................................49
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9.11 Variances From Operating Budget.............................................................50
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9.12 Notice of Suits, Adverse Events.............................................................50
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9.13 ERISA Notices and Requests..................................................................50
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9.14 Additional Documents........................................................................50
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X. EVENTS OF DEFAULT.....................................................................................51
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XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT............................................................53
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11.1 Rights and Remedies.........................................................................53
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11.2 Agent's Discretion..........................................................................54
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11.3 Setoff......................................................................................54
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11.4 Rights and Remedies not Exclusive...........................................................54
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XII. WAIVERS AND JUDICIAL PROCEEDINGS......................................................................54
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12.1 Waiver of Notice............................................................................54
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12.2 Delay.......................................................................................54
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12.3 Jury Waiver.................................................................................54
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XIII. EFFECTIVE DATE AND TERMINATION........................................................................55
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13.1 Term........................................................................................55
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13.2 Termination.................................................................................55
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XIV. REGARDING AGENT.......................................................................................56
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14.1 Appointment.................................................................................56
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14.2 Nature of Duties............................................................................56
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14.3 Lack of Reliance on Agent and Resignation...................................................56
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14.4 Certain Rights of Agent.....................................................................57
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14.5 Reliance....................................................................................57
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14.6 Notice of Default...........................................................................57
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14.7 Indemnification.............................................................................58
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14.8 Agent in its Individual Capacity............................................................58
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14.9 Delivery of Documents.......................................................................58
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14.10 Borrowers' Undertaking to Agent.............................................................58
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XV. BORROWING AGENCY......................................................................................58
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15.1 Borrowing Agency Provisions.................................................................58
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15.2 Waiver of Subrogation.......................................................................59
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XVI. MISCELLANEOUS.........................................................................................59
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16.1 Governing Law...............................................................................59
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16.2 Entire Understanding........................................................................60
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16.3 Successors and Assigns; Participations; New Lenders.........................................61
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16.4 Application of Payments.....................................................................63
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16.5 Indemnity...................................................................................63
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16.6 Notice......................................................................................63
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16.7 Survival....................................................................................65
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16.8 Severability................................................................................65
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16.9 Expenses....................................................................................65
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16.10 Injunctive Relief...........................................................................65
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16.11 Consequential Damages.......................................................................65
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16.12 Captions....................................................................................65
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16.13 Counterparts; Telecopied Signatures.........................................................66
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16.14 Construction................................................................................66
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16.15 Confidentiality; Sharing Information........................................................66
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16.16 Publicity...................................................................................66
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REVOLVING CREDIT
AND
SECURITY AGREEMENT
Revolving Credit and Security Agreement (the "Agreement"), dated December
19, 2000 among FRONTSTEP, INC., a corporation organized under the laws of the
State of Ohio ("Frontstep"), SYMIX COMPUTER SYSTEMS, INC., a corporation
organized under the laws of the State of Ohio, SYMIX COMPUTER SYSTEMS DELAWARE,
INC., a corporation organized under the laws of the State of Delaware,
BRIGHTWHITE SOLUTIONS, INC., a corporation organized under the laws of the State
of Ohio, FRONTSTEP, INC., a corporation organized under the laws of the State of
Minnesota ("Frontstep (MN)"), and SYMIX COMPUTER SYSTEMS (CANADA), INC. (each a
"Borrower" and collectively "Borrowers"), the financial institutions which are
now or which hereafter become a party hereto (collectively, the "Lenders" and
individually a "Lender") and PNC BANK, NATIONAL ASSOCIATION, ("PNC"), as agent
for Lenders (PNC, in such capacity, the "Agent").
IN CONSIDERATION of the mutual covenants and undertakings herein contained,
Borrowers, Lenders and Agent hereby agree as follows:
I. DEFINITIONS.
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1.1 ACCOUNTING TERMS. As used in this Agreement, the Note, or any
certificate, report or other document made or delivered pursuant to this
Agreement, accounting terms not defined in Section 1.2 or elsewhere in this
Agreement and accounting terms partly defined in Section 1.2 to the extent not
defined, shall have the respective meanings given to them under GAAP; PROVIDED,
HOWEVER, whenever such accounting terms are used for the purposes of determining
compliance with financial covenants in this Agreement, such accounting terms
shall be defined in accordance with GAAP as applied in preparation of the
audited financial statements of Borrowers for the fiscal year ended June 30,
2000.
1.2 GENERAL TERMS. For purposes of this Agreement the following terms
shall have the following meanings:
"ACCOUNTANTS" shall have the meaning set forth in Section 9.7 hereof.
"ADVANCES" shall mean and include the Revolving Advances.
"ADVANCE RATE" shall have the meaning set forth in Section 2.1(a)
hereof.
"AFFILIATE" of any Person shall mean any other Person directly or
indirectly controlling, controlled by or under common control with such Person.
A Person shall be deemed to control another Person if the controlling Person
owns 10% or more of any class of voting securities (or other ownership
interests) of the controlled Person or possesses, directly or indirectly, the
power to direct or cause the direction of the management or policies of the
controlled Person, whether through ownership of stock, by contract or otherwise.
"Affiliate" shall not include Xxxxxx Xxxxxxx Xxxx Xxxxxx.
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"AGENT" shall have the meaning set forth in the preamble to this
Agreement and shall include its successors and assigns.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal
to the higher of (i) the Base Rate in effect on such day and (ii) the Federal
Funds Rate in effect on such day plus 1/2 of 1%.
"AUTHORITY" shall have the meaning set forth in Section 4.18(b).
"BASE RATE" shall mean the base commercial lending rate of PNC as
publicly announced to be in effect from time to time, such rate to be adjusted
automatically, without notice, on the effective date of any change in such rate.
This rate of interest is determined from time to time by PNC as a means of
pricing some loans to its customers and is neither tied to any external rate of
interest or index nor does it necessarily reflect the lowest rate of interest
actually charged by PNC to any particular class or category of customers of PNC.
"BLOCKED ACCOUNTS" shall have the meaning set forth in Section 4.15(h).
"BORROWER" or "BORROWERS" shall have the meaning set forth in the
preamble to this Agreement and shall extend to all permitted successors and
assigns of such Persons.
"BORROWERS' ACCOUNT" shall have the meaning set forth in Section 2.7.
"BORROWING AGENT" shall mean Frontstep.
"BORROWING BASE CERTIFICATE" shall mean a certificate in substantially
the form of Exhibit A hereto duly executed by an officer of Borrowers
appropriately completed and delivered to Agent on a weekly basis.
"BUSINESS DAY" shall mean with respect to Eurodollar Rate Loans, any
day on which commercial banks are open for domestic and international business,
including dealings in Dollar deposits in London, England and New York, New York,
and, with respect to all other matters, any day other than a day on which
commercial banks in New York are authorized or required by law to close.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 ET
SEQ.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events:
(a) any Borrower is merged, consolidated or reorganized into or with
another Person, and as a result of such merger, consolidation or reorganization
less than a majority of the combined voting power of the then outstanding voting
stock (which shall all include all other equity interests with voting power) of
such Person immediately after such transaction are held in the aggregate by the
holders of voting stock of the Borrower immediately prior to such transaction;
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(b) any Borrower sells or otherwise transfers all or substantially all
of its assets to another Person, and as a result of such sale or transfer less
than a majority of the combined voting power of the then outstanding voting
stock of such Person immediately after such sale or transfer is held in the
aggregate by the holders of voting stock of the Borrower immediately prior to
such sale or transfer;
(c) (i) there is a report filed on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form or report), each as promulgated pursuant to the
Securities and Exchange Act of 1934, as amended, disclosing that any person (as
the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of such
Securities and Exchange Act) has become the beneficial owner (as the term
"beneficial owner" is defined under Rule 13d-3 or any successor rule or
regulation promulgated under said Securities Exchange Act) of securities
representing 20% or more of the combined voting power of the then outstanding
voting stock of the Borrower; and (ii) the employment of a majority of the
executive officers of the Borrower has been terminated and/or a majority of such
executive officers have terminated their employment for "good cause" in
accordance with certain severance agreements between such executive officers and
the Borrower;
(d) any Borrower files a report or proxy statement with the Securities
and Exchange Commission pursuant to the Securities and Exchange Act disclosing
in response to From 8-K or Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of the Borrower has occurred or
will occur in the future pursuant to any then existing contract or transaction;
or
(e) if, during any period of two consecutive years, individuals who at
the beginning of any such period constitute the directors of any Borrower cease
for any reason to constitute at least a majority thereof; provided, however,
that for purposes of this clause (e) each director who is first elected, or
first nominated for election by such Borrowers' stockholders, by a vote of at
least two-thirds of the directors of such Borrower ( or a committee thereof)
then still in office who were directors of such Borrower at the beginning of any
such period will be deemed to have been a director of such Borrower at the
beginning of such period.
Notwithstanding the foregoing provisions of subparts (c) or (d) above, unless
otherwise determined in a specific case by majority vote of the board of
directors of any Borrower, a "Change in Control" shall not be deemed to have
occurred for purposes of such subparts solely because (i) a Borrower, (ii) a
Subsidiary, or (iii) any Borrower sponsored employee stock ownership plan or any
other employee benefit plan of any Borrower or any Subsidiary either files or
becomes obligated to file a report or a proxy statement under or in response to
Schedule 13D, Schedule 14d-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) under such Securities Exchange Act
disclosing beneficial ownership by it of shares of voting stock, whether in
excess of 20% or otherwise, or because a Borrower reports that a change in
control of such Borrower has occurred or will occur in the future by reason of
such beneficial ownership.
"CHARGES" shall mean all taxes, charges, fees, imposts, levies or other
assessments, including, without limitation, all net income, gross income, gross
receipts, sales, use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license,
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withholding, payroll, employment, social security, unemployment, excise,
severance, stamp, occupation and property taxes, custom duties, fees,
assessments, liens, claims and charges of any kind whatsoever, together with any
interest and any penalties, additions to tax or additional amounts, imposed by
any taxing or other authority, domestic or foreign (including, without
limitation, the Pension Benefit Guaranty Corporation or any environmental agency
or superfund), upon the Collateral, any Borrower or any of its Affiliates.
"CLOSING DATE" shall mean December 19, 2000 or such other date as may
be agreed to by the parties hereto.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated thereunder.
"COLLATERAL" shall mean and include:
(a) all Receivables; and
(b) all proceeds and products of all Receivables in whatever form,
including, but not limited to: cash, deposit accounts (whether or not comprised
solely of proceeds), certificates of deposit, insurance proceeds (including
hazard, flood and credit insurance), negotiable instruments and other
instruments for the payment of money, chattel paper, security agreements,
documents, eminent domain proceeds, condemnation proceeds and tort claim
proceeds.
"COMMITMENT PERCENTAGE" of any Lender shall mean the percentage set
forth below such Lender's name on the signature page hereof as same may be
adjusted upon any assignment by a Lender pursuant to Section 16.3(b) hereof.
"COMMITMENT TRANSFER SUPPLEMENT" shall mean a document in the form of
EXHIBIT 16.3 hereto, properly completed and otherwise in form and substance
satisfactory to Agent by which the Purchasing Lender purchases and assumes a
portion of the obligation of Lenders to make Advances under this Agreement.
"CONSENTS" shall mean all filings and all licenses, permits, consents,
approvals, authorizations, qualifications and orders of governmental authorities
and other third parties, domestic or foreign, necessary to carry on any
Borrower's business, including, without limitation, any Consents required under
all applicable federal, state or other applicable law.
"CONSOLIDATED NET INCOME" shall mean the net income of Frontstep on a
Consolidated Basis determined in accordance with GAAP.
"CONTROLLED GROUP" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with any Borrower, are treated as a single
employer under Section 414 of the Code.
"CUSTOMER" shall mean and include the account debtor with respect to
any Receivable and/or the prospective purchaser of goods, services or both with
respect to any
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contract or contract right, and/or any party who enters into or proposes to
enter into any contract or other arrangement with any Borrower, pursuant to
which such Borrower is to deliver any personal property or perform any services.
"DEFAULT" shall mean an event which, with the giving of notice or
passage of time or both, would constitute an Event of Default.
"DEFAULT RATE" shall have the meaning set forth in Section 3.1 hereof.
"DEFAULTING LENDER" shall have the meaning set forth in Section 2.12
hereof.
"DEPOSITORY ACCOUNTS" shall have the meaning set forth in Section
4.15(h) hereof.
"DOCUMENTS" shall have the meaning set forth in Section 8.1(c) hereof.
"DOLLAR" and the sign "$" shall mean lawful money of the United States
of America.
"DOMESTIC RATE LOAN" shall mean any Advance that bears interest based
upon the Alternate Base Rate.
"EARLY TERMINATION DATE" shall have the meaning set forth in Section
13.1 hereof.
"ELIGIBLE RECEIVABLES" shall mean and include with respect to each
Borrower, each Receivable of such Borrower arising in the ordinary course of
such Borrower's business and which Agent, in its sole credit judgment, shall
deem to be an Eligible Receivable, based on such considerations as Agent may
from time to time deem appropriate. A Receivable shall not be deemed eligible
unless such Receivable is subject to Agent's first priority perfected security
interest and no other Lien (other than Permitted Encumbrances), and is evidenced
by an invoice or other documentary evidence reasonably satisfactory to Agent. In
addition, no Receivable shall be an Eligible Receivable if:
(a) it arises out of a sale made by any Borrower to an Affiliate of any
Borrower or to a Person controlled by an Affiliate of any Borrower, unless
otherwise approved by Agent;
(b) it is due or unpaid the lesser of (i) more than ninety (90) days
after the original due date or (ii) one hundred twenty (120) days or more from
the invoice date; provided, however, that up to $3,000,000 of Receivables with
extended terms of up to 180 days from the invoice date, but not more than 30
days past due, shall under this subpoint (b) be permitted to be included as
Eligible Receivables;
(c) fifty percent (50%) or more of the Receivables from such Customer
are not deemed Eligible Receivables hereunder. Such percentage may, in Agent's
sole credit judgment, be increased or decreased from time to time;
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(d) any covenant, representation or warranty contained in this
Agreement with respect to such Receivable has been breached;
(e) the Customer shall (i) apply for, suffer, or consent to the
appointment of, or the taking of possession by, a receiver, custodian, trustee
or liquidator of itself or of all or a substantial part of its property or call
a meeting of its creditors, (ii) admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business, (iii) make a general assignment for the benefit of creditors, (iv)
commence a voluntary case under any state or federal bankruptcy laws (as now or
hereafter in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a
petition seeking to take advantage of any other law providing for the relief of
debtors, (vii) acquiesce to, or fail to have dismissed, any petition which is
filed against it in any involuntary case under such bankruptcy laws, or (viii)
take any action for the purpose of effecting any of the foregoing;
(f) the sale is to a Customer outside the continental United States of
America or Canada, unless the sale is on letter of credit, guaranty or
acceptance terms, in each case acceptable to Agent in its reasonable discretion;
(g) the sale to the Customer is on a xxxx-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other repurchase or return
basis or is evidenced by chattel paper;
(h) Agent believes, in its sole credit judgment, that collection of
such Receivable is insecure or that such Receivable may not be paid by reason of
the Customer's financial inability to pay;
(i) the Customer is the United States of America, any state or any
department, agency or instrumentality of any of them, unless the applicable
Borrower assigns its right to payment of such Receivable to Agent pursuant to
the Assignment of Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 ET
SEQ. and 41 U.S.C. Sub-Section 15 ET SEQ.) or has otherwise complied with other
applicable statutes or ordinances;
(j) the products giving rise to such Receivable have not been shipped
and delivered to and accepted by the Customer or the Receivable otherwise does
not represent a final sale;
(k) the Receivables of the Customer exceed a credit limit determined by
Agent, in its sole credit discretion, to the extent such Receivable exceeds such
limit;
(l) to the extent the Receivable is subject to any offset, deduction,
defense, dispute, or counterclaim, the Customer is also a creditor or supplier
of a Borrower or the Receivable is contingent in any respect or for any reason;
(m) the applicable Borrower has made any agreement with any Customer
for any deduction therefrom, except for discounts or allowances made in the
ordinary course of business for prompt payment, all of which discounts or
allowances are reflected in the calculation of the face value of each respective
invoice related thereto;
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(n) the rendition of services has not been completed, except for the
rendition of maintenance and support services under license agreements and/or
sales orders;
(o) any return, rejection or repossession of the merchandise has
occurred;
(p) such Receivable is not payable to a Borrower; or
(q) such Receivable is not otherwise satisfactory to Agent in its sole
credit judgment.
For purposes of this definition, "credit judgment" or "sole credit judgment"
shall mean in the Agent's discretion based on its review of matters relating to
Borrowers or credit considerations and/or good faith belief respecting such
matters. As appropriate, Agent will use reasonable efforts to provide Borrowers
with notice, written or oral, as to any changes precipitated by the exercise of
Agent's credit judgment and review with Borrowers the reasons therefor.
"ENVIRONMENTAL COMPLAINT" shall have the meaning set forth in Section
4.18(b) hereof.
"ENVIRONMENTAL LAWS" shall mean all federal, state and local
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances and codes relating to the protection of the
environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.
"EQUIPMENT" shall mean and include as to each Borrower all of such
Borrower's goods whether now owned or hereafter acquired and wherever located
including, without limitation, all equipment, machinery, apparatus, motor
vehicles, fittings, furniture, furnishings, fixtures, parts, accessories and all
replacements and substitutions therefor or accessions thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time and the rules and regulations promulgated
thereunder.
"EURODOLLAR RATE LOAN" shall mean an Advance at any time that bears
interest based on the Eurodollar Rate.
"EURODOLLAR RATE" shall mean for any Eurodollar Rate Loan for the then
current Interest Period relating thereto the interest rate per annum determined
by PNC by dividing (the resulting quotient rounded upwards, if necessary, to the
nearest 1/100th of 1% per annum) (i) the rate of interest determined by PNC in
accordance with its usual procedures (which determination shall be conclusive
absent manifest error) to be the eurodollar rate two (2) Business Days prior to
the first day of such Interest Period for an amount comparable to such
Eurodollar Rate Loan and having a borrowing date and a maturity comparable to
such Interest Period by (ii) a number equal to 1.00 minus the Reserve
Percentage.
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Average of London interbank offered rates quoted by BBA as shown on
Eurodollar Rate = DOW XXXXX MARKETS SERVICE DISPLAY PAGE 3750 OR APPROPRITE
SUCCESSOR 1.00 - Reserve Percentage.
"EVENT OF DEFAULT" shall mean the occurrence and continuance of any of
the events set forth in Article X hereof.
"FEDERAL FUNDS RATE" shall mean, for any day, 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 which is a Business Day, the average of quotations for such day on such
transactions received by PNC from three Federal funds brokers of recognized
standing selected by PNC.
"FORMULA AMOUNT" shall have the meaning set forth in Section 2.1(a).
"FRONTSTEP ON A CONSOLIDATED BASIS" shall mean Frontstep and each of
its Subsidiaries which, in accordance with GAAP, are consolidated with Frontstep
for financial accounting purposes.
"GAAP" shall mean generally accepted accounting principles in the
United States of America in effect from time to time.
"GENERAL INTANGIBLES" shall mean and include as to each Borrower all of
such Borrower's General Intangibles, whether now owned or hereafter acquired
including, without limitation, all choses in action, causes of action, corporate
or other business records, inventions, designs, patents, patent applications,
trademarks, service marks, trade secrets, goodwill, copyrights, design rights,
registrations, licenses, franchises, customer lists, tax refunds, tax refund
claims, all claims under guaranties, security interests or other security held
by or granted to such Borrower to secure payment of any of the Receivables by a
Customer, all rights of indemnification and all other intangible property of
every kind and nature (other than Receivables).
"GOVERNMENTAL BODY" shall mean any nation or government, any state or
other political subdivision thereof or any entity exercising the legislative,
judicial, regulatory or administrative functions of or pertaining to a
government.
"HAZARDOUS DISCHARGE" shall have the meaning set forth in Section
4.18(b) hereof.
"HAZARDOUS SUBSTANCE" shall mean, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, Hazardous Wastes, hazardous or Toxic Substances or
related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. Sections 1801, ET SEQ.), RCRA, Articles 15 and 27 of
the New York State Environmental Conservation Law or any other applicable
Environmental Law and in the regulations adopted pursuant thereto.
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"HAZARDOUS WASTES" shall mean all waste materials subject to regulation
under CERCLA, RCRA or applicable state law, and any other applicable Federal and
state laws now in force or hereafter enacted relating to hazardous waste
disposal.
"INDEBTEDNESS" of a Person at a particular date shall mean all
obligations of such Person which in accordance with GAAP would be classified
upon a balance sheet as liabilities (except capital stock and surplus earned or
otherwise) and in any event, without limitation by reason of enumeration, shall
include all indebtedness, debt and other similar monetary obligations of such
Person whether direct or guaranteed, and all premiums, if any, due at the
required prepayment dates of such indebtedness, and all indebtedness secured by
a Lien on assets owned by such Person, whether or not such indebtedness actually
shall have been created, assumed or incurred by such Person. Any indebtedness of
such Person resulting from the acquisition by such Person of any assets subject
to any Lien shall be deemed, for the purposes hereof, to be the equivalent of
the creation, assumption and incurring of the indebtedness secured thereby,
whether or not actually so created, assumed or incurred.
"INDIVIDUAL FORMULA AMOUNT" shall mean at the date of determination
thereof, with respect to each Borrower an amount equal to: (a) up to the
Receivables Advance Rate of Eligible Receivables of such Borrower, MINUS (b)
such reserves as Agent may reasonably deem proper and necessary from time to
time.
"INTEREST PERIOD" shall mean the period provided for any Eurodollar
Rate Loan pursuant to Section 2.2(b).
"LENDER" and "LENDERS" shall have the meaning ascribed to such term in
the preamble to this Agreement and shall include each Person which becomes a
transferee, successor or assign of any Lender.
"LIEN" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, security interest, lien (whether statutory or otherwise), Charge,
claim or encumbrance, or preference, priority or other security agreement or
preferential arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including, without limitation, any conditional sale or other
title retention agreement, any lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement under the Uniform Commercial Code or comparable law of any
jurisdiction.
"MAINTENANCE CONTRACT RECEIVABLES" shall mean all forms of obligations
owing to such Borrower arising out of or in connection with the performance of
maintenance or support services under license agreements and/or sales orders
entered into between a Borrower and a Customer.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the condition, operations, assets, business or prospects of the applicable
Person or Persons, (b) any Borrower's ability to pay the Obligations in
accordance with the terms thereof, (c) the value of the Collateral, or Agent's
Liens on the Collateral or the priority of any such Lien or (d) the ability of
Agent and each Lender to realize the benefits of Agent's and each Lender's
rights and remedies under this Agreement and the Other Documents.
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"MAXIMUM REVOLVING ADVANCE AMOUNT" shall mean $20,000,000.
"MONTHLY ADVANCES" shall have the meaning set forth in Section 3.1
hereof.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined in
Sections 3(37) and 4001(a)(3) of ERISA.
"NET WORTH" shall mean, as of the applicable date, the shareholder
equity of Frontstep on a Consolidated Basis, as reported on Frontstep's
financial statements, determined in accordance with GAAP.
"NOTE" shall mean the Revolving Credit Note.
"OBLIGATIONS" shall mean and include any and all of each Borrower's
Indebtedness and/or liabilities to Agent or Lenders or any corporation that
directly or indirectly controls or is controlled by or is under common control
with Agent or any Lender of every kind, nature and description, direct or
indirect, secured or unsecured, joint, several, joint and several, absolute or
contingent, due or to become due, now existing or hereafter arising, contractual
or tortious, liquidated or unliquidated, regardless of how such indebtedness or
liabilities arise or by what agreement or instrument they may be evidenced or
whether evidenced by any agreement or instrument, including, but not limited to,
any and all of any Borrower's Indebtedness and/or liabilities under this
Agreement, the Other Documents or under any other agreement between Agent or
Lenders and any Borrower and all obligations of any Borrower to Agent or Lenders
to perform acts or refrain from taking any action.
"OTHER DOCUMENTS" shall mean the Note, the Pledge Agreement, the
Lockbox Agreement, the Blocked Account Agreement, the Assignment of Maintenance
Contract Receivables, the Questionnaire, and any and all other agreements,
instruments and documents, including, without limitation, guaranties, pledges,
powers of attorney, consents, and all other writings heretofore, now or
hereafter executed by any Borrower and/or delivered to Agent or any Lender in
respect of the transactions contemplated by this Agreement.
"PARENT" of any Person shall mean a corporation or other entity owning,
directly or indirectly at least 50% of the shares of stock or other ownership
interests having ordinary voting power to elect a majority of the directors of
the Person, or other Persons performing similar functions for any such Person.
"PARTICIPANT" shall mean each Person who shall be granted the right by
any Lender to participate in any of the Advances and who shall have entered into
a participation agreement in form and substance satisfactory to such Lender.
"PAYMENT OFFICE" shall mean initially Xxx Xxxxx Xxxxxx Xxxxxxxxx, Xxxx
Xxxxxxxxx, Xxx Xxxxxx, 00000; thereafter, such other office of Agent, if any,
which it may designate by notice to Borrowing Agent and to each Lender to be the
Payment Office.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
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"PERMITTED ENCUMBRANCES" shall mean (a) Liens in favor of Agent for the
benefit of Agent and Lenders; (b) Liens for taxes, assessments or other
governmental charges not delinquent or being contested in good faith and by
appropriate proceedings and with respect to which proper reserves have been
taken by Borrowers; PROVIDED, THAT, the Lien shall have no effect on the
priority of the Liens in favor of Agent or the value of the assets in which
Agent has such a Lien and a stay of enforcement of any such Lien shall be in
effect; (c) Liens disclosed in the financial statements referred to in Section
5.5, the existence of which Agent has consented to in writing; (d) deposits or
pledges to secure obligations under worker's compensation, social security or
similar laws, or under unemployment insurance; (e) deposits or pledges to secure
bids, tenders, contracts (other than contracts for the payment of money),
leases, statutory obligations, surety and appeal bonds and other obligations of
like nature arising in the ordinary course of any Borrower's business; (f)
judgment Liens that have been stayed or bonded and mechanics', workers',
materialmen's, landlord's or other like Liens arising in the ordinary course of
any Borrower's business with respect to obligations which are not due or which
are being contested in good faith by the applicable Borrower; (g) Liens placed
upon fixed assets hereafter acquired to secure a portion of the purchase price
thereof, provided that (x) any such Lien shall not encumber any other property
of the Borrowers and (y) the aggregate amount of Indebtedness secured by such
Liens incurred as a result of such purchases during any fiscal year shall not
exceed the amount provided for in Section 7.6; (h) other Liens incidental to the
conduct of Borrowers' business or the ownership of its property and assets which
were not incurred in connection with the borrowing of money or the obtaining of
advances or credit, and which do not in the aggregate materially detract from
Agent's or Lenders' rights in and to the Collateral or the value of Borrowers'
property or assets or which do not materially impair the use thereof in the
operation of Borrowers' business; and (i) Liens disclosed on SCHEDULE 1.2.
"PERSON" shall mean any individual, sole proprietorship, partnership,
corporation, business trust, joint stock company, trust, unincorporated
organization, association, limited liability company, institution, public
benefit corporation, joint venture, entity or government (whether Federal,
state, county, city, municipal or otherwise, including any instrumentality,
division, agency, body or department thereof).
"PLAN" shall mean any employee benefit plan within the meaning of
Section 3(3) of ERISA, maintained for employees of Borrowers or any member of
the Controlled Group or any such Plan to which any Borrower or any member of the
Controlled Group is required to contribute on behalf of any of its employees.
"PLEDGE AGREEMENT" shall mean the form of Pledge Agreement identified
in Exhibit 1.2 hereto pursuant to which capital stock of certain Subsidiaries of
Frontstep is pledged to Agent and Lenders.
"PRO FORMA BALANCE SHEET" shall have the meaning set forth in Section
5.5(a) hereof.
"PRO FORMA FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 5.5(b) hereof.
"PROJECTIONS" shall have the meaning set forth in Section 5.5(b)
hereof.
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"PURCHASING LENDER" shall have the meaning set forth in Section 16.3
hereof.
"QUESTIONNAIRE" shall mean the Documentation Information Questionnaire
and the responses thereto provided by Borrowers and delivered to Agent.
"RCRA" shall mean the Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901 ET SEQ., as same may be amended from time to time.
"REAL PROPERTY" shall mean all of each Borrower's right, title and
interest in and to the owned and leased premises identified on SCHEDULE 4.19
hereto.
"RECEIVABLES" shall mean and include, as to each Borrower, all of such
Borrower's accounts, contract rights, instruments (including those evidencing
indebtedness owed to Borrowers by their Affiliates), documents, chattel paper,
drafts and acceptances, and all other forms of obligations owing to such
Borrower arising out of or in connection with the sale or license of Software or
the rendition of services, all guarantees and other security therefor, whether
secured or unsecured, now existing or hereafter created, and whether or not
specifically sold or assigned to Agent hereunder.
"RECEIVABLES ADVANCE RATE" shall have the meaning set forth in Section
2.1(a)(y)(i) hereof.
"RELEASE" shall mean visible signs of releases, spills, discharges,
leaks or disposal.
"REPORTABLE EVENT" shall mean a reportable event described in Section
4043(b) of ERISA or the regulations promulgated thereunder.
"REQUIRED LENDERS" shall mean Lenders holding at least Sixty-six and
Two-thirds percent (66 2/3%) of the Advances and, if no Advances are
outstanding, shall mean Lenders holding Sixty-six and Two-thirds percent (66
2/3%) of the Commitment Percentages.
"RESERVE PERCENTAGE" shall mean the maximum effective percentage in
effect on any day as prescribed by the Board of Governors of the Federal Reserve
System (or any successor) for determining the reserve requirements (including,
without limitation, supplemental, marginal and emergency reserve requirements)
with respect to eurocurrency funding.
"REVOLVING ADVANCES" shall mean Advances made.
"REVOLVING CREDIT NOTE" shall mean the promissory note referred to in
Section 2.1(a) hereof.
"REVOLVING INTEREST RATE" shall mean an interest rate per annum equal
to (a) the sum of the Alternate Base Rate with respect to Domestic Rate Loans,
or (b) with respect to Eurodollar Rate Loans, the sum of the Eurodollar Rate
plus two and three-quarters percent (2 3/4%) prior to fiscal year end June 30,
2001 and thereafter the sum of the Eurodollar Rate plus the applicable PNC
Eurodollar Margin, based upon the Consolidated Net Income of the Borrowers on a
rolling four quarter basis, as follows:
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NET INCOME PNC EURODOLLAR MARGIN
---------- ---------------------
less than ($1,000,000) 2.75%
greater than ($1,000,000) but less than $5,000,000 2.50%
greater than $5,000,000 but less than $10,000,000 2.00%
greater than or equal to $10,000,000 1.50%
"SETTLEMENT DATE" shall mean the Closing Date and thereafter the
Wednesday of each week unless such day is not a Business Day in which case it
shall be the next succeeding Business Day.
"SOFTWARE" shall mean the computer programs sold or licensed by any
Borrower.
"SUBORDINATED DEBT" shall mean all amounts due under the Amended and
Restated Subordinated Promissory Notes, dated February 9, 2000, issued by
Frontstep to each of Xxxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxx and Xxxxxxx X.
Xxxxxxx.
"SUBORDINATED DEBT DOCUMENTATION" shall mean the documentation
evidencing the Subordinated Debt.
"SUBORDINATED DEBT PAYMENTS" shall mean and include all cash actually
expended to make payments of principal and interest on the Subordinated Debt.
"SUBSIDIARY" shall mean a corporation or other entity of whose shares
of stock or other ownership interests having ordinary voting power (other than
stock or other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such entity, are
owned, directly or indirectly, by such Person.
"TERM" shall have the meaning set forth in Section 13.1 hereof.
"TERMINATION EVENT" shall mean (i) a Reportable Event with respect to
any Plan or Multiemployer Plan; (ii) the withdrawal of any Borrower or any
member of the Controlled Group from a Plan or Multiemployer Plan during a plan
year in which such entity was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; (iii) the providing of notice of intent to terminate a Plan
in a distress termination described in Section 4041(c) of ERISA; (iv) the
institution by the PBGC of proceedings to terminate a Plan or Multiemployer
Plan; (v) any event or condition (a) which might constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Plan or Multiemployer Plan, or (b) that may result in
termination of a Multiemployer Plan pursuant to Section 4041A of ERISA; or (vi)
the partial or complete withdrawal within the meaning of Sections 4203 and 4205
of ERISA, of any Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"TOXIC SUBSTANCE" shall mean and include any material present on the
Real Property or the Leasehold Interests which has been shown to have
significant adverse effect on human health or which is subject to regulation
under the Toxic Substances Control Act (TSCA),
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15 U.S.C. " 2601 ET SEQ., applicable state law, or any other applicable Federal
or state laws now in force or hereafter enacted relating to toxic substances.
"Toxic Substance" includes but is not limited to asbestos, polychlorinated
biphenyls (PCBs) and lead-based paints.
"TRANSACTIONS" shall have the meaning set forth in Section 5.5 hereof.
"TRANSFEREE" shall have the meaning set forth in Section 16.3(b)
hereof.
"UNDRAWN AVAILABILITY" at a particular date shall mean an amount equal
to (a) the lesser of (i) the Formula Amount or (ii) the Maximum Revolving
Advance Amount, MINUS (b) the sum of (i) the outstanding amount of Advances PLUS
(ii) all amounts due and owing to Borrowers' trade creditors which are
outstanding beyond normal trade terms, PLUS (iii) fees and expenses for which
Borrowers are liable but which have not been paid or charged to Borrowers'
Account.
"WEEK" shall mean the time period commencing with the opening of
business on a Wednesday and ending on the end of business the following Tuesday.
1.3 UNIFORM COMMERCIAL CODE TERMS. All terms used herein and defined in the
Uniform Commercial Code as adopted in the State of Ohio shall have the meaning
given therein unless otherwise defined herein.
1.4 CERTAIN MATTERS OF CONSTRUCTION. The terms "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. Wherever appropriate in the context, terms
used herein in the singular also include the plural and VICE VERSA. All
references to statutes and related regulations shall include any amendments of
same and any successor statutes and regulations. Unless otherwise provided, all
references to any instruments or agreements to which Agent is a party,
including, without limitation, references to any of the Other Documents, shall
include any and all modifications or amendments thereto and any and all
extensions or renewals thereof.
II. ADVANCES, PAYMENTS.
------------------
2.1 (a) REVOLVING ADVANCES. Subject to the terms and conditions set forth
in this Agreement, each Lender, severally and not jointly, will make including,
without limitation, Section 2.1(b) Revolving Advances to Borrowers in aggregate
amounts outstanding at any time equal to such Lender's Commitment Percentage of
the lesser of (x) the Maximum Revolving Advance Amount or (y) an amount equal to
the sum of:
(i) up to 85%, subject to the provisions of Section 2.1(c) hereof
("Advance Rate"), of Eligible Receivables, provided, however, that no
more than five million dollars ($5,000,000) of such amount is on
account of Eligible Receivables that are Maintenance Contract
Receivables, PLUS
(ii) such reserves as Agent may reasonably deem proper and necessary
from time to time.
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The amount derived from the sum of (x) Sections 2.1(a)(y)(i) MINUS (y)
Section 2.1 (a)(y)(ii) at any time and from time to time shall be referred to as
the "Formula Amount". The Revolving Advances shall be evidenced by the secured
promissory note ("Revolving Credit Note") substantially in the form attached
hereto as EXHIBIT 2.1(a).
Without limiting any rights of Agent or any Lender hereunder, Agent shall
reserve against the amounts available for borrowing under this Section 2.1(a) an
amount equal to all principal and accrued and unpaid interest under the
Subordinated Debt, which reserve shall be effective January 3, 2001 and
thereafter; provided, however, that such reserve shall not be applicable if each
holder of Subordinated Debt has executed and delivered to Agent a subordination
agreement in form and substance satisfactory to Agent.
(b) INDIVIDUAL REVOLVING ADVANCES. Each Lender, severally and not
jointly, will make Revolving Advances to each Borrower in aggregate amounts
outstanding at any time not greater than such Lender's Commitment Percentage of
the lesser of (x) such Borrower's Individual Maximum Revolving Advance Amount or
(y) such Borrower's Individual Formula Amount.
(c) DISCRETIONARY RIGHTS. The Advance Rate may be increased or
decreased by Agent at any time and from time to time in the exercise of its
credit judgment. Each Borrower consents to any such increases or decreases and
acknowledges that decreasing the Advance Rate or increasing the reserves may
limit or restrict Advances requested by Borrowing Agent. Agent shall give
Borrowing Agent five (5) days prior written notice of its intention to decrease
the Advance Rate.
2.2 PROCEDURE FOR REVOLVING ADVANCES BORROWING.
(a) Borrowing Agent on behalf of any Borrower may notify Agent prior to
11:00 a.m. on a Business Day of a Borrower's request to incur, on that day, a
Revolving Advance hereunder. Should any amount required to be paid as interest
hereunder, or as fees or other charges under this Agreement or any other
agreement with Agent or Lenders, or with respect to any other Obligation, become
due, same shall be deemed a request for a Revolving Advance as of the date such
payment is due, in the amount required to pay in full such interest, fee, charge
or Obligation under this Agreement or any other agreement with Agent or Lenders,
and such request shall be irrevocable.
(b) Notwithstanding the provisions of (a) above, in the event any
Borrower desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall give
Agent at least three (3) Business Days' prior written notice, specifying (i) the
date of the proposed borrowing (which shall be a Business Day), (ii) the type of
borrowing and the amount on the date of such Advance to be borrowed, which
amount shall be an integral multiple of $1,000,000, and (iii) the duration of
the first Interest Period therefor. Interest Periods for Eurodollar Rate Loans
shall be for one, two or three months; PROVIDED, if an Interest Period would end
on a day that is not a Business Day, it shall end on the next succeeding
Business Day unless such day falls in the next succeeding calendar month in
which case the Interest Period shall end on the next preceding Business Day. No
Eurodollar Rate Loan shall be made available to Borrower during the continuance
of a Default or an Event of Default.
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(c) Each Interest Period of a Eurodollar Rate Loan shall commence on
the date such Eurodollar Rate Loan is made and shall end on such date as
Borrowing Agent may elect as set forth in (b)(iii) above provided that the exact
length of each Interest Period shall be determined in accordance with the
practice of the interbank market for offshore Dollar deposits and no Interest
Period shall end after the last day of the Term.
Borrowing Agent shall elect the initial Interest Period applicable to a
Eurodollar Rate Loan by its notice of borrowing given to Agent pursuant to
Section 2.2(b) or by its notice of conversion given to Agent pursuant to Section
2.2(d), as the case may be. Borrowing Agent shall elect the duration of each
succeeding Interest Period by giving irrevocable written notice to Agent of such
duration not less than three (3) Business Days prior to the last day of the then
current Interest Period applicable to such Eurodollar Rate Loan. If Agent does
not receive timely notice of the Interest Period elected by Borrowing Agent,
Borrowers shall be deemed to have elected to convert to a Domestic Rate Loan
subject to Section 2.2(d) hereinbelow.
(d) Provided that no Event of Default shall have occurred and be
continuing, any Borrower may, on the last Business Day of the then current
Interest Period applicable to any outstanding Eurodollar Rate Loan, or on any
Business Day with respect to Domestic Rate Loans, convert any such loan into a
loan of another type in the same aggregate principal amount provided that any
conversion of a Eurodollar Rate Loan shall be made only on the last Business Day
of the then current Interest Period applicable to such Eurodollar Rate Loan. If
a Borrower desires to convert a loan, Borrowing Agent shall give Agent not less
than three (3) Business Days' prior written notice to convert from a Domestic
Rate Loan to a Eurodollar Rate Loan or one (1) Business Day's prior written
notice to convert from a Eurodollar Rate Loan to a Domestic Rate Loan,
specifying the date of such conversion, the loans to be converted and if the
conversion is from a Domestic Rate Loan to any other type of loan, the duration
of the first Interest Period therefor. After giving effect to each such
conversion, there shall not be outstanding more than five Eurodollar Rate Loans,
in the aggregate.
(e) At its option and upon three (3) Business Days' prior written
notice, any Borrower may prepay the Eurodollar Rate Loans in whole at any time
or in part from time to time, without premium or penalty, but with accrued
interest on the principal being prepaid to the date of such repayment. Such
Borrower shall specify the date of prepayment of Advances which are Eurodollar
Rate Loans and the amount of such prepayment. In the event that any prepayment
of a Eurodollar Rate Loan is required or permitted on a date other than the last
Business Day of the then current Interest Period with respect thereto, such
Borrower shall indemnify Agent and Lenders therefor in accordance with Section
2.2(f) hereof.
(f) Each Borrower shall indemnify Agent and Lenders and hold Agent and
Lenders harmless from and against any and all losses or expenses that Agent and
Lenders may sustain or incur as a consequence of any prepayment, conversion of
or any default by any Borrower in the payment of the principal of or interest on
any Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of,
a prepayment of or conversion of or to a Eurodollar Rate Loan after notice
thereof has been given, including, but not limited to, any interest payable by
Agent or Lenders to lenders of funds obtained by it in order to make or maintain
its Eurodollar Rate Loans hereunder, unless such losses or expenses are due to
the gross negligence or willful misconduct of Agent or Lenders. A certificate as
to any additional amounts payable pursuant to
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the foregoing sentence submitted by Agent or any Lender to Borrowing Agent shall
be conclusive absent manifest error.
(g) Notwithstanding any other provision hereof, if any applicable law,
treaty, regulation or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Lender (for purposes of
this subsection (g), the term "Lender" shall include any Lender and the office
or branch where any Lender or any corporation or bank controlling such Lender
makes or maintains any Eurodollar Rate Loans ) to make or maintain its
Eurodollar Rate Loans, the obligation of Lenders to make Eurodollar Rate Loans
hereunder, as the case may be, shall forthwith be canceled and Borrowers shall,
if any affected Eurodollar Rate Loans are then outstanding, promptly upon
request from Agent, either pay all such affected Eurodollar Rate Loans or
convert such affected Eurodollar Rate Loans into loans of another type. If any
such payment or conversion of any Eurodollar Rate Loan is made on a day that is
not the last day of the Interest Period applicable to such Eurodollar Rate Loan,
Borrowers shall pay Agent, upon Agent's request, such amount or amounts as may
be necessary to compensate Lenders for any loss or expense sustained or incurred
by Lenders in respect of such Eurodollar Rate Loan as a result of such payment
or conversion, including (but not limited to) any interest or other amounts
payable by Lenders to lenders of funds obtained by Lenders in order to make or
maintain such Eurodollar Rate Loan. A certificate as to any additional amounts
payable pursuant to the foregoing sentence submitted by Lenders to Borrowing
Agent shall be conclusive absent manifest error.
2.3 DISBURSEMENT OF ADVANCE PROCEEDS. All Advances shall be disbursed from
whichever office or other place Agent may designate from time to time and,
together with any and all other Obligations of Borrowers to Agent or Lenders,
shall be charged to Borrowers' Account on Agent's books. During the Term,
Borrowers may use the Revolving Advances by borrowing, prepaying and
reborrowing, all in accordance with the terms and conditions hereof. The
proceeds of each Revolving Advance requested by Borrowers or deemed to have been
requested by Borrowers under Section 2.2(a) hereof shall, with respect to
requested Revolving Advances to the extent Lenders make such Revolving Advances,
be made available to the applicable Borrower on the day so requested by way of
credit to such Borrower's operating account at PNC, or such other bank as
Borrowing Agent may designate following notification to Agent, in immediately
available federal funds or other immediately available funds or, with respect to
Revolving Advances deemed to have been requested by any Borrower, be disbursed
to Agent to be applied to the outstanding Obligations giving rise to such deemed
request.
2.4 MAXIMUM ADVANCES. The aggregate balance of Revolving Advances
outstanding at any time shall not exceed the lesser of (a) Maximum Revolving
Advance Amount or (b) the Formula Amount.
2.5 REPAYMENT OF ADVANCES.
(a) The Advances shall be due and payable in full on the last day of
the Term subject to earlier prepayment as herein provided.
(b) Each Borrower recognizes that the amounts evidenced by checks,
notes, drafts or any other items of payment relating to and/or proceeds of
Collateral may not be
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collectible by Agent on the date received. In consideration of Agent's agreement
to conditionally credit Borrowers' Account as of the Business Day on which Agent
receives those items of payment, each Borrower agrees that, in computing the
charges under this Agreement, all items of payment shall be deemed applied by
Agent on account of the Obligations one (1) Business Day after the Business Day
Agent receives such payments via wire transfer or electronic depository check.
Agent is not, however, required to credit Borrowers' Account for the amount of
any item of payment which is unsatisfactory to Agent and Agent may charge
Borrowers' Account for the amount of any item of payment which is returned to
Agent unpaid.
(c) All payments of principal, interest and other amounts payable
hereunder, or under any of the related agreements shall be made to Agent at the
Payment Office not later than 1:00 P.M. (New York Time) on the due date therefor
in lawful money of the United States of America in federal funds or other funds
immediately available to Agent. Agent shall have the right to effectuate payment
on any and all Obligations due and owing hereunder by charging Borrowers'
Account or by making Advances as provided in Section 2.2 hereof.
(d) Borrowers shall pay principal, interest, and all other amounts
payable hereunder, or under any related agreement, without any deduction
whatsoever, including, but not limited to, any deduction for any setoff or
counterclaim.
2.6 REPAYMENT OF EXCESS ADVANCES. The aggregate balance of Advances
outstanding at any time in excess of the maximum amount of Advances permitted
hereunder shall be immediately due and payable without the necessity of any
demand, at the Payment Office, whether or not a Default or Event of Default has
occurred.
2.7 STATEMENT OF ACCOUNT. Agent shall maintain, in accordance with its
customary procedures, a loan account ("Borrowers' Account") in the name of
Borrowers in which shall be recorded the date and amount of each Advance made by
Agent and the date and amount of each payment in respect thereof; PROVIDED,
HOWEVER, the failure by Agent to record the date and amount of any Advance shall
not adversely affect Agent or any Lender. Each month, Agent shall send to
Borrowing Agent a statement showing the accounting for the Advances made,
payments made or credited in respect thereof, and other transactions between
Agent and Borrowers, during such month. The monthly statements shall be deemed
correct and binding upon Borrowers in the absence of manifest error and shall
constitute an account stated between Lenders and Borrowers unless Agent receives
a written statement of Borrowers' specific exceptions thereto within thirty (30)
days after such statement is received by Borrowing Agent. The records of Agent
with respect to the loan account shall be conclusive evidence absent manifest
error of the amounts of Advances and other charges thereto and of payments
applicable thereto.
2.8 ADDITIONAL PAYMENTS. Any sums expended by Agent or any Lender due to
any Borrower's failure to perform or comply with its obligations under this
Agreement or any Other Document including, without limitation, any Borrower's
obligations under Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be
charged to Borrowers' Account as a Revolving Advance and added to the
Obligations.
2.9 MANNER OF BORROWING AND PAYMENT.
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(a) Each borrowing of Revolving Advances shall be advanced according to
the applicable Commitment Percentages of Lenders.
(b) Each payment (including each prepayment) by Borrowers on account of
the principal of and interest on the Revolving Advances, shall be applied to the
Revolving Advances pro rata according to the applicable Commitment Percentages
of Lenders. Except as expressly provided herein, all payments (including
prepayments) to be made by any Borrower on account of principal, interest and
fees shall be made without set off or counterclaim and shall be made to Agent on
behalf of the Lenders to the Payment Office, in each case on or prior to 1:00
P.M., New York time, in Dollars and in immediately available funds.
(c) (i) Notwithstanding anything to the contrary contained in Sections
2.9(a) and (b) hereof, commencing with the first Business Day following the
Closing Date, each borrowing of Revolving Advances shall be advanced by Agent
and each payment by any Borrower on account of Revolving Advances shall be
applied first to those Revolving Advances advanced by Agent. On or before 1:00
P.M., New York time, on each Settlement Date commencing with the first
Settlement Date following the Closing Date, Agent and Lenders shall make certain
payments as follows: (I) if the aggregate amount of new Revolving Advances made
by Agent during the preceding Week (if any) exceeds the aggregate amount of
repayments applied to outstanding Revolving Advances during such preceding Week,
then each Lender shall provide Agent with funds in an amount equal to its
applicable Commitment Percentage of the difference between (w) such Revolving
Advances and (x) such repayments and (II) if the aggregate amount of repayments
applied to outstanding Revolving Advances during such Week exceeds the aggregate
amount of new Revolving Advances made during such Week, then Agent shall provide
each Lender with funds in an amount equal to its applicable Commitment
Percentage of the difference between (y) such repayments and (z) such Revolving
Advances.
(ii) Each Lender shall be entitled to earn interest at the
applicable Revolving Interest Rate on outstanding Advances which it has funded.
(iii) Promptly following each Settlement Date, Agent shall submit
to each Lender a certificate with respect to payments received and Advances
made during the Week immediately preceding such Settlement Date. Such
certificate of Agent shall be conclusive in the absence of manifest error.
(d) If any Lender or Participant (a "benefited Lender") shall at any
time receive any payment of all or part of its Advances, or interest thereon, or
receive any Collateral in respect thereof (whether voluntarily or involuntarily
or by set-off) in a greater proportion than any such payment to and Collateral
received by any other Lender, if any, in respect of such other Lender's
Advances, or interest thereon, and such greater proportionate payment or receipt
of Collateral is not expressly permitted hereunder, such benefited Lender shall
purchase for cash from the other Lenders a participation in such portion of each
such other Lender's Advances, or shall provide such other Lender with the
benefits of any such Collateral, or the proceeds thereof, as shall be necessary
to cause such benefited Lender to share the excess payment or benefits of such
Collateral or proceeds ratably with each of Lenders; PROVIDED, HOWEVER, that if
all or any portion of such excess payment or benefits is thereafter recovered
from such benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of
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such recovery, but without interest. Each Lender so purchasing a portion of
another Lender's Advances may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(e) Unless Agent shall have been notified by telephone, confirmed in
writing, by any Lender that such Lender will not make the amount which would
constitute its applicable Commitment Percentage of the Advances available to
Agent, Agent may (but shall not be obligated to) assume that such Lender shall
make such amount available to Agent on the next Settlement Date and, in reliance
upon such assumption, make available to Borrowers a corresponding amount. Agent
will promptly notify Borrowers of its receipt of any such notice from a Lender.
If such amount is made available to Agent on a date after such next Settlement
Date, such Lender shall pay to Agent on demand an amount equal to the product of
(i) the daily average Federal Funds Rate (computed on the basis of a year of 360
days) during such period as quoted by Agent, times (ii) such amount, times (iii)
the number of days from and including such Settlement Date to the date on which
such amount becomes immediately available to Agent. A certificate of Agent
submitted to any Lender with respect to any amounts owing under this paragraph
(e) shall be conclusive, in the absence of manifest error. If such amount is not
in fact made available to Agent by such Lender within three (3) Business Days
after such Settlement Date, Agent shall be entitled to recover such an amount,
with interest thereon at the rate per annum then applicable to such Revolving
Advances hereunder, on demand from Borrowers; PROVIDED, HOWEVER, that Agent's
right to such recovery shall not prejudice or otherwise adversely affect
Borrowers' rights (if any) against such Lender.
2.10 MANDATORY PREPAYMENTS. When any Borrower sells or otherwise disposes
of any (i) Collateral, (ii) Software (other than in the ordinary course of
business) or Equipment in excess of two million dollars ($2,000,000) (book value
or gross proceeds, whichever is greater) in any twelve (12) month period, or
(iii) any General Intangibles, Borrowers shall repay the Advances in an amount
equal to the net proceeds of such sale (i.e., gross proceeds less the reasonable
costs of such sales or other dispositions), such repayments to be made promptly
but in no event more than one (1) Business Day following receipt of such net
proceeds, and until the date of payment, such proceeds shall be held in trust
for Agent. The foregoing shall not be deemed to be implied consent to any such
sale otherwise prohibited by the terms and conditions hereof. Such repayments
shall be applied to the Advances in such order as Agent may determine, subject
to Borrowers' ability to reborrow Revolving Advances in accordance with the
terms hereof.
2.11 USE OF PROCEEDS. Borrowers shall apply the proceeds of Advances to (i)
repay existing indebtedness owed to Bank One, N. A., (ii) pay fees and expenses
relating to this transaction, and (iii) to provide for their working capital
needs.
2.12 DEFAULTING LENDER.
(a) Notwithstanding anything to the contrary contained herein, in the
event any Lender (x) has refused (which refusal constitutes a breach by such
Lender of its obligations under this Agreement) to make available its portion of
any Advance or (y) notifies either Agent or Borrowing Agent that it does not
intend to make available its portion of any Advance (if the actual refusal would
constitute a breach by such Lender of its obligations under
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this Agreement) (each, a "Lender Default"), all rights and obligations hereunder
of such Lender (a "Defaulting Lender") as to which a Lender Default is in effect
and of the other parties hereto shall be modified to the extent of the express
provisions of this Section 2.12 while such Lender Default remains in effect.
(b) Advances shall be incurred pro rata from Lenders (the
"Non-Defaulting Lenders") which are not Defaulting Lenders based on their
respective Commitment Percentages, and no Commitment Percentage of any Lender or
any pro rata share of any Advances required to be advanced by any Lender shall
be increased as a result of such Lender Default. Amounts received in respect of
principal of any type of Advances shall be applied to reduce the applicable
Advances of each Lender pro rata based on the aggregate of the outstanding
Advances of that type of all Lenders at the time of such application; provided,
that, such amount shall not be applied to any Advances of a Defaulting Lender at
any time when, and to the extent that, the aggregate amount of Advances of any
Non-Defaulting Lender exceeds such Non-Defaulting Lender's Commitment Percentage
of all Advances then outstanding.
(c) A Defaulting Lender shall not be entitled to give instructions to
Agent or to approve, disapprove, consent to or vote on any matters relating to
this Agreement and the Other Documents. All amendments, waivers and other
modifications of this Agreement and the Other Documents may be made without
regard to a Defaulting Lender and, for purposes of the definition of "Required
Lenders", a Defaulting Lender shall be deemed not to be a Lender and not to have
Advances outstanding.
(d) Other than as expressly set forth in this Section 2.12, the rights
and obligations of a Defaulting Lender (including the obligation to indemnify
Agent) and the other parties hereto shall remain unchanged. Nothing in this
Section 2.12 shall be deemed to release any Defaulting Lender from its
obligations under this Agreement and the Other Documents, shall alter such
obligations, shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which any Borrower, Agent or any Lender
may have against any Defaulting Lender as a result of any default by such
Defaulting Lender hereunder.
(e) In the event a Defaulting Lender retroactively cures to the
satisfaction of Agent the breach which caused a Lender to become a Defaulting
Lender, such Defaulting Lender shall no longer be a Defaulting Lender and shall
be treated as a Lender under this Agreement.
III. INTEREST AND FEES.
-----------------
3.1 INTEREST. Interest on Advances shall be payable in arrears on the last
day of each month with respect to Domestic Rate Loans and, with respect to
Eurodollar Rate Loans, at the end of each Interest Period. Interest charges
shall be computed on the actual principal amount of Advances outstanding during
the month (the "Monthly Advances") at a rate per annum equal to the Revolving
Interest Rate. Whenever, subsequent to the date of this Agreement, the Alternate
Base Rate is increased or decreased, the Revolving Interest Rate for Domestic
Rate Loans shall be similarly changed without notice or demand of any kind by an
amount equal to the amount of such change in the Alternate Base Rate during the
time such change or changes remain
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in effect. The Eurodollar Rate shall be adjusted with respect to Eurodollar Rate
Loans without notice or demand of any kind on the effective date of any change
in the Reserve Percentage as of such effective date. Upon and after the
occurrence of an Event of Default, and during the continuation thereof, (i) the
Obligations other than Eurodollar Rate Loans shall bear interest at the
Revolving Interest Rate for Domestic Loans plus two (2%) percent per annum and
(ii) Eurodollar Rate Loans shall bear interest at the Revolving Interest Rate
for Eurodollar Rate Loans plus two (2%) percent per annum as applicable, the
"Default Rate").
3.2 FEES. Borrowers shall pay to Agent such fees as agreed to by Borrowers
and Agent as set forth the in Agent Fee Letter Agreement, dated December 19,
2000.
3.3 COMPUTATION OF INTEREST AND FEES. Interest and fees hereunder shall be
computed on the basis of a year of 360 days and for the actual number of days
elapsed. If any payment to be made hereunder becomes due and payable on a day
other than a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and interest thereon shall be payable at the Revolving
Interest Rate for Domestic Rate Loans during such extension.
3.4 MAXIMUM CHARGES. In no event whatsoever shall interest and other
charges charged hereunder exceed the highest rate permissible under law. In the
event interest and other charges as computed hereunder would otherwise exceed
the highest rate permitted under law, such excess amount shall be first applied
to any unpaid principal balance owed by Borrowers, and if the then remaining
excess amount is greater than the previously unpaid principal balance, Lenders
shall promptly refund such excess amount to Borrowers and the provisions hereof
shall be deemed amended to provide for such permissible rate.
3.5 INCREASED COSTS. In the event that any applicable law, treaty or
governmental regulation, or any change therein or in the interpretation or
application thereof, or compliance by any Lender (for purposes of this Section
3.5, the term "Lender" shall include Agent or any Lender and any corporation or
bank controlling Agent or any Lender) and the office or branch where Agent or
any Lender (as so defined) makes or maintains any Eurodollar Rate Loans with any
request or directive (whether or not having the force of law) from any central
bank or other financial, monetary or other authority, shall:
(a) subject Agent or any Lender to any tax of any kind whatsoever with
respect to this Agreement or any Other Document or change the basis of taxation
of payments to Agent or any Lender of principal, fees, interest or any other
amount payable hereunder or under any Other Documents (except for changes in the
rate of tax on the overall net income of Agent or any Lender by the jurisdiction
in which it maintains its principal office);
(b) impose, modify or hold applicable any reserve, special deposit,
assessment or similar requirement against assets held by, or deposits in or for
the account of, advances or loans by, or other credit extended by, any office of
Agent or any Lender, including (without limitation) pursuant to Regulation D of
the Board of Governors of the Federal Reserve System; or
(c) impose on Agent or any Lender or the London interbank Eurodollar
market any other condition with respect to this Agreement or any Other Document;
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and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing or maintaining its Advances hereunder by an amount
that Agent or such Lender deems in its reasonable discretion to be material or
to reduce the amount of any payment (whether of principal, interest or
otherwise) in respect of any of the Advances by an amount that Agent or such
Lender deems in its reasonable discretion to be material, then, in any case
Borrowers shall promptly pay Agent or such Lender, upon its demand, such
additional amount as will compensate Agent or such Lender for such additional
cost or such reduction, as the case may be, provided that the foregoing shall
not apply to increased costs which are reflected in the Eurodollar Rate, as the
case may be. Agent or such Lender shall certify the amount of such additional
cost or reduced amount to Borrowers, and such certification shall be conclusive
absent manifest error.
3.6 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR. In the event
that Agent or any Lender shall have determined that:
(a) reasonable means do not exist for ascertaining the Eurodollar Rate
applicable pursuant to Section 2.2 hereof for any Interest Period; or
(b) Dollar deposits in the relevant amount and for the relevant
maturity are not available in the London interbank Eurodollar market, with
respect to an outstanding Eurodollar Rate Loan, a proposed Eurodollar Rate Loan,
or a proposed conversion of a Domestic Rate Loan into a Eurodollar Rate Loan,
then Agent shall give Borrowing Agent prompt written, telephonic or telegraphic
notice of such determination. If such notice is given, (i) any such requested
Eurodollar Rate Loan shall be made as a Domestic Rate Loan, unless Borrowing
Agent shall notify Agent no later than 10:00 a.m. (New York City time) two (2)
Business Days prior to the date of such proposed borrowing, that its request for
such borrowing shall be canceled or made as an unaffected type of Eurodollar
Rate Loan , (ii) any Domestic Rate Loan or Eurodollar Rate Loan which was to
have been converted to an affected type of Eurodollar Rate Loan shall be
continued as or converted into a Domestic Rate Loan, or, if Borrowing Agent
shall notify Agent, no later than 10:00 a.m. (New York City time) two (2)
Business Days prior to the proposed conversion, shall be maintained as an
unaffected type of Eurodollar Rate Loan , and (iii) any outstanding affected
Eurodollar Rate Loans shall be converted into a Domestic Rate Loan, or, if
Borrowing Agent shall notify Agent, no later than 10:00 a.m. (New York City
time) two (2) Business Days prior to the last Business Day of the then current
Interest Period applicable to such affected Eurodollar Rate Loan , shall be
converted into an unaffected type of Eurodollar Rate Loan , on the last Business
Day of the then current Interest Period for such affected Eurodollar Rate Loans
. Until such notice has been withdrawn, Lenders shall have no obligation to make
an affected type of Eurodollar Rate Loan or maintain outstanding affected
Eurodollar Rate Loans and no Borrower shall have the right to convert a Domestic
Rate Loan or an unaffected type of Eurodollar Rate Loan into an affected type of
Eurodollar Rate Loan .
3.7 CAPITAL ADEQUACY.
(a) In the event that Agent or any Lender shall have determined that
any applicable law, rule, regulation or guideline regarding capital adequacy, or
any change therein, or any change in the interpretation or administration
thereof by any governmental
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authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by Agent or any Lender (for purposes of
this Section 3.7, the term "Lender" shall include Agent or any Lender and any
corporation or bank controlling Agent or any Lender) [and the office or branch
where Agent or any Lender (as so defined) makes or maintains any Eurodollar Rate
Loans]with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on Agent or
any Lender's capital as a consequence of its obligations hereunder to a level
below that which Agent or such Lender could have achieved but for such adoption,
change or compliance (taking into consideration Agent's and each Lender's
policies with respect to capital adequacy) by an amount deemed by Agent or any
Lender to be material, then, from time to time, Borrowers shall pay upon demand
to Agent or such Lender such additional amount or amounts as will compensate
Agent or such Lender for such reduction. In determining such amount or amounts,
Agent or such Lender may use any reasonable averaging or attribution methods.
The protection of this Section 3.7 shall be available to Agent and each Lender
regardless of any possible contention of invalidity or inapplicability with
respect to the applicable law, regulation or condition.
(b) A certificate of Agent or such Lender setting forth such amount or
amounts as shall be necessary to compensate Agent or such Lender with respect to
Section 3.7(a) hereof when delivered to Borrowers shall be conclusive absent
manifest error.
IV. COLLATERAL: GENERAL TERMS
-------------------------
4.1 SECURITY INTEREST IN THE COLLATERAL. To secure the prompt payment and
performance to Agent and each Lender of the Obligations, each Borrower hereby
assigns, pledges and grants to Agent for the ratable benefit of each Lender a
continuing security interest in and to all of its Collateral, whether now owned
or existing or hereafter acquired or arising and wheresoever located. Each
Borrower shall xxxx its books and records as may be necessary or appropriate to
evidence, protect and perfect Agent's security interest and shall cause its
financial statements to reflect such security interest.
4.2 PERFECTION OF SECURITY INTEREST. Each Borrower shall take all action
that may be necessary or desirable, or that Agent may request, so as at all
times to maintain the validity, perfection, enforceability and priority of
Agent's security interest in the Collateral or to enable Agent to protect,
exercise or enforce its rights hereunder and in the Collateral, including, but
not limited to, (i) immediately discharging all Liens other than Permitted
Encumbrances, (ii) delivering to Agent, endorsed or accompanied by such
instruments of assignment as Agent may specify, and stamping or marking, in such
manner as Agent may specify, any and all chattel paper, instruments, letters of
credits and advices thereof and documents evidencing or forming a part of the
Collateral, (iii) entering into warehousing, lock box and other custodial
arrangements satisfactory to Agent, and (iv) executing and delivering financing
statements, instruments of pledge, mortgages, notices and assignments, in each
case in form and substance satisfactory to Agent, relating to the creation,
validity, perfection, maintenance or continuation of Agent's security interest
under the Uniform Commercial Code or other applicable law. Agent is hereby
authorized to file financing statements signed by Agent instead of Borrower in
accordance with Section 9-402(2) of the Uniform Commercial Code as adopted in
the applicable state or states.
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All charges, expenses and fees Agent may incur in doing any of the foregoing,
and any local taxes relating thereto, shall be charged to Borrowers' Account as
a Revolving Advance of a Domestic Rate Loan and added to the Obligations, or, at
Agent's option, shall be paid to Agent for the ratable benefit of Lenders
immediately upon demand.
4.3 DISPOSITION OF COLLATERAL. Each Borrower will make all reasonable
efforts to collect and enforce its rights with respect to, and otherwise
safeguard, the Collateral for Agent's general account and make no disposition
thereof, whether by sale, lease or otherwise.
4.4 PRESERVATION OF COLLATERAL. Following the occurrence and during the
continuance of a Default or Event of Default in addition to the rights and
remedies set forth in Section 11.1 hereof, Agent may at any time take such steps
as Agent deems necessary to protect Agent's interest in and to the Collateral
and may employ and maintain at any of any Borrower's premises a custodian who
shall have full authority to do all acts necessary to protect Agent's interests
in the Collateral. Each Borrower shall cooperate fully with all of Agent's
efforts to preserve the Collateral and will take such actions to collect and
enforce its rights with respect to, and otherwise preserve, the Collateral as
Agent may direct. All of Agent's expenses of preserving the Collateral,
including any expenses relating to the bonding of a custodian, shall be charged
to Borrowers' Account as a Revolving Advance of a Domestic Rate Loan and added
to the Obligations.
4.5 OWNERSHIP OF COLLATERAL. With respect to the Collateral, at the
time the Collateral becomes subject to Agent's security interest: (a) each
Borrower shall be the sole owner of and fully authorized and able to sell,
transfer, pledge and/or grant a first priority security interest in each and
every item of the its respective Collateral to Agent; and, except for Permitted
Encumbrances the Collateral shall be free and clear of all Liens and
encumbrances whatsoever; (b) each document and agreement executed by each
Borrower or delivered to Agent or any Lender in connection with this Agreement
shall be true and correct in all respects; and (c) all signatures and
endorsements of each Borrower that appear on such documents and agreements shall
be genuine and each Borrower shall have full capacity to execute same.
4.6 DEFENSE OF AGENT'S AND LENDERS' INTERESTS. Until (a) payment and
performance in full of all of the Obligations and (b) termination of this
Agreement, Agent's interests in the Collateral shall continue in full force and
effect. During such period no Borrower shall, without Agent's prior written
consent, pledge, sell, assign, transfer, create or suffer to exist a Lien upon
or encumber or allow or suffer to be encumbered in any way except for Permitted
Encumbrances, any part of the Collateral. Each Borrower shall defend Agent's
interests in the Collateral against any and all Persons whatsoever. At any time
following demand by Agent for payment of all Obligations, Agent shall have the
right to take possession of the indicia of the Collateral and the Collateral in
whatever physical form contained, including without limitation: labels,
stationery, documents, instruments and advertising materials. If Agent exercises
this right to take possession of the Collateral, Borrowers shall, upon demand,
assemble it in the best manner possible and make it available to Agent at a
place reasonably convenient to Agent. In addition, with respect to all
Collateral, Agent and Lenders shall be entitled to all of the rights and
remedies set forth herein and further provided by the Uniform Commercial Code or
other applicable law. Each Borrower shall, and Agent may, at its option,
instruct all suppliers, carriers, forwarders, warehouses or others receiving or
holding cash, checks, documents or instruments in
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which Agent holds a security interest to deliver same to Agent and/or subject
to Agent's order and if they shall come into any Borrower's possession, they,
and each of them, shall be held by such Borrower in trust as Agent's trustee,
and such Borrower will immediately deliver them to Agent in their original form
together with any necessary endorsement.
4.7 BOOKS AND RECORDS. Each Borrower shall (a) keep proper books of
record and account in which full, true and correct entries will be made of all
dealings or transactions of or in relation to its business and affairs; (b) set
up on its books accruals with respect to all taxes, assessments, charges, levies
and claims; and (c) on a reasonably current basis set up on its books, from its
earnings, allowances against doubtful Receivables, advances and investments and
all other proper accruals (including without limitation by reason of
enumeration, accruals for premiums, if any, due on required payments and
accruals for depreciation, obsolescence, or amortization of properties), which
should be set aside from such earnings in connection with its business. All
determinations pursuant to this subsection shall be made in accordance with, or
as required by, GAAP consistently applied in the opinion of such independent
public accountant as shall then be regularly engaged by Borrowers.
4.8 FINANCIAL DISCLOSURE. Each Borrower hereby irrevocably authorizes
and directs all accountants and auditors employed by such Borrower at any time
during the Term to exhibit and deliver to Agent and each Lender, to the extent
the same would be available to such Borrower, copies of any of any Borrower's
financial statements, trial balances or other accounting records of any sort in
the accountant's or auditor's possession, and to disclose to Agent and each
Lender any information such accountants may have concerning such Borrower's
financial status and business operations. Each Borrower hereby authorizes all
federal, state and municipal authorities to furnish to Agent and each Lender
copies of reports or examinations relating to such Borrower, whether made by
such Borrower or otherwise; however, Agent and each Lender will attempt to
obtain such information or materials directly from such Borrower prior to
obtaining such information or materials from such accountants or such
authorities.
4.9 COMPLIANCE WITH LAWS. Each Borrower shall comply in all material
respects with all acts, rules, regulations and orders of any legislative,
administrative or judicial body or official applicable to its respective
Collateral and assets or any part thereof or to the operation of such Borrower's
business the non-compliance with which could reasonably be expected to have a
Material Adverse Effect on such Borrower. The Collateral and assets of Borrowers
at all times shall be maintained in accordance with the requirements of all
insurance carriers which provide insurance with respect to the Collateral so
that such insurance shall remain in full force and effect.
4.10 INSPECTION OF PREMISES. At all reasonable times and without
disruption of normal business operations, Agent and each Lender shall have full
access to and the right to audit, check, inspect and make abstracts and copies
from each Borrower's books, records, audits, correspondence and all other papers
relating to the Collateral and the operation of each Borrower's business. Agent,
any Lender and their agents may enter upon any of Borrower's premises at any
time during business hours and at any other reasonable time, and from time to
time, for the purpose of inspecting the Collateral and any and all records
pertaining thereto and the operation of such Borrower's business.
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4.11 INSURANCE. Each Borrower shall bear the full risk of any loss of
any nature whatsoever with respect to the Collateral. At each Borrower's own
cost and expense in amounts and with carriers acceptable to Agent, each Borrower
shall, maintain all insurance policies as are customary for similar companies in
Borrowers' industry and as reasonably acceptable to Agent and furnish Agent with
(i) copies of all policies and evidence of the maintenance of such policies by
the renewal thereof at least thirty (30) days before any expiration date, and
(ii) appropriate loss payable endorsements in form and substance satisfactory to
Agent, naming Agent as a co-insured and loss payee as its interests may appear
with respect to all insurance coverage, and providing (A) that all proceeds
thereunder shall be payable solely to Agent, (B) no such insurance shall be
affected by any act or neglect of the insured or owner of the property described
in such policy, and (C) that such policy and loss payable clauses may not be
canceled, amended or terminated unless at least thirty (30) days' prior written
notice is given to Agent. In the event of any loss thereunder, the carriers
named therein hereby are directed by Agent and the applicable Borrower to make
payment for such loss to Agent and not to such Borrower and Agent jointly. If
any insurance losses are paid by check, draft or other instrument payable to any
Borrower and Agent jointly, Agent may endorse such Borrower's name thereon and
do such other things as Agent may deem advisable to reduce the same to cash.
Agent is hereby authorized to adjust and compromise claims under insurance
coverage referred to in clauses (a) and (b) above. All loss recoveries received
by Agent upon any such insurance may be applied to the Obligations, in such
order as Agent in its sole discretion shall determine. Any surplus shall be paid
by Agent to Borrowers or applied as may be otherwise required by law. Any
deficiency thereon shall be paid by Borrowers to Agent, on demand. Anything
hereinabove to the contrary notwithstanding, and subject to the fulfillment of
the conditions set forth below, Agent shall remit to Borrowers insurance
proceeds received by Agent during any calendar year under insurance policies
procured and maintained by Borrowers which insure Borrowers' insurable
properties to the extent such insurance proceeds do not exceed $500,000 in the
aggregate during such calendar year or $250,000 per occurrence. In the event the
amount of insurance proceeds received by Agent for any occurrence exceeds
$250,000, then Agent shall not be obligated to remit the insurance proceeds to
Borrowers unless Borrowers shall provide Agent with evidence reasonably
satisfactory to Agent that the insurance proceeds will be used by Borrowers to
repair, replace or restore the insured property which was the subject of the
insurable loss. In the event Borrowers have previously received (or, after
giving effect to any proposed remittance by Agent to Borrowers would receive)
insurance proceeds which equal or exceed $500,000 in the aggregate during any
calendar year, then Agent may, in its sole discretion, either remit the
insurance proceeds to Borrowers upon Borrowers providing Agent with evidence
reasonably satisfactory to Agent that the insurance proceeds will be used by
Borrowers to repair, replace or restore the insured property which was the
subject of the insurable loss, or apply the proceeds to the Obligations, as
aforesaid. The agreement of Agent to remit insurance proceeds in the manner
above provided shall be subject in each instance to satisfaction of each of the
following conditions: (x) No Event of Default or Default shall then have
occurred, and (y) Borrowers shall use such insurance proceeds to repair, replace
or restore the insurable property which was the subject of the insurable loss
and for no other purpose.
4.12 FAILURE TO PAY INSURANCE. If any Borrower fails to obtain
insurance as hereinabove provided, or to keep the same in force, Agent, if Agent
so elects, may obtain such insurance and pay the premium therefor on behalf of
Borrower, and charge Borrowers' Account
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therefor as a Revolving Advance of a Domestic Rate Loan and such expenses so
paid shall be part of the Obligations.
4.13 PAYMENT OF TAXES. Each Borrower will pay, when due, all taxes,
assessments and other Charges lawfully levied or assessed upon such Borrower or
any of the Collateral including, without limitation, real and personal property
taxes, assessments and charges and all franchise, income, employment, social
security benefits, withholding, and sales taxes. If any tax by any governmental
authority is or may be imposed on or as a result of any transaction between any
Borrower and Agent or any Lender which Agent or any Lender may be required to
withhold or pay or if any taxes, assessments, or other Charges remain unpaid
after the date fixed for their payment, or if any claim shall be made which, in
Agent's or any Lender's opinion, may possibly create a valid Lien on the
Collateral, Agent may without notice to Borrowers pay the taxes, assessments or
other Charges and each Borrower hereby indemnifies and holds Agent and each
Lender harmless in respect thereof. The amount of any payment by Agent under
this Section 4.13 shall be charged to Borrowers' Account as a Revolving Advance
and added to the Obligations and, until Borrowers shall furnish Agent with an
indemnity therefor (or supply Agent with evidence satisfactory to Agent that due
provision for the payment thereof has been made), Agent may hold without
interest any balance standing to Borrowers' credit and Agent shall retain its
security interest in any and all Collateral held by Agent.
4.14 PAYMENT OF LEASEHOLD OBLIGATIONS. Each Borrower shall at all times
pay, when and as due, its rental obligations under all leases under which it is
a tenant, and shall otherwise comply, in all material respects, with all other
terms of such leases and keep them in full force and effect and, at Agent's
request, will provide evidence of having done so.
4.15 RECEIVABLES.
(a) NATURE OF RECEIVABLES. Each of the Receivables shall be a bona fide
and valid account representing a bona fide indebtedness incurred by the Customer
therein named, for a fixed sum as set forth in the invoice relating thereto
(provided immaterial or unintentional invoice errors shall not be deemed to be a
breach hereof) with respect to an absolute sale or lease and delivery of goods
upon stated terms of a Borrower, or work, labor or services theretofore rendered
by a Borrower as of the date each Receivable is created. Same shall be due and
owing in accordance with the applicable Borrower's standard terms of sale
without dispute, setoff or counterclaim except as may be stated on the accounts
receivable schedules delivered by Borrowers to Agent.
(b) SOLVENCY OF CUSTOMERS. Each Customer, to the best of each
Borrower's knowledge, as of the date each Receivable is created, is and will be
solvent and able to pay all Receivables on which the Customer is obligated in
full when due or with respect to such Customers of any Borrower who are not
solvent such Borrower has set up on its books and in its financial records bad
debt reserves adequate to cover such Receivables.
(c) LOCATIONS OF BORROWER. Each Borrower's chief executive office is
located at the addresses set forth on SCHEDULE 4.15(C) hereto. Other locations
of Borrower are listed in SCHEDULE 4.15. Until written notice is given to Agent
by Borrowing Agent of any other
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office at which any Borrower keeps its records pertaining to Receivables, all
such records shall be kept at such executive office.
(d) COLLECTION OF RECEIVABLES. Until any Borrower's authority to do so
is terminated by Agent (which notice Agent may give at any time following the
occurrence of an Event of Default or a Default or when Agent in its sole
discretion deems it to be in Lenders' best interest to do so), each Borrower
will, at such Borrower's sole cost and expense, but on Agent's behalf and for
Agent's account, collect as Agent's property and in trust for Agent all amounts
received on Receivables, and shall not commingle such collections with any
Borrower's funds or use the same except to pay Obligations. Each Borrower shall,
upon request, deliver to Agent, or deposit in the Blocked Account, in original
form and on the date of receipt thereof, all checks, drafts, notes, money
orders, acceptances, cash and other evidences of Indebtedness.
(e) NOTIFICATION OF ASSIGNMENT OF RECEIVABLES. At any time following
the occurrence of an Event of Default or a Default, Agent shall have the right
to send notice of the assignment of, and Agent's security interest in, the
Receivables to any and all Customers or any third party holding or otherwise
concerned with any of the Collateral. Thereafter, Agent shall have the sole
right to collect the Receivables, take possession of the Collateral, or both.
Agent's actual collection expenses, including, but not limited to, stationery
and postage, telephone and telegraph, secretarial and clerical expenses and the
salaries of any collection personnel used for collection, may be charged to
Borrowers' Account and added to the Obligations.
(f) POWER OF AGENT TO ACT ON BORROWERS' BEHALF. Agent shall have the
right to receive, endorse, assign and/or deliver in the name of Agent or any
Borrower any and all checks, drafts and other instruments for the payment of
money relating to the Receivables, and each Borrower hereby waives notice of
presentment, protest and non-payment of any instrument so endorsed. Each
Borrower hereby constitutes Agent or Agent's designee as such Borrower's
attorney with power (i) to endorse such Borrower's name upon any notes,
acceptances, checks, drafts, money orders or other evidences of payment or
Collateral; (ii) to sign such Borrower's name on any invoice or xxxx of lading
relating to any of the Receivables, drafts against Customers, assignments and
verifications of Receivables; (iii) to send verifications of Receivables to any
Customer; (iv) to sign such Borrower's name on all financing statements or any
other documents or instruments deemed necessary or appropriate by Agent to
preserve, protect, or perfect Agent's interest in the Collateral and to file
same; (v) to demand payment of the Receivables; (vi) to enforce payment of the
Receivables by legal proceedings or otherwise; (vii) to exercise all of
Borrowers' rights and remedies with respect to the collection of the Receivables
and any other Collateral; (viii) to settle, adjust, compromise, extend or renew
the Receivables; (ix) to settle, adjust or compromise any legal proceedings
brought to collect Receivables; (x) to prepare, file and sign such Borrower's
name on a proof of claim in bankruptcy or similar document against any Customer;
(xi) to prepare, file and sign such Borrower's name on any notice of Lien,
assignment or satisfaction of Lien or similar document in connection with the
Receivables; and (xii) to do all other acts and things necessary to carry out
this Agreement. All acts of said attorney or designee are hereby ratified and
approved, and said attorney or designee shall not be liable for any acts of
omission or commission nor for any error of judgment or mistake of fact or of
law, unless done maliciously or with gross (not mere) negligence; this power
being coupled with an interest is irrevocable while any of the Obligations
remain unpaid. Upon notice to
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Borrower and in the reasonable discretion of Agent, Agent shall have the right
at any time to change the address for delivery of mail addressed to any Borrower
to such address as Agent may designate and to receive, open and dispose of all
mail addressed to any Borrower.
(g) NO LIABILITY. Neither Agent nor any Lender shall, under any
circumstances or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Receivables or any instrument received in payment thereof, or for
any damage resulting therefrom absent gross negligence or willful misconduct.
Following the occurrence of an Event of Default or Default Agent may, without
notice or consent from any Borrower, xxx upon or otherwise collect, extend the
time of payment of, compromise or settle for cash, credit or upon any terms any
of the Receivables or any other securities, instruments or insurance applicable
thereto and/or release any obligor thereof. Agent is authorized and empowered to
accept following the occurrence of an Event of Default or Default the return of
the goods represented by any of the Receivables, without notice to or consent by
any Borrower, all without discharging or in any way affecting any Borrower's
liability hereunder.
(h) ESTABLISHMENT OF A LOCKBOX ACCOUNT, DOMINION ACCOUNT. All proceeds
of Collateral shall, at the direction of Agent, be deposited by Borrowers into a
lock box account, dominion account or such other "blocked account" ("Blocked
Accounts") as Agent may require pursuant to an arrangement with such bank as may
be selected by Borrowers and be acceptable to Agent. Borrowers shall issue to
any such bank, an irrevocable letter of instruction directing said bank to
transfer such funds so deposited to Agent, either to any account maintained by
Agent at said bank or by wire transfer to appropriate account(s) of Agent. All
funds deposited in such "blocked account" shall immediately become the property
of Agent, and Borrowers shall obtain the agreement by such bank to waive any
offset rights against the funds so deposited. Neither Agent nor any Lender
assumes any responsibility for such "blocked account" arrangement, including
without limitation, any claim of accord and satisfaction or release with respect
to deposits accepted by any bank thereunder. Alternatively, Agent may establish
depository accounts ("Depository Accounts") in the name of Agent at a bank or
banks for the deposit of such funds and Borrowers shall deposit all proceeds of
Collateral or cause same to be deposited, in kind, in such Depository Accounts
of Agent in lieu of depositing same to the Blocked Accounts.
(i) ADJUSTMENTS. No Borrower will, without Agent's consent, compromise
or adjust any Receivables (or extend the time for payment thereof) or accept any
returns of merchandise or grant any additional discounts, allowances or credits
thereon except for those compromises, adjustments, returns, discounts, credits
and allowances as have been heretofore customary in the business of such
Borrower.
4.16 MAINTENANCE OF EQUIPMENT. The Equipment shall be maintained in good
operating condition and repair (reasonable wear and tear excepted) and all
necessary replacements of and repairs thereto shall be made so that the value
and operating efficiency of the Equipment shall be maintained and preserved. No
Borrower shall use or operate the Equipment in violation of any law, statute,
ordinance, code, rule or regulation.
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4.17 EXCULPATION OF LIABILITY. Nothing herein contained shall be construed
to constitute Agent or any Lender as any Borrower's agent for any purpose
whatsoever, nor shall Agent or any Lender be responsible or liable for any
shortage, discrepancy, damage, loss or destruction of any part of the Collateral
wherever the same may be located and regardless of the cause thereof absent the
gross negligence or willful misconduct of Agent or Lender. Neither Agent nor any
Lender, whether by anything herein or in any assignment or otherwise, assume any
of any Borrower's obligations under any contract or agreement assigned to Agent
or such Lender, and neither Agent nor any Lender shall be responsible in any way
for the performance by any Borrower of any of the terms and conditions thereof.
4.18 ENVIRONMENTAL MATTERS.
(a) Borrowers shall take reasonable efforts to ensure that the Real
Property remains in compliance with all Environmental Laws, and to the extent
any Borrower has knowledge of any noncompliance, such Borrower shall take all
action necessary to remedy the noncompliance. Borrowers shall not place or
permit to be placed any Hazardous Substances on any Real Property except as not
prohibited by applicable law or appropriate governmental authorities.
(b) In the event any Borrower obtains, gives or receives notice of any
Release or threat of Release of a reportable quantity of any Hazardous
Substances at the Real Property (any such event being hereinafter referred to as
a "Hazardous Discharge") or receives any notice of violation, request for
information or notification that it is potentially responsible for investigation
or cleanup of environmental conditions at the Real Property, demand letter or
complaint, order, citation, or other written notice with regard to any Hazardous
Discharge or violation of Environmental Laws affecting the Real Property or any
Borrower's interest therein (any of the foregoing is referred to herein as an
"Environmental Complaint") from any Person, including any state agency
responsible in whole or in part for environmental matters in the state in which
the Real Property is located or the United States Environmental Protection
Agency (any such person or entity hereinafter the "Authority"), then Borrowing
Agent shall, within five (5) Business Days, give written notice of same to Agent
detailing facts and circumstances of which any Borrower is aware giving rise to
the Hazardous Discharge or Environmental Complaint.
(c) Borrowers shall continue to forward copies of correspondence
between any Borrower and the Authority regarding such claims to Agent until the
claim is settled. Borrowers shall promptly forward to Agent copies of all
documents and reports concerning a Hazardous Discharge at the Real Property that
any Borrower is required to file under any Environmental Laws.
(d) Borrowers shall respond promptly to any Hazardous Discharge or
Environmental Complaint and take all necessary action in order to safeguard the
health of any Person and to avoid subjecting the Collateral or Real Property to
any Lien. If any Borrower shall fail to respond promptly to any Hazardous
Discharge or Environmental Complaint or any Borrower shall fail to comply with
any of the requirements of any Environmental Laws, Agent on behalf of Lenders
may, but without the obligation to do so, for the sole purpose of protecting
Agent's interest in Collateral: (A) give such notices or (B) enter onto the Real
Property (or authorize third parties to enter onto the Real Property) and take
such actions as Agent (or such
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third parties as directed by Agent) deem reasonably necessary or advisable, to
clean up, remove, mitigate or otherwise deal with any such Hazardous Discharge
or Environmental Complaint. All reasonable costs and expenses incurred by Agent
and Lenders (or such third parties) in the exercise of any such rights,
including any sums paid in connection with any judicial or administrative
investigation or proceedings, fines and penalties, together with interest
thereon from the date expended at the Default Rate for Domestic Rate Loans
constituting Revolving Advances shall be paid upon demand by Borrowers, and
until paid shall be added to and become a part of the Obligations secured by the
Liens created by the terms of this Agreement or any other agreement between
Agent, any Lender and any Borrower.
(e) Borrowers shall defend and indemnify Agent and Lenders and hold
Agent, Lenders and their respective employees, agents, directors and officers
harmless from and against all loss, liability, damage and expense, claims,
costs, fines and penalties, including attorney's fees, suffered or incurred by
Agent or Lenders under or on account of any Environmental Laws, including,
without limitation, the assertion of any Lien thereunder, with respect to any
Hazardous Discharge, the presence of any Hazardous Substances affecting the Real
Property, whether or not the same originates or emerges from the Real Property
or any contiguous real estate, including any loss of value of the Real Property
as a result of the foregoing except to the extent such loss, liability, damage
and expense is attributable to any Hazardous Discharge resulting from actions on
the part of Agent or any Lender. Borrowers' obligations under this Section 4.18
shall arise upon the discovery of the presence of any Hazardous Substances at
the Real Property, whether or not any federal, state, or local environmental
agency has taken or threatened any action in connection with the presence of any
Hazardous Substances. Borrowers' obligation and the indemnifications hereunder
shall survive the termination of this Agreement.
(f) For purposes of Section 4.18 and 5.7, all references to Real
Property shall be deemed to include all of Borrowers' right, title and interest
in and to its owned and leased premises.
4.19 FINANCING STATEMENTS. Except as respects the financing statements
filed by Agent and the financing statements described on SCHEDULE 1.2, no
financing statement covering any of the Collateral or any proceeds thereof is on
file in any public office.
V. REPRESENTATIONS AND WARRANTIES.
------------------------------
Each Borrower represents and warrants as follows:
5.1 AUTHORITY. Each Borrower has full power, authority and legal right to
enter into this Agreement and the Other Documents and to perform all its
respective Obligations hereunder and thereunder. The execution, delivery and
performance of this Agreement and of the Other Documents (a) are within such
Borrower's corporate powers, have been duly authorized, are not in contravention
of law or the terms of such Borrower's by-laws, certificate of incorporation or
other applicable documents relating to such Borrower's formation or to the
conduct of such Borrower's business or of any material agreement or undertaking
to which such Borrower is a party or by which such Borrower is bound, and (b)
will not conflict with nor result
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in any breach in any of the provisions of or constitute a default under or
result in the creation of any Lien except Permitted Encumbrances upon any asset
of such Borrower under the provisions of any agreement, charter document,
instrument, by-law, or other instrument to which such Borrower or its property
is a party or by which it may be bound.
5.2 FORMATION AND QUALIFICATION.
(a) Each Borrower is duly incorporated and in good standing under the
laws of the state where each was incorporated and is qualified to do business
and is in good standing in the states listed on SCHEDULE 5.2(a) which constitute
all states in which qualification and good standing are necessary for such
Borrower to conduct its business and own its property and where the failure to
so qualify could reasonably be expected to have a Material Adverse Effect on
such Borrower. Each Borrower has delivered to Agent true and complete copies of
its certificate of incorporation and by-laws and will promptly notify Agent of
any amendment or changes thereto.
(b) The only Subsidiaries of each Borrower are listed on SCHEDULE
5.2(b).
5.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of such Borrower contained in this Agreement and the Other Documents
shall be true at the time of such Borrower's execution of this Agreement and the
Other Documents, and shall survive the execution, delivery and acceptance
thereof by the parties thereto and the closing of the transactions described
therein or related thereto.
5.4 TAX RETURNS. Each Borrower's federal tax identification number is set
forth on Schedule 5.4. Each Borrower has filed all federal, state and local tax
returns and other reports each is required by law to file and has paid all
taxes, assessments, fees and other governmental charges that are due and
payable. Federal, state and local income tax returns of each Borrower have been
examined and reported upon by the appropriate taxing authority or closed by
applicable statute and satisfied for all fiscal years prior to and including the
fiscal year ending June 30, 1999. The provision for taxes on the books of each
Borrower are adequate for all years not closed by applicable statutes, and for
its current fiscal year, and no Borrower has any knowledge of any deficiency or
additional assessment in connection therewith not provided for on its books.
5.5 FINANCIAL STATEMENTS.
(a) The pro forma balance sheet of Borrower (the "Pro Forma Balance
Sheet") furnished to Agent on the Closing Date reflects the consummation of the
transactions contemplated under this Agreement (the "Transactions") and is
accurate, complete and correct and fairly reflects the financial condition of
Frontstep on a Consolidated Basis as of the Closing Date after giving effect to
the Transactions, and has been prepared in accordance with GAAP. All financial
statements referred to in this subsection 5.5(a), including the related
schedules and notes thereto, have been prepared in accordance with GAAP, except
as may be disclosed in such financial statements.
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(b) The twelve-month cash flow projections of the Frontstep on a
Consolidated Basis and their projected balance sheets as of the Closing Date,
copies of which have been delivered to Agent, were prepared by the Chief
Financial Officer of Borrower, are based on underlying assumptions which provide
a reasonable basis for the projections contained therein and reflect Borrowers'
judgment based on present circumstances of the most likely set of conditions and
course of action for the projected period. The cash flow Projections together
with the Pro Forma Balance Sheet, are referred to as the "Pro Forma Financial
Statements".
(c) The consolidated audited balance sheets of Frontstep on a
Consolidated Basis as of June 30, 2000, the consolidated audited statements of
income and cash flow of Frontstep on a Consolidated Basis for the fiscal year
ended on such date, and a consolidated statement of the changes in stockholders
equity for the fiscal year ended on such date, all prepared in accordance with
GAAP, together with such financial statements of Frontstep on a consolidating
basis and an unqualified audit report of independent certified public
accountants, have been delivered to Agent. The consolidated unaudited balance
sheets of Frontstep on a Consolidated Basis as of September 30, 20000, the
consolidated unaudited statements of income and cash flow of Frontstep on a
Consolidated Basis for the fiscal quarter ended on such date, and a statement of
the changes in stockholders equity for the fiscal quarter ended on such date,
all prepared in accordance with GAAP, together with such unaudited financial
statements of Frontstep on a consolidating basis, have been delivered to Agent.
Since September 30, 2000, there has been no change in the condition, financial
or otherwise, of Frontstep on a Consolidated Basis, as shown on the consolidated
balance sheet of September 30, 2000, except change in the ordinary course of
business, none of which individually or in the aggregate has been materially
adverse.
5.6 CORPORATE NAME. Except as set forth on SCHEDULE 5.6, no Borrower has
been known by any other corporate name in the past five years, nor has any
Borrower been the surviving corporation of a merger or consolidation or acquired
all or substantially all of the assets of any Person during the past five (5)
years.
5.7 O.S.H.A. AND ENVIRONMENTAL COMPLIANCE. Each Borrower has duly complied
with, and its facilities, business, assets and property are in compliance in all
material respects with, the provisions of the Federal Occupational Safety and
Health Act and the Environmental Laws; there have been no outstanding citations,
notices or orders of non-compliance issued to any Borrower or relating to its
business, assets or property under any such laws, rules or regulations.
5.8 SOLVENCY; NO LITIGATION, VIOLATION, INDEBTEDNESS OR DEFAULT.
(a) After giving effect to the Transactions, Borrowers will be solvent,
able to pay their debts as they mature, will have capital sufficient to carry on
their business and all businesses in which they are about to engage, and (i) as
of the Closing Date, the fair present saleable value of their assets, calculated
on a going concern basis, is in excess of the amount of their liabilities and
(ii) subsequent to the Closing Date, the fair saleable value of their assets
(calculated on a going concern basis) will be in excess of the amount of their
liabilities.
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(b) Except as disclosed in SCHEDULE 5.8(b), no Borrower has (i) any
pending or, to its knowledge threatened, litigation, arbitration, actions or
proceedings which involve the possibility of having a Material Adverse Effect on
such Borrower, and (ii) any liabilities nor indebtedness for borrowed money
other than the Obligations.
(c) To its knowledge, no Borrower is in violation of any applicable
statute, regulation or ordinance in any respect which could reasonably be
expected to have a Material Adverse Effect on such Borrower, nor is any Borrower
in violation of any order of any court, governmental authority or arbitration
board or tribunal.
(d) No Borrower nor any member of the Controlled Group maintains or
contributes to any Plan other than those listed on SCHEDULE 5.8(d) hereto.
Except as set forth in SCHEDULE 5.8(d), (i) no Plan has incurred any
"accumulated funding deficiency," as defined in Section 302(a)(2) of ERISA and
Section 412(a) of the Code, whether or not waived, and each Borrower and each
member of the Controlled Group has met all applicable minimum funding
requirements under Section 302 of ERISA in respect of each Plan, (ii) each Plan
which is intended to be a qualified plan under Section 401(a) of the Code as
currently in effect has been determined by the Internal Revenue Service to be
qualified under Section 401(a) of the Code and the trust related thereto is
exempt from federal income tax under Section 501(a) of the Code, (iii) no
Borrower nor any member of the Controlled Group has incurred any liability to
the PBGC other than for the payment of premiums, and there are no premium
payments which have become due which are unpaid, (iv) no Plan has been
terminated by the plan administrator thereof nor by the PBGC, and there is no
occurrence which would cause the PBGC to institute proceedings under Title IV of
ERISA to terminate any Plan, (v) at this time, the current value of the assets
of each Plan exceeds the present value of the accrued benefits and other
liabilities of such Plan and no Borrower nor any member of the Controlled Group
knows of any facts or circumstances which would materially change the value of
such assets and accrued benefits and other liabilities, (vi) no Borrower nor any
member of the Controlled Group has breached any of the responsibilities,
obligations or duties imposed on it by ERISA with respect to any Plan, (vii) no
Borrower nor any member of a Controlled Group has incurred any liability for any
excise tax arising under Section 4972 or 4980B of the Code, and no fact exists
which could give rise to any such liability, (viii) no Borrower nor any member
of the Controlled Group nor any fiduciary of, nor any trustee to, any Plan, has
engaged in a "prohibited transaction" described in Section 406 of the ERISA or
Section 4975 of the Code nor taken any action which would constitute or result
in a Termination Event with respect to any such Plan which is subject to ERISA,
(ix) each Borrower and each member of the Controlled Group has made all
contributions due and payable with respect to each Plan, (x) there exists no
event described in Section 4043(b) of ERISA, for which the thirty (30) day
notice period contained in 29 CFR Section 2615.3 has not been waived, (xi) no
Borrower nor any member of the Controlled Group has any fiduciary responsibility
for investments with respect to any plan existing for the benefit of persons
other than employees or former employees of any Borrower and any member of the
Controlled Group, and (xii) no Borrower nor any member of the Controlled Group
has withdrawn, completely or partially, from any Multiemployer Plan so as to
incur liability under the Multiemployer Pension Plan Amendments Act of 1980.
5.9 PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES. All patents, patent
applications, trademarks, trademark applications, service marks, service xxxx
applications, copyrights, copyright applications, design rights, trade names,
assumed names, trade secrets and
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licenses owned or utilized by any Borrower are set forth on SCHEDULE 5.9, are
valid and have been duly registered or filed with all appropriate governmental
authorities and constitute all of the intellectual property rights which are
necessary for the operation of its business; there is no objection to or pending
challenge to the validity of any such material patent, trademark, copyright,
design right, trade name, trade secret or license and no Borrower is aware of
any grounds for any challenge, except as set forth in SCHEDULE 5.9 hereto. Each
patent, patent application, patent license, trademark, trademark application,
trademark license, service xxxx, service xxxx application, service xxxx license,
copyright, copyright application and copyright license owned or held by any
Borrower and all trade secrets used by any Borrower consist of original material
or property developed by such Borrower or was lawfully acquired by such Borrower
from the proper and lawful owner thereof. Each of such items has been maintained
so as to preserve the value thereof from the date of creation or acquisition
thereof. With respect to all Software used by any Borrower, such Borrower is in
possession of all source and object codes, other than Software owned by third
parties and licensed to Borrower.
5.10 LICENSES AND PERMITS. Except as set forth in SCHEDULE 5.10, each
Borrower (a) is in compliance with and (b) has procured and is now in possession
of, all material licenses or permits required by any applicable federal, state,
provincial or local law or regulation for the operation of its business in each
jurisdiction wherein it is now conducting or proposes to conduct business and
where the failure to procure such licenses or permits could have a Material
Adverse Effect on such Borrower.
5.11 DEFAULT OF INDEBTEDNESS. Except for defaults occurring as a result
of a good faith dispute as to payment involving an amount less than $100,000, no
Borrower is in default in the payment of the principal of or interest on any
Indebtedness or under any instrument or agreement under or subject to which any
Indebtedness has been issued and no event has occurred under the provisions of
any such instrument or agreement which with or without the lapse of time or the
giving of notice, or both, constitutes or would constitute an event of default
thereunder. Notwithstanding the foregoing exception to the contrary, any default
under the Subordinated Debt Documentation shall in all events constitute a
default in the payment of Indebtedness.
5.12 NO DEFAULT. Except for defaults occurring as a result of a good
faith dispute as to the payment or performance of a contractual obligation
involving less than [$250,000], no Borrower is in default in the payment or
performance of any of its contractual obligations and no Default has occurred.
5.13 NO BURDENSOME RESTRICTIONS. No Borrower is party to any contract
or agreement the performance of which could have a Material Adverse Effect on
such Borrower. No Borrower has agreed or consented to cause or permit in the
future (upon the happening of a contingency or otherwise) any of its property,
whether now owned or hereafter acquired, to be subject to a Lien which is not a
Permitted Encumbrance.
5.14 NO LABOR DISPUTES. No Borrower is involved in any labor dispute;
there are no strikes or walkouts or union organization of any Borrower's
employees threatened or in existence and no labor contract is scheduled to
expire during the Term other than as set forth on SCHEDULE 5.14 hereto.
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5.15 MARGIN REGULATIONS. No Borrower is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" within
the respective meanings of each of the quoted terms under Regulation U or
Regulation G of the Board of Governors of the Federal Reserve System as now and
from time to time hereafter in effect. No part of the proceeds of any Advance
will be used for "purchasing" or "carrying" "margin stock" as defined in
Regulation U of such Board of Governors.
5.16 INVESTMENT COMPANY ACT. No Borrower is an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, nor is it controlled by such a company.
5.17 DISCLOSURE. To its knowledge, no representation or warranty made
by any Borrower in this Agreement, or in any financial statement, report,
certificate or any other document furnished in connection herewith contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements herein or therein not misleading. To its
knowledge, there is no fact known to Borrowers or which reasonably should be
known to Borrowers which Borrowers have not disclosed to Agent in writing with
respect to the transactions contemplated by this Agreement which could
reasonably be expected to have a Material Adverse Effect on any Borrower.
5.18 SWAPS. No Borrower is a party to, nor will it be a party to, any
swap agreement whereby such Borrower has agreed or will agree to swap interest
rates or currencies unless same provides that damages upon termination following
an event of default thereunder are payable on an unlimited "two-way basis"
without regard to fault on the part of either party.
5.19 CONFLICTING AGREEMENTS. No provision of any mortgage, indenture,
contract, agreement, judgment, decree or order binding on any Borrower or
affecting the Collateral conflicts with, or requires any Consent which has not
already been obtained to, or would in any way prevent the execution, delivery or
performance of, the terms of this Agreement or the Other Documents.
5.20 APPLICATION OF CERTAIN LAWS AND REGULATIONS. No Borrower nor any
Affiliate of any Borrower is subject to any statute, rule or regulation which
regulates the incurrence of any Indebtedness, including without limitation,
statutes or regulations relative to common or interstate carriers or to the sale
of electricity, gas, steam, water, telephone, telegraph or other public utility
services.
5.21 BUSINESS AND PROPERTY OF BORROWER. Upon and after the Closing
Date, Borrowers do not propose to engage in any business other than the business
of providing integrated enterprise software solutions for mid-sized
manufacturing and distribution companies and business units of larger companies,
including e-commerce, e-procurement, enterprise resource planning, supply chain
and CRM solutions and other activities necessary to conduct the foregoing. On
the Closing Date, each Borrower will own all the property and possess all of the
rights and Consents necessary for the conduct of the business of such Borrower.
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VI. AFFIRMATIVE COVENANTS.
---------------------
Each Borrower shall, until payment in full of the Obligations and
termination of this Agreement:
6.1 PAYMENT OF FEES. Pay to Agent on demand all usual and customary
fees and expenses which Agent incurs in connection with (a) the forwarding of
Advance proceeds and (b) the establishment and maintenance of any Blocked
Accounts or Depository Accounts as provided for in Section 4.15(h). Agent may,
without making demand, charge Borrowers' Account for all such fees and expenses.
6.2 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE AND ASSETS.
(a) Conduct continuously and operate actively its business according to good
business practices, including, without limitation, continuing to provide
support, maintenance, installation and other services to customers; (b)
maintain all of its properties useful or necessary in its business in good
working order and condition (reasonable wear and tear excepted and except as
may be disposed of in accordance with the terms of this Agreement), including,
without limitation, all licenses, patents, copyrights, design rights, trade
names, trade secrets and trademarks and take all actions necessary to enforce
and protect the validity of any intellectual property right or other right
included in the Collateral; (c) keep in full force and effect its existence and
comply in all material respects with the laws and regulations governing the
conduct of its business where the failure to do so could reasonably be expected
to have a Material Adverse Effect on such Borrower; and (d) make all such
reports and pay all such franchise and other taxes and license fees and do all
such other acts and things as may be lawfully required to maintain its rights,
licenses, leases, powers and franchises under the laws of the United States or
any political subdivision thereof.
6.3 VIOLATIONS. Promptly notify Agent in writing of any violation of
any law, statute, regulation or ordinance of any Governmental Body, or of any
agency thereof, applicable to any Borrower which could reasonably be expected to
have a Material Adverse Effect on any Borrower.
6.4 GOVERNMENT RECEIVABLES. Take all steps necessary to protect Agent's
interest in the Collateral under the Federal Assignment of Claims Act or other
applicable state or local statutes or ordinances and deliver to Agent
appropriately endorsed, any instrument or chattel paper connected with any
Receivable arising out of contracts between any Borrower and the United States,
any state or any department, agency or instrumentality of any of them.
6.5 EXECUTION OF SUPPLEMENTAL INSTRUMENTS. Execute and deliver to Agent
from time to time, upon demand, such supplemental agreements, statements,
assignments and transfers, or instructions or documents relating to the
Collateral, and such other instruments as Agent may request, in order that the
full intent of this Agreement may be carried into effect.
6.6 PAYMENT OF INDEBTEDNESS. Pay, discharge or otherwise satisfy at or
before maturity (subject, where applicable, to specified grace periods and, in
the case of the trade payables, to normal payment practices) all its obligations
and liabilities of whatever nature, except when the failure to do so could not
reasonably be expected to have a Material Adverse Effect or when the amount or
validity thereof is currently being contested in good faith by
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appropriate proceedings and each Borrower shall have provided for such reserves
as Agent may reasonably deem proper and necessary.
6.7 STANDARDS OF FINANCIAL STATEMENTS. Prepare all financial statements
referred to in Sections 9.6, 9.7, 9.8, 9.9, 9.10, 9.11, 9.12 9.13 and 9.14 in
accordance with GAAP (to the extent applicable) and in all events complete and
correct in all material respects and prepared in reasonable detail.
6.8 MINIMUM NET WORTH. Possess (i) a minimum Net Worth of no less than
$39,000,000 on or after the Closing Date to and including June 30, 2001; and
(ii) after June 30, 2001, a minimum Net Worth of not less than $39,000,000 plus
the sum of fifty percent (50%) of the Net Income for the immediately preceding
fiscal year and all fiscal years prior thereto but ending after June 30, 2001.
The Net Worth shall be tested on a quarterly basis on the last day of each
quarter.
6.9 COLLATERAL REPORTING. Deliver to Agent information as to the aggregate
amount of Maintenance Contract Receivables and the aggregate amount of all
Receivables for such period as determined by Agent. The first report shall
contain the above information from December 18, 2000, and shall be delivered to
Agent sixty (60) days from the Closing Date.
VII. NEGATIVE COVENANTS.
No Borrower shall, without the prior written consent of Agent, until
satisfaction in full of the Obligations and termination of this Agreement:
7.1 MERGER, CONSOLIDATION, ACQUISITION AND SALE OF ASSETS.
(a) Enter into any merger, consolidation or other reorganization with
or into any other Person or acquire all or a substantial portion of the assets
or stock of any Person or permit any other Person to consolidate with or merge
with it (an "Acquisition"); provided, however, that Borrowers may consummate one
or more Acquisitions if (i) Borrowers have Undrawn Availability of at least
$10,000,000 on the date the Acquisition(s) is consummated, after giving effect
to such Acquisition(s) or (ii) all of the parties involved in the Acquisition
are Subsidiaries or Affiliates of Borrowers and Borrowers provide prior written
notice of such Acquisition to Lenders, (i) and (ii) provided further that such
Person is in the same line of business as Borrowers and Borrowers deliver to
Agent a good standing certificate or other similar certificate and an amended
Borrowing Base Certificate reflecting the addition of the new collateral. Agent
and Lenders acknowledge that Frontstep (MN) and Symix Delaware will be merged
into Symix Computer Systems on or about December 31, 2000, and hereby waive the
notice requirement set forth in Section 7.1(a)(ii) above with respect to this
Acquisition.
(b) Sell, lease, transfer or otherwise dispose of any of its properties
or assets, except in the ordinary course of its business and as permitted
pursuant to Section 7.1(a)(ii).
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7.2 CREATION OF LIENS. Create or suffer to exist any Lien or transfer
upon or against any of its property or assets now owned or hereafter acquired,
except Permitted Encumbrances.
7.3 GUARANTEES. Become liable upon the obligations of any Person by
assumption, endorsement or guaranty thereof or otherwise (other than to Lenders)
except the endorsement of checks in the ordinary course of business and which
involve in the aggregate no more than $100,000 outstanding at any one time.
7.4 INVESTMENTS. Purchase or acquire obligations or stock of, or any
other interest in, any Person, except (a) obligations issued or guaranteed by
the United States of America or any agency thereof, (b) commercial paper with
maturities of not more than 180 days (or 270 days if approved by Agent) and a
published rating of not less than A-1 or P-1 (or the equivalent rating), (c)
certificates of time deposit and bankers' acceptances having maturities of not
more than 180 days (or 270 days if approved by Agent) and repurchase agreements
backed by United States government securities of a commercial bank if (i) such
bank has a combined capital and surplus of at least $500,000,000, or (ii) its
debt obligations, or those of a holding company of which it is a Subsidiary, are
rated not less than A (or the equivalent rating) by a nationally recognized
investment rating agency, (d) U.S. money market funds that invest solely in
obligations issued or guaranteed by the United States of America or an agency
thereof, (e) investments up to $500,000 in Internet Commerce Express, Inc.,
provided Borrower has a minimum of $7,000,000 Undrawn Availability after giving
effect to payment of all fees in connection with the transactions contemplated
by this Agreement and subtraction of all trade payables 60 or more days past due
and provided no Event of Default exists, (f) investments in notes and other
securities received in settlement of overdue debts and accounts payable in the
ordinary course of business provided that such investments do not exceed
$250,000; and (g) the renewal of any investment owned by the Borrowers as of the
date of this Agreement provided that any such renewal in upon substantially
similar terms.
7.5 LOANS. Make advances, loans or extensions of credit (the "Loans")
to any Person except (a) Loans to another Borrower; (b) Loans that do not exceed
in the aggregate at any time outstanding the amount of $1,000,000 and provided
Borrower has a minimum, at any time Loans are outstanding, of $8,000,000 Undrawn
Availability after giving effect to payment of all fees in connection with the
transactions contemplated by this Agreement and subtraction of all trade
payables 60 or more days past due; and (c) Loans to officers and directors of
the Borrowers or any Subsidiaries (or any employees thereof provided such Loans
are approved by an officer of one of the Borrowers) for travel, entertainment
and relocation expenses in the ordinary course of business not exceeding the
aggregate amount of $250,000.
7.6 CAPITAL EXPENDITURES. Contract for, purchase or make any
expenditure or commitments for (i) fixed or capital assets (including property,
plant, equipment and capitalized leases) in any fiscal year in an amount in
excess of $8,000,000 or (ii) software treated as capitalized assets in any
fiscal year in an amount in excess of $7,250,000.
7.7 DIVIDENDS. Declare, pay or make any dividend or distribution on any
shares of the common stock or preferred stock of any Borrower (other than
dividends or distributions payable in its stock, or split-ups or
reclassifications of its stock) or apply any of its funds,
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property or assets to the purchase, redemption or other retirement of any common
or preferred stock, or of any options to purchase or acquire any such shares of
common or preferred stock of Borrower; provided, however, that Borrower may make
dividends or distributions in an aggregate amount per year of up to 25% of
Borrowers' Consolidated Net Income for the immediately preceding fiscal year
based on Borrowers' financial statements delivered pursuant to Section 9.6 if,
after giving effect to such dividend or distribution, Borrowers have Undrawn
Availability of at least $10,000,000.
7.8 INDEBTEDNESS. Create, incur, assume or suffer to exist any Indebtedness
(exclusive of trade debt) except in respect of (i) Indebtedness to Lenders; (ii)
the Subordinated Debt; (iii) any debt among the Borrowers; or (iv) Indebtedness
incurred pursuant to Section 7.6 hereof.
7.9 NATURE OF BUSINESS. Substantially change the nature of the business in
which it is presently engaged, nor except as specifically permitted hereby
purchase or invest, directly or indirectly, in any assets or property other than
in the ordinary course of business for assets or property which are useful in,
necessary for and are to be used in its business as presently conducted.
7.10 TRANSACTIONS WITH AFFILIATES. Directly or indirectly, purchase,
acquire or lease any property from, or sell, transfer or lease any property to,
or otherwise deal with, any Affiliate, except transactions disclosed in the
ordinary course of business, on an arm's-length basis on terms no less favorable
than terms which would have been obtainable from a Person other than an
Affiliate.
7.11 LEASES. Enter as lessee into any lease arrangement for real or
personal property (unless capitalized and permitted under Section 7.6 hereof) if
after giving effect thereto, aggregate annual rental payments for all leased
property (unless capitalized and permitted under Section 7.6 hereof) would
exceed $4,800,000 in any one fiscal year.
7.12 SUBSIDIARIES.
(a) Form any Subsidiary unless (i) if such Subsidiary is an entity
formed in any jurisdiction of Canada or the United States, such Subsidiary
expressly joins in this Agreement as a Borrower and becomes jointly and
severally liable for the obligations of Borrowers hereunder, under the Note, and
under any other agreement between any Borrower and Lenders, (ii) if such
Subsidiary is an entity formed outside of Canada or the United States, the
owners of such Subsidiary pledge no less than 2/3% of the outstanding capital
stock of such Subsidiary to Agent and Lenders pursuant to a Pledge Agreement,
and (iii) in each case, Agent shall have received all documents, including legal
opinions, it may reasonably require to establish compliance with each of the
foregoing conditions.
(b) Enter into any partnership, joint venture or similar arrangement.
7.13 FISCAL YEAR AND ACCOUNTING CHANGES. Change its fiscal year end from
June 30, 2000 or make any significant change (i) in accounting treatment and
reporting practices except as required by GAAP or (ii) in tax reporting
treatment except as required by law.
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7.14 PLEDGE OF CREDIT. Now or hereafter pledge Agent's or any Lender's
credit on any purchases or for any purpose whatsoever or use any portion of any
Advance in or for any business other than such Borrower's business as conducted
on the date of this Agreement.
7.15 AMENDMENT OF ARTICLES OF INCORPORATION, BY-LAWS. Amend, modify or
waive any term or material provision of its Articles of Incorporation or By-Laws
unless required by law.
7.16 COMPLIANCE WITH ERISA. (i) (x) Maintain, or permit any member of
the Controlled Group to maintain, or (y) become obligated to contribute, or
permit any member of the Controlled Group to become obligated to contribute, to
any Plan, other than those Plans disclosed on SCHEDULE 5.8(D), (ii) engage, or
permit any member of the Controlled Group to engage, in any non-exempt
"prohibited transaction", as that term is defined in section 406 of ERISA and
Section 4975 of the Code, (iii) incur, or permit any member of the Controlled
Group to incur, any "accumulated funding deficiency", as that term is defined in
Section 302 of ERISA or Section 412 of the Code, (iv) terminate, or permit any
member of the Controlled Group to terminate, any Plan where such event could
result in any liability of any Borrower or any member of the Controlled Group or
the imposition of a lien on the property of any Borrower or any member of the
Controlled Group pursuant to Section 4068 of ERISA, (v) assume, or permit any
member of the Controlled Group to assume, any obligation to contribute to any
Multiemployer Plan not disclosed on SCHEDULE 5.8(d), (vi) incur, or permit any
member of the Controlled Group to incur, any withdrawal liability to any
Multiemployer Plan; (vii) fail promptly to notify Agent of the occurrence of any
Termination Event, (viii) fail to comply, or permit a member of the Controlled
Group to fail to comply, with the requirements of ERISA or the Code or other
applicable laws in respect of any Plan, (ix) fail to meet, or permit any member
of the Controlled Group to fail to meet, all minimum funding requirements under
ERISA or the Code or postpone or delay or allow any member of the Controlled
Group to postpone or delay any funding requirement with respect of any Plan.
7.17 PREPAYMENT OF INDEBTEDNESS. At any time, directly or indirectly,
prepay any Indebtedness (other than the Obligations, trade payables in the
ordinary course of business and the Subordinated Debt in accordance with the
Subordinated Debt Documentation), or repurchase, redeem, retire or otherwise
acquire any Indebtedness of any Borrower.
7.18 SUBORDINATED DEBT. At any time, directly or indirectly, pay,
prepay, repurchase, redeem, retire or otherwise acquire, or make any payment on
account of any principal of, interest on or premium payable in connection with
the repayment or redemption of the Subordinated Debt, provided, however, that
Borrower shall be permitted, after June 30, 2001, to make payments of principal
if Borrower has a minimum of $10,000,000 Undrawn Availability after giving
effect to such payments and no Event of Default or Default exists.
VIII. CONDITIONS PRECEDENT.
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8.1 CONDITIONS TO INITIAL ADVANCES. The agreement of Lenders to make
the initial Advances requested to be made on the Closing Date is subject to the
satisfaction, or
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waiver by Agent, immediately prior to or concurrently with the making of such
Advances, of the following conditions precedent:
(a) NOTE. Agent shall have received the Note duly executed and
delivered by an authorized officer of each Borrower;
(b) FILINGS, REGISTRATIONS AND RECORDINGS. Each document (including,
without limitation, any Uniform Commercial Code financing statement) required by
this Agreement, any related agreement or under law or reasonably requested by
the Agent to be filed, registered or recorded in order to create, in favor of
Agent, a perfected security interest in or lien upon the Collateral shall have
been properly filed, registered or recorded in each jurisdiction in which the
filing, registration or recordation thereof is so required or requested, and
Agent shall have received an acknowledgment copy, or other evidence satisfactory
to it, of each such filing, registration or recordation and satisfactory
evidence of the payment of any necessary fee, tax or expense relating thereto;
(c) CORPORATE PROCEEDINGS OF BORROWERS. Agent shall have received a
copy of the resolutions in form and substance reasonably satisfactory to Agent,
of the Board of Directors of each Borrower authorizing (i) the execution,
delivery and performance of this Agreement, the Note and any related agreements
(collectively the "Documents") and (ii) the granting by each Borrower of the
security interests in and liens upon the Collateral in each case certified by
the Secretary or an Assistant Secretary of each Borrower as of the Closing Date;
and, such certificate shall state that the resolutions thereby certified have
not been amended, modified, revoked or rescinded as of the date of such
certificate;
(d) INCUMBENCY CERTIFICATES OF BORROWERS. Agent shall have received a
certificate of the Secretary or an Assistant Secretary of each Borrower, dated
the Closing Date, as to the incumbency and signature of the officers of each
Borrower executing this Agreement, any certificate or other documents to be
delivered by it pursuant hereto, together with evidence of the incumbency of
such Secretary or Assistant Secretary;
(e) CERTIFICATES. Agent shall have received a copy of the Articles or
Certificate of Incorporation of each Borrower, and all amendments thereto,
certified by the Secretary of State or other appropriate official of its
jurisdiction of incorporation together with copies of the By-Laws of each
Borrower and all agreements of each Borrower's shareholders certified as
accurate and complete by the Secretary of each Borrower;
(f) GOOD STANDING CERTIFICATES. Agent shall have received good standing
certificates for each Borrower dated not more than 20 days prior to the Closing
Date, issued by the Secretary of State or other appropriate official of each
Borrower's jurisdiction of incorporation and each jurisdiction where the conduct
of each Borrower's business activities or the ownership of its properties
necessitates qualification;
(g) LEGAL OPINION. Agent shall have received the executed legal opinion
of Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP and Xxxxx & XxXxxxxx in form and
substance satisfactory to Agent which shall cover such matters incident to the
transactions contemplated by this Agreement, the Note, and related agreements as
Agent may reasonably require and each
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Borrower hereby authorizes and directs such counsel to deliver such opinions to
Agent and Lenders;
(h) NO LITIGATION. Except as disclosed on Schedule 8.1(j), (i) no
litigation, investigation or proceeding before or by any arbitrator or
Governmental Body shall be continuing or threatened against any Borrower or
against the officers or directors of any Borrower (A) in connection with the
Other Documents or any of the transactions contemplated thereby and which, in
the reasonable opinion of Agent, is deemed material or (B) which could, in the
reasonable opinion of Agent, have a Material Adverse Effect; and (ii) no
injunction, writ, restraining order or other order of any nature materially
adverse to any Borrower or the conduct of its business or inconsistent with the
due consummation of the Transactions shall have been issued by any Governmental
Body;
(i) FINANCIAL CONDITION CERTIFICATES. Agent shall have received an
executed Financial Condition Certificate in the form of EXHIBIT 8.1(i);
(j) COLLATERAL EXAMINATION. Agent shall have completed Collateral
examinations and received appraisals, the results of which shall be satisfactory
in form and substance to Lenders;
(k) FEES. Agent shall have received all fees payable to Agent and
Lenders on or prior to the Closing Date pursuant to Article III hereof;
(l) INSURANCE. Agent shall have received in form and substance
satisfactory to Agent, certified copies of Borrowers' casualty insurance
policies, together with loss payable endorsements on Agent's standard form of
loss payee endorsement naming Agent as loss payee, and certified copies of
Borrowers' liability insurance policies, together with endorsements naming Agent
as a co-insured;
(m) PAYMENT INSTRUCTIONS. Agent shall have received written
instructions from Borrowers directing the application of proceeds of the initial
Advances made pursuant to this Agreement;
(n) LOCKBOX AND BLOCKED ACCOUNTS. Agent shall have received duly
executed agreements establishing the Lockbox with Agent and the Blocked Accounts
or Depository Accounts with financial institutions acceptable to Agent for the
collection or servicing of the Receivables and proceeds of the Collateral;
(o) CONSENTS. Agent shall have received any and all Consents necessary
to permit the effectuation of the transactions contemplated by this Agreement
and the Other Documents; and, Agent shall have received such Consents and
waivers of such third parties as might assert claims with respect to the
Collateral, as Agent and its counsel shall deem necessary;
(p) NO ADVERSE MATERIAL CHANGE. (i) Since June 30, 2000, there shall
not have occurred any event, condition or state of facts which could reasonably
be expected to have a Material Adverse Effect and (ii) no representations made
or information supplied to Agent shall have been proven to be inaccurate or
misleading in any material respect;
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(q) CONTRACT REVIEW. Agent shall have reviewed all material contracts
of Borrowers including, without limitation, leases, union contracts, labor
contracts, vendor supply contracts, license agreements and distributorship
agreements and such contracts and agreements shall be satisfactory in all
respects to Agent;
(r) CLOSING CERTIFICATE. Agent shall have received a closing
certificate signed by the Chief Financial Officer of each Borrower dated as of
the date hereof, stating that (i) all representations and warranties set forth
in this Agreement and the Other Documents are true and correct on and as of such
date, (ii) Borrowers are on such date in compliance with all the terms and
provisions set forth in this Agreement and the Other Documents and (iii) on such
date no Default or Event of Default has occurred or is continuing;
(s) BORROWING BASE. Agent shall have received from Borrowers a
Borrowing Base Certificate evidencing that the aggregate amount of Eligible
Receivables is sufficient in value and amount to support Advances in the amount
requested by Borrowers on the Closing Date;
(t) UNDRAWN AVAILABILITY AND RESERVE. After giving effect to the
initial Advances hereunder, Borrowers shall have Undrawn Availability of at
least $4,000,000 and a reserve in the aggregate amount of all subordinated debt
with a maturity date prior to June 30, 2001, and after giving effect to payment
of all fees in connection with the transactions contemplated by this Agreement
and subtraction of all trade payables 60 or more days past due, which Undrawn
Availability and reserve shall be evidenced on the Borrowing Base Certificate;
(u) PRO FORMA FINANCIAL STATEMENTS. Agent shall have received a copy of
the Pro Forma Financial Statements which shall be satisfactory in all respects
to Lenders;
(v) PLEDGE AGREEMENT AND OTHER DOCUMENTS. Agent shall have received an
executed Pledge Agreement satisfactory to Agent pledging the equity interests of
each direct and indirect foreign subsidiary of Frontstep that is not a Borrower
and executed copies of the Other Documents, each in form and substance
satisfactory to Agent; and
(w) OTHER. All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the Transactions shall be
satisfactory in form and substance to Agent and its counsel.
8.2 CONDITIONS TO EACH ADVANCE. The agreement of Lenders to make any
Advance requested to be made on any date (including, without limitation, the
initial Advance), is subject to the satisfaction of the following conditions
precedent as of the date such Advance is made:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by any Borrower in or pursuant to this Agreement and any related
agreements to which it is a party, and each of the representations and
warranties contained in any certificate, document or financial or other
statement furnished at any time under or in connection with this Agreement or
any related agreement shall be true and correct in all material respects on and
as of such date as if made on and as of such date;
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(b) NO DEFAULT. No Event of Default or Default shall have occurred and
be continuing on such date, or would exist after giving effect to the Advances
requested to be made, on such date; provided, however that Lenders, in their
sole discretion, may continue to make Advances notwithstanding the existence of
an Event of Default or Default and that any Advances so made shall not be deemed
a waiver of any such Event of Default or Default; and
(c) MAXIMUM ADVANCES. In the case of any Advances requested to be made,
after giving effect thereto, the aggregate Advances shall not exceed the maximum
amount of Advances permitted under Section 2.1 hereof.
Each request for an Advance by any Borrower hereunder shall constitute a
representation and warranty by each Borrower as of the date of such Advance that
the conditions contained in this subsection shall have been satisfied.
IX. INFORMATION AS TO BORROWERS.
---------------------------
Each Borrower shall, until satisfaction in full of the Obligations and the
termination of this Agreement:
9.1 DISCLOSURE OF MATERIAL MATTERS. Immediately upon learning thereof,
report to Agent all matters materially affecting the value, enforceability or
collectibility of any portion of the Collateral including, without limitation,
any Borrower's reclamation or repossession of, or the return to any Borrower of,
a material amount of goods or claims or disputes asserted by any Customer or
other obligor.
9.2 SCHEDULES. Deliver to Agent on or before the fifteenth (15th) day of
each month as and for the prior month (a) accounts receivable agings and (b)
accounts payable schedules. In addition, each Borrower will deliver to Agent or
make originals available to Agent at Agent's request: (i) confirmatory
assignment schedules, (ii) copies of Customer's invoices, (iii) evidence of
shipment or delivery, and (iv) such further schedules, documents and/or
information regarding the Collateral as Agent may require including, without
limitation, trial balances and test verifications. Agent shall have the right to
confirm and verify all Receivables by any manner and through any medium it
considers advisable and do whatever it may deem reasonably necessary to protect
its interests hereunder. The items to be provided under this Section are to be
in form satisfactory to Agent and executed by each Borrower and delivered to
Agent from time to time solely for Agent's convenience in maintaining records of
the Collateral, and any Borrower's failure to deliver any of such items to Agent
shall not affect, terminate, modify or otherwise limit Agent's Lien with respect
to the Collateral.
9.3 LITIGATION. Promptly notify Agent in writing of any litigation, suit or
administrative proceeding affecting any Borrower, whether or not the claim is
covered by insurance, and of any suit or administrative proceeding, which in any
such case could reasonably be expected to have a Material Adverse Effect on any
Borrower.
9.4 MATERIAL OCCURRENCES. Promptly notify Agent in writing upon the
occurrence of (a) any Event of Default or Default; (b) any event of default
under the Subordinated Debt Documentation; (c) any event which with the giving
of notice or lapse of
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time, or both, would constitute an event of default under the Subordinated Debt
Documentation; (d) any event, development or circumstance whereby any financial
statements or other reports furnished to Agent fail in any material respect to
present fairly, in accordance with GAAP consistently applied, the financial
condition or operating results of any Borrower as of the date of such
statements; (e) any accumulated retirement plan funding deficiency which, if
such deficiency continued for two plan years and was not corrected as provided
in Section 4971 of the Code, could subject any Borrower to a tax imposed by
Section 4971 of the Code; (f) each and every default by any Borrower which might
result in the acceleration of the maturity of any Indebtedness, including the
names and addresses of the holders of such Indebtedness with respect to which
there is a default existing or with respect to which the maturity has been or
could be accelerated, and the amount of such Indebtedness; and (g) any other
development in the business or affairs of any Borrower which could reasonably be
expected to have a Material Adverse Effect; in each case describing the nature
thereof and the action Borrowers propose to take with respect thereto.
9.5 GOVERNMENT RECEIVABLES. Notify Agent immediately if any of its
Receivables arise out of contracts between any Borrower and the United States,
any state, or any department, agency or instrumentality of any of them.
9.6 ANNUAL FINANCIAL STATEMENTS. Furnish Agent within ninety (90) days
after the end of each fiscal year of Frontstep, for Frontstep on a Consolidated
Basis, consolidated, audited balance sheets as of the end of the two most recent
fiscal years, consolidated, audited statements of income and cash flow for each
of the three fiscal years preceding the date of the most recent audited balance
sheet, and a consolidated statement of the changes in stockholders' equity in
the form of a reconciliation of the beginning balance to the ending balance for
each period for which an income statement is presented with all significant
reconciling items described by appropriate captions, all prepared in reasonable
detail and in accordance with GAAP, together with such unaudited financial
statements of Frontstep on a consolidating basis and an unqualified audit report
by an independent certified public accounting firm selected by Borrowers and
satisfactory to Agent (the "Accountants"). The report of the Accountants shall
be accompanied by a statement of the Accountants certifying that (i) they have
caused the Loan Agreement to be reviewed, (ii) in making the examination upon
which such report was based either no information came to their attention which
to their knowledge constituted an Event of Default or a Default under this
Agreement or any related agreement or, if such information came to their
attention, specifying any such Default or Event of Default, its nature, when it
occurred and whether it is continuing, and such report shall contain or have
appended thereto calculations which set forth Borrowers' compliance with the
requirements or restrictions imposed by Sections 6.5, 6.6, 6.7, 6.8, 7.6 and
7.11 hereof. In addition, the reports shall be accompanied by a certificate of
each Borrower's Chief Financial Officer which shall state that, based on an
examination sufficient to permit him to make an informed statement, such
financial information is complete and correct in all material respects and no
Default or Event of Default exists, or, if such is not the case, specifying such
Default or Event of Default, its nature, when it occurred, whether it is
continuing and the steps being taken by such Borrower with respect to such
event, and such certificate shall have appended thereto calculations which set
forth Borrowers' compliance with the requirements or restrictions imposed by
Sections 6.5, 6.6, 6.7, 6.8, 7.6 and 7.11 hereof.
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9.7 QUARTERLY FINANCIAL STATEMENTS. Furnish Agent within 45 days after the
end of each fiscal quarter of Frontstep, for Frontstep on a Consolidated Basis,
consolidated unaudited balance sheets as of the end of the fiscal quarter,
consolidated, unaudited statements of income and cash flow for that quarter and
for the period from the beginning of the fiscal year to the end of that quarter,
and a consolidated unaudited statement of the changes in stockholders' equity in
the form of a reconciliation of the beginning balance to the ending balance for
that quarter and from the beginning of the fiscal year to the end of that
quarter, all prepared in reasonable detail and in accordance with GAAP, together
with such unaudited financial statements of Frontstep on a consolidating basis.
The reports shall be accompanied by a certificate signed by the Chief Financial
Officer of each Borrower, which shall state that, based on an examination
sufficient to permit him to make an informed statement, such financial
information is complete and correct in all material respects and no Default or
Event of Default exists, or, if such is not the case, specifying such Default or
Event of Default, its nature, when it occurred, whether it is continuing and the
steps being taken by Borrowers with respect to such default and, such
certificate shall have appended thereto calculations which set forth Borrowers'
compliance with the requirements or restrictions imposed by Sections 6.5, 6.6,
6.7, 6.8, 7.6 and 7.11 hereof.
9.8 OTHER REPORTS. Furnish Agent as soon as available, but in any event
within ten (10) days after the issuance thereof, with (i) copies of all reports
and other materials filed with the Securities and Exchange Commission, (ii)
copies of such financial statements, reports and returns as each Borrower shall
send to its stockholders, and (iii) copies of all notices sent pursuant to the
Subordinated Debt Documentation.
9.9 ADDITIONAL INFORMATION. Furnish Agent with such additional information
as Agent shall reasonably request in order to enable Agent to determine whether
the terms, covenants, provisions and conditions of this Agreement and the Note
have been complied with by Borrowers including, without limitation and without
the necessity of any request by Agent, (a) copies of all environmental audits
and reviews, (b) at least thirty (30) days prior thereto, notice of any
Borrower's opening of any new office or place of business or any Borrower's
closing of any existing office or place of business, and (c) promptly upon any
Borrower's learning thereof, notice of any labor dispute to which any Borrower
may become a party, any strikes or walkouts relating to any of its plants or
other facilities, and the expiration of any labor contract to which any Borrower
is a party or by which any Borrower is bound.
9.10 PROJECTED OPERATING BUDGET. Furnish Agent, no later than thirty (30)
days prior to the beginning of each Borrower's fiscal years commencing with
fiscal year 2001, a preliminary month-by-month projected operating budget and
cash flow of Frontstep on a Consolidated Basis and for Frontstep and its
Subsidiaries on a consolidating basis for such fiscal year (including an income
statement for each month and a balance sheet as at the end of the last month in
each fiscal quarter), with a final projected operating budget to be delivered to
Agent no later than 30 days after Frontstep's fiscal year end together with a
certificate signed by the President or Chief Financial Officer of each Borrower
to the effect that such projections have been prepared on the basis of sound
financial planning practice consistent with past budgets and financial
statements and that such officer has no reason to question the reasonableness of
any material assumptions on which such projections were prepared.
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9.11 VARIANCES FROM OPERATING BUDGET. Furnish Agent, 45 days after the end
of each fiscal quarter, a written report summarizing all material variances from
budgets submitted by Borrowers pursuant to Section 9.10 and a discussion and
analysis by management with respect to such variances.
9.12 NOTICE OF SUITS, ADVERSE EVENTS. Furnish Agent with prompt notice of
(i) any lapse or other termination of any Consent issued to any Borrower by any
Governmental Body or any other Person that is material to the operation of any
Borrower's business, (ii) any refusal by any Governmental Body or any other
Person to renew or extend any such Consent; and (iii) copies of any periodic or
special reports filed by any Borrower with any Governmental Body or Person, if
such reports indicate any material change in the business, operations, affairs
or condition of any Borrower, or if copies thereof are requested by Lender, and
(iv) copies of any material notices and other communications from any
Governmental Body or Person which specifically relate to any Borrower.
9.13 ERISA NOTICES AND REQUESTS. Furnish Agent with immediate written
notice in the event that (i) any Borrower or any member of the Controlled Group
knows or has reason to know that a Termination Event has occurred, together with
a written statement describing such Termination Event and the action, if any,
which such Borrower or member of the Controlled Group has taken, is taking, or
proposes to take with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, Department of Labor or PBGC with
respect thereto, (ii) any Borrower or any member of the Controlled Group knows
or has reason to know that a prohibited transaction (as defined in Sections 406
of ERISA and 4975 of the Code) has occurred together with a written statement
describing such transaction and the action which such Borrower or any member of
the Controlled Group has taken, is taking or proposes to take with respect
thereto, (iii) a funding waiver request has been filed with respect to any Plan
together with all communications received by any Borrower or any member of the
Controlled Group with respect to such request, (iv) any increase in the benefits
of any existing Plan or the establishment of any new Plan or the commencement of
contributions to any Plan to which any Borrower or any member of the Controlled
Group was not previously contributing shall occur, (v) any Borrower or any
member of the Controlled Group shall receive from the PBGC a notice of intention
to terminate a Plan or to have a trustee appointed to administer a Plan,
together with copies of each such notice, (vi) any Borrower or any member of the
Controlled Group shall receive any favorable or unfavorable determination letter
from the Internal Revenue Service regarding the qualification of a Plan under
Section 401(a) of the Code, together with copies of each such letter; (vii) any
Borrower or any member of the Controlled Group shall receive a notice regarding
the imposition of withdrawal liability, together with copies of each such
notice; (viii) any Borrower or any member of the Controlled Group shall fail to
make a required installment or any other required payment under Section 412 of
the Code on or before the due date for such installment or payment; (ix) any
Borrower or any member of the Controlled Group knows that (a) a Multiemployer
Plan has been terminated, (b) the administrator or plan sponsor of a
Multiemployer Plan intends to terminate a Multiemployer Plan, or (c) the PBGC
has instituted or will institute proceedings under Section 4042 of ERISA to
terminate a Multiemployer Plan.
9.14 ADDITIONAL DOCUMENTS. Execute and deliver to Agent, upon request, such
documents and agreements as Agent may, from time to time, reasonably request to
carry out the purposes, terms or conditions of this Agreement.
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X. EVENTS OF DEFAULT.
-----------------
The occurrence of any one or more of the following events shall constitute
an "Event of Default":
10.1 failure by any Borrower to pay any principal or interest on the
Obligations when due, whether at maturity or by reason of acceleration pursuant
to the terms of this Agreement or by notice of intention to prepay, or by
required prepayment or failure to pay any other liabilities or make any other
payment, fee or charge provided for herein when due or in any Other Document;
10.2 any representation or warranty made or deemed made by any Borrower in
this Agreement or any related agreement or in any certificate, document or
financial or other statement furnished at any time in connection herewith or
therewith shall prove to have been misleading in any material respect on the
date when made or deemed to have been made;
10.3 failure by any Borrower to (i) furnish financial information when due
or when requested which is unremedied for a period of fifteen (15) days, or (ii)
permit the inspection of its books or records;
10.4 issuance of a notice of Lien, levy, assessment, injunction or
attachment against a material portion of any Borrower's property which is not
stayed or lifted within thirty (30) days;
10.5 except as otherwise provided for in Sections 10.1 and 10.3, failure or
neglect of any Borrower to perform, keep or observe any term, provision,
condition, covenant herein contained, or contained in any other agreement or
arrangement, now or hereafter entered into between any Borrower and Agent or any
Lender except for a failure or neglect of Borrower to perform, keep or observe
any term, provision, condition or covenant, contained in Sections 4.6, 4.7, 4.9,
4.11, 6.1, 6.3, 6.4, 9.4 or 9.6 hereof which is cured within fifteen (15) days
from the occurrence of such failure or neglect;
10.6 any judgment or judgments are rendered or judgment liens filed against
any Borrower for an aggregate amount in excess of $250,000, which, within thirty
(30) days of such rendering or filing, are not satisfied, stayed or discharged
of record;
10.7 any Borrower shall (i) apply for, consent to or suffer the appointment
of, or the taking of possession by, a receiver, custodian, trustee, liquidator
or similar fiduciary of itself or of all or a substantial part of its property,
(ii) make a general assignment for the benefit of creditors, (iii) commence a
voluntary case under any state or federal bankruptcy laws (as now or hereafter
in effect), (iv) be adjudicated a bankrupt or insolvent, (v) file a petition
seeking to take advantage of any other law providing for the relief of debtors,
(vi) acquiesce to, or fail to have dismissed, within thirty (30) days, any
petition filed against it in any involuntary case under such bankruptcy laws, or
(vii) take any action for the purpose of effecting any of the foregoing;
10.8 any Borrower shall admit in writing its inability, or be generally
unable, to pay its debts as they become due or cease operations of its present
business;
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10.9 any Affiliate or any Subsidiary of any Borrower, or any Guarantor,
shall (i) apply for, consent to or suffer the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator or similar fiduciary
of itself or of all or a substantial part of its property, (ii) admit in writing
its inability, or be generally unable, to pay its debts as they become due or
cease operations of its present business, (iii) make a general assignment for
the benefit of creditors, (iv) commence a voluntary case under any state or
federal bankruptcy laws (as now or hereafter in effect), (v) be adjudicated a
bankrupt or insolvent, (vi) file a petition seeking to take advantage of any
other law providing for the relief of debtors, (vii) acquiesce to, or fail to
have dismissed, within thirty (30) days, any petition filed against it in any
involuntary case under such bankruptcy laws, or (viii) take any action for the
purpose of effecting any of the foregoing;
10.10 any change in any Borrower's condition or affairs (financial or
otherwise) which in Agent's opinion has a Material Adverse Effect;
10.11 any Lien created hereunder or provided for hereby or under any
related agreement for any reason ceases to be or is not a valid and perfected
Lien having a first priority interest;
10.12 an event of default has occurred and been declared under the
Subordinated Debt Documentation which default shall not have been cured or
waived within the applicable grace period;
10.13 a default of the obligations of any Borrower under any other
agreement to which it is a party shall occur which adversely affects its
condition, affairs or prospects (financial or otherwise) which default is not
cured within any applicable grace period;
10.14 any Change of Control shall occur;
10.15 any material provision of this Agreement shall, for any reason, cease
to be valid and binding on any Borrower, or any Borrower shall so claim in
writing to Agent;
10.16 (i) any Governmental Body shall (A) revoke, terminate, suspend or
adversely modify any license, permit, patent trademark or trade name of any
Borrower, the continuation of which is material to the continuation of any
Borrower's business, or (B) commence proceedings to suspend, revoke, terminate
or adversely modify any such license, permit, trademark, trade name or patent
and such proceedings shall not be dismissed or discharged within sixty (60)
days, or (c) schedule or conduct a hearing on the renewal of any license,
permit, trademark, trade name or patent necessary for the continuation of any
Borrower's business and the staff of such Governmental Body issues a report
recommending the termination, revocation, suspension or material, adverse
modification of such license, permit, trademark, trade name or patent; (ii) any
agreement which is necessary or material to the operation of any Borrower's
business shall be revoked or terminated and not replaced by a substitute
acceptable to Agent within thirty (30) days after the date of such revocation or
termination, and such revocation or termination and non-replacement would
reasonably be expected to have a Material Adverse Effect on any Borrower;
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10.17 any portion of the Collateral shall be seized or taken by a
Governmental Body, or any Borrower or the title and rights of any Borrower or
any Original Owner which is the owner of any material portion of the Collateral
shall have become the subject matter of litigation which might, in the opinion
of Agent, upon final determination, result in impairment or loss of the security
provided by this Agreement or the Other Documents; or
10.18 an event or condition specified in Sections 7.16 or 9.13 hereof shall
occur or exist with respect to any Plan and, as a result of such event or
condition, together with all other such events or conditions, any Borrower or
any member of the Controlled Group shall incur, or in the opinion of Agent be
reasonably likely to incur, a liability to a Plan or the PBGC (or both) which,
in the reasonable judgment of Agent, would have a Material Adverse Effect on any
Borrower.
XI. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT.
------------------------------------------
11.1 RIGHTS AND REMEDIES. Upon the occurrence of (i) an Event of Default
pursuant to Section 10.7 all Obligations shall be immediately due and payable
and this Agreement and the obligation of Lenders to make Advances shall be
deemed terminated; and, (ii) any of the other Events of Default and at any time
thereafter (such default not having previously been cured), at the option of
Required Lenders all Obligations shall be immediately due and payable and
Lenders shall have the right to terminate this Agreement and to terminate the
obligation of Lenders to make Advances and (iii) a filing of a petition against
Borrower in any involuntary case under any state or federal bankruptcy laws, the
obligation of Lenders to make Advances hereunder shall be terminated other than
as may be required by an appropriate order of the bankruptcy court having
jurisdiction over any Borrower. Upon the occurrence of any Event of Default,
Agent shall have the right to exercise any and all other rights and remedies
provided for herein, under the Uniform Commercial Code and at law or equity
generally, including, without limitation, the right to foreclose the security
interests granted herein and to realize upon any Collateral by any available
judicial procedure and/or to take possession of and sell any or all of the
Collateral with or without judicial process. Agent may enter any of Borrower's
premises or other premises without legal process and without incurring liability
to any Borrower therefor, and Agent may thereupon, or at any time thereafter, in
its discretion without notice or demand, take the Collateral and remove the same
to such place as Agent may deem advisable and Agent may require Borrowers to
make the Collateral available to Agent at a convenient place. With or without
having the Collateral at the time or place of sale, Agent may sell the
Collateral, or any part thereof, at public or private sale, at any time or
place, in one or more sales, at such price or prices, and upon such terms,
either for cash, credit or future delivery, as Agent may elect. Except as to
that part of the Collateral which is perishable or threatens to decline speedily
in value or is of a type customarily sold on a recognized market, Agent shall
give Borrowers reasonable notification of such sale or sales, it being agreed
that in all events written notice mailed to Borrowers at least five (5) days
prior to such sale or sales is reasonable notification. At any public sale Agent
or any Lender may bid for and become the purchaser, and Agent, any Lender or any
other purchaser at any such sale thereafter shall hold the Collateral sold
absolutely free from any claim or right of whatsoever kind, including any equity
of redemption and such right and equity are hereby expressly waived and released
by each Borrower. In connection with the exercise of the foregoing remedies,
Agent is granted permission to use all of each Borrower's
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trademarks, trade styles, trade names, patents, patent applications, licenses,
franchises and other proprietary rights which are used in connection with
Equipment for the purpose of completing the manufacture of unfinished goods.
The proceeds realized from the sale of any Collateral shall be applied as
follows: first, to the reasonable costs, expenses and attorneys' fees and
expenses incurred by Agent for collection and for acquisition, completion,
protection, removal, storage, sale and delivery of the Collateral; second, to
interest due upon any of the Obligations and any fees payable under this
Agreement; and, third, to the principal of the Obligations. If any deficiency
shall arise, Borrowers shall remain liable to Agent and Lenders therefor.
11.2 AGENT'S DISCRETION. Agent shall have the right in its sole discretion
to determine which rights, Liens, security interests or remedies Agent may at
any time pursue, relinquish, subordinate, or modify or to take any other action
with respect thereto and such determination will not in any way modify or affect
any of Agent's or Lenders' rights hereunder.
11.3 SETOFF. In addition to any other rights which Agent or any Lender may
have under applicable law, upon the occurrence of an Event of Default hereunder,
Agent and such Lender shall have a right to apply any Borrower's property held
by Agent and such Lender to reduce the Obligations.
11.4 RIGHTS AND REMEDIES NOT EXCLUSIVE. The enumeration of the foregoing
rights and remedies is not intended to be exhaustive and the exercise of any
right or remedy shall not preclude the exercise of any other right or remedies
provided for herein or otherwise provided by law, all of which shall be
cumulative and not alternative.
XII. WAIVERS AND JUDICIAL PROCEEDINGS.
--------------------------------
12.1 WAIVER OF NOTICE. Each Borrower hereby waives notice of non-payment of
any of the Receivables, demand, presentment, protest and notice thereof with
respect to any and all instruments, notice of acceptance hereof, notice of loans
or advances made, credit extended, Collateral received or delivered, or any
other action taken in reliance hereon, and all other demands and notices of any
description, except such as are expressly provided for herein.
12.2 DELAY. No delay or omission on Agent's or any Lender's part in
exercising any right, remedy or option shall operate as a waiver of such or any
other right, remedy or option or of any default.
12.3 JURY WAIVER. EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (A)
ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO
OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR
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TORT OR OTHERWISE AND EACH PARTY HEREBY CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENTS OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
XIII. EFFECTIVE DATE AND TERMINATION.
------------------------------
13.1 TERM. This Agreement, which shall inure to the benefit of and shall
be binding upon the respective successors and permitted assigns of each
Borrower, Agent and each Lender, shall become effective on the date hereof and
shall continue in full force and effect until December 19, 2003 (the "Term")
unless sooner terminated as herein provided. Borrowers may terminate this
Agreement at any time upon ninety (90) days' prior written notice upon payment
in full of the Obligations. In the event the Obligations are prepaid in full
prior to the last day of the Term (the date of such prepayment hereinafter
referred to as the "Early Termination Date"), Borrowers shall pay to Agent for
the benefit of Lenders an early termination fee in an amount equal to $200,000
if the Early Termination Date occurs on or after the Closing Date to and
including the date immediately preceding the first anniversary of the Closing
Date. No such fee upon the Early Termination Date shall be required if PNC has
reduced its Commitment Percentage through a sale, assignment or transfer to
another Lender prior to the Early Termination Date; provided, however, in the
event of an increase in the Maximum Revolving Advance Amount, the foregoing
provision of this sentence shall not be applicable.
13.2 TERMINATION. The termination of the Agreement shall not affect any
Borrower's, Agent's or any Lender's rights, or any of the Obligations having
their inception prior to the effective date of such termination, and the
provisions hereof shall continue to be fully operative until all transactions
entered into, rights or interests created or Obligations have been fully
disposed of, concluded or liquidated. The security interests, Liens and rights
granted to Agent and Lenders hereunder and the financing statements filed
hereunder shall continue in full force and effect, notwithstanding the
termination of this Agreement or the fact that Borrowers' Account may from time
to time be temporarily in a zero or credit position, until all of the
Obligations of each Borrower have been paid or performed in full after the
termination of this Agreement or each Borrower has furnished Agent and Lenders
with an indemnification satisfactory to Agent and Lenders with respect thereto.
Accordingly, each Borrower waives any rights which it may have under Section
9-404(1) of the Uniform Commercial Code to demand the filing of termination
statements with respect to the Collateral, and Agent shall not be required to
send such termination statements to each Borrower, or to file them with any
filing office, unless and until this Agreement shall have been terminated in
accordance with its terms and all Obligations paid in full in immediately
available funds. All representations, warranties, covenants, waivers and
agreements contained herein shall survive termination hereof until all
Obligations are paid or performed in full.
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XIV. REGARDING AGENT.
---------------
14.1 APPOINTMENT. Each Lender hereby designates PNC to act as Agent for
such Lender under this Agreement and the Other Documents. Each Lender hereby
irrevocably authorizes Agent to take such action on its behalf under the
provisions of this Agreement and the Other Documents and to exercise such powers
and to perform such duties hereunder and thereunder as are specifically
delegated to or required of Agent by the terms hereof and thereof and such other
powers as are reasonably incidental thereto and Agent shall hold all Collateral,
payments of principal and interest, fees (except the fees set forth in Sections
3.2), charges and collections (without giving effect to any collection days)
received pursuant to this Agreement, for the ratable benefit of Lenders. Agent
may perform any of its duties hereunder by or through its agents or employees.
As to any matters not expressly provided for by this Agreement (including
without limitation, collection of the Note) Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding; PROVIDED, HOWEVER, that Agent shall not be
required to take any action which exposes Agent to liability or which is
contrary to this Agreement or the Other Documents or applicable law unless Agent
is furnished with an indemnification reasonably satisfactory to Agent with
respect thereto.
14.2 NATURE OF DUTIES. Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and the Other Documents.
Neither Agent nor any of its officers, directors, employees or agents shall be
(i) liable for any action taken or omitted by them as such hereunder or in
connection herewith, unless caused by their gross (not mere) negligence or
willful misconduct, or (ii) responsible in any manner for any recitals,
statements, representations or warranties made by any Borrower or any officer
thereof contained in this Agreement, or in any of the Other Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any of the
Other Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, or any of the Other Documents
or for any failure of any Borrower to perform its obligations hereunder. Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any of the Other Documents, or to inspect the
properties, books or records of any Borrower. The duties of Agent as respects
the Advances to Borrowers shall be mechanical and administrative in nature;
Agent shall not have by reason of this Agreement a fiduciary relationship in
respect of any Lender; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon Agent any obligations in
respect of this Agreement except as expressly set forth herein.
14.3 LACK OF RELIANCE ON AGENT AND RESIGNATION. Independently and without
reliance upon Agent or any other Lender, each Lender has made and shall continue
to make (i) its own independent investigation of the financial condition and
affairs of each Borrower in connection with the making and the continuance of
the Advances hereunder and the taking or not taking of any action in connection
herewith, and (ii) its own appraisal of the creditworthiness of each Borrower.
Agent shall have no duty or responsibility, either initially or on a continuing
basis, to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before making of the Advances or at
any time or times thereafter
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except as shall be provided by any Borrower pursuant to the terms hereof. Agent
shall not be responsible to any Lender for any recitals, statements,
information, representations or warranties herein or in any agreement, document,
certificate or a statement delivered in connection with or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any Other Document, or of the financial
condition of any Borrower, or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement, the Note, the Other Documents or the financial condition of any
Borrower, or the existence of any Event of Default or any Default.
Agent may resign on sixty (60) days' written notice to each of Lenders and
Borrowing Agent and upon such resignation, the Required Lenders will promptly
designate a successor Agent reasonably satisfactory to Borrowers.
Any such successor Agent shall succeed to the rights, powers and duties of
Agent, and the term "Agent" shall mean such successor agent effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent. After any Agent's resignation as Agent, the provisions of this Article
XIV shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement.
14.4 CERTAIN RIGHTS OF AGENT. If Agent shall request instructions from
Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any Other Document, Agent shall be entitled to
refrain from such act or taking such action unless and until Agent shall have
received instructions from the Required Lenders; and Agent shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, Lenders shall not have any right of action whatsoever against Agent
as a result of its acting or refraining from acting hereunder in accordance with
the instructions of the Required Lenders.
14.5 RELIANCE. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other
document or telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper person or entity, and, with respect
to all legal matters pertaining to this Agreement and the Other Documents and
its duties hereunder, upon advice of counsel selected by it. Agent may employ
agents and attorneys-in-fact and shall not be liable for the default or
misconduct of any such agents or attorneys-in-fact selected by Agent with
reasonable care.
14.6 NOTICE OF DEFAULT. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder or under
the Other Documents, unless Agent has received notice from a Lender or a
Borrower referring to this Agreement or the Other Documents, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that Agent receives such a notice, Agent shall give
notice thereof to Lenders. Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; PROVIDED, THAT, unless and until Agent shall have received such
directions, Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of Lenders.
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14.7 INDEMNIFICATION. To the extent Agent is not reimbursed and indemnified
by Borrowers, each Lender will reimburse and indemnify Agent in proportion to
its respective portion of the Advances (or, if no Advances are outstanding,
according to its Commitment Percentage), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against Agent in performing its duties
hereunder, or in any way relating to or arising out of this Agreement or any
Other Document; PROVIDED THAT, Lenders shall not be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent's gross (not mere)
negligence or willful misconduct.
14.8 AGENT IN ITS INDIVIDUAL CAPACITY. With respect to the obligation of
Agent to lend under this Agreement, the Advances made by it shall have the same
rights and powers hereunder as any other Lender and as if it were not performing
the duties as Agent specified herein; and the term "Lender" or any similar term
shall, unless the context clearly otherwise indicates, include Agent in its
individual capacity as a Lender. Agent may engage in business with any Borrower
as if it were not performing the duties specified herein, and may accept fees
and other consideration from any Borrower for services in connection with this
Agreement or otherwise without having to account for the same to Lenders.
14.9 DELIVERY OF DOCUMENTS. To the extent Agent receives financial
statements required under Sections 9.6, 9.7, and 9.8 from any Borrower pursuant
to the terms of this Agreement, Agent will promptly furnish such documents and
information to Lenders.
14.10 BORROWERS' UNDERTAKING TO AGENT. Without prejudice to their
respective obligations to Lenders under the other provisions of this Agreement,
each Borrower hereby undertakes with Agent to pay to Agent from time to time on
demand all amounts from time to time due and payable by it for the account of
Agent or Lenders or any of them pursuant to this Agreement to the extent not
already paid. Any payment made pursuant to any such demand shall PRO TANTO
satisfy the relevant Borrower's obligations to make payments for the account of
Lenders or the relevant one or more of them pursuant to this Agreement.
XV. BORROWING AGENCY.
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15.1 BORROWING AGENCY PROVISIONS.
(a) Each Borrower hereby irrevocably designates Borrowing Agent to be
its attorney and agent and in such capacity to borrow, sign and endorse notes,
and execute and deliver all instruments, documents, writings and further
assurances now or hereafter required hereunder, on behalf of such Borrower or
Borrowers, and hereby authorizes Agent to pay over or credit all loan proceeds
hereunder in accordance with the request of Borrowing Agent.
(b) The handling of this credit facility as a co-borrowing facility
with a borrowing agent in the manner set forth in this Agreement is solely as an
accommodation to Borrowers and at their request. Neither Agent nor any Lender
shall incur liability to Borrowers as a result thereof. To induce Agent and
Lenders to do so and in consideration thereof, each
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Borrower hereby indemnifies Agent and each Lender and holds Agent and each
Lender harmless from and against any and all liabilities, expenses, losses,
damages and claims of damage or injury asserted against Agent or any Lender by
any Person arising from or incurred by reason of the handling of the financing
arrangements of Borrowers as provided herein, reliance by Agent or any Lender on
any request or instruction from Borrowing Agent or any other action taken by
Agent or any Lender with respect to this Section 15.1 except due to willful
misconduct or gross (not mere) negligence by the indemnified party.
(c) All Obligations shall be joint and several, and each Borrower shall
make payment upon the maturity of the Obligations by acceleration or otherwise,
and such obligation and liability on the part of each Borrower shall in no way
be affected by any extensions, renewals and forbearance granted to Agent or any
Lender to any Borrower, failure of Agent or any Lender to give any Borrower
notice of borrowing or any other notice, any failure of Agent or any Lender to
pursue or preserve its rights against any Borrower, the release by Agent or any
Lender of any Collateral now or thereafter acquired from any Borrower, and such
agreement by each Borrower to pay upon any notice issued pursuant thereto is
unconditional and unaffected by prior recourse by Agent or any Lender to the
other Borrowers or any Collateral for such Borrower's Obligations or the lack
thereof.
15.2 WAIVER OF SUBROGATION. Each Borrower expressly waives any and all
rights of subrogation, reimbursement, indemnity, exoneration, contribution of
any other claim which such Borrower may now or hereafter have against the other
Borrowers or other Person directly or contingently liable for the Obligations
hereunder, or against or with respect to the other Borrowers' property
(including, without limitation, any property which is Collateral for the
Obligations), arising from the existence or performance of this Agreement, until
termination of this Agreement and repayment in full of the Obligations.
XVI. MISCELLANEOUS.
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16.1 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio applied to contracts to be
performed wholly within the State of Ohio. Any judicial proceeding brought by or
against any Borrower with respect to any of the Obligations, this Agreement or
any related agreement may be brought in any court of competent jurisdiction in
the State of Ohio, United States of America, and, by execution and delivery of
this Agreement, each Borrower accepts for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. Each Borrower hereby waives personal
service of any and all process upon it and consents that all such service of
process may be made by registered mail (return receipt requested) directed to
Borrowing Agent at its address set forth in Section 16.6 and service so made
shall be deemed completed five (5) days after the same shall have been so
deposited in the mails of the United States of America, or, at the Agent's
and/or any Lender's option, by service upon Borrowing Agent which each Borrower
irrevocably appoints as such Borrower's Agent for the purpose of accepting
service within the State of Ohio. Nothing herein shall affect the right to serve
process in any manner permitted by law or shall limit the right of Agent or any
Lender to bring proceedings against any Borrower in the courts of any other
jurisdiction. Each Borrower
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waives any objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon FORUM NON CONVENIENS. Any judicial proceeding by any
Borrower against Agent or any Lender involving, directly or indirectly, any
matter or claim in any way arising out of, related to or connected with this
Agreement or any related agreement, shall be brought only in a federal or state
court located in the County of Cuyahoga, State of Ohio.
16.2 ENTIRE UNDERSTANDING (a) This Agreement and the documents executed
concurrently herewith contain the entire understanding between each Borrower,
Agent and each Lender and supersedes all prior agreements and understandings, if
any, relating to the subject matter hereof. Any promises, representations,
warranties or guarantees not herein contained and hereinafter made shall have no
force and effect unless in writing, signed by each Borrower's, Agent's and each
Lender's respective officers. Neither this Agreement nor any portion or
provisions hereof may be changed, modified, amended, waived, supplemented,
discharged, canceled or terminated orally or by any course of dealing, or in any
manner other than by an agreement in writing, signed by the party to be charged.
Each Borrower acknowledges that it has been advised by counsel in connection
with the execution of this Agreement and Other Documents and is not relying upon
oral representations or statements inconsistent with the terms and provisions of
this Agreement.
(b) The Required Lenders, Agent with the consent in writing of the
Required Lenders, and Borrowers may, subject to the provisions of this Section
16.2 (b), from time to time enter into written supplemental agreements to this
Agreement or the Other Documents executed by Borrowers, for the purpose of
adding or deleting any provisions or otherwise changing, varying or waiving in
any manner the rights of Lenders, Agent or Borrowers thereunder or the
conditions, provisions or terms thereof of waiving any Event of Default
thereunder, but only to the extent specified in such written agreements;
PROVIDED, HOWEVER, that no such supplemental agreement shall, without the
consent of all Lenders:
(i) increase the Commitment Percentage of any Lender.
(ii) extend the maturity of any Note or the due date for any amount
payable hereunder, or decrease the rate of interest or reduce any fee payable by
Borrowers to Lenders pursuant to this Agreement.
(iii) alter the definition of the term Required Lenders or alter,
amend or modify this Section 16.2(b).
(iv) release any Collateral during any calendar year (other than in
accordance with the provisions of this Agreement) having an aggregate value in
excess of $500,000.
(v) change the rights and duties of Agent.
(vi) permit any Revolving Advance to be made if after giving effect
thereto the total of Advances outstanding hereunder would exceed the Formula
Amount for
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more than sixty (60) consecutive Business Days or exceed one hundred and ten
percent (110%) of the Formula Amount.
(vii) increase the Advance Rate above the Advance Rate in effect on
the Closing Date.
(viii) increase the Maximum Revolving Advance Amount or permit any
Revolving Advance to be made if after giving effect thereto the total of
Revolving Advances outstanding hereunder would exceed the Formula Amount for
more than sixty (60) consecutive Business Days or exceed one hundred ten percent
(110%) of the Formula Amount.
Any such supplemental agreement shall apply equally to each Lender and shall be
binding upon Borrowers, Lenders and Agent and all future holders of the
Obligations. In the case of any waiver, Borrowers, Agent and Lenders shall be
restored to their former positions and rights, and any Event of Default waived
shall be deemed to be cured and not continuing, but no waiver of a specific
Event of Default shall extend to any subsequent Event of Default (whether or not
the subsequent Event of Default is the same as the Event of Default which was
waived), or impair any right consequent thereon.
In the event that Agent requests the consent of a Lender pursuant
to this Section 16.2 and such Lender shall not respond or reply to Agent in
writing within five (5) days of delivery of such request, such Lender shall be
deemed to have consented to the matter that was the subject of the request. In
the event that Agent requests the consent of a Lender pursuant to this Section
16.2 and such consent is denied, then PNC may, at its option, require such
Lender to assign its interest in the Advances to PNC or to another Lender or to
any other Person designated by the Agent (the "Designated Lender"), for a price
equal to the then outstanding principal amount thereof plus accrued and unpaid
interest and fees due such Lender, which interest and fees shall be paid when
collected from Borrower. In the event PNC elects to require any Lender to assign
its interest to PNC or to the Designated Lender, PNC will so notify such Lender
in writing within forty five (45) days following such Lender's denial, and such
Lender will assign its interest to PNC or the Designated Lender no later than
five (5) days following receipt of such notice pursuant to a Commitment Transfer
Supplement executed by such Lender, PNC or the Designated Lender, as
appropriate, and Agent.
16.3 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; NEW LENDERS.
(a) This Agreement shall be binding upon and inure to the benefit of
Borrowers, Agent, each Lender, all future holders of the Obligations and their
respective successors and assigns, except that no Borrower may assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of Agent and each Lender.
(b) Each Borrower acknowledges that in the regular course of commercial
banking business one or more Lenders may at any time and from time to time sell
participating interests in the Advances to other financial institutions (each
such transferee or purchaser of a participating interest, a "Transferee"). Each
Transferee may exercise all rights of payment (including without limitation
rights of set-off) with respect to the portion of such Advances held by it or
other Obligations payable hereunder as fully as if such Transferee were
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the direct holder thereof provided that Borrowers shall not be required to pay
to any Transferee more than the amount which it would have been required to pay
to Lender which granted an interest in its Advances or other Obligations payable
hereunder to such Transferee had such Lender retained such interest in the
Advances hereunder or other Obligations payable hereunder and in no event shall
Borrowers be required to pay any such amount arising from the same circumstances
and with respect to the same Advances or other Obligations payable hereunder to
both such Lender and such Transferee. Each Borrower hereby grants to any
Transferee a continuing security interest in any deposits, moneys or other
property actually or constructively held by such Transferee as security for the
Transferee's interest in the Advances.
(c) Any Lender may with the consent of Agent which shall not be
unreasonably withheld or delayed sell, assign or transfer all or any part of its
rights under this Agreement and the Other Documents to one or more additional
banks or financial institutions and one or more additional banks or financial
institutions may commit to make Advances hereunder (each a "Purchasing Lender"),
in minimum amounts of not less than $5,000,000 or such other amount as approved
by Agent, pursuant to a Commitment Transfer Supplement, executed by a Purchasing
Lender, the transferor Lender, and Agent and delivered to Agent for recording.
Upon such execution, delivery, acceptance and recording, from and after the
transfer effective date determined pursuant to such Commitment Transfer
Supplement, (i) Purchasing Lender thereunder shall be a party hereto and, to the
extent provided in such Commitment Transfer Supplement, have the rights and
obligations of a Lender thereunder with a Commitment Percentage as set forth
therein, and (ii) the transferor Lender thereunder shall, to the extent provided
in such Commitment Transfer Supplement, be released from its obligations under
this Agreement, the Commitment Transfer Supplement creating a novation for that
purpose. Such Commitment Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of the
Commitment Percentages arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such transferor Lender under
this Agreement and the Other Documents. Borrowers hereby consent to the addition
of such Purchasing Lender and the resulting adjustment of the Commitment
Percentages arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement and the Other Documents. Borrowers shall execute and deliver such
further documents and do such further acts and things in order to effectuate the
foregoing.
(d) Agent shall maintain at its address a copy of each Commitment
Transfer Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Advances owing to each Lender from
time to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and Borrowers, Agent and Lenders may treat each Person whose
name is recorded in the Register as the owner of the Advance recorded therein
for the purposes of this Agreement. The Register shall be available for
inspection by Borrowers or any Lender at any reasonable time and from time to
time upon reasonable prior notice. Agent shall receive a fee in the amount of
$2,500 payable by the applicable Purchasing Lender upon the effective date of
each transfer or assignment to such Purchasing Lender.
(e) Borrowers authorize each Lender to disclose to any Transferee or
Purchasing Lender and any prospective Transferee or Purchasing Lender any and
all financial
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information in such Lender's possession concerning Borrowers which has been
delivered to such Lender by or on behalf of Borrowers pursuant to this Agreement
or in connection with such Lender's credit evaluation of Borrowers.
16.4 APPLICATION OF PAYMENTS. Agent shall have the continuing and exclusive
right to apply or reverse and re-apply any payment and any and all proceeds of
Collateral to any portion of the Obligations. To the extent that any Borrower
makes a payment or Agent or any Lender receives any payment or proceeds of the
Collateral for any Borrower's benefit, which are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver, custodian or any other party under
any bankruptcy law, common law or equitable cause, then, to such extent, the
Obligations or part thereof intended to be satisfied shall be revived and
continue as if such payment or proceeds had not been received by Agent or such
Lender.
16.5 INDEMNITY. Each Borrower shall indemnify Agent, each Lender and each
of their respective officers, directors, Affiliates, employees and agents from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind or
nature whatsoever (including, without limitation, fees and disbursements of
counsel) which may be imposed on, incurred by, or asserted against Agent or any
Lender in any litigation, proceeding or investigation instituted or conducted by
any governmental agency or instrumentality or any other Person with respect to
any aspect of, or any transaction contemplated by, or referred to in, or any
matter related to, this Agreement or the Other Documents, whether or not Agent
or any Lender is a party thereto, except to the extent that any of the foregoing
arises out of the gross negligence or willful misconduct of the party being
indemnified.
16.6 NOTICE. Any notice, request, demand, direction or other communication
(for purposes of this Section 16.6 only, a "Notice") to be given to or made upon
any party hereto under any provision of this Agreement shall be given or made by
telephone or in writing (which includes by means of electronic transmission
(i.e., "e-mail") or facsimile transmission or by setting forth such Notice on a
site on the World Wide Web (a "Website Posting") if Notice of such Website
Posting (including the information necessary to access such site) has previously
been delivered to the applicable parties hereto by another means set forth in
this Section 16.6) in accordance with this Section 16.6. Any such Notice must be
delivered to the applicable parties hereto at the addresses and numbers set
forth herein or in accordance with any subsequent unrevoked Notice from any such
party that is given in accordance with this Section 16.6. Any Notice shall be
effective:
(a) In the case of hand-delivery, when delivered;
(b) If given by mail, four days after such Notice is deposited with the
United States Postal Service, with first-class postage prepaid, return receipt
requested;
(c) In the case of a telephonic Notice, when a party is contacted by
telephone, if delivery of such telephonic Notice is confirmed no later than the
next Business Day by hand delivery, a facsimile or electronic transmission, a
Website Posting or an overnight
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courier delivery of a confirmatory Notice (received at or before noon on such
next Business Day);
(d) In the case of a facsimile transmission, when sent to the
applicable party's facsimile machine's telephone number, if the party sending
such Notice receives confirmation of the delivery thereof from its own facsimile
machine;
(e) In the case of electronic transmission, when actually received;
(f) In the case of a Website Posting, upon delivery of a Notice of such
posting (including the information necessary to access such site) by another
means set forth in this Section 16.6; and
(g) If given by any other means (including by overnight courier), when
actually received.
Any Lender giving a Notice to a Borrower shall concurrently send a copy
thereof to the Agent, and the Agent shall promptly notify the other Lenders of
its receipt of such Notice.
(A) If to Agent or PNC Bank, National Association
PNC at: 0 Xxxxx Xxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxxx Xxxxxxx-Nurse
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to: Xxxxx & Xxxxxxxxx LLP
3200 National City Center
0000 X. 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxxxx X.
Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
(B) If to a Lender other than Agent, as specified on the signature pages
hereof.
(C) If to Borrowing Agent
or any Borrower, at: Frontstep, Inc.
0000 Xxxxxxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
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with a copy to: Vorys, Xxxxx Xxxxxxx & Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, Xxxx
Attention: Xxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
16.7 SURVIVAL. The obligations of Borrowers under Sections 2.2(f), 3.5,
4.18(h), 14.7 and 16.5 shall survive termination of this Agreement and the Other
Documents and payment in full of the Obligations.
16.8 SEVERABILITY. If any part of this Agreement is contrary to, prohibited
by, or deemed invalid under applicable laws or regulations, such provision shall
be inapplicable and deemed omitted to the extent so contrary, prohibited or
invalid, but the remainder hereof shall not be invalidated thereby and shall be
given effect so far as possible.
16.9 EXPENSES. All costs and expenses including, without limitation,
reasonable attorneys' fees (including the allocated costs of in house counsel)
and disbursements incurred by Agent, Agent on behalf of Lenders and Lenders (a)
in all efforts made to enforce payment of any Obligation or effect collection of
any Collateral, or (b) in connection with the entering into, modification,
amendment, administration and enforcement of this Agreement or any consents or
waivers hereunder and all related agreements, documents and instruments, or (c)
in instituting, maintaining, preserving, enforcing and foreclosing on Agent's
security interest in or Lien on any of the Collateral, whether through judicial
proceedings or otherwise, or (d) in defending or prosecuting any actions or
proceedings arising out of or relating to Agent's or any Lender's transactions
with any Borrower, or (e) in connection with any advice given to Agent or any
Lender with respect to its rights and obligations under this Agreement and all
related agreements, may be charged to Borrowers' Account and shall be part of
the Obligations. Notwithstanding the foregoing, in the event any Agent or Lender
sells, assigns or transfers all or any part of its rights under this Agreement
or the Other Documents to one or more Participating Lenders, the attorneys fees
to be paid by Borrowers shall not exceed $2500 unless otherwise approved by
Agent or there exists an Event of Default of a Default.
16.10 INJUNCTIVE RELIEF. Each Borrower recognizes that, in the event any
Borrower fails to perform, observe or discharge any of its obligations or
liabilities under this Agreement, any remedy at law may prove to be inadequate
relief to Lenders; therefore, Agent, if Agent so requests, shall be entitled to
temporary and permanent injunctive relief in any such case without the necessity
of proving that actual damages are not an adequate remedy.
16.11 CONSEQUENTIAL DAMAGES. No party to this Agreement, nor any agent or
attorney for any of them, shall be liable to any other party for consequential
damages arising from any breach of contract, tort or other wrong relating to the
establishment, administration or collection of the Obligations.
16.12 CAPTIONS. The captions at various places in this Agreement are
intended for convenience only and do not constitute and shall not be interpreted
as part of this Agreement.
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16.13 COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement may be executed
in any number of and by different parties hereto on separate counterparts, all
of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute one and the same agreement. Any signature
delivered by a party by facsimile transmission shall be deemed to be an original
signature hereto.
16.14 CONSTRUCTION. The parties acknowledge that each party and its counsel
have reviewed this Agreement and that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement or any amendments,
schedules or exhibits thereto.
16.15 CONFIDENTIALITY; SHARING INFORMATION. (a) Agent, each Lender and each
Transferee shall hold all non-public information obtained by Agent, such Lender
or such Transferee pursuant to the requirements of this Agreement in accordance
with Agent's, such Lender's and such Transferee's customary procedures for
handling confidential information of this nature; PROVIDED, HOWEVER, Agent, each
Lender and each Transferee may disclose such confidential information (a) to its
examiners, affiliates, outside auditors, counsel and other professional
advisors, (b) to Agent, any Lender or to any prospective Transferees and
Purchasing Lenders, and (c) as required or requested by any Governmental Body or
representative thereof or pursuant to legal process; PROVIDED, FURTHER that (i)
unless specifically prohibited by applicable law or court order, Agent, each
Lender and each Transferee shall use its best efforts prior to disclosure
thereof, to notify the applicable Borrower of the applicable request for
disclosure of such non-public information (A) by a Governmental Body or
representative thereof (other than any such request in connection with an
examination of the financial condition of a Lender or a Transferee by such
Governmental Body) or (B) pursuant to legal process and (ii) in no event shall
Agent, any Lender or any Transferee be obligated to return any materials
furnished by any Borrower other than those documents and instruments in
possession of Agent or any Lender in order to perfect its Lien on the Collateral
once the Obligations have been paid in full and this Agreement has been
terminated.
(b) Borrower acknowledges that from time to time financial advisory,
investment banking and other services may be offered or provided to such
Borrower or one or more of its Affiliates (in connection with this Agreement or
otherwise) by any Lender or by one or more Subsidiaries or Affiliates of such
Lender and each Borrower hereby authorizes each Lender to share any information
delivered to such Lender by such Borrower and its Subsidiaries pursuant to this
Agreement, or in connection with the decision of such Lender to enter into this
Agreement, to any such Subsidiary or Affiliate of such Lender, it being
understood that any such Subsidiary or Affiliate of any Lender receiving such
information shall be bound by the provision of Section 16.15 as if it were a
Lender hereunder. Such authorization shall survive the repayment of the other
Obligations and the termination of the Loan Agreement.
16.16 PUBLICITY. Each Borrower and each Lender hereby authorizes Agent to
make appropriate announcements of the financial arrangement entered into among
Borrowers, Agent and Lenders, including, without limitation, announcements which
are commonly known as tombstones, in such publications and to such selected
parties as Agent shall in its sole and absolute discretion deem appropriate.
-66-
72
Each of the parties has signed this Agreement as of the day and
year first above written.
FRONTSTEP, INC., an Ohio corporation
ATTEST:
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------- -------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: President & Chief Executive Officer
----------------------------------------
0000 Xxxxxxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
SYMIX COMPUTER SYSTEMS, INC., an Ohio
corporation
ATTEST:
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------- -------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: President & Chief Executive Officer
----------------------------------------
0000 Xxxxxxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
SYMIX COMPUTER SYSTEMS DELAWARE,
INC., a Delaware corporation
ATTEST:
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------- -------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: Chief Executive Officer
----------------------------------------
000 X. Xxxxxxx Xxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
FRONTSTEP, INC., a Minnesota corporation
ATTEST:
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------- -------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: Chief Executive Officer
----------------------------------------
-67-
73
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
BRIGHTWHITE SOLUTIONS, INC., an Ohio
corporation
ATTEST:
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------- -------------------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------------------
Title: President & Chief Executive Officer
----------------------------------------
0000 Xxxxxxxxx Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
SYMIX COMPUTER SYSTEMS (CANADA),
INC., a Canadian corporation
ATTEST:
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxxx X. XxXxxx
---------------------------------------- -------------------------------------------
Name: Xxxxxxxx X. XxXxxx
-----------------------------------------
Title: Assistant Secretary
----------------------------------------
0000 X. Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx X0X 0X0
Xxxxxx
PNC BANK, NATIONAL ASSOCIATION, as Lender
and as Agent
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------------
Xxxxxxx Xxxxxx, Vice President
Xxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Commitment Percentage: 100%
-68-
74
List of Exhibits and Schedules
------------------------------
Exhibits
Exhibit A Borrowing Base Certificate
Exhibit 1.2 Pledge Agreement
Exhibit 2.1(a) Revolving Credit Note
Exhibit 8.1(i) Financial Condition Certificate
Exhibit 16.3 Commitment Transfer Supplement
Schedules
Schedule 1.2 Permitted Encumbrances
Schedule 4.15 Other Locations
Schedule 4.15(c) Location of Executive Offices
Schedule 4.19 Real Property
Schedule 5.2(a) States of Qualification and Good Standing
Schedule 5.2(b) Subsidiaries
Schedule 5.4 Federal Tax Identification Number
Schedule 5.6 Prior Names
Schedule 5.8(b) Indebtedness for Borrowed Money
Schedule 5.8(b) Litigation
Schedule 5.8(d) Plans
Schedule 5.9 Patents, Trademarks, Copyrights and Licenses
Schedule 5.10 Licenses and Permits
Schedule 5.14 Labor Disputes
* Each of the exhibits and schedules listed above have been omitted by the
Registrant and will be filed with the Securities and Exchange Commission
upon request.
