1
EXHIBIT 10.14
REVOLVING CREDIT AGREEMENT
Dated as of March 31, 1997
between
BRIDGESTREET INTERNATIONAL INC., AS BORROWER
and
FLEET NATIONAL BANK
AND THE OTHER LENDING INSTITUTIONS
LISTED ON SCHEDULE 1 HERETO
and
FLEET NATIONAL BANK, as Agent
2
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of March 31, 1997, by and
among BRIDGESTREET INTERNATIONAL INC., a Delaware corporation (the "Borrower"),
having its principal place of business at c/o American Business Partners, 00
Xxxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX 00000, and FLEET NATIONAL BANK, a
national banking association ("Fleet"), and the other lending institutions
listed on Schedule I hereto, and FLEET NATIONAL BANK, as agent for itself and
such other lending institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this Section 1 or elsewhere in the provisions of this Credit Agreement
referred to below:
Affiliate. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agent. Fleet National Bank acting as agent for the Banks.
Agent's Head Office. The Agent's head office located at Xxx Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Agent's Special Counsel. Xxxxxxxx, Xxxxxxx & Xxxxxxx, A Professional
Corporation, or such other counsel as may be approved by the Agent.
Assignment and Acceptance. See Section 18.1 hereof.
Balance Sheet Date. December 31, 1996.
Banks. Fleet and the other lending institutions listed on Schedule I
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to Section 18 hereof.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
3
Capital Expenditures. Amounts paid or indebtedness incurred by the
Borrower or its Subsidiaries in connection with the purchase or lease by the
Borrower or its Subsidiaries of Capital Assets that would be required to be
capitalized and shown on the balance sheet of such Person in accordance with
generally accepted accounting principles.
Capitalization Documents. The certificate of incorporation and by-laws
of the Borrower.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See Section 6.18 hereof.
Closing Date. The first date on which the conditions set forth in
Sections 10 and 11 hereof have been satisfied and any Revolving Credit Loans are
to be made.
Code. The Internal Revenue Code of 1986, as amended.
Collateral. All of the property, rights and interests of the Borrower
and its Subsidiaries that are or are intended to be subject to the security
interests and mortgages created by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule
I hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to the Borrower, as the same may be reduced from time to time; or if such
commitment is terminated pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule I hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Compliance Certificate. See Section 7.4(c) hereof.
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated EBITDA. For any fiscal period, the sum of (a) the
Consolidated Net Income for the Borrower and its Subsidiaries for such period,
after all expenses and other proper charges but before payment or provision for
any income taxes or interest expense of the Borrower for such period, plus (b)
the aggregate
2
4
amount of depreciation, amortization and other non-cash charges made in
calculating Consolidated Net Income for such period, all as determined in
accordance with generally accepted accounting principles. For purposes of
calculating Consolidated EBITDA for the Current Subsidiaries for any period
including a fiscal quarter in the fiscal year ended December 31, 1996 (such
quarter being referred to herein as a "1996 Fiscal Quarter"), an adjustment,
reasonably satisfactory to the Agent, may be made for such 1996 Fiscal Quarter
to reduce management compensation expense during such period to an amount which
reflects management compensation expense of the Current Subsidiary since the
date of its acquisition of the Borrower.
Consolidated Funded Debt. At any time, all Indebtedness of the Borrower
and its Subsidiaries at such time, whether recourse is to all or a portion of
the assets of the Borrower or its Subsidiaries and whether or not contingent,
(a) in respect of money borrowed or the deferred purchase price of property and
services (excluding trade accounts payable), (b) in respect of letters of
credit, bankers' acceptances, or similar facilities, (c) in respect of any
Capitalized Leases, (d) evidenced by any loan or credit agreement, reimbursement
agreement, promissory note, debenture, bond, or other similar contract, and (e)
any Indebtedness of any other entity of a type described in (a), (b), (c), or
(d) that the Borrower or its Subsidiaries has guaranteed or for which the
Borrower or its Subsidiaries is otherwise responsible or liable, directly or
indirectly.
Consolidated Net Income (or Deficit). For any period, the consolidated
net income (or deficit) of the Borrower and Subsidiaries for such period, after
deduction of all expenses, taxes, and other proper charges, determined in
accordance with generally accepted accounting principles, after eliminating
therefrom all extraordinary nonrecurring items of income.
Consolidated Total Assets. All items which, in accordance with
generally accepted accounting principles, would be included in determining the
total assets on the asset side of a consolidated balance sheet of the Borrower
and its Subsidiaries.
Consolidated Total Liabilities. All items which, in accordance with
generally accepted accounting principles, would be included in determining the
total liabilities on the liability side of a consolidated balance sheet of the
Borrower and its Subsidiaries.
Consolidated Total Tangible Net Worth. At any date as of which the
amount thereof shall be determined, the excess of Consolidated Total Assets over
Consolidated Total Liabilities.
3
5
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in accordance
with Section 2.7 hereof.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto, as amended or supplemented, and in effect from
time to time.
Current Subsidiaries. Collectively, Corporate Lodgings, Inc., a
Delaware corporation, Temporary Corporate Housing, Inc., a Delaware corporation,
Temporary Housing Experts, Inc., a Delaware corporation, Exclusive Interim
Properties, Ltd., a Delaware corporation, and HAI Acquisition Corp., a Delaware
corporation.
Default. See Section 12.1 hereof.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the any Person, other
than dividends payable solely in shares of capital stock of such Person; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of any Person, directly or indirectly through a Subsidiary of such Person
or otherwise; the return of capital by any Person to its shareholders as such;
or any other distribution on or in respect of any shares of any class of capital
stock of any Person.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule I hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Prime
Rate Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or
is to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with Section 2.7 hereof.
EBITDA. For any fiscal period for any Person, the sum of (a) the net
income for such Person for such period, after all expenses and other proper
charges but before payment or provision for any income taxes or interest expense
of such Person for such period, after eliminating therefrom all extraordinary
nonrecurring items of income, plus (b) the aggregate amount of depreciation,
amortization and other non-cash charges made in calculating the net income in
clause (a) for such period for such Person, all as determined in accordance with
generally accepted accounting principles.
4
6
Eligible Assignee. Any of (a) a commercial bank organized under the
laws of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (d) the central bank of any country
which is a member of the OECD; and (e) if, but only if, any Event of Default has
occurred and is continuing, any other bank, insurance company, commercial
finance company or other financial institution approved by the Agent, such
approval not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(2) of ERISA maintained of contributed to by the Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See Section 6.18(a) hereof.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other Eurodollar interbank market as
5
7
may be selected by the Agent in its sole discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule I hereto; thereafter, such other office of such
Bank, if any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the rate per annum (rounded upwards
to the nearest whole multiple of 1/16 of 1%) of the rate at which the Agent's
Eurodollar Lending Office is offered Dollar deposits two (2) Eurodollar Business
Days prior to the beginning of such Interest Period in the interbank eurodollar
market where the eurodollar and foreign currency and exchange operations of such
Eurodollar Lending Office are customarily conducted, for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Rate Loan of the Agent to
which such Interest Period applies, divided by (b) a number equal to 1.00 minus
the Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans bearing interest
calculated by reference to the Eurodollar Rate.
Event of Default. See Section 12.1 hereof.
Fleet. Fleet National Bank, a national banking association, in its
individual capacity.
generally accepted accounting principles. (a) When used in Section 9
hereof, whether directly or indirectly through reference to a capitalized term
used therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means principles that are (i) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (ii) consistently applied with past financial
statements of the Borrower adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as
6
8
to financial statements in which such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate, the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guarantor. Any Subsidiary of the Borrower that is a party to the
Guaranty or that delivers an Instrument of Adherence to the Guaranty pursuant to
Section 5.14 hereof.
Guaranty. The Guaranty, dated or to be dated on or prior to the Closing
Date, made by each of the Current Subsidiaries in favor of the Banks and the
Agent pursuant to which such entities jointly and severally guarantee to the
Banks and the Agent the payment and performance of the Obligations in form and
substance satisfactory to the Agent.
Hazardous Substances. See Section 6.18(b) hereof.
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (a) all debt and similar monetary obligations, whether direct or
indirect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit.
Interest Payment Date. (a) As to any Prime Rate Loan, the last day of
the calendar quarter which includes the Drawdown Date thereof; and (b) as to any
Eurodollar Rate Loan the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Loan and ending on
the last day of one of the periods set forth below, as selected by the Borrower
in a Revolving Credit
7
9
Loan Request (i) for any Prime Rate Loan, the last day of each calendar quarter;
and (ii) for any Eurodollar Rate Loan, 1, 2 or 3 months; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Revolving Credit Loan and ending on the last day of one of
the periods set forth above, as selected by the Borrower in a Conversion
Request; provided that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(a) if any Interest Period with respect to a Eurodollar
Rate Loan would otherwise end on a day that is not a
Eurodollar Business Day, that Interest Period shall
be extended to the next succeeding Eurodollar
Business Day unless the result of such extension
would be to carry such Interest Period into another
calendar month, in which event such Interest Period
shall end on the immediately preceding Eurodollar
Business Day;
(b) if any Interest Period with respect to a Prime Rate
Loan would end on a day that is not a Business Day,
that Interest Period shall end on the next succeeding
Business Day;
(c) if the Borrower shall fail to give notice as provided
in Section 2.7 hereof, the Borrower shall be deemed
to have requested a conversion of the affected
Eurodollar Rate Loan to a Prime Rate Loan and the
continuance of all Prime Rate Loans as Prime Rate
Loans on the last day of the then current Interest
Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate
Loan that begins on the last Eurodollar Business Day
of a calendar month (or on a day for which there is
no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end
on the last Eurodollar Business Day of a calendar
month; and
(e) any Interest Period relating to any Eurodollar Rate
Loan that would otherwise extend beyond the Revolving
Credit Loan Maturity Date shall end on the Revolving
Credit Loan Maturity Date.
Instrument of Adherence. An Instrument of Adherence to the Guaranty
substantially in the form of Exhibit A to the Guaranty.
8
10
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Leverage Ratio. As at the last day of any fiscal quarter, the ratio of
(a) Consolidated Total Funded Debt to (b) Consolidated EBITDA, determined for
the four consecutive fiscal quarters of the Borrower ended on such date.
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the
Security Documents and all other documents designated by the parties thereto as
a "Loan Document" for purposes hereof.
Majority Banks. As of any date, the Banks holding at least sixty-six
and two-thirds percent (66-2/3%) of the outstanding principal amount of the
Revolving Credit Notes on such date; and if no such principal is outstanding,
the Banks whose aggregate Commitments constitutes at least fifty-one percent
(51%) of the Total Commitment.
Material Subsidiary. A Subsidiary of the Borrower whose (i) total
assets represent ten percent (10%) or more of the consolidated assets of the
Borrower and its Subsidiaries, or (ii) EBITDA represents ten percent (10%) or
more of Consolidated EBITDA, all as determined in accordance with generally
accepted accounting principles.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Obligations. All indebtedness, obligations and liabilities of any of
the Borrower and any of its Subsidiaries to any of the
9
11
Banks and the Agent, individually or collectively, existing on the date of this
Credit Agreement or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise, in
each case arising or incurred under this Credit Agreement or any of the other
Loan Documents or in respect of any of the Revolving Credit Loans made or any of
the Revolving Credit Notes or other instruments at any time evidencing any
thereof.
Outstanding. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Permitted Acquisitions. See Section 8.5.1 hereof.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 8.2 hereof.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Prime Rate. At any time, the annual rate of interest most recently
announced and made effective by Fleet at its head office in Boston,
Massachusetts, as its "Prime Rate". Such rate is used for reference purposes
only and is not necessarily the best or lowest rate charged by Fleet to its most
substantial or creditworthy customer and serves only as the basis upon which
effective rates of interest are calculated for obligations making reference
thereto.
Prime Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Prime Rate.
Pro Forma Balance Sheet. See Section 6.4 hereof.
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
Revolving Credit Loan Maturity Date. Five (5) years from the Closing
Date, or such earlier date on which the Total Commitment is terminated pursuant
to the provisions hereof.
Revolving Credit Loan Request. See Section 2.6 hereof.
10
12
Revolving Credit Loans. Revolving credit loans made or to be made by
the Banks to the Borrower pursuant to Section 2 hereof.
Revolving Credit Note Record. The grid attached to a Revolving Credit
Note, or the continuation of such grid, or any other similar record, including
computer records, maintained by any Bank with respect to any Revolving Credit
Loan referred to in such Revolving Credit Note.
Revolving Credit Notes. See Section 2.4 hereof.
Security Documents. The Stock Pledge Agreement, the Guaranty and all
Instruments of Adherence to the Guaranty delivered after the Closing Date
pursuant to Section 7.13 hereof.
Stock Pledge Agreement. The Stock Pledge Agreement, dated or to be
dated on or prior to the Closing Date, between the Borrower and the Agent in
form and substance satisfactory to the Agent.
Subordinated Debt. Unsecured Indebtedness of the Borrower that is
expressly subordinated and made junior to the payment and performance in full of
the Obligations, and evidenced as such by a subordination agreement or by
another written instrument containing subordination provisions in form and
substance approved by the Agent in writing.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time. The Total Commitment on the Closing Date is $10,000,000.
Type. As to any Revolving Credit Loan, its nature as a Prime Rate Loan
or a Eurodollar Rate Loan.
Unaudited Financial Statements. See Section 6.4.1 hereof.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. RULES OF INTERPRETATION.
11
13
(a) A reference to any document or agreement shall
include such document or agreement as amended,
modified or supplemented from time to time in
accordance with its terms and the terms of this
Credit Agreement.
(b) The singular includes the plural and the plural
includes the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have
the meanings assigned to them by generally accepted
accounting principles applied on a consistent basis
by the accounting entity to which they refer.
(f) The words "include," "includes" and "including" are
not limiting.
(g) All terms not specifically defined herein or by
generally accepted accounting principles, which terms
are defined in the Uniform Commercial Code as in
effect in The Commonwealth of Massachusetts, have the
meanings assigned to them therein, with the term
"instrument" being that defined under Article 9 of
the Uniform Commercial Code.
(h) Reference to a particular "Section " refers to that
section of this Credit Agreement unless otherwise
indicated.
(i) The words "herein," "hereof," "hereunder," and words
of like import shall refer to this Credit Agreement
as a whole and not to any particular section or
subdivision of this Credit Agreement.
2. THE REVOLVING CREDIT FACILITY
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time
between the Closing Date and up to but not including the Revolving Credit Loan
Maturity Date upon notice by the Borrower to the Agent given in accordance with
Section 2.6 hereof, such sums as are requested by the Borrower up to a maximum
aggregate amount outstanding (after giving effect to all amounts requested) at
any one time equal to
12
14
such Bank's Commitment, provided that the sum of the outstanding amount of the
Revolving Credit Loans (after giving effect to all amounts requested) shall not
at any time exceed the Total Commitment. The Revolving Credit Loans shall be
made pro rata in accordance with each Bank's Commitment Percentage. Each request
for a Revolving Credit Loan hereunder shall constitute a representation and
warranty by the Borrower that the conditions set forth in Sections 11 and 12
hereof, in the case of the initial Revolving Credit Loans to be made, and
Section 12, in the case of all other Revolving Credit Loans thereafter, have
been satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the rate of .375% per annum on the average daily
amount during each calendar quarter or portion thereof from the Closing Date to
the Revolving Credit Loan Maturity Date by which the Total Commitment exceeds
the outstanding amount of Revolving Credit Loans during such calendar quarter.
The commitment fee shall be payable quarterly in arrears on the first day of
each calendar quarter for the immediately preceding calendar quarter commencing
on the first such date following the date hereof, with a final payment on the
Revolving Credit Maturity Date.
2.3. OPTIONAL REDUCTION OF TOTAL COMMITMENT. The Borrower shall have
the right at any time and from time to time upon five (5) Business Days prior
written notice to the Agent to reduce by $500,000 or a larger integral multiple
of $100,000 or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced pro rata in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this Section 2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued in the amount of the reduction.
No reduction of the Total Commitment or termination of the Commitments may be
reinstated.
2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of Exhibit A hereto (each a "Revolving Credit Note"), dated as of the Closing
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of
13
15
receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Revolving Credit Note Record reflecting the
making of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on such
Bank's Revolving Credit Note Record shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount on such Bank's Revolving
Credit Note Record shall not limit or otherwise affect the obligations of the
Borrower hereunder or under any Revolving Credit Note to make payments of
principal of or interest on any Revolving Credit Note when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided
in Section 4.10 hereof:
(a) Each Prime Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the annual rate equal to
the Prime Rate as in effect from time to time while such Prime Rate
Loan is outstanding.
(b) Each Eurodollar Rate Loan shall bear interest for the
period commencing with the Drawdown Date thereof and ending on the last
day of the Interest Period with respect thereto at the annual rate
equal to the sum of the Eurodollar Rate plus one and one-quarter of one
percent (1.25%).
(c) The Borrower promises to pay interest on each Revolving
Credit Loan in arrears on each Interest Payment Date with respect
thereto.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrower shall give to
the Agent written notice in the form of Exhibit B hereto (or telephonic notice
confirmed in a writing in the form of Exhibit B hereto) of each Revolving Credit
Loan requested hereunder (a "Revolving Credit Loan Request") no later than (a)
12:00 noon (Boston time) on the Business Day of the proposed Drawdown Date of
any Prime Rate Loan and (b) 10:00 a.m. (Boston time) on the date three (3)
Eurodollar Business Days prior to the proposed Drawdown Date of any Eurodollar
Rate Loan. Each such notice shall specify (w) the principal amount of the
Revolving Credit Loan requested, (x) the proposed Drawdown Date of such
Revolving Credit Loan, (y) the Interest Period for such Revolving Credit Loan
and (z) the Type of such Revolving Credit Loan. Promptly upon receipt of any
such notice, the Agent shall notify each of the Banks thereof. Each Revolving
Credit Loan Request shall be irrevocable and binding on the Borrower and shall
obligate the Borrower to accept the Revolving Credit Loan requested from the
Banks on the proposed Drawdown Date. Each
14
16
Revolving Credit Loan Request shall be in a minimum aggregate amount of $200,000
or a larger integral multiple of $50,000.
2.7. CONVERSION AND CONTINUATION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.
The Borrower may elect from time to time to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type, provided that (a) with
respect to any such conversion of a Eurodollar Rate Loan to a Prime Rate Loan,
the Borrower shall give the Agent at least one (1) Business Day prior written
notice of such election; (b) with respect to any such conversion of a Prime Rate
Loan to a Eurodollar Rate Loan, the Borrower shall give the Agent at least three
(3) Eurodollar Business Days prior written notice of such election; (c) with
respect to any such conversion of a Eurodollar Rate Loan into a Revolving Credit
Loan of another Type, such conversion shall only be made on the last day of the
Interest Period with respect thereto or, if not made on such date, shall be
subject to the provisions of Section 4.9 hereof and (d) no Revolving Credit Loan
may be converted into a Eurodollar Rate Loan when any Event of Default has
occurred and is continuing. On the date on which such conversion is being made
each Bank shall take such action as is necessary to transfer its Commitment
Percentage of such Revolving Credit Loans to its Domestic Lending Office or its
Eurodollar Lending Office, as the case may be. All or any part of outstanding
Revolving Credit Loans of any Type may be converted into a Revolving Credit Loan
of another Type as provided herein, provided that any partial conversion shall
be in an aggregate minimum principal amount of $200,000 and an integral multiple
of $50,000 in excess thereof. Each Conversion Request relating to the conversion
of a Revolving Credit Loan to a Eurodollar Rate Loan shall be irrevocable by the
Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any
Revolving Credit Loan of any Type may be continued as a Revolving Credit Loan of
the same Type upon the expiration of an Interest Period with respect thereto by
compliance by the Borrower with the notice provisions for continuations that are
contained in Section 2.7.1 hereof; provided that no Eurodollar Rate Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Prime Rate Loan on the
last day of the first Interest Period relating thereto ending during the
continuance of any Default or Event of Default of which officers of the Agent
active upon the Borrower's account have actual knowledge. In the event that the
Borrower fails to provide any such notice with respect to the continuation of
any Eurodollar Rate Loan as such, then such Eurodollar Rate Loan shall be
automatically converted to a Prime Rate Loan on the last day of the first
Interest Period relating thereto. The Agent shall notify the Banks promptly when
any such
15
17
automatic conversion contemplated by this Section 2.7 is scheduled to occur.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from
Eurodollar Rate Loans shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of all Eurodollar Rate Loans having the same Interest Period shall not be less
than $200,000 and a whole multiple of $50,000 in excess thereof.
2.8. FUNDS FOR REVOLVING CREDIT LOANS.
2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Boston
time) on the proposed Drawdown Date of any Revolving Credit Loans, each of the
Banks will make available to the Agent, at its Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of the amount
of the requested Revolving Credit Loans. Upon receipt from each Bank of such
amount, and upon receipt of the documents required by Sections 11 and 12 hereof
and the satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate amount
of such Revolving Credit Loans made available to the Agent by the Banks. The
failure or refusal of any Bank to make available to the Agent at the aforesaid
time and place on any Drawdown Date the amount of its Commitment Percentage of
the requested Revolving Credit Loans shall not relieve any other Bank from its
several obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Revolving Credit Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to
the contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Revolving Credit Loans to be made on such Drawdown
Date, and the Agent may (but it shall not be required to), in reliance upon such
assumption, make available to the Borrower a corresponding amount with written
notice to the Borrower of such Bank's failure to fund. If any Bank makes
available to the Agent such amount on a date after such Drawdown Date, such Bank
shall pay to the Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c) below, of the weighted
average interest rate paid by the Agent for federal funds acquired by the Agent
during each day included in such period, times (b) the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans, time (c) a fraction, the
numerator of which is the number of days that elapse from and including such
Drawdown Date to the date on which the amount of such Bank's Commitment
Percentage of such Revolving Credit Loans shall become immediately available to
the Agent, and the denominator of which is 365. A statement of the Agent
submitted
16
18
to such Bank with respect to any amounts owing under this paragraph shall be
prima facie evidence of the amount due and owing to the Agent by such Bank. If
the amount of such Bank's Commitment Percentage of such Revolving Credit Loans
is not made available to the Agent by such Bank within three (3) Business Days
following such Drawdown Date, the Agent shall be entitled to recover such amount
from the Borrower on demand, with interest thereon at the rate per annum
applicable to the Revolving Credit Loans made on such Drawdown Date.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS
3.1. MATURITY. The Borrower promises to pay on the Revolving Credit
Loan Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the
sum of the outstanding amount of the Revolving Credit Loans exceeds the Total
Commitment, then the Borrower shall immediately pay the amount of such excess to
the Agent for application to the Revolving Credit Loans.
3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
of any Eurodollar Rate Loans pursuant to this Section 3.3 may be made only on
the last day of the Interest Period relating thereto. The Borrower shall give
the Agent, no later than 10:00 a.m. (Boston time), at least three (3) Business
Days' prior written notice of any proposed prepayment pursuant to this Section
3.3 of Prime Rate Loans, and four (4) Eurodollar Business Days' notice of any
proposed prepayment pursuant to this Section 3.3 of Eurodollar Rate Loans, in
each case specifying the proposed date of prepayment of Revolving Credit Loans
and the principal amount to be prepaid. Each such partial prepayment of the
Revolving Credit Loans shall be in an integral multiple of $50,000, shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of prepayment and shall be applied, in the absence of instruction by the
Borrower, first to the principal of Prime Rate Loans and then to the principal
of Eurodollar Rate Loans. Each partial prepayment shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective unpaid
principal amount of each Bank's Revolving Credit Note, with adjustments to the
extent practicable to equalize any prior repayments not exactly in proportion.
4. CERTAIN GENERAL PROVISIONS
17
19
4.1. FUNDS FOR PAYMENTS.
4.1.1. PAYMENTS TO AGENT. All payments of principal, interest,
commitment fees and any other amounts due hereunder or under any of the other
Loan Documents shall be made to the Agent, for the respective accounts of the
Banks and the Agent, at the Agent's Head Office or at such other location in the
Boston, Massachusetts, area that the Agent may from time to time designate, in
each case in immediately available funds.
4.1.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes, levies,
imposts, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions of any nature now or hereafter imposed or levied by
any jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrower is compelled by law to make such deduction
or if any such obligation is imposed upon the Borrower with respect to any
amount payable by it hereunder or under any of the other Loan Documents, the
Borrower will pay to the Agent, for the account of the Banks or (as the case may
be) the Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Banks or the Agent to receive the same net amount which
the Banks or the Agent would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver promptly to
the Agent certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrower hereunder or
under such other Loan Document.
4.2. COMPUTATIONS. All computations of interest on the Revolving Credit
Loans and commitment fees or other fees shall, unless otherwise expressly
provided herein, be based on a 360-day year and paid for the actual number of
days elapsed. Except as otherwise provided in the definition of the term
"Interest Period" with respect to Eurodollar Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Revolving Credit Loans as reflected on the Revolving
Credit Note Records from time to time shall be considered correct and binding on
the Borrower absent manifest error or unless within five (5) Business Days after
receipt of any notice by the Agent or any of the Banks of such outstanding
amount, the Agent or such Bank shall notify the Borrower to the contrary.
18
20
4.3. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Revolving Credit
Loan Request or Conversion Request with respect to Eurodollar Rate Loans shall
be automatically withdrawn and shall be deemed a request for Prime Rate Loans,
(b) each Eurodollar Rate Loan will automatically, on the last day of the then
current Interest Period relating thereto, become a Prime Rate Loan, and (c) the
obligations of the Banks to make Eurodollar Rate Loans shall be suspended until
the Agent or the Majority Banks determine that the circumstances giving rise to
such suspension no longer exist, whereupon the Agent or, as the case may be, the
Agent upon the instruction of the Majority Banks, shall so notify the Borrower
and the Banks.
4.4. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
Eurodollar Rate Loans, such Bank shall forthwith give notice of such
circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Revolving
Credit Loans of another Type to Eurodollar Rate Loans shall forthwith be
suspended and (b) such Bank's Revolving Credit Loans then outstanding as
Eurodollar Rate Loans, if any, shall be converted automatically to Prime Rate
Loans on the last day of each Interest Period applicable to such Eurodollar Rate
Loans or within such earlier period as may be required by law. The Borrower
hereby agrees promptly to pay the Agent for the account of such Bank, upon
demand by such Bank, any additional amounts necessary to compensate such Bank
for any costs incurred by such Bank in making any conversion in accordance with
this Section 4.5, including any interest or fees payable by such Bank to lenders
of funds obtained by it in order to make or maintain its Eurodollar Rate Loans
hereunder.
4.5. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
19
21
(a) subject any Bank or the Agent to any tax, levy,
impost, duty, charge, fee, deduction or withholding
of any nature with respect to this Credit Agreement,
the other Loan Documents, such Bank's Commitment or
the Revolving Credit Loans (other than taxes based
upon or measured by the income or profits of such
Bank or the Agent); or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to
any Bank of the principal of or the interest on any
Revolving Credit Loans or any other amounts payable
to any Bank or the Agent under this Credit Agreement
or any of the other Loan Documents; or
(c) impose or increase or render applicable (other than
to the extent specifically provided for elsewhere in
this Credit Agreement) any special deposit, reserve,
assessment, liquidity, capital adequacy or other
similar requirements (whether or not having the force
of law) against assets held by, or deposits in or for
the account of, or loans by, or letters of credit
issued by, or commitments of an office of any Bank;
or
(d) impose on any Bank or the Agent any other conditions
or requirements with respect to this Credit
Agreement, the other Loan Documents, the Revolving
Credit Loans, such Bank's Commitment, or any class of
loans, letters of credit or commitments of which any
of the Revolving Credit Loans or such Bank's
Commitment forms a part, and the result of any of the
foregoing is:
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or
maintaining any of the Revolving Credit
Loans or such Bank's Commitment, or;
(ii) to reduce the amount of principal, interest,
reimbursement Obligation, or other amount
payable to such Bank or the Agent hereunder
on account of such Bank's Commitment or any
of the Revolving Credit Loans; or
20
22
(iii) to require such Bank or the Agent to make
any payment or to forego any interest or
other sum payable hereunder, the amount of
which payment or foregone interest or other
sum is calculated by reference to the gross
amount of any sum receivable or deemed
received by such Bank or the Agent from the
Borrower hereunder;
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum.
4.6. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline, or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Revolving Credit Loans to a level below that which such Bank or
the Agent could have achieved but for such adoption, change, or compliance
(taking into consideration such Bank's or the Agent's then existing policies
with respect to capital adequacy and assuming full utilization of such entity's
capital) by any amount deemed by such Bank or (as the case may be) the Agent to
be material, then such Bank or the Agent may notify the Borrower of such fact.
To the extent that the amount of such reduction in the return on capital is not
reflected in the Prime Rate, the Borrower agrees to pay such Bank or (as the
case may be) the Agent for the amount of such reduction in the return on capital
as and when such reduction is determined upon presentation by such Bank or (as
the case may be) the Agent of a certificate in accordance with Section 4.7
hereof. Each Bank shall allocate such cost increases among its customers in good
faith and on an equitable basis.
4.7. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to Sections 4.5 or 4.6 and a brief explanation of such amounts
which are due, submitted by any Bank or the Agent to the Borrower, shall be
conclusive, absent manifest error, that such amounts are due and owing.
21
23
4.8. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost, or expense (including loss
of anticipated profits) that such Bank may sustain or incur as a consequence of
(a) default by the Borrower in payment of the principal amount of or any
interest on any Eurodollar Rate Loans as and when due and payable, including any
such loss or expense arising from interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain its Eurodollar Rate Loans,
(b) default by the Borrower in making a borrowing or conversion after the
Borrower has given (or is deemed to have given) a Revolving Credit Loan Request
or a Conversion Request relating thereto in accordance with Section 2.6 or
Section 2.7, or (c) the making of any payment of a Eurodollar Rate Loan or the
making of any conversion of any such Revolving Credit Loan to a Prime Rate Loan
on a day that is not the last day of the applicable Interest Period with respect
thereto, including interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain any such Revolving Credit Loans.
4.9. INTEREST AFTER DEFAULT. Overdue principal and (to the extent
permitted by applicable law) interest on the Revolving Credit Loans and all
other overdue amounts payable hereunder or under any of the other Loan Documents
shall bear interest payable on demand at a rate per annum equal to two percent
(2%) above the Prime Rate until such amount shall be paid in full (after as well
as before judgment).
4.10. REPLACEMENT BANK. Within thirty (30) days after any Bank has
demanded compensation from the Borrower pursuant to Sections 4.5 or 4.6 hereof
or any Bank has become a Delinquent Bank, as defined in Section 14.5.3 hereof
(any such Bank described in the foregoing clause is hereinafter referred to as
an "Affected Bank"), the Borrower may request that the Non-Affected Banks
acquire all, but not less than all, of the Affected Bank's outstanding Revolving
Credit Loans and assume all, but not less than all, of the Affected Bank's
Commitment. If the Borrower so requests, the Non-Affected Banks may elect to
acquire all or any portion of the Affected Bank's outstanding Revolving Credit
Loans and to assume all or any portion of the Affected Bank's Commitment. If the
Non-Affected Banks do not elect to acquire and assume all of the Affected Bank's
outstanding Revolving Credit Loans and Commitment, the Borrower may designate a
replacement bank or banks, which must be satisfactory to the Agent, to acquire
and assume that portion of the outstanding Revolving Credit Loans and Commitment
of the Affected Bank not being acquired and assumed by the Non-Affected Banks.
The provisions of Section 18 hereof shall apply to all reallocations pursuant to
this Section 4.10, and the Affected Bank and any Non-Affected Banks and/or
replacement banks which are to acquire the Revolving Credit Loans and Commitment
of the Affected Bank shall execute and deliver to the Agent, in accordance with
the
22
24
provisions of Section 18 hereof, such Assignments and Acceptances and other
instruments, including, without limitation, Notes, as are required pursuant to
Section 18 hereof to give effect to such reallocations. Any Non-Affected Banks
and/or replacement banks which are to acquire the Revolving Credit Loans and
Commitment of the Affected Bank shall be deemed to be Eligible Assignees for all
purposes of Section 18 hereof. On the effective date of the applicable
Assignments and Acceptances, the Borrower shall pay to the Affected Bank all
interest accrued on its Revolving Credit Loans up to but excluding such date,
along with any fees payable to such Affected Bank hereunder up to but excluding
such date.
5. SECURITY AND GUARANTIES
5.1. STOCK PLEDGE. The Obligations shall be secured by a pledge by the
Borrower of all the capital stock of its Subsidiaries owned by Borrower, whether
now owned or hereafter acquired, pursuant to the terms of the Stock Pledge
Agreement.
5.2. GUARANTY. The Obligations shall also be guaranteed pursuant to the
terms of the Guaranty, as amended by the Instruments of Adherence delivered
pursuant to Section 7.13 hereof after the Closing Date.
6. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Banks and the Agent as
follows:
6.1. CORPORATE AUTHORITY.
6.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and
each of its Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation, (b) has all
requisite corporate power to own its property and conduct its business as now
conducted and as presently contemplated, and (c) is in good standing as a
foreign corporation and is duly authorized to do business in each jurisdiction
where such qualification is necessary except where a failure to be so qualified
would not have a materially adverse effect on the business, assets or financial
condition of the Borrower and its Subsidiaries, considered as a whole.
6.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which the Borrower or
any of its Subsidiaries is or is to become a party and the transactions
contemplated hereby and thereby (a) are within the corporate authority of such
Person, (b) have been duly authorized by all necessary corporate proceedings,
(c) do not conflict with or result in any breach or contravention of any
provision of law, statute, rule or
23
25
regulation to which the Borrower or such Subsidiary of the Borrower is subject
or any judgment, order, writ, injunction, license or permit applicable to the
Borrower or such Subsidiary, and (d) do not conflict with any provision of the
corporate charter or bylaws of, or any agreement or other instrument binding
upon, the Borrower or such Subsidiary.
6.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Borrower or any
Subsidiary of the Borrower is or is to become a party will result in valid and
legally binding obligations of the Borrower or such Subsidiary of the Borrower
enforceable against such Person in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to or
affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
6.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any of its Subsidiaries of this Credit Agreement and the other
Loan Documents to which the Borrower or any Subsidiary of the Borrower is or is
to become a party and the transactions contemplated hereby and thereby do not
require the approval or consent of, or filing with, any governmental agency or
authority other than those already obtained.
6.3. TITLE TO PROPERTIES, LEASES. Except as indicated on Schedule 6.3
hereto, the Borrower and each of its Subsidiaries owns all of the assets
reflected in the consolidated balance sheet of the Borrower and its Subsidiaries
as at the Balance Sheet Date or acquired since that date (except property and
assets sold or otherwise disposed of in the ordinary course of business since
that date), subject to no rights of others, including any mortgages, leases,
conditional sales agreements, title retention agreements, liens or other
encumbrances except Permitted Liens.
6.4. FINANCIAL STATEMENTS AND PROJECTIONS.
6.4.1. FINANCIAL STATEMENTS. There has been furnished to the
Agent an unaudited internally prepared consolidated pro forma balance sheet of
the Borrower and its Subsidiaries as at December 31, 1996 (the "Pro Forma
Balance Sheet"), and related combined statements of financial condition, income
changes in stockholders' equity and cash flows of the Borrower and its
Subsidiaries for the fiscal year (or nine months in the case of Exclusive
Interim Properties, Ltd.), ended December 31, 1996 (the "Unaudited Financial
Statements"). The
24
26
Unaudited Financial Statements have been prepared in accordance with generally
accepted accounting principles and fairly present the financial condition of the
Borrower and its Subsidiaries as at the close of business on the date thereof.
There are no contingent liabilities of the Borrower or any of its Subsidiaries
as of such date involving material amounts, known to the officers of the
Borrower, which were not disclosed in the Unaudited Financial Statements and the
notes related thereto. There has also been furnished to the Agent audited
consolidated financial statements of financial condition, income, changes in
stockholders equity and cash flows as of and for the fiscal years ended December
31, 1994 and December 31, 1995 for each Current Subsidiary, which financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods covered thereby
and present fairly the financial condition of each Current Subsidiary, as the
case may be, for such period.
6.4.2. PROJECTIONS. The projections of the annual operating
budgets of the Borrower and its Subsidiaries on a consolidated basis, balance
sheets and cash flow statements for the 1997 fiscal year, copies of which have
been delivered to the Agent, disclose all assumptions made with respect to
general economic, financial and market conditions used in formulating such
projections. To the knowledge of the Borrower, no facts exist that (individually
or in the aggregate) would result in any material change in any of such
projections. The projections are based upon reasonable estimates and
assumptions, have been prepared on the basis of the assumptions stated therein
and reflect the reasonable estimates of the Borrower and its Subsidiaries of the
results of operations and other information projected therein.
6.5. NO MATERIAL CHANGES, ETC. Since the Pro Forma Balance Sheet date,
there has occurred no materially adverse change in the financial condition or
business of the Borrower as shown on or reflected in the balance sheet of the
Borrower as at the Pro Forma Balance Sheet date, or the statement of income for
the fiscal year then ended, other than changes in the ordinary course of
business that have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition of the Borrower. Since
the Pro Forma Balance Sheet date, the Borrower has not made any Distribution.
6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrower and its
Subsidiaries possess all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of their business substantially as now conducted without known
conflict with any rights of others.
25
27
6.7. LITIGATION. Except as set forth on Schedule 6.7, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against the Borrower or any of the Borrower's Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of the Borrower or its
Subsidiaries or materially impair the right of the Borrower or any of its
Subsidiaries, considered as a whole, to carry on business substantially as now
conducted by them, or result in any substantial liability not adequately covered
by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of the Borrower and its Subsidiaries, or which
question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
6.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of the Borrower or any
of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower and the Borrower's Subsidiaries
considered as whole. None of the Borrower or any of the Borrower's Subsidiaries
is a party to any contract or agreement that has or is expected, in the judgment
of the Borrower's officers, to have any materially adverse effect on the
business of the Borrower and the Borrower's Subsidiaries considered as a whole.
6.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of the Borrower
or any of the Borrower's Subsidiaries is in violation of any provision of its
charter documents, bylaws, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could result in the imposition of substantial penalties
or materially and adversely affect the financial condition, properties or
business of the Borrower and the Borrower's Subsidiaries considered as a whole.
6.10. TAX STATUS. The Borrower and the Borrower's Subsidiaries (a) have
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which any of them is subject,
(b) have paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings and (c) have set
aside on their books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns, reports or
declarations apply. There are no unpaid taxes in any material
26
28
amount claimed to be due by the taxing authority of any jurisdiction, and the
officers of the Borrower know of no basis for any such claim.
6.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
6.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of the Borrower
or any of the Borrower's Subsidiaries is a "holding company," or a "subsidiary
company" of a "holding company," or an affiliate" of a "holding company," as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
it an "investment company," or an "affiliated company" or a "principal
underwriter" of an "investment company," as such terms are defined in the
Investment Company Act of 1940.
6.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of the Borrower's Subsidiaries
and any rights relating thereto.
6.14. COLLATERAL. The Collateral and the Agent's rights with respect to
the Collateral are not subject to any setoff, claims, withholdings or other
defenses. The Borrower is the owner of the Collateral free from any lien,
security interest, encumbrance and any other claim or demand, except for
Permitted Liens.
6.15. CERTAIN TRANSACTIONS. Except as shown on Schedule 6.15 and except
for arm's length transactions pursuant to which the Borrower or its Subsidiaries
makes payments in the ordinary course of business upon terms no less favorable
than the Borrower or such Subsidiary could obtain from third parties, none of
the officers, directors, or employees of the Borrower or any of the Borrower's
Subsidiaries is presently a party to any transaction with the Borrower or a
Subsidiary of the Borrower (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
6.16. EMPLOYEE BENEFIT PLANS.
27
29
6.16.1. IN GENERAL. Each Employee Benefit Plan has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited transactions. The
Borrower has heretofore delivered to the Agent the most recently completed
annual report, Form 5500, with all required attachments, and actuarial statement
required to be submitted under Section 103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
6.16.2. TERMINABILITY OF WELFARE PLANS. Under each Employee
Benefit Plan which is an employee welfare benefit plan within the meaning of
Section 3(l) or Section 3(2)(B) of ERISA, no benefits are due unless the event
giving rise to the benefit entitlement occurs prior to plan termination (except
as required by Title I, Part 6 of ERISA) . The Borrower or an ERISA Affiliate,
as appropriate, may terminate each such Plan at any time (or at any time
subsequent to the expiration of any applicable bargaining agreement) in the
discretion of the Borrower or such ERISA Affiliate without liability to any
Person.
6.16.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to avoid
the incurrence of an accumulated funding deficiency, the notice or lien
provisions of Section 302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization periods
has been received with respect to any Guaranteed Pension Plan. No liability to
the PBGC (other than required insurance premiums, all of which have been paid)
has been incurred by the Borrower or any ERISA Affiliate with respect to any
Guaranteed Pension Plan and there has not been any ERISA Reportable Event, or
any other event or condition which presents a material risk of termination of
any Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within twelve months of the
date of this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of Section 4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
6.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any
ERISA Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under Section 4201 of ERISA or as a
result of a sale of assets described in Section 4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any Multiemployer Plan
is in reorganization or insolvent under and within the meaning of
28
30
Section 4241 or Section 4245 of ERISA or that any Multiemployer Plan intends to
terminate or has been terminated under Section 4041A of ERISA.
6.17. REGULATIONS U AND X. The proceeds of the Revolving Credit Loans
shall be used for refinancing existing indebtedness of the Borrower with Bank
One, The First National Bank of Ohio, Fleet National Bank, Columbia Bank and
Homewood Federal Savings, working capital purposes and making Permitted
Acquisitions. No portion of any Revolving Credit Loan is to be used for the
purpose of purchasing or carrying any "margin security" or "margin stock" as
such terms are used in Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.
6.18. ENVIRONMENTAL COMPLIANCE. The Borrower represents that, to its
knowledge:
(a) none of the Borrower, its Subsidiaries or any
operator of the Real Estate or any operations thereon
is in violation, or alleged violation, of any
judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters,
including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation
and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986
("XXXX"), the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act, or
any state or local statute, regulation, ordinance,
order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which
violation would have a material adverse effect on the
business, assets or financial condition of the
Borrower and its Subsidiaries taken as a whole;
(b) neither the Borrower nor any of its Subsidiaries has
received notice from any third party including,
without limitation, any federal, state or local
governmental authority, (i) that it has been
identified by the United States Environmental
Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R.
Part 000 Xxxxxxxx X; (ii) that any hazardous waste,
as defined by 42 U.S.C. Section 6903(5), any
hazardous substances as defined
29
31
by 42 U.S.C. Section 9601(14), any pollutant or
contaminant as defined by 42 U.S.C. Section 9601(33)
and any toxic substances, oil or hazardous materials
or other chemicals or substances regulated by any
Environmental Laws ("Hazardous Substances") which it
has generated, transported or disposed of has been
found at any site at which a federal, state or local
agency or other third party has conducted or has
ordered that the Borrower or such Subsidiary of the
Borrower conduct a remedial investigation, removal or
other response action pursuant to any Environmental
Law; or (iii) that it is or shall be a named party to
any claim, action, cause of action, complaint, or
legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or
damages of any kind whatsoever in connection with the
release of Hazardous Substances;
(c) (i) no portion of the Real Estate has been used for
the handling, processing, storage or disposal of
Hazardous Substances except in accordance with
applicable Environmental Laws; (ii) in the course of
any activities conducted by the Borrower, any of its
Subsidiaries or operators of its properties, no
Hazardous Substances have been generated or are being
used on the Real Estate except in accordance, with
applicable Environmental Laws; (iii) there have been
no releases (i.e. any past or present releasing,
spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing
or dumping) or threatened releases of Hazardous
Substances on, upon, into or from the properties of
the Borrower or any of its Subsidiaries, which
releases would have a material adverse effect on the
value of any of the Real Estate or adjacent
properties or the environment; (iv) to the best of
the Borrower's knowledge, there have been no releases
on, upon, from or into any real property in the
vicinity of any of the Real Estate which, through
soil or groundwater contamination, may have come to
be located on, and which would have a material
adverse effect on the value of, the Real Estate; and
(v) in addition, any Hazardous Substances
30
32
that have been generated on any of the Real Estate
have been transported offsite only by carriers having
an identification number issued by the EPA, treated
or disposed of only by treatment or disposal
facilities maintaining valid permits as required
under applicable Environmental Laws, which
transporters and facilities have been and are, to the
best of the Borrower's knowledge, operating in
compliance with such permits and applicable
Environmental Laws; and
(d) none of the Borrower, its Subsidiaries or any of the
Real Estate is subject to any applicable
environmental law requiring the performance of
Hazardous Substances site assessments, or the removal
or remediation of Hazardous Substances, or the giving
of notice to any governmental agency or the recording
or delivery to other Persons of an environmental
disclosure document or statement by virtue of the
transactions set forth herein and contemplated
hereby, or as a condition to the effectiveness of any
other transactions contemplated hereby.
6.19. SUBSIDIARIES, ETC. The Borrower does not have any Subsidiaries
except as set forth on Schedule 6.19 hereto. Except as set forth on Schedule
6.19 hereto, the Borrower is not engaged in any joint venture or partnership
with any other Person.
6.20. CHIEF EXECUTIVE OFFICES. The Borrower's chief executive office is
at c/o American Business Partners, 00 Xxxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, XX
00000 at which location its books and records are kept.
6.21. FISCAL YEAR. The Borrower has a fiscal year which is the twelve
(12) months ending on December 31 of each year.
6.22. DISCLOSURE. No representation or warranty made by the Borrower in
this Credit Agreement or in any agreement, instrument, document, certificate,
statement or letter furnished to the Agent by or on behalf of the Borrower in
connection with any of the transactions contemplated by any of the Loan
Documents contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained therein not
misleading in light of the circumstances in which they are made.
6.23. INSURANCE. The Borrower and its Subsidiaries maintain with
financially sound and reputable insurers insurance with respect to its
properties and businesses against such
31
33
casualties and contingencies as are in accordance with sound business practices.
7. AFFIRMATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan or Revolving Credit Note is outstanding or any Bank has any obligation to
make any Revolving Credit Loans:
7.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Revolving Credit Loans, the
commitment fees and all other amounts provided for in this Credit Agreement and
the other Loan Documents to which the Borrower is a party, all in accordance
with the terms of this Credit Agreement and such other Loan Documents.
7.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in Boston, Massachusetts or at such other place in the United
States of America as the Borrower shall designate upon written notice to the
Agent, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents to which the Borrower is a party may be given or
made.
7.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep true and accurate
records and books of account in which full, true and correct entries will be
made in accordance with generally accepted accounting principles and (b)
maintain adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties and the
properties of its Subsidiaries, contingencies, and other reserves.
7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to the Agent:
(a) as soon as practicable, but in any event not later
than ninety (90) days after the end of each fiscal
year of the Borrower, the consolidated balance sheet
of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its
Subsidiaries, each as at the end of such year, and
the related consolidated statement of income and
statement of cash flow for such year, and the
consolidating statement of income and statement of
cash flow for such year, each setting forth in
comparative form the figures for the previous fiscal
year and all such statements to be in reasonable
detail, prepared in accordance with generally
32
34
accepted accounting principles, and certified without
qualification by Xxxxxx Xxxxxxxx LLP or by other
independent certified public accountants satisfactory
to the Agent, that, in making the examination
necessary to said certification, they have obtained
no knowledge of any Default or Event of Default, or,
if such accountants shall have obtained knowledge of
any then existing Default or Event of Default they
shall disclose in such statement any such Default or
Event of Default; provided that such accountants
shall not be liable to the Banks for failure to
obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later
than forty-five (45) days after the end of each of
the first three fiscal quarters of the Borrower,
copies of the unaudited consolidated balance sheet of
the Borrower and its Subsidiaries and the unaudited
consolidating balance sheet of the Borrower and its
Subsidiaries, each as at the end of such quarter, and
the related consolidated statement of income and
statement of cash flow and consolidating statement of
income and statement of cash flow, each for the
portion of the Borrower's fiscal year then elapsed,
all in reasonable detail and prepared in accordance
with generally accepted accounting principles,
together with a certification by the principal
financial or accounting officer of the Borrower that
the information contained in such financial
statements fairly presents the financial position of
the Borrower and its Subsidiaries on the date thereof
(subject to year-end adjustments);
(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b)
above, a statement certified by the principal
financial or accounting officer of the Borrower in
substantially the form of Exhibit C hereto and
setting forth in reasonable detail computations
evidencing compliance with the covenants contained in
Section 9 and (if applicable) reconciliations to
reflect changes in generally accepted accounting
principles since the Balance Sheet Date:
33
35
(d) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed
with the Securities and Exchange Commission or sent
to the stockholders of the Borrower;
(e) thirty (30) days prior to the beginning of each
fiscal year, an operating plan and budget, for the
Borrower and its Subsidiaries updating those
projections delivered to the Agent and referred to in
Section 6.4.2 or, if applicable, updating any later
such projections delivered in response to a request
pursuant to this Section 7.4(e); and
(f) from time to time such other financial data and
information (including accountants' management
letters) as the Agent or any Bank may reasonably
request.
7.5. NOTICES.
7.5.1. DEFAULTS. The Borrower will promptly notify the Agent
in writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Credit Agreement or
any other note, evidence of indebtedness, indenture or other obligation to which
or with respect to which the Borrower or any of its Subsidiaries is a party or
obligor, whether as principal, guarantor, surety or otherwise, the Borrower
shall forthwith give written notice thereof to the Agent, describing the notice
or action and the nature of the claimed default.
7.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give
notice to the Agent (a) of any violation of any Environmental Law that the
Borrower reports in writing or is reportable by such Person in writing (or for
which any written report supplemental to any oral report is made) to any
federal, state or local environmental agency and (b) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action, including a
notice from any agency of potential environmental liability, of any federal,
state or local environmental agency or board, that has the potential to
materially affect the assets, liabilities, financial conditions or operations of
the Borrower and its Subsidiaries taken as a whole, or the Agent's security
interests pursuant to the Security Documents.
7.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrower
will, immediately upon becoming aware thereof, notify the Agent in writing of
any setoff, claims (including,
34
36
with respect to the Real Estate, environmental claims), withholdings or other
defenses to which any of the Collateral, or the Agent's rights with respect to
the Collateral, are subject.
7.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will
give notice to the Agent in writing within fifteen (15) days of becoming aware
of any litigation or proceedings threatened in writing or any pending litigation
and proceedings affecting the Borrower or any of its Subsidiaries or to which
the Borrower or any of its Subsidiaries is or becomes a party involving an
uninsured claim against the Borrower or any of its Subsidiaries that could
reasonably be expected to have a materially adverse effect on the Borrower and
its Subsidiaries taken as a whole, and stating the nature and status of such
litigation or proceedings. The Borrower will give notice to the Agent, in
writing, in form and detail satisfactory to the Agent, within ten (10) days of
any judgment not covered by insurance against the Borrower or any of its
Subsidiaries in an amount in excess of $500,000.
7.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises and those of its
Subsidiaries and will not, and will not cause or permit any of its Subsidiaries
to, convert to a limited liability company. It (a) will cause all of its
properties and those of its Subsidiaries used or useful in the conduct of its
business or the business of its Subsidiaries to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(b) will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Borrower may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) will, and will cause
each of its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; provided that nothing in this
Section 7.6 shall prevent the Borrower from discontinuing the operation and
maintenance of any of its properties if such discontinuance is, in the judgment
of the Borrower, desirable in the conduct of its or their business and that do
not in the aggregate materially adversely affect the business of the Borrower
and its Subsidiaries, considered as a whole.
7.7. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may
35
37
be reasonable and prudent and in accordance with the terms of the Security
Agreements.
7.8. TAXES. The Borrower will, and will cause each of its Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided further that the Borrower will, and will cause each of its
Subsidiaries to, pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
7.9. INSPECTION OF PROPERTIES AND BOOKS, ETC. The Borrower shall permit
the Banks, through the Agent or any of the Banks' other designated
representatives, to visit and inspect any of the properties of the Borrower and
its Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and to discuss
the affairs, finances and accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, its and their officers, all at such
reasonable times and intervals as the Agent or any Bank may reasonably request.
7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to, comply with (a) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, in all material respects, (b) the provisions of its
charter documents and by-laws, (c) all agreements and instruments by which it or
any of its properties may be bound in all material respects and (d) all
applicable decrees, orders, and judgments. If any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that the Borrower or its
Subsidiaries may fulfill any of its obligations hereunder or any of the other
Loan Documents to which the Borrower or its Subsidiaries is a party, the
Borrower will immediately take or cause to be taken all reasonable steps within
the power of the Borrower to obtain such authorization, consent, approval,
permit or license and furnish the Agent and the Banks with evidence thereof.
36
38
7.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon
filing the same with the Department of Labor or Internal Revenue Service,
furnish to the Agent a copy of the most recent actuarial statement required to
be submitted under Section 103(d) of ERISA and Annual Report, Form 5500, with
all required attachments, in respect of each Guaranteed Pension Plan and (b)
promptly upon receipt or dispatch, furnish to the Agent any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan under Sections
302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under Sections 4041A, 4202, 4219, 4242, or 4245 of ERISA.
7.12. USE OF PROCEEDS. The Borrower will use the proceeds of the
Revolving Credit Loans solely to refinance existing indebtedness of the Borrower
as stated in Section 6.17, for working capital purposes and to make Permitted
Acquisitions.
7.13. ADDITIONAL SUBSIDIARIES. (a) The Borrower will not, and will not
permit its Subsidiaries to, form or acquire any Subsidiaries except as permitted
under Section 8.5 hereof. If, after the Closing Date, the Borrower acquires,
either directly or indirectly, any Subsidiary in accordance with Section 8.5
hereof, it will notify the Agent five (5) Business Days prior to such
acquisition and provide the Agent with an updated Schedule 6.19, and will,
concurrently with the acquisition of any Subsidiary, pledge to the Agent all
capital stock (or similar interests) of such Subsidiary pursuant to the Stock
Pledge Agreement.
(b) The Borrower shall cause each of its Material Subsidiaries
that are not parties on the Closing Date to the Guaranty to execute and deliver
to the Agent, on a date no later than five (5) Business Days after such Person
becomes a Material Subsidiary of the Borrower, an Instrument of Adherence to the
Guaranty, together with such supporting documentation, including legal opinions
and corporate authority documents as the Agent may reasonably request.
7.14. FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Banks or the Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan or Revolving Credit Note is outstanding or any Bank has any obligation to
make any Revolving Credit Loans:
8.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit its Subsidiaries to, create, incur, assume,
37
39
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under
any of the Loan Documents;
(b) current liabilities of the Borrower and its
Subsidiaries incurred in the ordinary course of
business not incurred through (i) the borrowing of
money, or (ii) the obtaining of credit except for
credit on an open account basis customarily extended
and in fact extended in connection with normal
purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor,
materials and supplies to the extent that payment
therefor shall not at the time be required to be made
in accordance with the provisions of Section 7.8;
(d) Indebtedness in respect of judgments or awards that
have been in force for less than the applicable
period for taking an appeal so long as execution is
not levied thereunder or in respect of which the
Borrower or its Subsidiaries shall at the time in
good faith be prosecuting an appeal or proceedings
for review and in respect of which a stay of
execution shall have been obtained pending such
appeal or review;
(e) endorsements for collection, deposit or negotiation
and warranties of products or services, in each case
incurred in the ordinary course of business;
(f) Subordinated Debt;
(g) obligations under Capitalized Leases not exceeding
$100,000 in aggregate amount at any time outstanding
or operating leases of houses, apartments and
condominiums entered into in the normal course of
business;
(h) purchase money Indebtedness incurred in connection
with the acquisition after the date hereof of any
real or personal property by the Borrower or its
Subsidiaries, provided that the aggregate principal
amount of such Indebtedness of the Borrower and its
38
40
Subsidiaries shall not exceed the aggregate amount of
$500,000 at any one time; and
(i) Indebtedness existing on the date hereof and listed
and described on Schedule 8.1 hereto.
8.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
its Subsidiaries to, (a) create or incur or suffer to be created or incurred or
to exist any lien, encumbrance, mortgage, pledge, charge, restriction or other
security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (b) transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or (e) sell, assign, pledge or otherwise transfer any accounts,
contract rights, general intangibles, chattel paper or instruments, with or
without recourse; provided that the Borrower and its Subsidiaries may create or
incur or suffer to be created or incurred or to exist:
(i) liens to secure taxes, assessments and other
government charges in respect of obligations
not overdue or liens on properties to secure
claims for labor, material or supplies in
respect of obligations not overdue;
(ii) deposits or pledges made in connection with,
or to secure payment of, workmen's
compensation, unemployment insurance, old
age pensions or other social security
obligations;
(iii) liens on properties in respect of judgments
or awards, the Indebtedness with respect to
which is permitted by Section 8.1(d);
(iv) liens of carriers, warehousemen, mechanics
and materialmen, and other like liens on
properties in existence less than 120 days
from the date of
39
41
creation thereof in respect of obligations
not overdue;
(v) encumbrances on Real Estate consisting of
easements, rights of way, zoning
restrictions, restrictions on the use of
real property and defects and irregularities
in the title thereto, landlord's or lessor's
liens under leases to which the Borrower or
any of its Subsidiaries is a party, and
other minor liens or encumbrances none of
which in the opinion of the Borrower
interferes materially with the use of the
property affected in the ordinary conduct of
the business of the Borrower or such
Subsidiary of the Borrower which defects do
not individually or in the aggregate have a
materially adverse effect on the business of
the Borrower and its Subsidiaries considered
as a whole;
(vi) liens existing on the date hereof and listed
on Schedule 8.2 hereto;
(vii) purchase money security interests in or
purchase money mortgages on real or personal
property acquired after the date hereof to
secure purchase money Indebtedness of the
type and amount permitted by Section 8.1(h),
incurred in connection with the acquisition
of such property, which security interests
or mortgages cover only the real or personal
property so acquired;
(viii) leases of apartments, houses and
condominiums entered into by Borrower or the
Subsidiaries as lessor in the ordinary
course of business; and
(ix) liens in favor of the Agent for the benefit
of the Banks and the Agent under the Loan
Documents.
8.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not make or permit
to exist or to remain outstanding any Investment by the Borrower or its
Subsidiaries except Investments in:
(a) marketable direct or guaranteed obligations of the
United States of America that mature
40
42
within one (1) year from the date of purchase by the
Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks
having total assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper"
issued by a corporation organized and existing under
the laws of the United States of America or any state
thereof that at the time of purchase have been rated
and the ratings for which are not less than "P 1" if
rated by Xxxxx'x Investors Services, Inc., and not
less than "A 1" if rated by Standard and Poor's;
(d) Investments existing on the date hereof and listed on
Schedule 8.3 hereto;
(e) Investments consisting of the Guaranty and the
Instruments of Adherence delivered after the Closing
Date pursuant to Section 7.13 hereof; and
(f) Investments consisting of loans and advances to
employees for moving, entertainment, travel and other
similar expenses in the ordinary course of business
not to exceed $50,000 in the aggregate at any time
outstanding.
8.4. DISTRIBUTIONS. The Borrower will not make any Distributions except
distributions to shareholders of subsidiary S Corporations for payment of
personal tax liability related to the earnings of the subsidiary.
8.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
8.5.1. MERGERS AND ACQUISITIONS.
(a) The Borrower will not, and will not permit its
Subsidiaries to become a party to any merger or consolidation, or agree to or
effect any asset acquisition or stock acquisition (other than the acquisition of
assets in the ordinary course of business consistent with past practices) except
the merger or consolidation of one or more wholly-owned Subsidiaries of the
Borrower with and into the Borrower, or the merger or consolidation of two or
more wholly-owned Subsidiaries of the Borrower.
41
43
(b) Notwithstanding the provisions of Section 8.5.1(a), the
Borrower may become a party to any asset acquisition or stock acquisition (each,
a "Permitted Acquisition") if the following conditions have been met: (i) the
proposed transaction will not otherwise create a Default or Event of Default;
(ii) the Person being acquired (or whose assets are being substantially
acquired) shall be predominantly involved in the existing lines of business of
the Borrower or in lines of business substantially related thereto; (iii) all of
the assets material to the operation of the business of the Person being
acquired or all or substantially all of the assets being acquired and material
to the operation of the business of the Borrower shall be located in North
America; (iv) in the event of a stock acquisition, the Borrower shall have
complied with the provisions of Section 7.13 to the satisfaction of the Bank in
its reasonable discretion; (v) the board of directors and (if required by
applicable law) the shareholders, or the equivalent thereof, of the business to
be acquired shall have approved such transaction; (vi) the Borrower shall have
provided calculations showing compliance with the covenants set forth in Section
9 on a pro forma historical combined basis as if the proposed transaction
occurred on the first day of the period of measurement; (vii) the business being
acquired shall have had positive operating cash flow for at least the two (2)
fiscal years immediately preceding the acquisition, as such operating cash flow
may be adjusted, in a manner reasonably satisfactory to the Agent, to reduce
management compensation expense in any such two-year period to an amount which
reflects projected management compensation expense on an ongoing basis,
following the acquisition and (viii) the Agent shall have received at least ten
(10) days prior to the acquisition, an accurate summary of the material terms of
the transactions, including a copy of the applicable acquisition agreement.
8.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will
not permit its Subsidiaries to, become a party to or agree to or effect any
disposition of assets, other than the disposition of assets in the ordinary
course of business, consistent with past practices.
8.6 INTENTIONALLY OMITTED.
8.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and
will not permit its Subsidiaries to (a) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances, except in accordance with applicable Environmental Laws, (b)
generate any Hazardous Substances on any of the Real Estate, (c) conduct any
activity at any Real Estate or use any Real Estate in any manner so as to cause
a release (i.e. releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, disposing or dumping) or
threatened release of Hazardous Substances on, upon or into the Real Estate or
(d)
42
44
otherwise conduct any activity at any Real Estate or use any Real Estate in any
manner that would materially violate any Environmental Law or bring such Real
Estate in material violation of any Environmental Law.
8.8. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will:
(a) engage in any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of
the Code which could result in a material liability
for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency," as such term is
defined in Section 302 of ERISA, whether or not such
deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to
an extent which, or terminate any Guaranteed Pension
Plan in a manner which, could result in the
imposition of a lien or encumbrance on the assets of
the Borrower or any of its Subsidiaries pursuant to
Section 302(f) or Section 4068 of ERISA; or
(d) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of
Section 4001 of ERISA) of all Guaranteed Pension
Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets
in excess of benefit liabilities.
8.9. FISCAL YEAR. The Borrower will not, and will not permit its
Subsidiaries to, change the date of the end of its fiscal years from that set
forth in Section 6.21 hereof.
8.10. SUBSIDIARIES. The Borrower will not, and will not permit its
Subsidiaries to, form, acquire or in any manner have any Subsidiaries except for
Subsidiaries acquired pursuant to a Permitted Acquisition or with the Majority
Banks' prior written consent.
8.11. NEGATIVE PLEDGES. The Borrower will not, and will not permit its
Subsidiaries to, enter into any agreement (excluding this Credit Agreement and
the Loan Documents) prohibiting the creation or assumption of any lien upon its
properties, revenues or assets, whether now owned or hereafter
43
45
acquired, other than agreements with Persons prohibiting any such lien on assets
in which such Person has a prior security interest which is permitted by Section
8.2.
8.12. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not
permit its Subsidiaries to, enter into, or cause, suffer or permit to exist (a)
any arrangement or contract with any of its other Affiliates of a nature
customarily entered into by Persons which are Affiliates of each other
(including management or similar contracts or arrangements relating to the
allocation of revenues, taxes and expenses or otherwise) requiring any payments
to be made by the Borrower or such Subsidiary of the Borrower unless such
arrangement is fair and equitable to the Borrower or such Subsidiary; or (b) any
other transaction, arrangement, contract with any of its Affiliates which would
not be entered into by a prudent Person in the position of the Borrower or such
Subsidiary with, or which is on terms which are less favorable than are
obtainable from, any person which is not one of its Affiliates.
8.13. INCONSISTENT AGREEMENTS. The Borrower will not, and will not
permit its Subsidiaries to, enter into any agreement containing any provision
which would be violated or breached by the performance by the Borrower of its
obligations hereunder or under any of the Loan Documents.
8.14. MODIFICATION OF DOCUMENTS. The Borrower will not, and will not
permit its Subsidiaries to, consent to or agree to any amendment, supplement or
other modification to its certificate of incorporation or its by-laws; provided
that the Borrower or its Subsidiaries may amend, supplement, and modify its
certificate of incorporation and its by-laws with written notice to the Agent,
so long as such amendment, supplement or other modification shall not have a
materially adverse effect on (i) the ability of the Borrower to enter into and
to perform and observe its obligations under the Loan Documents, and (ii) the
assets, properties, business, operations, condition (financial and otherwise),
and prospects of the Borrower and its Subsidiaries taken as a whole.
9. FINANCIAL COVENANTS OF THE BORROWER
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan or Revolving Credit Note is outstanding or any Bank has any obligation to
make any Revolving Credit Loans:
9.1. CONSOLIDATED TOTAL TANGIBLE NET WORTH. The Borrower will maintain,
at all times, Consolidated Total Tangible Net Worth in an amount equal to at
least:
(a) $1,800,000, plus
44
46
(b) fifty percent (50%) of Consolidated Net Income for the
immediately preceding fiscal quarter. No reduction shall be given in calculating
the minimum Consolidated Total Tangible Net Worth for any Consolidated Net
Deficit, plus
(c) eighty percent (80%) of the gross proceeds from any
issuance of equity securities of the Borrower, net of out-of-pocket expenses
incurred by the Borrower in connection with such offering.
9.2. PROFITABLE OPERATIONS. The Borrower will not permit Consolidated
Net Income for any fiscal quarter, other than the fiscal quarter in which the
Borrower consummates an initial public offering of its capital stock under the
Securities Act of 1933, as amended, to be less than $1.00.
9.3. LEVERAGE RATIO. The Borrower will not permit, as at the last day
of each fiscal quarter, the Leverage Ratio to exceed 4.00:1.00.
9.4. MINIMUM CONSOLIDATED EBITDA. The Borrower will maintain, as at the
last day of any fiscal quarter, Consolidated EBITDA in amount at least equal to
the greater of (a) $2,000,000, or (b) ninety percent (90%) of Consolidated
EBITDA for the immediately preceding fiscal quarter, all as determined for the
four consecutive fiscal quarters of the Borrower ended on such date.
10. CLOSING CONDITIONS
The obligations of the Banks to make the initial Revolving Credit Loans
shall be subject to the satisfaction of the following conditions precedent on or
prior to the Closing Date:
10.1. LOAN DOCUMENTS, ETC. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of the
Banks. Each Bank shall have received a fully executed copy of each such
document.
10.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. The Agent shall have
received from the Borrower and each Subsidiary a copy, certified by a duly
authorized officer of such Person to be true and complete on the Closing Date,
of each of (a) its charter or other incorporation documents as in effect on such
date of certification, and (b) its bylaws as in effect on such date.
10.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of its Subsidiaries
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall
45
47
have been duly and effectively taken, and evidence thereof satisfactory to the
Agent shall have been provided to the Agent.
10.4. INCUMBENCY CERTIFICATE. The Agent shall have received from each
of the Borrower and each of the Subsidiaries an incumbency certificate, dated as
of the Closing Date, signed by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of each of the Borrower or such Subsidiary, as the case may be,
each of the Loan Documents to which the Borrower or such Subsidiary is or is to
become a party; (b) with respect to the Borrower, to make Revolving Credit Loan
Requests and Conversion Requests; and (c) to give notices and to take other
action on its behalf under the Loan Documents.
10.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) security interest in
and lien upon the Collateral. All filings, recordings, deliveries of instruments
and other actions necessary or desirable in the opinion of the Agent to protect
and preserve such security interests shall have been duly effected. The Agent
shall have received evidence thereof in form and substance satisfactory to the
Agent.
10.6. UCC SEARCH RESULTS. The Agent shall have received results of UCC
searches with respect to the Collateral, indicating no liens other than
Permitted Liens and otherwise in form and substance satisfactory to the Agent.
10.7. CERTIFICATES OF INSURANCE. The Agent shall have received (a) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying its insurers, types of insurance, and insurance
limits, and (b) certified copies of all policies evidencing such insurance (or
certificates therefore signed by the insurer or an agent authorized to bind the
insurer).
10.8. SOLVENCY CERTIFICATE. The Agent shall have received an officer's
certificate of the Borrower dated as of the Closing Date as to the solvency of
the Borrower following the consummation of the transactions contemplated herein
and in form and substance satisfactory to the Banks.
10.9. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from Xxxxxx, XxXxxxxxx & Fish, LLP, counsel to the Borrower.
46
48
10.10. PAYMENT OF EXPENSES. The Borrower shall have paid the reasonable
fees and expenses of the Agent's Special Counsel incurred in connection with the
Loan Documents.
10.11. DISBURSEMENT INSTRUCTIONS. The Agent shall have received
disbursement instructions from the Borrower with respect to the proceeds of the
initial Revolving Credit Loan.
11. CONDITIONS TO ALL BORROWINGS
The obligations of the Banks to make any Revolving Credit Loan,
including the initial Revolving Credit Loan, whether on or after the Closing
Date, shall also be subject to the satisfaction of the following conditions
precedent:
11.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of the Borrower and its Subsidiaries contained in
this Credit Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Credit Agreement shall be true
as of the date as of which they were made and shall also be true at and as of
the time of the making of such Revolving Credit Loan with the same effect as if
made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the extent that
such representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
11.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Revolving Credit
Loan.
11.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
11.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
47
49
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the
Revolving Credit Loans when the same shall become due
and payable, whether at the stated date of maturity
or any accelerated date of maturity or at any other
date fixed for payment;
(b) the Borrower shall fail to pay any interest on the
Revolving Credit Loans, the commitment fee or other
sums due hereunder or under any of the other Loan
Documents, when the same shall become due and
payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date
fixed for payment and such failure shall continue for
a period of three (3) Business Days;
(c) the Borrower shall fail to comply with any of its
covenants contained in Section 8.1, 8.4 - 8.7, 8.9,
8.10, 8.12, 8.14 or 9.1 - 9.4;
(d) the Borrower shall fail to perform any term, covenant
or agreement contained herein or in any of the other
Loan Documents (other than those specified elsewhere
in this Section 12.1) for fifteen (15) days after
written notice of such failure has been given to the
Borrower by the Agent;
(e) any representation or warranty of the Borrower or any
Subsidiary in this Credit Agreement or any of the
other Loan Documents or in any other document or
instrument delivered pursuant to or in connection
with this Credit Agreement shall prove to have been
false in any material respect upon the date when made
or deemed to have been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to
pay at maturity, or within any applicable period of
grace, any obligation for borrowed money or credit
received or in respect of any Capitalized Leases, in
either case with respect to obligations in excess of
48
50
$100,000, or fail to observe or perform any material
term, covenant or agreement contained in any
agreement by which it is bound, evidencing or
securing borrowed money or credit received or in
respect of any Capitalized Leases, in either case
with respect to obligations in excess of $100,000,
for such period of time as would permit (assuming the
giving of appropriate notice if required) the holder
or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof, and
shall not cure such failure within three (3) Business
Days thereof.
(g) the Borrower shall make an assignment for the benefit
of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature
or become due, or shall petition or apply for the
appointment of a trustee or other custodian,
liquidator or receiver of the Borrower or any of its
Subsidiaries or of any substantial part of the assets
of the Borrower or any of its Subsidiaries or shall
commence any case or other proceeding relating to the
Borrower or any of its Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in
effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such
case or other proceeding shall be commenced against
the Borrower or any of its Subsidiaries and the
Borrower or such Subsidiary shall indicate its
approval thereof, consent thereto or acquiescence
therein or such petition or application shall not
have been dismissed within sixty (60) days following
the filing thereof;
(h) a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or
adjudicating the Borrower or any of its Subsidiaries
bankrupt or insolvent, or approving a petition in any
such case or other proceeding, or a decree or order
for relief is entered in respect of the Borrower or
any of its Subsidiaries in an involuntary
49
51
case under federal bankruptcy laws as now or
hereafter constituted;
(i) there shall remain in force, undischarged,
unsatisfied and unstayed, for more than thirty days,
whether or not consecutive, any final judgment
against the Borrower or any of its Subsidiaries that,
with other outstanding final judgments, undischarged,
against the Borrower or any of its Subsidiaries
exceeds in the aggregate $100,000;
(j) if any of the Loan Documents shall be canceled,
terminated, revoked or rescinded or the Agent's
security interests, mortgages or liens in a
substantial portion of the Collateral shall cease to
be perfected, or shall cease to have the priority
contemplated by the Security Documents, in each case
otherwise than in accordance with the terms thereof
or with the express prior written agreement, consent
or approval of the Banks, or any action at law, suit
or in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be
commenced by or on behalf of the Borrower or
Subsidiary party thereto or any of its stockholders,
or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment,
order, decree or ruling to the effect that, any one
or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof,
(k) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority
Banks shall have determined in their reasonable
discretion that such event reasonably could be
expected to result in liability of the Borrower or
any of its Subsidiaries to the PBGC or such
Guaranteed Pension Plan in an aggregate amount
exceeding $100,000 and such event in the
circumstances occurring reasonably could constitute
grounds for the termination of such Guaranteed
Pension Plan by the PBGC or for the appointment by
the appropriate United States District Court of a
trustee to administer such Guaranteed Pension Plan;
or a trustee shall have been appointed by the United
50
00
Xxxxxx Xxxxxxxx Xxxxx to administer such Plan; or the
PBGC shall have instituted proceedings to terminate
such Guaranteed Pension Plan;
(l) the Borrower or any of its Subsidiaries shall be
enjoined, restrained or in any way prevented by the
order of any court or any administrative or
regulatory agency from conducting any material part
of its business and such order shall continue in
effect for more than thirty (30) days;
(m) there shall occur any material damage to, or loss,
theft or destruction of, any Collateral, whether or
not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or
other casualty, which in any such case causes, for
more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue
producing activities at any facility of the Borrower
or its Subsidiaries if such event or circumstance is
not covered by business interruption insurance and
would have a material adverse effect on the business
or financial condition of the Borrower and its
Subsidiaries, considered as a whole;
(n) there shall occur the loss, suspension or revocation
of, or failure to renew, any license or permit now
held or hereafter acquired by the Borrower or any of
its Subsidiaries if such loss, suspension, revocation
or failure to renew would have a material adverse
effect on the business or financial condition of the
Borrower and its Subsidiaries, considered as a whole;
(o) the Borrower or any of its Subsidiaries shall be
indicted for a state or federal crime, or any civil
or criminal action shall otherwise have been brought
against the Borrower or any of its Subsidiaries a
punishment for which in any such case could include
the forfeiture of any assets of the Borrower or any
of its Subsidiaries having a fair market value in
excess of $100,000 or a material adverse effect on
the business or financial condition of the Borrower
and its Subsidiaries, considered as a whole;
51
53
(p) Exel Holdings, Xxxxx Xxxxxxxx and her siblings,
Xxxxxxx and Xxxxxx Xxxxxxxxx, Xxxxx XxXxxxx, and
Xxxxxx and Xxxxxx X'Xxxxxx collectively shall at any
time, legally or beneficially, own in the aggregate
less than 51% of the issued and outstanding capital
stock of the Borrower;
(q) Any Person (other than a current stockholder of
Borrower) shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange
Act of 1934, as amended), directly or indirectly, of
25% or more of the issued and outstanding capital
stock of Borrower.
(r) at any time individuals who were directors of the
Borrower on the Closing Date or within six (6) months
of the Closing Date shall cease, for any reason, to
constitute a majority of the board or directors
(except to the extent that individuals who were
directors on the Closing Date were replaced by
individuals (i) elected by a majority of the
remaining members of the board of directors of the
Borrower or (ii) nominated for election by a majority
of the remaining members of the board of directors of
the Borrower);
(s) there shall occur any material adverse change in the
financial condition of the Borrower and its
Subsidiaries as reported on the audited financial
statements of the Borrower for the fiscal year ended
December 31, 1996 delivered to the Agent in
accordance with Section 7.4, hereof, from financial
condition of the Borrower and its Subsidiaries as
reported on the Unaudited Financial Statements;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Revolving Credit Notes and the other Loan Documents to be, and they shall
thereupon forthwith become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that in the event of any Event of Default
specified in Sections 12.1(g) or 12.1(h)), all such amounts shall become
52
54
immediately due and payable automatically and without any requirement of notice
from the Agent or any Bank.
12.2. TERMINATION OF COMMITMENTS. If any one or more of the
Events of Default specified in Section 12.1(g) or Section 12.1(h)) shall occur,
any unused portion of the credit hereunder shall forthwith terminate and each of
the Banks shall be relieved of all further obligations to make Revolving Credit
Loans to the Borrower. If any other Event of Default shall have occurred and be
continuing, the Agent may and, upon the request of the Majority Banks, shall, by
notice to the Borrower, terminate the unused portion of the credit hereunder,
and upon such notice being given such unused portion of the credit hereunder
shall terminate immediately and each of the Banks shall be relieved of all
further obligations to make Revolving Credit Loans. No termination of the credit
hereunder shall relieve the Borrower of any of the Obligations.
12.3. REMEDIES. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Banks
shall have accelerated the maturity of the Revolving Credit Loans pursuant to
Section 12.1, each Bank, if owed any amount with respect to the Revolving Credit
Loans, may proceed to protect and enforce its rights by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Bank are
evidenced, including as permitted by applicable law the obtaining of the ex
parte appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank; provided that, prior to undertaking such
action, the Bank shall have requested the Agent to do so and shall have given
the Agent reasonable time to do so, but the Agent shall have failed to do so. No
remedy herein conferred upon any Bank or the Agent or the holder of any
Revolving Credit Note is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
12.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event
that following the occurrence or during the continuance of any Default or Event
of Default, the Agent or any Bank, as the case may be, receives any monies in
connection with the enforcement of any the Security Documents, or otherwise with
respect to the realization upon any of the Collateral, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all
reasonable costs, expenses, disbursements
53
55
and losses which shall have been incurred or
sustained by the Agent in connection with the
collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of
all or any of the rights, remedies, powers and
privileges of the Agent under this Credit Agreement
or any of the other Loan Documents or in respect of
the Collateral or in support of any provision of
adequate indemnity to the Agent against any taxes or
liens which by law shall have, or may have, priority
over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or
preference as the Majority Banks may determine;
provided, however, that distributions in respect of
such obligations shall be made (i) pari passu among
Obligations and (ii) Obligations owing to the Banks
with respect to each type of Obligation such as
interest, principal, fees and expenses, shall be made
among the Banks pro rata; and provided, further, that
the Agent may in its discretion make proper allowance
to take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the
Banks and the Agent of all of the Obligations, to the
payment of any obligations required to be paid
pursuant to Section 9-504(l)(c) of the Uniform
Commercial Code of the Commonwealth of Massachusetts;
and
(d) Fourth, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled
thereto.
13. SETOFF
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower and any investment securities or other property of the
Borrower in the possession of such Bank may be applied to or set off by such
Bank, with notice to the Borrower, against the payment of Obligations and any
and all other liabilities, direct, or indirect, absolute or contingent, then
due, now existing or hereafter arising, of the Borrower to such Bank under the
Credit Agreement. Each of the Banks agrees with each other Bank that (a) if an
amount to be set off is to be applied to Indebtedness of the Borrower to such
Bank, other than Indebtedness evidenced by the Revolving Credit Notes held by
such Bank owed to such
54
56
Bank, such amount shall be applied ratably to such other Indebtedness and to the
Indebtedness evidenced by all such Revolving Credit Notes held by such Bank and
(b) if such Bank shall receive from the Borrower, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of the
claim evidenced by the Revolving Credit Notes held by such Bank by proceedings
against the Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Revolving Credit Note or
Revolving Credit Notes held by such Bank any amount in excess of its ratable
portion of the payments received by all of the Banks with respect to the
Revolving Credit Notes held by all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Revolving
Credit Notes held by it, its proportionate payment as contemplated by this
Credit Agreement; provided that if all or any part of such excess payment is
thereafter recovered from such Bank, such disposition and arrangements shall be
rescinded and the amount restored to the extent of such recovery, but without
interest.
14. THE AGENT
14.1. AUTHORIZATION.
(a) The Agent is authorized to take such action on behalf
of each of the Banks and to exercise all such powers
as are hereunder and under any of the other Loan
Documents and any related documents delegated to the
Agent, together with such powers as are reasonably
incident thereto, provided that no duties or
responsibilities not expressly assumed herein or
therein shall be implied to have been assumed by the
Agent.
(b) The relationship between the Agent and each of the
Banks is that of an independent contractor. The use
of the term "Agent" is for convenience only and is
used to describe, as a form of convention, the
independent contractual relationship between the
Agent and each of the Banks. Nothing contained in
this Credit Agreement nor the other Loan Documents
shall be construed to create an agency, trust or
other fiduciary relationship between the Agent and
any of the Banks.
55
57
(c) As an independent contractor empowered by the Banks
to exercise certain rights and perform certain duties
and responsibilities hereunder and under the other
Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is
defined in Article I of the Uniform Commercial Code,
for purposes of actions for the benefit of the Banks
and the Agent with respect to all collateral security
and guaranties contemplated by the Loan Documents.
Such actions include the designation of the Agent as
"secured party," mortgagee" or the like on all
financing statements and other documents and
instruments, whether recorded or otherwise, relating
to the attachment, perfection, priority or
enforcement of any security interests, mortgages or
deeds of trust in collateral security intended to
secure the payment or performance of any of the
Obligations, all for the benefit of the Banks and the
Agent.
14.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
14.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
14.4. NO REPRESENTATIONS. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the Revolving
Credit Notes, any of the other Loan Documents or any instrument at any time
constituting, or intended to constitute, collateral security for the Revolving
Credit Notes, or for the value of any such collateral security or for the
validity, enforceability or collectability of any such amounts owing with
respect to the Revolving Credit Notes, or for
56
58
any recitals or statements, warranties or representations made herein or in any
of the other Loan Documents or in any certificate or instrument hereafter
furnished to it by or on behalf of the Borrower, or be bound to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Revolving Credit Notes or to
inspect any of the properties, books or records of the Borrower. The Agent shall
not be bound to ascertain whether any notice, consent, waiver or request
delivered to it by the Borrower or any holder of any of the Revolving Credit
Notes shall have been duly authorized or is true, accurate and complete. The
Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Banks, with respect
to the credit worthiness or financial conditions of the Borrower. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.
14.5. PAYMENTS.
14.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of any Bank
shall constitute a payment to such Bank. The Agent agrees promptly to distribute
to each Bank such Bank's pro rata share of payments received by the Agent for
the account of the Banks except as otherwise expressly provided herein or in any
of the other Loan Documents.
14.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent
the distribution of any amount received by it in such capacity hereunder, under
the Revolving Credit Notes or under any of the other Loan Documents might
involve it in liability, it may refrain from making distribution until its right
to make distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any amount
received and distributed by the Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
14.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan Documents,
any Bank that fails (a) to make available to the Agent its pro rata share of any
Revolving Credit Loan or (b) to comply with the provisions of Section 13 with
respect to making dispositions and arrangements with the other Banks, where such
57
59
Bank's share of any payment received, whether by setoff or otherwise, is in
excess of its pro rata share of such payments due and payable to all of the
Banks, in each case as, when and to the full extent required by the provisions
of this Credit Agreement, shall be deemed delinquent (a "Delinquent Bank") and
shall be deemed a Delinquent Bank until such time as such delinquency is
satisfied. A Delinquent Bank shall be deemed to have assigned any and all
payments due to it from the Borrower, whether on account of outstanding
Revolving Credit Loans, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective pro
rata shares of all outstanding Revolving Credit Loans. The Delinquent Bank
hereby authorizes the Agent to distribute such payments to the nondelinquent
Banks in proportion to their respective pro rata shares of all outstanding
Revolving Credit Loans. A Delinquent Bank shall be deemed to have satisfied in
full a delinquency when and if, as a result of application of the assigned
payments to all outstanding Revolving Credit Loans of the nondelinquent Banks,
the Banks' respective pro rata shares of all outstanding Revolving Credit Loans
have returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
14.6. HOLDERS OF REVOLVING CREDIT NOTES. The Agent may deem and treat
the payee of any Revolving Credit Note as the absolute owner or purchaser
thereof for all purposes hereof until it shall have been furnished in writing
with a different name by such payee or by a subsequent holder, assignee or
transferee.
14.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by Section 15), and liabilities of every nature and character arising
out of or related to this Credit Agreement, the Revolving Credit Notes, or any
of the other Loan Documents or the transactions contemplated or evidenced hereby
or thereby, or the Agent's actions taken hereunder or thereunder, except to the
extent that any of the same shall be directly caused by the Agent's willful
misconduct or gross negligence.
14.8. AGENT AS BANK. In its individual capacity, Fleet shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Revolving Credit Loans made by it, and as the holder of any
of the Revolving Credit Notes as it would have were it not also the Agent.
14.9. RESIGNATION. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a
58
60
Default or Event of Default shall have occurred and be continuing, such
successor Agent shall be reasonably acceptable to the Borrower. If no successor
Agent shall have been so appointed by the Majority Banks and shall have accepted
such appointment within thirty (30) days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a financial institution having a
rating of not less than A or its equivalent by Standard & Poor's Corporation.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation, the provisions of this Credit Agreement and the
other Loan Documents shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
14.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this Section 14.10 it shall promptly notify the
other Banks of the existence of such Default or Event of Default.
14.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one or more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Agent shall, if (a) so requested by
the Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
15. EXPENSES
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Credit Agreement, the other Loan Documents and the other
agreements and instruments mentioned
59
61
herein, (b) any taxes (including any interest and penalties in respect thereto)
payable by the Agent or any of the Banks (other than taxes based upon the
Agent's or any Bank's net income) on or with respect to the transactions
contemplated by this Credit Agreement (the Borrower hereby agreeing to indemnify
the Agent and each Bank with respect thereto), (c) the reasonable fees, expenses
and disbursements of the Agent's Special Counsel or any local counsel to the
Agent incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder, (d) the fees, expenses and disbursements of the
Agent incurred by the Agent in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
including in connection with any commercial finance examinations, (e) the
reasonable fees, expenses and disbursements incurred by the Agent in connection
with the syndication of the revolving credit facility described herein, (f) all
reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or the
Agent, and reasonable consulting, accounting, appraisal, investment banking and
similar professional fees and charges) incurred by any Bank or the Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or any of its Subsidiaries or the
administration thereof after the occurrence of a Default or Event of Default and
(ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Bank's or the Agent's relationship with the
Borrower or its Subsidiaries and (g) all reasonable fees, expenses and
disbursements of any Bank or the Agent incurred in connection with UCC searches,
UCC filings or mortgage recordings. The covenants of this Section 15 shall
survive payment or satisfaction of all other Obligations.
16. INDEMNIFICATION
The Borrower agrees to indemnify and hold harmless the Agent and the
Banks from and against any and all claims, actions and suits not arising out of
the negligence or willful misconduct of the Agent or such Bank, whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Credit
Agreement or any of the other Loan Documents or the transactions contemplated
hereby including, without limitation, (a) any actual or proposed use by the
Borrower or any of its Subsidiaries of the proceeds of any of the Revolving
Credit Loans, (b) the Borrower entering into or performing this Credit Agreement
or any of the other Loan Documents or (c) with respect to the Borrower and its
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release
60
62
or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated costs
of internal counsel incurred in connection with any such investigation,
litigation or other proceeding. In litigation, or the preparation therefor, the
Banks and the Agent shall be entitled to select their own counsel and, in
addition to the foregoing indemnity, the Borrower agrees to pay promptly the
reasonable fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this Section 16 are unenforceable for any
reason, the Borrower hereby agrees to make the maximum contribution to the
payment in satisfaction of such obligations which is permissible under
applicable law. The covenants contained in this Section 16 shall survive payment
or satisfaction in full of all other Obligations.
17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Revolving Credit Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Borrower or its
Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of any of the
Revolving Credit Loans, as herein contemplated, and shall continue in full force
and effect so long as any amount due under this Credit Agreement or the
Revolving Credit Notes or any of the other Loan Documents remains outstanding or
any Bank has any obligation to make any Revolving Credit Loans, and for such
further time as may be otherwise expressly specified in this Credit Agreement.
All statements contained in any certificate or other paper delivered to any Bank
or the Agent at any time by or on behalf of the Borrower pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrower hereunder.
18. ASSIGNMENT AND PARTICIPATION
18.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Revolving Credit Loans at the time owing to it and the Revolving Credit
Notes held by it; provided that (a) each of the Agent and, unless a Default or
Event of Default shall have occurred and be continuing, the Borrower shall have
given its prior written consent to such assignment, which consent, in the
61
63
case of the Borrower, will not be unreasonably withheld, (b) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Credit Agreement, (c) each
assignment shall be in an amount that is a whole multiple of $1,000,000 (d) each
Bank which is a Bank on the date hereof shall retain, free of any such
assignment, an amount of its Commitment of not less than $1,000,000 and (e) the
parties to such assignment shall execute and deliver to the Agent, for recording
in the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of Exhibit D hereto (an "Assignment and Acceptance"),
together with any Revolving Credit Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (x) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (y) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in Section 18.3,
be released from its obligations under this Credit Agreement.
18.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS, COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is
the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim,
the assigning Bank makes no representation or
warranty, express or implied, and assumes no
responsibility with respect to any statements,
warranties or representations made in or in
connection with this Credit Agreement or the
execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit
Agreement, the other Loan Documents or any other
instrument or document furnished pursuant hereto or
the attachment, perfection or priority of any
security interest or mortgage,
(b) the assigning Bank makes no representation or
warranty and assumes no responsibility with respect
to the financial condition of the Borrower and its
Subsidiaries or any other Person primarily or
secondarily liable in
62
64
respect of any of the Obligations, or the performance
or observance by the Borrower or any other Person
primarily or secondarily liable in respect of any of
the Obligations of any of their obligations under
this Credit Agreement or any of the other Loan
Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of
this Credit Agreement, together with copies of the
most recent financial statements referred to in
Section 7.4 and Section 8.4 and such other documents
and information as it has deemed appropriate to make
its own credit analysis and decision to enter into
such Assignment and Acceptance;
(d) such assignee will, independently and without
reliance upon the assigning Bank, the Agent or any
other Bank and based on such documents and
information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking
or not taking action under this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to
take such action as agent on its behalf and to
exercise such powers under this Credit Agreement and
the other Loan Documents as are delegated to the
Agent by the terms hereof or thereof, together with
such powers as are reasonably incidental thereto;
(g) such assignee agrees that it will perform in
accordance with their terms all of the obligations
that by the terms of this Credit Agreement are
required to be performed by it as a Bank; and
(h) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and
Acceptance.
18.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to the
Banks
63
65
from time to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrower, the Agent and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and from time to
time upon reasonable prior notice. Upon each such recordation, the assigning
Bank agrees to pay to the Agent a registration fee in the sum of $3,500.
18.4. NEW REVOLVING CREDIT NOTES. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give prompt notice
thereof to the Borrower and the Banks (other than the assigning Bank). Within
five (5) Business Days after receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Agent, in exchange for each
surrendered Revolving Credit Note, a new Revolving Credit Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Revolving Credit
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Revolving Credit Notes shall provide that
they are replacements for the surrendered Revolving Credit Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Revolving Credit Notes, shall be dated the effective date of such in
Assignment and Acceptance and shall otherwise be substantially the form of the
assigned Revolving Credit Notes. Within five (5) days of issuance of any new
Revolving Credit Notes pursuant to this Section 18.4, the Borrower shall deliver
an opinion of counsel, addressed to the Banks and the Agent, relating to the due
authorization, execution and delivery of such new Revolving Credit Notes and the
legality, validity and binding effect thereof, in form and substance
satisfactory to the Banks. The surrendered Revolving Credit Notes shall be
canceled and returned to the Borrower.
18.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) any such sale or participation shall not affect the rights and duties
of the selling Bank hereunder to the Borrower and (b) the only rights granted to
the participant pursuant to such participation arrangements with respect to
waivers, amendments or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Revolving Credit Loans, extend the term
64
66
or increase the amount of the Commitment of such Bank as it relates to such
participant, reduce the amount of any commitment fees to which such participant
is entitled or extend any regularly scheduled payment date for principal or
interest.
18.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
provided that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
18.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to Section 12.1 or Section
12.2, and the determination of the Majority Banks shall for all purposes of this
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Revolving Credit Loans. If any Bank sells a
participating interest in any of the Revolving Credit Loans to a participant,
and such participant is the Borrower or an Affiliate of the Borrower, then such
transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Agent pursuant to
Section 12.1 or Section 12.2 to the extent that such participation is
beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Agreement and
the other Loan Documents be made without regard to the interest of such
transferor Bank in the Revolving Credit Loans to the extent of such
participation.
18.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to Section 16 with respect to any
claims or actions arising prior to the date of such assignment. If any assignee
Bank is not incorporated under the laws of the United States of America or any
state thereof, it shall, prior to the date on which any interest or fees are
payable hereunder or under any of the other
65
67
Loan Documents for its account, deliver to the Borrower and the Agent
certification as to its exemption from deduction or withholding of any United
States federal income taxes. Anything contained in this Section 18 to the
contrary notwithstanding, any Bank may at any time pledge all or any portion of
its interest and rights under this Credit Agreement (including all or any
portion of its Revolving Credit Notes) to any of the twelve Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
341. No such pledge or the enforcement thereof shall release the pledgor Bank
from its obligations hereunder or under any of the other Loan Documents.
18.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
19. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Revolving Credit Notes c/o American Business Partners,
00 Xxxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxxxxx 00000 shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to the Borrower, at c/o American Business
Partners, 00 Xxxxxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxx,
Xxxxxxxxxxxxx 00000 Attention: Xxxx Xxxxx, Chief
Financial Officer, or at such other address for
notice as the Borrower shall last have furnished in
writing to the Person giving the notice;
(b) if to the Agent, at Xxx Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, XXX, Attention: Xxxx X. Xxxxxx,
Vice President, or such other address for notice as
the Agent shall last have furnished in writing to the
Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on
Schedule 1 hereto, or such other address for notice
as such Bank shall have last furnished in writing to
the Person giving the notice.
66
68
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the fifth Business Day following the mailing thereof.
20. GOVERNING LAW
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 19. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
21. HEADINGS
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
22. COUNTERPARTS
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
23. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in Section 25.
67
69
24. WAIVER OF JURY TRIAL
The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Credit
Agreement, the Revolving Credit Notes or any of the other Loan Documents, any
rights or obligations hereunder or thereunder or the performance of which rights
and obligations. The Borrower (a) certifies that no representative, agent or
attorney of any Bank or the Agent has represented, expressly or otherwise, that
such Bank or the Agent would not, in the event of litigation, seek to enforce
the foregoing waivers and (b) acknowledges that the Agent and the Banks have
been induced to enter into this Credit Agreement or the other Loan Documents to
which it is a party, among other things, the waivers and certifications
contained herein.
25. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by all of the Banks may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by the
Borrower or any of its Subsidiaries of any terms of this Credit Agreement, the
other Loan Documents or such other instrument or the continuance of any Default
or Event of Default may be waived (either generally or in a particular instance
and either retroactively or prospectively) with, but only with, the written
consent of the Borrower and the written consent of the Majority Banks.
Notwithstanding the foregoing, the rate of interest on the Revolving Credit
Notes (other than interest accruing pursuant to Section 4.9 following the
effective date of any waiver by the Majority Banks of the Default or Event of
Default relating thereto), the term of the Revolving Credit Notes, the amount of
the Commitments of the Banks and the amount of commitment fee hereunder may not
be changed without the written consent of the Borrower and the written consent
of each Bank affected thereby; the definition of Majority Banks may not be
amended without the written consent of all of the Banks; and Section 14 may not
be amended without the written consent of the Agent. No waiver shall extend to
or affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Agent or
any Bank in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in similar or other
circumstances.
68
70
26. SEVERABILITY
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
69
71
REVOLVING CREDIT AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned have duly executed this Revolving
Credit Agreement as a sealed instrument as of the date first set forth above.
BRIDGESTREET INTERNATIONAL INC.
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Chief Financial Officer
FLEET NATIONAL BANK, INDIVIDUALLY AND AS
AGENT
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
70
72
SCHEDULE I
Name and Address of Bank Commitment Commitment %
------------------------ ---------- ------------
Fleet National Bank $10,000,000 100%
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
71
