EXECUTION
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CREDIT AGREEMENT
Dated as of March 31, 2005
between
FIND/SVP, INC.,
as the Borrower,
FLEET NATIONAL BANK, A Bank of America company,
as the Lender
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TABLE OF CONTENTS
Section Page
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ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS..................................1
1.01. Defined Terms....................................................1
1.02. Other Interpretive Provisions. ................................24
1.03. Accounting Terms. .............................................25
1.04. Rounding. .....................................................25
1.05. Times of Day. .................................................26
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS...........................26
2.01. Revolving Credit Loans and Term Loan............................26
2.02. Borrowings, Conversions and Continuations of Loans..............27
2.03. Prepayments.....................................................28
2.04. Termination or Reduction of Commitments.........................35
2.05. Repayment of Loans..............................................35
2.06. Interest........................................................35
2.07. Fees............................................................36
2.08. Computation of Interest and Fees. .............................36
2.09. Evidence of Debt. .............................................37
2.10. Payments Generally..............................................37
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY.........................37
3.01. Taxes...........................................................37
3.02. Illegality. ...................................................38
3.03. Inability to Determine Rates....................................39
3.04. Increased Costs; Reserves on LIBOR Loans........................39
3.05. Compensation for Losses. ......................................40
3.06. Mitigation Obligations. .......................................41
3.07. Survival. .....................................................41
ARTICLE IV. CONDITIONS PRECEDENT TO Credit Extensions.......................41
4.01. Conditions of Initial Loans. ...................................41
4.02. Conditions to all Credit Extensions. ..........................44
ARTICLE V. REPRESENTATIONS AND WARRANTIES...................................45
5.01. Existence, Qualification and Power; Compliance with Laws. .....45
5.02. Authorization; No Contravention. ..............................45
5.03. Governmental Authorization; Other Consents......................45
5.04. Binding Effect. ...............................................46
5.05. Financial Statements; No Material Adverse Effect................46
5.06. Litigation......................................................47
5.07. No Default. ...................................................47
5.08. Ownership of Property; Liens. .................................47
5.10. Insurance. ....................................................47
5.11. Taxes. ........................................................47
5.12. ERISA Compliance................................................48
Table of Contents
(Continued)
Page
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5.13. Subsidiaries; Equity Interests. ...............................48
5.15. Disclosure. ....................................................49
5.16. Compliance with Laws. .........................................49
5.18. Condition of Assets. ..........................................49
5.19. ARC Acquisition. ..............................................49
5.20. Signia Acquisition..............................................50
ARTICLE VI. AFFIRMATIVE COVENANTS...........................................51
6.01. Financial Statements............................................51
6.02. Certificates; Other Information.................................52
6.03. Notices. ......................................................53
6.04. Payment of Obligations..........................................54
6.05. Preservation of Existence, Etc..................................54
6.06. Maintenance of Properties.......................................54
6.07. Maintenance of Insurance. .....................................54
6.08. Compliance with Laws............................................54
6.09. Books and Records...............................................54
6.10. Inspection Rights...............................................55
6.11. Use of Proceeds.................................................55
6.12. Additional Subsidiaries.........................................55
ARTICLE VII. NEGATIVE COVENANTS.............................................55
7.01. Liens...........................................................55
7.02. Investments.....................................................56
7.03. Indebtedness....................................................58
7.05. Dispositions....................................................58
7.06. Restricted Payments.............................................59
7.07. Change in Nature of Business....................................59
7.08. Transactions with Affiliates....................................59
7.09. Burdensome Agreements...........................................60
7.10. Use of Proceeds.................................................60
7.11. Financial Covenants.............................................61
7.13. Amendments, Etc. of Certain Agreements; Double Negative Pledge..61
7.14. Accounting Changes..............................................62
7.15. Swap Contracts..................................................62
7.16. Formation of Subsidiaries.......................................62
7.18. Nature of Business; Name Changes................................62
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES................................62
8.01. Events of Default...............................................65
8.03. Application of Funds............................................65
ARTICLE IX. COLLATERAL SECURITY.............................................66
9.01. Collateral Security.............................................66
ARTICLE X. MISCELLANEOUS....................................................66
10.01. Amendments, Etc.................................................66
10.02. Notices; Effectiveness; Electronic Communication................66
ii
Table of Contents
(Continued)
Page
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10.03. No Waiver; Cumulative Remedies..................................68
10.05. Payments Set Aside..............................................69
10.06. Successors and Assigns..........................................70
10.07. Treatment of Certain Information; Confidentiality...............71
10.08. Right of Setoff.................................................72
10.09. Interest Rate Limitation........................................72
10.10. Counterparts; Integration; Effectiveness........................72
10.12. Severability....................................................73
10.13. Governing Law; Jurisdiction; Etc................................73
10.14. Waiver of Jury Trial............................................74
10.15. USA PATRIOT Act Notice..........................................74
10.16. Time of the Essence.............................................74
10.17. Arbitration.....................................................74
iii
SCHEDULES
1.01 High Concentration Account Debtors
5.05 Supplement to Interim Financial Statements
5.11 Taxes
5.13 Subsidiaries; Other Equity Investments; Equity Interests in the Borrower
5.17 Intellectual Property Matters
5.19 Earnout Obligations
7.01 Existing Liens
7.03 Existing Indebtedness
EXHIBITS
Form of
A Loan Notice
B Revolving Credit Note
C Term Note
D Compliance Certificate
E Borrowing Base Certificate
F Security Agreement
G Guaranty
H Opinion
iv
EXECUTION
CREDIT AGREEMENT
This CREDIT AGREEMENT ("Agreement") is entered into as of March 31, 2005
between FIND/SVP, INC., a New York corporation (the "Borrower") and FLEET
NATIONAL BANK, a Bank of America company (together with its affiliates,
successors and assigns, the "Lender").
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of March 14,
2005 (the "ARC Purchase Agreement") by and among Xxxxx Xxxxxx and the Borrower,
pursuant to which the Borrower is acquiring on or before the Closing Date the
capital stock and business of Atlantic Research & Consulting, Inc., a
Massachusetts corporation ("ARC") (the "ARC Acquisition");
WHEREAS, pursuant to a Stock Purchase Agreement, dated as of March 14,
2005 (the "Signia Purchase Agreement") by and among Xxxxxxx House and the
Borrower, pursuant to which the Borrower is acquiring on or before the Closing
Date the capital stock and business of Signia Partners Incorporated, a District
of Columbia corporation ("Signia") (the "Signia Acquisition");
WHEREAS, the Borrower has requested the Lender make available a revolving
credit facility in an amount not to exceed $4,500,000 and to make a term loan to
the Borrower in the aggregate principal amount of up to $4,500,000, which term
loan and which revolving credit facility (or a portion thereof) will be used to
partially fund the consideration payable pursuant to the ARC Purchase Agreement
and the Signia Purchase Agreement, together with certain fees and expenses
payable in connection therewith, and which revolving credit facility will also
be used for working capital needs and general business purposes; and
WHEREAS, the Lender has agreed to make available to the Borrower a
revolving credit facility and term loan upon the terms and conditions set forth
in this Agreement;
NOW, THEREFORE, in consideration of the mutual conditions and agreements
set forth in this Agreement, and for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01. Defined Terms. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Accounts" shall mean those accounts arising out of the sale or lease of
goods or the rendition of services by the Borrower.
"Acquisition" with respect to any Person shall mean the purchase or other
acquisition by such Person, by any means whatsoever (including through a merger,
dividend or otherwise and whether in a single transaction or in a series of
related transactions), of (i) any Equity Interests of any other Person if,
immediately thereafter, such other Person would be either a Subsidiary of such
Person or otherwise under the control of such Person, (ii) any business, going
concern or division or segment of any other Person, or (iii) any property of any
other Person other than in the ordinary course of business, provided, however,
that no acquisition of all or substantially all of the assets of such other
Person shall be deemed to be in the ordinary course of business.
"Acquisition Documents" means collectively, the Signia Acquisition
Documents and the ARC Acquisition Documents.
1
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agreement" means this Credit Agreement.
"Aggregate Commitment" means the $4,500,000 Revolving Credit Commitment
and the $4,500,000 Term Commitment.
"Applicable Rate" means a per annum rate equal to:
(a) with respect to Revolving Credit Loans:
(i) with respect to Base Rate Loans, 0.75%, and after the Reduction
Event, 0.50%;
(ii) with respect to LIBOR Loans and Letters of Credit, 2.75%, and
after the Reduction Event, 2.50%; and
(iii) with respect to the commitment fee, 0.375%.
(b) with respect to the Term Loan:
(i) with respect to Base Rate Loans, 1.00% and after the Reduction
Event, 0.75%; and
(ii) with respect to LIBOR Loans, 3.00%, and after the Reduction
Event, 2.75%.
"Approved Bank" shall mean any bank whose (or whose parent company's)
unsecured non-credit supported short-term commercial paper rating from (i)
Standard & Poor's is at least A-1 or the equivalent thereof or (ii) Xxxxx'x is
at least P-1 or the equivalent thereof.
"ARC" has the meaning specified in the recitals hereto.
"ARC Acquisition" has the meaning specified in the recitals hereto and
shall mean the acquisition by the Borrower of ARC in a manner in all respects
satisfactory to the Lender.
"ARC Acquisition Documents" shall mean collectively, (i) the ARC Purchase
Agreement and (ii) all other documents executed in connection therewith, as each
may be amended, supplemented or otherwise modified.
2
"ARC Assets" shall mean the assets and business of ARC being acquired in
the ARC Acquisition.
"ARC Business" shall mean ARC's current operating business, which,
together with the ARC Assets and certain liabilities related thereto (other than
liabilities under the Loan Documents), is to be transferred to, and assumed by,
the Borrower on the Effective Date.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended December
31, 2004, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the Base Rate.
"Borrower" has the meaning specified in the introductory paragraph hereto.
"Borrowing" means a Revolving Credit borrowing or a borrowing of the Term
Loan.
"Borrowing Base" shall mean:
(a) for the period commencing with the month ending April 30, 2005 through
and including the end of the Borrower's first fiscal quarter in 2006, 75% of the
Borrower's and each Material Subsidiary's Eligible Accounts Receivable from time
to time outstanding less reserves with respect to such Accounts which the Lender
may deem necessary in its sole discretion (the "Revolver Borrowing Base"); and
(b) thereafter, for the period commencing with the Borrower's second
quarter of fiscal year 2006, 75% of the Borrower's and each Material
Subsidiary's Eligible Accounts Receivable from time to time outstanding less
reserves with respect to such Accounts which the Lender may deem necessary in
its sole discretion.
"Borrowing Base Certificate" shall mean a certificate substantially in the
form of Exhibit E hereto.
3
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Lender's Office is located and, if such day
relates to any LIBOR Loan, means any such day on which dealings in Dollar
deposits are conducted by and between banks in the London interbank market.
"Capital Stock" shall mean, as to any Person, all shares, interests,
partnership interests, limited liability company interests, participations,
rights in or other equivalents (however designated) of such Person's equity
(however designated) and any rights, warrants or options exchangeable for or
convertible into such shares, interests, participations, rights or other equity.
"Capitalized Lease" shall mean any lease the obligations to pay rent or
other amounts under which constitute Capitalized Lease Obligations.
"Capitalized Lease Obligations" shall mean as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such Person under GAAP and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
"Cash Equivalents" shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in full support thereof) having maturities of not
more than six months from the date of acquisition, (ii) Dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) the Lender or
(y) any Approved Bank, in any such case with maturities of not more than six
months from the date of acquisition, (iii) commercial paper issued by any
Approved Bank or by the parent company of any Approved Bank and commercial paper
issued by, or guaranteed by, any industrial or financial company with an
unsecured non-credit supported short-term commercial paper rating of at least
A-1 or the equivalent by Standard & Poor's or at least P-1 or the equivalent by
Moody's, or guaranteed by any industrial or financial company with a long term
unsecured non-credit supported senior debt rating of at least A or A-2, or the
equivalent, by Standard & Poor's or Moody's, as the case may be, and in each
case maturing within six months after the date of acquisition, (iv) marketable
direct obligations issued by any state of the United States of America or any
political subdivision of any such state or any public instrumentality thereof
maturing within six months from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's or Moody's, (v) investments in money market funds
substantially all the assets of which are comprised of securities of the types
described in clauses (i) through (iv) above, and (vi) such other accounts as may
be approved by the Lender in its sole discretion.
4
"Change in Law" means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty, (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
"Change of Control" means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit
plan of such person or its subsidiaries, and any person or entity acting in its
capacity as trustee, agent or other fiduciary or administrator of any such plan)
becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be deemed
to have "beneficial ownership" of all securities that such person or group has
the right to acquire (such right, an "option right"), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 35% or more of the equity securities of the Borrower entitled to
vote for members of the board of directors or equivalent governing body of the
Borrower on a fully-diluted basis (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option
right);
(b) during any period of 12 consecutive months, a majority of the members
of the board of directors or other equivalent governing body of the Borrower
cease to be composed of individuals (i) who were members of that board or
equivalent governing body on the first day of such period, (ii) whose election
or nomination to that board or equivalent governing body was approved by
individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of an actual or threatened solicitation of proxies or
consents for the election or removal of one or more directors by any person or
group other than a solicitation for the election of one or more directors by or
on behalf of the board of directors); or
(c) any Person or two or more Persons acting in concert shall have
acquired by contract or otherwise, or shall have entered into a contract or
arrangement that, upon consummation thereof, will result in its or their
acquisition of the power to exercise, directly or indirectly, a controlling
influence over the management or policies of the Borrower, or control over the
equity securities of the Borrower entitled to vote for members of the board of
directors or equivalent governing body of the Borrower on a fully-diluted basis
(and taking into account all such securities that such Person or group has the
right to acquire pursuant to any option right) representing 35% or more of the
combined voting power of such securities.
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 10.01.
5
"Code" means the Internal Revenue Code of 1986.
"Collateral" shall mean the collateral described in the Security
Documents, as summarized in Article 9 hereof.
"Commitment" shall mean the Revolving Credit Commitment and/or the Term
Commitment.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit D.
"Consolidated EBITDA" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, without duplication, the sum of (A) (a) an
amount equal to Consolidated Net Income for such period plus (b) the following
to the extent deducted in calculating such Consolidated Net Income: (i)
Consolidated Interest Charges for such period, (ii) the provision for Federal,
state, local and foreign income taxes payable by the Borrower and its
Subsidiaries for such period, (iii) depreciation and amortization expenses, (iv)
other non-recurring expenses of the Borrower and its Subsidiaries reducing such
Consolidated Net Income which do not represent a cash item in such period or any
future period, (v) non-cash stock compensation expenses, and (vi) the Series A
Preferred Stock Dividends and minus (c) the following to the extent included in
calculating such Consolidated Net Income: (i) Federal, state, local and foreign
income tax credits of the Borrower and its Subsidiaries for such period and (ii)
all non-cash items increasing Consolidated Net Income for such period; plus (B)
for the Signia Acquisition and the ARC Acquisition, the pro forma effect (i.e.
assuming that the applicable acquisition was consummated at the beginning of
such period) on Consolidated EBITDA for such period of the Signia Acquisition
and the ARC Acquisition during the most recent twelve month period preceding the
date of determination, but solely for the number of months immediately preceding
the consummation of the applicable acquisition, which number equals twelve (12)
less the number of months following the consummation of the applicable
acquisition to such date of determination (as reflected in the audited financial
statements covering the applicable target company (or applicable business
thereof), prepared by an independent certified public accountant of recognized
national standing acceptable to the Lender, or if such audited financial
statements are not available, then at the request of the Lender, as reflected in
financial statements covering such company (or business), examined by an
independent certified public accountant of recognized national standing
acceptable to the Lender).
"Consolidated Funded Debt" means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, the sum, without
duplication, of (I)(a) the outstanding principal amount of all obligations,
whether current or long-term, for borrowed money (including Obligations
hereunder) and all obligations evidenced by bonds, debentures, notes, loan
agreements or other similar instruments, (b) all purchase money Indebtedness,
(c) all direct obligations arising under letters of credit (including standby
and commercial), bankers' acceptances, bank guaranties, surety bonds and similar
instruments, (d) all obligations in respect of the deferred purchase price of
property or services (other than trade accounts payable in the ordinary course
of business), (e) Attributable Indebtedness in respect of capital leases and
Synthetic Lease Obligations, (f) all Earnout Obligations (to the extent
reasonably determined likely to be due and payable), (g) without duplication,
all Guarantees with respect to outstanding Indebtedness of the types specified
in clauses (a) through (f) above of Persons other than the Borrower or any
Subsidiary, and (h) all Indebtedness of the types referred to in clauses (a)
through (g) above of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which the
Borrower or a Subsidiary is a general partner or joint venturer, unless such
Indebtedness is expressly made non-recourse to the Borrower or such Subsidiary;
plus (II) for the Signia Acquisition and the ARC Acquisition, the pro forma
effect (i.e. assuming that the applicable acquisition was consummated at the
beginning of such period) on Consolidated Funded Debt for such period of the
Signia Acquisition and the ARC Acquisition during the most recent twelve month
period preceding the date of determination, but solely for the number of months
immediately preceding the consummation of the applicable acquisition, which
number equals twelve (12) less the number of months following the consummation
of the applicable acquisition to such date of determination (as reflected in the
audited financial statements covering the applicable target company (or
applicable business thereof), prepared by an independent certified public
accountant of recognized national standing acceptable to the Lender, or if such
audited financial statements are not available, then at the request of the
Lender, as reflected in financial statements covering such company (or
business), examined by an independent certified public accountant of recognized
national standing acceptable to the Lender).
6
"Consolidated Interest Charges" means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, debt discount, fees, charges and related expenses of the
Borrower and its Subsidiaries in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP
and (b) the portion of Capitalized Lease Obligations allocable to interest
expense.
"Consolidated Net Income" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries (excluding extraordinary gains but including extraordinary losses)
for that period.
"Consolidated Net Worth" means, as of any date of determination, for the
Borrower and its Subsidiaries on a consolidated basis, the sum of (A) (i)
Shareholders' Equity of the Borrower and its Subsidiaries on that date (as
indicated on the Borrower's financial statements prepared in accordance with
GAAP and delivered in accordance with Sections 7.2 and 7.3 herein), and (ii)
redeemable capital (common and preferred) stock (as indicated on the Borrower's
financial statements prepared in accordance with GAAP and delivered in
accordance with Sections 7.2 and 7.3 herein).
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
7
"Credit Extension" means each of the following: (a) a Borrowing and (b) an
L/C Credit Extension.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means (a) when used with respect to Obligations other than
Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the
Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 4% per annum;
provided, however, that with respect to a LIBOR Loan, the Default Rate shall be
an interest rate equal to the interest rate (including any Applicable Rate)
otherwise applicable to such Loan plus 4% per annum, and (b) when used with
respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 4%
per annum.
"Disposition" or "Dispose" means the sale, transfer, license, lease or
other disposition (including any sale and leaseback transaction) of any property
by any Person, including any sale, assignment, transfer or other disposal, with
or without recourse, of any notes or accounts receivable or any rights and
claims associated therewith (for the avoidance of doubt, such term (and the
corresponding Section 7.05) does not refer to or limit issuance or sales of
Equity Interests issued by the Borrower.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means any Subsidiary that is organized under the
laws of any political subdivision of the United States.
"Earnout Obligations" means the amount of all earnouts and other payments
owing to Persons, whether direct or contingent, arising in respect of the Signia
Acquisition, the ARC Acquisition, the Guideline Acquisition and each other
Acquisition expressly permitted by the Lender, on such terms as are set forth in
their respective purchase agreements and as more fully described in Schedule
5.19 hereto.
8
"Eligible Accounts Receivable" shall mean those Accounts of the Borrower
and the Material Subsidiaries (i) which have been outstanding for not more than
ninety (90) days from the original invoice date, and (ii) have been validly
assigned to the Lender and comply with all of the terms, conditions, warranties
and representations made to the Lender under this Agreement and the other Loan
Documents; but Eligible Accounts Receivable shall not include the following: (a)
Accounts with respect to which the Account Debtor is an officer, director,
employee, or agent of the Borrower or an Affiliate of the Borrower; (b) Accounts
which represent a sale on a xxxx-and-hold, guaranteed sale, sale and return,
sale on approval, consignment, or other repurchase or return basis; (c) Accounts
with respect to which the Account Debtor is not domiciled in the United States
of America unless such Account is fully secured by an irrevocable letter of
credit acceptable to the Lender and assigned to the Lender; (d) Accounts with
respect to which the sale is on an installment sale, lease or other extended
payment basis; (e) Accounts with respect to which the Account Debtor is a
federal, state, local or foreign governmental authority unless such governmental
authority is the United States of America or any department, agency or
instrumentality of the United States, and the Borrowers comply with the
Assignment of Claims Act of 1940, as amended (31 U.S.C. Section 203 et seq.);
(f) all Accounts owing by any Account Debtor if fifty percent (50%) or more of
the Accounts due from such Account Debtor are deemed not to be Eligible Accounts
hereunder; (g) Accounts with respect to which the Account Debtor is a Subsidiary
of, Affiliate of, or has common officers or directors with the Borrower; (h)
Accounts with respect to which the Lender does not for any reason have a
perfected first priority Lien; (i) Accounts with respect to which the Borrower
or a Subsidiary is or may become liable to the Account Debtor for goods sold or
services rendered by the Account Debtor to the Borrower or a Subsidiary, to the
extent of such Borrower's or Subsidiary's existing or potential liability to
such Account Debtor; (j) Accounts with respect to which the Account Debtor has
disputed any liability, or the Account Debtor has made any claim with respect to
any other Account due to the Borrower or a Subsidiary, or the Account is
otherwise subject to any right of setoff, deduction, breach of warranty or other
defense, dispute or counterclaim by the Account Debtor; (k) that portion of the
Accounts owed by any single Account Debtor which exceeds ten percent (10%) of
all of the Accounts, except that with respect to Accounts owed by the account
debtor(s) listed on Schedule 1.01 hereto, the ineligible portion shall be that
portion which exceeds fifteen percent (15%) of all the Accounts; (l) that
portion of any Accounts representing late fees, service charges or interest, but
only to the extent of such portion; (m) Accounts with respect to which the
Account Debtor is located in any state requiring the filing of a Notice of
Business Activities Report or similar report in order to permit the Borrower or
a Subsidiary to seek judicial enforcement in such State of payment of such
Account, unless the Borrower or such Subsidiary has qualified to do business in
such state or has filed a Notice of Business Activities Report or equivalent
report for the then current year; (n) Accounts owed by any Account Debtor which
is insolvent or is the subject of an insolvency proceeding; (o) that portion or
any Account which is evidenced by a promissory note or other instrument or by
chattel paper; and (p) any and all Accounts of an Account Debtor whose
creditworthiness is not satisfactory to the Lender in its sole credit judgment
based on information available to the Lender; provided, however, that
notwithstanding anything to the contrary contained herein, the Lender agrees
that Eligible Accounts Receivable shall include earned retainers as well as that
portion of any retainers that are considered unearned by virtue of the fact that
they are paid to the Borrower (or its Material Subsidiaries) in advance (on an
annual or other periodic basis) pursuant to a service contract. References to
percentages of all Accounts are based on dollar amount of Accounts, and not
number of Accounts.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
hazardous substances or wastes, air emissions and discharges to waste or public
systems.
9
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower, any other Loan Party or any of their
respective Subsidiaries directly or indirectly resulting from or based upon (a)
violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Materials, (c)
exposure to any Hazardous Materials, (d) the release or threatened release of
any Hazardous Materials into the environment or (e) any contract, agreement or
other consensual arrangement pursuant to which liability is assumed or imposed
with respect to any of the foregoing.
"Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are outstanding on any date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Event of Default" has the meaning specified in Section 8.01.
"Excess Cash Flow" means, with respect to the Borrower and its
Subsidiaries on a consolidated basis for the applicable period of determination
(any period of four fiscal quarters), the amount by which (A) Consolidated
EBITDA for the period of determination, minus the sum of (i) Federal, State and
local income taxes payable in cash during the period of determination, (ii)
unfunded capital expenditures during the period of determination, (iii) the
current portion of long term debt paid or scheduled to have been paid during the
twelve month period immediately preceding the last day of the period of
determination, (iv) Capitalized Lease Obligations during the period of
determination, (v) Consolidated Interest Charges during the period of
determination, (vi) Earnout Obligations and any other permitted dividends and
distributions paid during the period of determination, (vii) voluntary
prepayments hereunder solely to the extent they are applied to the Term Loan,
and (viii) the Guideline Redemption, if any; exceeds (B) the 1.25 to 1.00 Fixed
Charge Coverage Ratio for such period of determination.
10
"Excluded Taxes" means, with respect to the Lender or any other recipient
of any payment to be made by or on account of any obligation of the Borrower
hereunder, (a) taxes imposed on or measured by its overall net income (however
denominated), and franchise taxes imposed on it (in lieu of net income taxes),
by the jurisdiction (or any political subdivision thereof) under the laws of
which such recipient is organized or in which its principal office is located
or, in the case of the Lender, in which its applicable Lending Office is
located, (b) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which the Borrower is located.
"Existing Credit Agreements" means (a) that certain line of credit
documentation between the Borrower and JPMorgan Chase Bank; and (b) that certain
line of credit documentation between Signia and Cardinal Bank Dulles, NA.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Lender.
"Xxxx.Xxx" means Xxxx.Xxx, LLC, a Delaware limited liability company,
which is a joint venture owned in part by the Borrower, as more fully described
in item #1 of Schedule 7.02 hereto.
"Fixed Charge Coverage Ratio" shall mean, with respect to the Borrower and
its Subsidiaries on a consolidated basis for the applicable period of
determination (any period of four fiscal quarters), the ratio of (A)
Consolidated EBITDA for the period of determination, minus Federal, State and
local income taxes payable in cash during the period of determination, minus
unfunded capital expenditures during the period of determination, to (B) the sum
of (i) the current portion of long term debt paid or scheduled to have been paid
during the twelve month period immediately preceding the last day of the period
of determination, plus (ii) Capitalized Lease Obligations during the period of
determination, plus (iii) Consolidated Interest Charges during the period of
determination, plus (iv) Earnout Obligations and any other permitted dividends
and distributions paid during the period of determination, other than the
Guideline Earnout.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
11
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).
"Guarantee" means, as to any Person, any (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"Guarantors" means, collectively, each of the direct or indirect Material
Subsidiaries of the Borrower, including, without limitation, Signia and ARC
(whether or not they constitute a Material Subsidiary).
"Guaranty" means the Guaranty made by the Guarantors in favor of the
Lender, substantially in the form of Exhibit F.
"Guideline Acquisition" means the acquisition of all of the capital stock
of Guideline Research Corp. pursuant to the Guideline Acquisition Agreement.
12
"Guideline Acquisition Agreement" means that certain Stock Purchase
Agreement dated as of April 1, 2003, among the Borrower, Xxxxx Xxxxx, Guideline
Research Corp., Xxx X. Xxxxxxxxx and Xxxxxx La Terra.
"Guideline Earnout" means the Two Year Deferred Consideration Amount (as
defined in the Guideline Acquisition Agreement) due and payable to Xxx X.
Xxxxxxxxx and Xxxxxx La Terra pursuant to the terms and conditions of the
Guideline Acquisition Agreement, as the same is more fully described in the
second bullet point paragraph on the third page of Schedule 5.19.
"Guideline Redemption" means the reacquisition of Consideration Shares (as
defined in the Guideline Acquisition Agreement) by the Borrower upon demand of
Xxx X. Xxxxxxxxx and Xxxxxx La Terra pursuant to the terms and conditions of
Section 2.6 of the Guideline Acquisition Agreement, as the same is more fully
described in item 4 of Part (c) of Schedule 5.13.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase
price of property or services (other than trade accounts payable in the
ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by
such Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations;
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interest in
such Person or any other Person, valued, in the case of a redeemable
preferred interest, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends; and
13
(h) all Guarantees of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitees" has the meaning specified in Section 10.04(b).
"Installment Payment Date" means any date on which all or any portion of
the principal amount of a Term Loan is due and payable.
"Interest Payment Date" means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a LIBOR Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates; (b)
as to any Base Rate Loan, the last Business Day of each calendar month and the
Maturity Date; and (c) as to the Term Loan, on each Installment Payment Date
therefore.
"Interest Period" means, as to each LIBOR Loan, the period commencing on
the date such LIBOR Loan is disbursed or converted to or continued as a LIBOR
Loan and ending on the date one, two, three or six months thereafter, as
selected by the Borrower in its Loan Notice; provided that:
(i) any Interest Period that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period;
(iii) no Interest Period with respect to a Revolving Credit Loan
shall extend beyond the Revolving Credit Maturity Date and no Interest
Period with respect to the Term Loan shall extend beyond the Term Maturity
Date; and
(iv) no portion of the Term Loan shall be continued as or converted
into a LIBOR Loan with an Interest Period which extends beyond an
Installment Payment Date if, after giving effect to the continuation or
conversion of such LIBOR Loan, the amount payable on any Installment
Payment Date would exceed the sum of (i) the aggregate principal amount of
the outstanding portion of the Term Loan constituting LIBOR Loans with
Interest Periods ending prior to such Installment Payment Date and (ii)
the aggregate outstanding portion of the Term Loan constituting Base Rate
Loans.
14
"Internal Control Event" means a material weakness in, or fraud that
involves management or other employees who have a significant role in, the
Borrower's internal controls over financial reporting, in each case as described
in the Securities Laws.
"Investment" means, as to any Person, any direct or indirect acquisition
or investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of assets of
another Person that constitute a business unit. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
"IP Rights" has the meaning specified in Section 5.17.
"IRS" means the United States Internal Revenue Service.
"ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
issuance).
"Issuer Documents" means with respect to any Letter of Credit, the Letter
Credit Application, and any other document, agreement and instrument entered
into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor the L/C
Issuer and relating to any such Letter of Credit.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the increase of the
amount thereof.
"L/C Issuer" means the Lender, in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.
15
"L/C Obligations" means, as at any date of determination, the aggregate
undrawn amount of all outstanding Letters of Credit plus the aggregate of all
Unreimbursed Amounts, including all L/C Borrowings. For all purposes of this
Agreement, if on any date of determination a Letter of Credit has expired by its
terms but any amount may still be drawn thereunder by reason of the operation of
Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be "outstanding"
in the amount so remaining available to be drawn.
"Lender" has the meaning specified in the introductory paragraph hereto.
"Lender's Office" means the Lender's address as set forth in Section 10.02
hereof or such other address as the Lender may from time to time notify to the
Borrower.
"Lending Office" means, as to the Lender, the office or offices of the
Lender as the Lender may from time to time notify the Borrower.
"Letter of Credit" means any standby letter of credit issued hereunder.
"Letter of Credit Application" means an application and agreement for the
issuance or amendment of a Letter of Credit in the form from time to time in use
by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days prior
to the Revolving Credit Maturity Date then in effect (or, if such day is not a
Business Day, the next preceding Business Day).
"Letter of Credit Fee" has the meaning specified in Section 2.03(i).
"Letter of Credit Sublimit" means an amount equal to $500,000. The Letter
of Credit Sublimit is part of, and not in addition to, the Revolving Credit
Commitment.
"LIBOR" shall mean, as applicable to any LIBOR Loan, the rate per annum as
determined on the basis of the offered rates for deposits in U.S. dollars, for a
period of time comparable to such LIBOR Loan which appears on the Telerate page
3750 as of 11:00 a.m. London time on the day that is two Business Days preceding
the first day of such LIBOR Loan; provided, however, if the rate described above
does not appear on the Telerate System on any applicable interest determination
date, LIBOR shall be the rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point), determined on the basis of the
offered rates for deposits in dollars for a period substantially equal to the
Interest Period on the Reuters Page "LIBO" (or such other page as may replace
the LIBO Page on that service for the purpose of displaying such rates), as of
11:00 a.m.(London Time), on the day that is two (2) Business Days prior to the
beginning of such Interest Period. If both the Dow Xxxxx Market Service and
Reuters system are unavailable, then the rate for that date will be determined
on the basis of the offered rates for deposits in U.S. dollars for a period of
time comparable to such LIBOR Loan which are offered by four major banks in the
London interbank market at approximately 11:00 a.m. London time, on the day that
is two (2) Business Days preceding the first day of such LIBOR Loan as selected
by the Bank. The principal London office of each of the four major London banks
will be requested to provide a quotation of its U.S. dollar deposit offered
rate. If at least two such quotations are provided, the rate for the date will
be the arithmetic mean of the quotations. If fewer than two quotations are
provided as requested, the rate for that date will be determined on the basis of
the rates quoted for loans in U.S. dollars to leading European banks for a
period of time comparable to such LIBOR Loan offered by major banks in New York
City at approximately 11:00 a.m. New York City time, on the day that is two
Business Days preceding the first day of such LIBOR Loan. In the event that the
Bank is unable to obtain any such quotation as provided above, it will be deemed
that LIBOR pursuant to a LIBOR Loan cannot be determined. In the event that the
Board of Governors of the Federal Reserve System shall impose a Reserve
Percentage with respect to LIBOR deposits of the Bank, then for any period
during which such Reserve Percentage shall apply, LIBOR shall be equal to the
amount determined above divided by an amount equal to 1 minus the Reserve
Percentage. "Reserve Percentage" shall mean the maximum aggregate reserve
requirement (including all basic, supplemental, marginal and other reserves)
which is imposed on member banks of the Federal Reserve System against
"Euro-currency Liabilities" as defined in Regulation D.
16
"LIBOR Loan" means a Loan that bears interest at a rate based on LIBOR.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in the nature of
a security interest of any kind or nature whatsoever (including any conditional
sale or other title retention agreement, any easement, right of way or other
encumbrance on title to real property, and any financing lease having
substantially the same economic effect as any of the foregoing).
"Loan" means an extension of credit by a Lender to the Borrower under
Article II in the form of a Revolving Credit Loan or a Term Loan.
"Loan Documents" means this Agreement, each Note, the Security Documents,
each Issuer Document, the Guaranty, and each other document, agreement and
instrument executed in connection herewith or therewith or in connection with or
pursuant to any of the foregoing.
"Loan Notice" means a notice of (a) a Borrowing, (b) a conversion of Loans
from one Type to the other, or (c) a continuation of LIBOR Loans, pursuant to
Section 2.02(a), which, if in writing, shall be substantially in the form of
Exhibit A.
"Loan Parties" means, collectively, the Borrower and each Guarantor.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower or the Borrower and its Subsidiaries taken as a whole; (b) a material
impairment of the ability of any Loan Party to perform its obligations under any
Loan Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against any Loan Party of
any Loan Document to which it is a party.
"Material Agreements" shall mean collectively, the ARC Acquisition
Documents and the Signia Acquisition Documents and the Guideline Acquisition
Agreement, as each may be amended, supplemented or otherwise modified from time
to time.
17
"Material Subsidiary" shall mean each Subsidiary of the Borrower, which
for the four most recently completed fiscal quarters of the Borrower accounted
for more than four percent (4%) of total revenues of the Borrower and its
Subsidiaries on a consolidated basis and/or more than four percent (4%) of total
assets of the Borrower and its Subsidiaries on a consolidated basis; provided,
that notwithstanding the foregoing, each of Signia and ARC shall, for all
purposes hereof, be a Material Subsidiary; and provided, further, that, except
for that portion of the thirty (30) day grace period utilized in order for the
Borrower to be in compliance with Section 6.12 with respect to any Material
Subsidiary, at no time shall there be Subsidiaries of the Borrower that are not
Material Subsidiaries if, for the four most recently completed fiscal quarters
of the Borrower, such Subsidiaries that are not deemed or designated by the
Borrower as Material Subsidiaries, account in the aggregate for more than ten
percent (10%) of total revenues of the Borrower and its Subsidiaries on a
consolidated basis and/or more than ten percent (10%) of total assets of the
Borrower and its Subsidiaries on a consolidated basis.
"Moody's" means Xxxxx'x Investors Service, Inc. and any successor thereto.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding five plan
years, has made or been obligated to make contributions.
"Net Proceeds" shall mean with respect to any event, (a) the cash proceeds
received in respect of such event, including (i) any cash received in respect of
any non?cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, (b) net of the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Borrower and its
Subsidiaries to third parties in connection with such event, including legal,
accounting, banking and underwriting expenses, fees, discounts, commissions and
other issuance expenses, (ii) in the case of a sale, transfer, lease or other
disposition of an asset (including pursuant to a sale and leaseback
transaction), the amount of all payments required to be made by the Borrower and
its Subsidiaries as a result of such event to repay Indebtedness (other than the
Revolving Credit Loans) secured by such asset or otherwise subject to mandatory
payment as a result of such event and (iii) the amount of all taxes paid (or
reasonably estimated to be payable) by the Borrower and the Subsidiaries, and
the amount of any reserves established by the Borrower and the Subsidiaries to
fund contingent liabilities reasonably estimated to be payable, in each case
during the year that such event occurred or the next succeeding year and that
are directly attributable to such event (as determined reasonably and in good
faith by the chief financial officer of the Borrower); provided, however, that,
with respect to any casualty or other insured damage or condemnation or similar
proceeding, if the Borrower shall deliver a certificate of its chief financial
officer to the Lender at the time of such casualty or other insured damage or
condemnation setting forth the Borrower's intent to use the proceeds of such
casualty or other insured damage or condemnation to replace or repair the assets
that are the subject of such casualty or other insured damage or condemnation
with other assets to be used in the same line of business within 180 days of
receipt of such proceeds and no Default shall have occurred and shall be
continuing at the time of such certificate or at the proposed time of the
application of such proceeds, such proceeds shall not constitute Net Proceeds
except to the extent not so used at the end of such 180-day period, at which
time such proceeds shall be deemed Net Proceeds.
18
"Note" means a promissory note made by the Borrower in favor of the Lender
evidencing Loans made by the Lender, including the Revolving Credit Note and the
Term Note.
"Obligations" means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document or
otherwise with respect to any Loan, or any Swap Contracts of the Borrower to
which the Lender or its Affiliate is a party whether direct or indirect
(including those acquired by assumption), absolute or contingent, due or to
become due, now existing or hereafter arising and including interest and fees
that accrue after the commencement by or against any Loan Party or any Affiliate
thereof of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding, regardless of whether such interest and fees are
allowed claims in such proceeding. Without limiting the generality of the
foregoing, the Obligations of the Loan Parties under the Loan Documents include
(a) the obligation to pay principal, interest, charges, expenses, fees,
reasonable attorneys' fees and disbursements, indemnities and other amounts
payable by any Loan Party under any Loan Document, (b) any amounts owing to the
Lender or any Affiliate of the Lender in respect of any cash management or
treasury management arrangements provided to the Loan Parties, (c) the
obligation of any Loan Party to reimburse any amount in respect of any of the
foregoing that the Lender may, after the occurrence and during the continuance
of an Event of Default, elect to pay or advance on behalf of such Loan Party,
and (d) any other obligations arising out of or under, based upon or relating to
the Loan Documents or any Swap Contracts of the Borrower to which the Lender or
its Affiliate is a party.
"Organization Documents" means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
"Other Taxes" means all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
"Outstanding Amount" means (i) with respect to Revolving Credit Loans and
the Term Loan on any date, the aggregate outstanding principal amount thereof
after giving effect to any borrowings and prepayments or repayments of Revolving
Credit Loans and the Term Loan, as the case may be, occurring on such date, and
(ii) with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements by the
Borrower of Unreimbursed Amounts.
19
"Participant" has the meaning specified in Section 10.06(c).
"PBGC" means the Pension Benefit Guaranty Corporation. "Pension Plan"
means any "employee pension benefit plan" (as such term is defined in Section
3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of
ERISA and is sponsored or maintained by the Borrower or any ERISA Affiliate or
to which the Borrower or any ERISA Affiliate contributes or has an obligation to
contribute, or in the case of a multiple employer or other plan described in
Section 4064(a) of ERISA, has made contributions at any time during the
immediately preceding five plan years.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Petra Series A Preferred Stock Dividend" means the dividends payable to
holders of Series A Preferred Stock of the Borrower pursuant to the terms and
conditions of the Certificate of Incorporation of the Borrower, as more fully
described in item #1 of Schedule 7.06.
"Petra Series A Preferred Stock Redemption" means the reacquisition of the
Series A Preferred Stock of the Borrower pursuant to the terms and conditions of
the Certificate of Incorporation of the Borrower, as more fully described in
item #5 of Part (c) of Schedule 5.13.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Prepayment/Reduction Event" shall mean any of the following events:
(i) any sale, transfer, lease or other Disposition (including pursuant to
a sale and leaseback transaction) of any property of the Borrower or any
Subsidiary of the Borrower or any other Loan Party, other than (i) Dispositions
expressly permitted by this Agreement (including the Disposition described in
Section 7.05(g)) and (ii) Dispositions resulting in aggregate Net Proceeds not
exceeding $500,000 during any fiscal year of the Borrower; and/or
(ii) any casualty or other insured damage to, or any taking under power of
eminent domain or by condemnation or similar proceeding of, any property or
asset of the Borrower or any Subsidiary of the Borrower or any other Loan Party,
other than casualties, insured damage or takings resulting in aggregate Net
Proceeds not exceeding $500,000 during any fiscal year.
"Property" shall mean all types of real, personal, tangible, intangible or
mixed property.
"Reduction Event" means an event by which the Lender shall reduce the
Applicable Rate for Base Rate Loans and LIBOR Loans effective on May 1, 2006, if
and only if the Lender has determined, in its sole and absolute discretion, that
each of the following conditions have been satisfied: (i) during the period from
the Closing Date through and including March 31, 2006, the aggregate Outstanding
Amount of the Revolving Credit Loans, plus the Outstanding Amount of all L/C
Obligations for such period, whenever calculated, did not exceed the Revolver
Borrowing Base (it being understood that if any inadvertent overadvance occurs
during such period, a Reduction Event shall not be prohibited so long as the
Borrower takes immediate corrective action in compliance with Sections
2.04(b)(i) and (b)(ii)); and (ii) at all times during the period from the
Closing Date through and including March 31, 2006, and during any subsequent
period through the time of the Lender's determination and notice to the Borrower
of the existence of a Reduction Event, no Default or Event of Default shall have
occurred or be continuing.
20
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Revolving Credit Loans, a Loan Notice, and (b)
with respect to an L/C Credit Extension, a Letter of Credit Application.
"Responsible Officer" means the chief executive officer, president, chief
financial officer, controller, treasurer or assistant treasurer of a Loan Party.
Any document delivered hereunder that is signed by a Responsible Officer of a
Loan Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such Loan
Party and such Responsible Officer shall be conclusively presumed to have acted
on behalf of such Loan Party.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any capital stock or other
Equity Interest of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other Equity Interest,
or on account of any return of capital to the Borrower's stockholders, partners
or members (or the equivalent Person thereof).
"Revolver Borrowing Base" has the meaning specified in the definition of
Borrowing Base.
"Revolving Credit Availability Period" means the period from and including
the Closing Date to the earliest of (a) the Revolving Credit Maturity Date, (b)
the date of termination of the commitment of the Lender to make Revolving Credit
Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions
pursuant to Section 8.02.
"Revolving Credit Borrowing" means a Borrowing consisting of simultaneous
Revolving Credit Loans of the same Type and, in the case of LIBOR Loans, having
the same Interest Period made by the Lender pursuant to Section 2.01.
"Revolving Credit Commitment" means the obligation of the Lender to make
Revolving Credit Loans to the Borrower (and the L/C Issuer to issue Letters of
Credit) as such commitment is described in Section 2.01(a) in an aggregate
principal amount at any one time outstanding not to exceed $4,500,000, as such
amount may be adjusted from time to time in accordance with this Agreement.
21
"Revolving Credit Loan" has the meaning specified in Section 2.01(a).
"Revolving Credit Maturity Date" means the third anniversary of the
Closing Date.
"Revolving Credit Note" means any Note evidencing a Revolving Credit Loan,
which Note shall be substantially in the form attached hereto as Exhibit B.
"Rolling Four Quarters" shall mean the consecutive twelve-month period
computed from the last day of the most recent fiscal quarter to the day 12
months prior to such last day.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Security Laws" means the Securities Act of 1933, the Securities Exchange
Act of 1934, Xxxxxxxx-Xxxxx and the applicable accounting and auditing
principles, rules, standards and practices promulgated, approved or incorporated
by the Securities Exchange Commission or the Public Company Accounting Oversight
Board, as each of the foregoing may be amended and in effect on any applicable
date hereunder.
"Security Agreement" shall mean one or more Security Agreements between
each Loan Party and the Lender, as the same may be amended, supplemented or
otherwise modified from time to time.
"Security Documents" shall mean collectively, (i) upon the execution and
delivery thereof, a Security Agreement delivered by each Loan Party, the Uniform
Commercial Code financing statements, and (ii) all documents executed or
delivered in connection with any of the foregoing.
"Shareholders' Equity" means, as of any date of determination,
consolidated shareholders' equity of the Borrower and its Subsidiaries as of
that date determined in accordance with GAAP.
"Signia" has the meaning specified in the recitals hereto.
"Signia Acquisition" has the meaning specified in the recitals hereto and
shall mean the acquisition by the Borrower of Signia in a manner in all respects
satisfactory to the Lender.
"Signia Acquisition Documents" shall mean collectively, (i) the Signia
Purchase Agreement and (ii) all other documents executed in connection
therewith, as each may be amended, supplemented or otherwise modified.
22
"Signia Assets" shall mean the assets and business of Signia being
acquired in the Signia Acquisition.
"Signia Business" shall mean Signia's current operating business, which,
together with the Signia Assets and certain liabilities related thereto (other
than liabilities under the Loan Documents), is to be transferred to, and assumed
by, the Borrower on the Effective Date.
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower, and shall include Signia and ARC (with all financial statements
and covenants with respect to Signia and ARC given pro forma effect), but shall
not refer to or include Xxxx.Xxx so long as the Disposition in Section 7.05(g)
hereof is consummated as described therein.
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
23
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Term Loan" has meaning specified in Section 2.01(b).
"Term Loan Commitment" means the obligation of the Lender to make the Term
Loan to the Borrower on the Closing Date as such commitment is described in
Section 2.01(b) in an aggregate principal amount at any one time outstanding not
to exceed $4,500,000, as such amount may be adjusted from time to time in
accordance with this Agreement..
"Term Maturity Date" means the date that is five years after the making of
such Term Loan.
"Term Note" means the Note evidencing the Term Loan, which Note shall be
substantially in the form of Exhibit C.
"Threshold Amount" means $500,000.
"Total Outstandings" means the aggregate Outstanding Amount of all Loans
and all L/C Obligations.
"Transaction Documents" shall mean collectively, the Loan Documents and
the Acquisition Documents.
"Type" means, with respect to a Loan, its character as a Base Rate Loan or
a LIBOR Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning specified in Section 2.03(c)(i).
1.02. Other Interpretive Provisions. With reference to this Agreement and
each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
24
(a) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine
and neuter forms. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word
"shall." Unless the context requires otherwise, (i) any definition of or
reference to any agreement, instrument or other document (including any
Organization Document) shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments,
supplements or modifications set forth herein or in any other Loan
Document), (ii) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (iii) the words "herein,"
"hereof" and "hereunder," and words of similar import when used in any
Loan Document, shall be construed to refer to such Loan Document in its
entirety and not to any particular provision thereof, (iv) all references
in a Loan Document to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules
to, the Loan Document in which such references appear, (v) any reference
to any law shall include all statutory and regulatory provisions
consolidating, amending replacing or interpreting such law and any
reference to any law or regulation shall, unless otherwise specified,
refer to such law or regulation as amended, modified or supplemented from
time to time, and (vi) the words "asset" and "property" shall be construed
to have the same meaning and effect and to refer to any and all tangible
and intangible assets and properties, including cash, securities, accounts
and contract rights.
(b) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including;" the
words "to" and "until" each mean "to but excluding;" and the word
"through" means "to and including."
(c) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03. Accounting Terms. (a) Generally. All accounting terms not
specifically or completely defined herein shall be construed in conformity with,
and all financial data (including financial ratios and other financial
calculations) required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the Audited Financial Statements, except as otherwise specifically prescribed
herein.
(a) Changes in GAAP. If at any time any change in GAAP would affect the
computation of any financial ratio or requirement set forth in any Loan
Document, and either the Borrower or the Lender shall so request, the Lender,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Lender); provided that, until so
amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Lenders financial statements and other documents required under
this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made before and
after giving effect to such change in GAAP.
1.04. Rounding. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
25
1.05. Times of Day. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
1.06. Letter of Credit Amounts. Unless otherwise specified, all references
herein to the amount of a Letter of Credit at any time shall be deemed to mean
the maximum face amount of such Letter of Credit after giving effect to all
increases thereof contemplated by such Letter of Credit or the Issuer Documents
related thereto, whether or not such maximum face amount is in effect at such
time.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01. Revolving Credit Loans and Term Loan.
(a) Subject to the terms and conditions set forth herein and except as set
forth in Section 2.01(c) hereof, the Lender agrees to make revolving credit
loans (each such loan, a "Revolving Credit Loan") to the Borrower from time to
time, on any Business Day during the Revolving Credit Availability Period of
which the aggregate principal amount of Revolving Credit Loans at any one time
outstanding shall not exceed the lesser of (x) (i) when applicable, the Revolver
Borrowing Base, or (ii) at all other times, the Borrowing Base less the then
outstanding principal amount of the Term Loan, or (y) $4,500,000, as such amount
may be reduced as provided in this Agreement (the "Revolving Credit
Commitment"); provided, however, that after giving effect to any Borrowing, (i)
the Total Outstandings shall not exceed the Aggregate Commitment, and (ii) the
aggregate Outstanding Amount of the Revolving Credit Loans, plus the Outstanding
Amount of all L/C Obligations shall not exceed the Revolving Credit Commitment.
During the Revolving Credit Availability Period, the Borrower may use the
Revolving Credit Commitment for obtaining Revolving Credit Loans by borrowing,
paying, prepaying in whole or in part and reborrowing on a revolving basis, all
in accordance with the terms and conditions hereof. Revolving Credit Loans may
be Base Rate Loans or LIBOR Loans, as further provided herein.
(b) Subject to the terms and conditions set forth herein, the Lender
agrees to make a single term loan to the Borrower on the Closing Date, in an
amount equal to the Term Loan Commitment (such term loan being referred to
herein as the "Term Loan"); provided, however, that no such Term Loan shall be
made if after giving effect thereto, the Total Outstandings shall exceed the
Aggregate Commitment. Principal amounts of the Term Loan which are prepaid or
repaid, in whole or in part, may not be reborrowed. The Term Loan may be a Base
Rate Loan or LIBOR Loan, as further provided herein.
(c) Subject to the terms and conditions set forth herein and
notwithstanding anything herein to the contrary (including Section 2.01(a)
hereof), commencing with the second quarter of the Borrower's fiscal year 2006,
the Total Outstandings shall not at any time exceed the lesser of the Aggregate
Commitment or the Borrowing Base.
26
2.02. Borrowings, Conversions and Continuations of Loans.
(a) Each Borrowing, each conversion of Loans from one Type to the other,
and each continuation of LIBOR Loans shall be made upon the Borrower's
irrevocable notice to the Lender, which may be given by telephone. Each such
notice must be received by the Lender not later than 11:00 a.m. (i) three
Business Days prior to the requested date of any Borrowing of, conversion to or
continuation of LIBOR Loans or of any conversion of LIBOR Loans to Base Rate
Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans. Each
telephonic notice by the Borrower pursuant to this Section 2.02(a) must be
confirmed promptly by delivery to the Lender of a written Loan Notice,
appropriately completed and signed by a Responsible Officer of the Borrower.
Each Borrowing of, conversion to or continuation of LIBOR Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof.
Each Borrowing of or conversion to Base Rate Loans shall be in a principal
amount of $150,000 or a whole multiple of $50,000 in excess thereof. Each Loan
Notice (whether telephonic or written) shall specify (i) whether the Borrower is
requesting a Revolving Credit Borrowing or a Borrowing of a Term Loan, a
conversion of Loans from one Type to the other, or a continuation of LIBOR
Loans, (ii) the requested date of the Borrowing, conversion or continuation, as
the case may be (which shall be a Business Day), (iii) the principal amount of
Loans to be borrowed, converted or continued, (iv) the Type of Loans to be
borrowed or to which existing Loans are to be converted, and (v) if applicable,
the duration of the Interest Period with respect thereto. If the Borrower fails
to specify a Type of Loan in a Loan Notice or if the Borrower fails to give a
timely notice requesting a conversion or continuation, then the applicable Loans
shall be made as, or converted to, Base Rate Loans. Any such automatic
conversion to Base Rate Loans shall be effective as of the last day of the
Interest Period then in effect with respect to the applicable LIBOR Loans. If
the Borrower requests a Borrowing of, conversion to, or continuation of LIBOR
Loans in any such Loan Notice, but fails to specify an Interest Period, it will
be deemed to have specified an Interest Period of one month.
(b) Upon satisfaction of the applicable conditions set forth in Section
4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the
Lender shall make all funds available to the Borrower either by (i) crediting
the account of the Borrower on the books of the Lender with the amount of such
funds or (ii) wire transfer of such funds, in each case in accordance with
instructions provided to (and reasonably acceptable to) the Lender by the
Borrower.
(c) Except as otherwise provided herein, a LIBOR Loan may be continued or
converted only on the last day of an Interest Period for such LIBOR Loan. During
the existence of a Default, no Loans may be requested as, converted to or
continued as LIBOR Loans without the consent of the Lender.
(d) The Lender shall promptly notify the Borrower and the Lenders of the
interest rate applicable to any Interest Period for LIBOR Loans upon
determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Lender shall notify the Borrower and the Lenders of any change
in Bank of America's prime rate used in determining the Base Rate promptly
following the public announcement of such change.
27
(e) After giving effect to all Borrowings, all conversions of Loans from
one Type to the other, and all continuations of Loans as the same Type, there
shall not be more than ten (10) Interest Periods in effect with respect to
Loans.
2.03. Letters of Credit.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A) the L/C
Issuer agrees, in reliance upon the agreement of the Lender set forth in this
Section 2.03, (1) from time to time on any Business Day during the period from
the Closing Date until the Letter of Credit Expiration Date, to issue Letters of
Credit for the account of the Borrower or its Subsidiaries, and to amend or
extend Letters of Credit previously issued by it, in accordance with subsection
(b) below, and (2) to honor drawings under the Letters of Credit; provided that
after giving effect to any L/C Credit Extension with respect to any Letter of
Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitment,
(y) the aggregate Outstanding Amount of the Revolving Credit Loans, plus the
Outstanding Amount of all L/C Obligations, shall not exceed the Revolving Credit
Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not
exceed the Letter of Credit Sublimit. Each request by the Borrower for the
issuance or amendment of a Letter of Credit shall be deemed to be a
representation by the Borrower that the L/C Credit Extension so requested
complies with the conditions set forth in the proviso to the preceding sentence.
Within the foregoing limits, and subject to the terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully revolving, and
accordingly the Borrower may, during the foregoing period, obtain Letters of
Credit to replace Letters of Credit that have expired or that have been drawn
upon and reimbursed.
(ii) The L/C Issuer shall not issue any Letter of Credit, if:
(A) subject to Section 2.03(b)(iii), the expiry date of such requested
Letter of Credit would occur more than twelve months after the date of issuance
or last extension, unless the Lender has approved such expiry date; or
(B) the expiry date of such requested Letter of Credit would occur after
the Letter of Credit Expiration Date, unless Lender has approved such expiry
date.
(iii) The L/C Issuer shall not be under any obligation to issue any Letter
of Credit if:
(A) any order, judgment or decree of any Governmental Authority or
arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from
issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or
request that the L/C Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose upon the L/C
Issuer with respect to such Letter of Credit any restriction, reserve or capital
requirement (for which the L/C Issuer is not otherwise compensated hereunder)
not in effect on the Closing Date, or shall impose upon the L/C Issuer any
unreimbursed loss, cost or expense which was not applicable on the Closing Date
and which the L/C Issuer in good xxxxx xxxxx material to it;
28
(B) the issuance of such Letter of Credit would violate one or more
policies of the L/C Issuer;
(C) except as otherwise agreed by the Lender, such Letter of Credit is in
an initial face amount less than $25,000 in the case of a standby Letter of
Credit; or
(D) such Letter of Credit is to be denominated in a currency other than
Dollars.
(iv) The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer
would not be permitted at such time to issue such Letter of Credit in its
amended form under the terms hereof.
(v) The L/C Issuer shall be under no obligation to amend any Letter of
Credit if (A) the L/C Issuer would have no obligation at such time to issue such
Letter of Credit in its amended form under the terms hereof, or (B) the
beneficiary of such Letter of Credit does not accept the proposed amendment to
such Letter of Credit.
(vi) The L/C Issuer shall act on behalf of the Lender with respect to any
Letters of Credit issued by it and the documents associated therewith, and the
L/C Issuer shall have all of the benefits and immunities (A) provided to the
Lender herein with respect to any acts taken or omissions suffered by the L/C
Issuer in connection with Letters of Credit issued by it or proposed to be
issued by it and Issuer Documents pertaining to such Letters of Credit as fully
as if the term "Lender" included the L/C Issuer with respect to such acts or
omissions, and (B) as additionally provided herein with respect to the L/C
Issuer.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Auto-Extension Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the case may be,
upon the request of the Borrower delivered to the L/C Issuer in the form of a
Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Borrower. Such Letter of Credit Application must be
received by the L/C Issuer not later than 11:00 a.m. at least two Business Days
(or such later date and time as the L/C Issuer may agree in a particular
instance in its sole discretion) prior to the proposed issuance date or date of
amendment, as the case may be. In the case of a request for an initial issuance
of a Letter of Credit, such Letter of Credit Application shall specify in form
and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the
requested Letter of Credit (which shall be a Business Day); (B) the amount
thereof; (C) the expiry date thereof; (D) the name and address of the
beneficiary thereof; (E) the documents to be presented by such beneficiary in
case of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and (G) such
other matters as the L/C Issuer may require. In the case of a request for an
amendment of any outstanding Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter
of Credit to be amended; (B) the proposed date of amendment thereof (which shall
be a Business Day); (C) the nature of the proposed amendment; and (D) such other
matters as the L/C Issuer may require. Additionally, the Borrower shall furnish
to the L/C Issuer such other documents and information pertaining to such
requested Letter of Credit issuance or amendment, including any Issuer
Documents, as the L/C Issuer may require.
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(ii) Promptly after receipt of any Letter of Credit Application, unless
the L/C Issuer has determined or received written notice from any Loan Party, at
least one Business Day prior to the requested date of issuance or amendment of
the applicable Letter of Credit, that one or more applicable conditions
contained in Article IV shall not then be satisfied, then, subject to the terms
and conditions hereof, the L/C Issuer shall, on the requested date, issue a
Letter of Credit for the account of the Borrower (or the applicable Subsidiary)
or enter into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer's usual and customary business practices.
(iii) If the Borrower so requests in any applicable Letter of Credit
Application, the L/C Issuer may, in its sole and absolute discretion, agree to
issue a Letter of Credit that has automatic extension provisions (each, an
"Auto-Extension Letter of Credit"); provided that any such Auto-Extension Letter
of Credit must permit the L/C Issuer to prevent any such extension at least once
in each twelve-month period (commencing with the date of issuance of such Letter
of Credit) by giving prior notice to the beneficiary thereof not later than a
day (the "Non-Extension Notice Date") in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued. Unless otherwise
directed by the L/C Issuer, the Borrower shall not be required to make a
specific request to the L/C Issuer for any such extension. Once an
Auto-Extension Letter of Credit has been issued, the Lender shall be deemed to
have authorized (but may not require) the L/C Issuer to permit the extension of
such Letter of Credit at any time to an expiry date not later than the Letter of
Credit Expiration Date; provided, however, that the L/C Issuer shall not permit
any such extension if the L/C Issuer has determined that it would not be
permitted, or would have no obligation, at such time to issue such Letter of
Credit in its revised form (as extended) under the terms hereof (by reason of
the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or that
one or more of the applicable conditions specified in Section 4.02 is not then
satisfied.
(iv) Promptly after its delivery of any Letter of Credit or any amendment
to a Letter of Credit to an advising bank with respect thereto or to the
beneficiary thereof, the L/C Issuer will also deliver to the Borrower a true and
complete copy of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit of any
notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the
Borrower thereof. Not later than 11:00 a.m. on the date of any payment by the
L/C Issuer under a Letter of Credit (each such date, an "Honor Date"), the
Borrower shall reimburse the L/C Issuer in an amount equal to the amount of such
drawing. If the Borrower fails to so reimburse the L/C Issuer by such time, the
L/C Issuer shall promptly notify the Lender of the Honor Date and the amount of
the unreimbursed drawing (the "Unreimbursed Amount"). In such event, the
Borrower shall be deemed to have requested a Borrowing of Base Rate Loans to be
disbursed on the Honor Date in an amount equal to the Unreimbursed Amount,
without regard to the minimum and multiples specified in Section 2.02 for the
principal amount of Base Rate Loans, but subject to the amount of the unutilized
portion of the Aggregate Commitment and the conditions set forth in Section 4.02
(other than the delivery of a Loan Notice). Any notice given by the L/C Issuer
pursuant to this Section 2.03(c)(i) may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate confirmation
shall not affect the conclusiveness or binding effect of such notice.
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(ii) The Lender shall upon any notice pursuant to Section 2.03(c)(i) make
funds available for the account of the L/C Issuer in an amount equal to the
Unreimbursed Amount not later than 1:00 p.m. on the Business Day specified in
such notice, whereupon, subject to the provisions of Section 2.03(c)(iii), the
Lender shall be deemed to have made a Base Rate Loan to the Borrower in such
amount.
(iii) With respect to any Unreimbursed Amount that is not fully refinanced
by a Borrowing of Base Rate Loans because the conditions set forth in Section
4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed
to have incurred from the L/C Issuer an L/C Borrowing in the amount of the
Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due
and payable on demand (together with interest) and shall bear interest at the
Default Rate.
(iv) The Lender's obligation to make Loans to reimburse the L/C Issuer for
amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c),
shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Lender may have against the L/C Issuer, the Borrower or
any other Person for any reason whatsoever; (B) the occurrence or continuance of
a Default, or (C) any other occurrence, event or condition, whether or not
similar to any of the foregoing; provided, however, that the Lender's obligation
to make Loans pursuant to this Section 2.03(c) is subject to the conditions set
forth in Section 4.02 (other than delivery by the Borrower of a Loan Notice). No
such making of a Loan shall relieve or otherwise impair the obligation of the
Borrower to reimburse the L/C Issuer for the amount of any payment made by the
L/C Issuer under any Letter of Credit, together with interest as provided
herein.
(d) Obligations Absolute. The obligation of the Borrower to reimburse the
L/C Issuer for each drawing under each Letter of Credit and to repay each L/C
Borrowing shall be absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all circumstances,
including the following:
(i) any lack of validity or enforceability of such Letter of Credit, this
Agreement, or any other Loan Document;
(ii) the existence of any claim, counterclaim, setoff, defense or other
right that the Borrower or any Subsidiary may have at any time against any
beneficiary or any transferee of such Letter of Credit (or any Person for whom
any such beneficiary or any such transferee may be acting), the L/C Issuer or
any other Person, whether in connection with this Agreement, the transactions
contemplated hereby or by such Letter of Credit or any agreement or instrument
relating thereto, or any unrelated transaction;
(iii) any draft, demand, certificate or other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect; or any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under such Letter of Credit;
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(iv) any payment by the L/C Issuer under such Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of such Letter of Credit; or any payment made by the L/C Issuer under such
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of such Letter of Credit, including any arising in connection with
any proceeding under any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or not similar
to any of the foregoing, including any other circumstance that might otherwise
constitute a defense available to, or a discharge of, the Borrower or any
Subsidiary.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(e) Role of L/C Issuer. The Lender and the Borrower agree that, in paying
any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer or
any of their respective Related Parties nor any correspondent, participant or
assignee of the L/C Issuer shall be liable or responsible for any of the matters
described in clauses (i) through (v) of Section 2.03(d); provided, however, that
anything in such clauses to the contrary notwithstanding, the Borrower may have
a claim against the L/C Issuer, and the L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by the L/C Issuer's willful misconduct or gross negligence or
the L/C Issuer's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of Credit. In
furtherance and not in limitation of the foregoing, the L/C Issuer may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and the L/C Issuer shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
(f) Cash Collateral. Upon the request of the Lender, (i) if the L/C Issuer
has honored any full or partial drawing request under any Letter of Credit and
such drawing has resulted in an L/C Borrowing, or (ii) if, as of the Letter of
Credit Expiration Date, any L/C Obligation for any reason remains outstanding,
the Borrower shall, in each case, immediately Cash Collateralize the then
Outstanding Amount of all L/C Obligations. Sections 2.04 and 8.02(c) set forth
certain additional requirements to deliver Cash Collateral hereunder. For
purposes of this Section 2.03, Section 2.04 and Section 8.02(c), "Cash
Collateralize" means to pledge and deposit with or deliver to the Lender, for
the benefit of the L/C Issuer, as collateral for the L/C Obligations, cash or
deposit account balances pursuant to documentation in form and substance
satisfactory to the L/C Issuer (which documents are hereby consented to by the
Lender). Derivatives of such term have corresponding meanings. The Borrower
hereby grants to the L/C Issuer and the Lender, a security interest in all such
cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash Collateral shall be maintained in blocked, non-interest bearing
deposit accounts at the Lender or Bank of America.
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(g) Applicability of ISP. Unless otherwise expressly agreed by the L/C
Issuer and the Borrower when a Letter of Credit is issued, (i) the rules of the
ISP shall apply to each standby Letter of Credit.
(h) Letter of Credit Fees. The Borrower shall pay to the Lender a Letter
of Credit fee (the "Letter of Credit Fee") for each standby Letter of Credit
equal to the Applicable Rate times the daily maximum amount available to be
drawn under such Letter of Credit (whether or not such maximum amount is then in
effect under such Letter of Credit). Letter of Credit Fees shall be (i) computed
on a quarterly basis in arrears and (ii) due and payable on the first Business
Day after the end of each March, June, September and December, commencing with
the first such date to occur after the issuance of such Letter of Credit, on the
Letter of Credit Expiration Date and thereafter on demand. If there is any
change in the Applicable Rate during any quarter, the daily maximum amount of
each standby Letter of Credit shall be computed and multiplied by the Applicable
Rate separately for each period during such quarter that such Applicable Rate
was in effect. Notwithstanding anything to the contrary contained herein, while
any Event of Default exists, all Letter of Credit Fees shall accrue at the
Default Rate.
(i) Processing Charges Payable to L/C Issuer. The Borrower shall pay
directly to the L/C Issuer for its own account the customary issuance,
presentation, amendment and other processing fees, and other standard costs and
charges, of the L/C Issuer relating to letters of credit as from time to time in
effect. Such customary fees and standard costs and charges are due and payable
on demand and are nonrefundable.
(j) Conflict with Issuer Documents. In the event of any conflict between
the terms hereof and the terms of any Issuer Document, the terms hereof shall
control.
(k) Letters of Credit Issued for Subsidiaries. Notwithstanding that a
Letter of Credit issued or outstanding hereunder is in support of any
obligations of, or is for the account of, a Subsidiary, the Borrower shall be
obligated to reimburse the L/C Issuer hereunder for any and all drawings under
such Letter of Credit. The Borrower hereby acknowledges that the issuance of
Letters of Credit for the account of Subsidiaries inures to the benefit of the
Borrower, and that the Borrower's business derives substantial benefits from the
businesses of such Subsidiaries.
2.04. Prepayments.
(a) Voluntary. The Borrower may, upon notice to the Lender, at any time or
from time to time voluntarily prepay Loans in whole or in part without premium
or penalty; provided that (i) such notice must be received by the Lender not
later than 11:00 a.m. (A) three Business Days prior to any date of prepayment of
LIBOR Loans and (B) on the date of prepayment of Base Rate Loans; (ii) any
prepayment of LIBOR Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof; and (iii) any prepayment of Base Rate
Loans shall be in a principal amount of $150,000 or a whole multiple of $50,000
in excess thereof or, in each case, if less, the entire principal amount thereof
then outstanding. Each such notice shall specify the date and amount of such
prepayment and the Type(s) of Loans to be prepaid. If such notice is given by
the Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Any prepayment of a LIBOR Loan shall be accompanied by all accrued interest on
the amount prepaid, together with any additional amounts required pursuant to
Section 3.05. Any partial prepayment of the Term Loan shall be applied to the
last maturing installments in inverse order or their maturities. Any amount
prepaid on account of a Revolving Credit Loan may be reborrowed in accordance
with the provisions of Section 2.1 hereof.
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(b) Mandatory.
(i) If, after March 31, 2006, for any reason, the Total Outstandings
at any time exceed the lesser of the Borrowing Base or the Aggregate Commitment
then in effect, the Borrower shall immediately prepay Revolving Credit Loans in
an aggregate amount equal to such excess, and thereafter if there is still an
excess, Cash Collateralize the L/C Obligations, and thereafter if there is still
an excess, prepay the then outstanding Term Loan to the extent of such excess.
(ii) If, at any time for any reason, the aggregate outstanding
principal amount of Revolving Credit Loans and L/C Obligations exceeds the
lesser of, when applicable, the Revolver Borrowing Base or the Revolving Credit
Commitment, the Borrower shall immediately prepay Revolving Credit Loans and/or
Cash Collateralize the L/C Obligations in an aggregate amount equal to such
excess; provided, however, that the Borrower shall not be required to Cash
Collateralize the L/C Obligations pursuant to this Section unless after the
prepayment in full of the Revolving Credit Loans, the L/C Obligations exceed the
lesser of, when applicable, the Revolver Borrowing Base or the Revolving Credit
Commitment then in effect.
(iii) The Borrower shall prepay outstanding Revolving Credit Loans
(and thereafter, Cash Collateralize the L/C Obligations), within five Business
Days after financial statements have been delivered pursuant to Section 6.01(a)
and the related Compliance Certificate has been delivered pursuant to Section
6.02(b), in an amount equal to the net proceeds of Excess Cash Flow for the
fiscal year covered by such financial statements; provided, however, that no
such prepayment shall cause a reduction in the Revolving Credit Commitment; and
provided, further, that, the total prepayment amount due and owing under this
sentence shall be reduced by the amount by which (A) the Outstanding Amount of
Revolving Credit Loans as of the most recent January 1 preceding the date the
Section 6.01(a) financial statements have been delivered, exceeds (B) the
Outstanding Amount of Revolving Credit Loans as of the date of timely delivery
of said financial statements, if such difference is positive and solely to the
extent it reflects a net reduction in the Outstanding Amount of Revolving Loans
during such period.
(iv) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Borrower or any Subsidiary of the Borrower or
any other Loan Party in respect of any Prepayment/Reduction Event, then,
immediately after such Net Proceeds are received, the Borrower shall prepay the
then outstanding Term Loan in an amount equal to such Net Proceeds, and
thereafter such Net Proceeds shall reduce the Revolving Credit Commitment.
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(v) Unless otherwise specified herein, each mandatory prepayment of
Loans shall be applied first to Term Loan installments in the inverse order of
maturity, and second, to Revolving Credit Loans. Each prepayment shall be made
together with accrued interest on the amount prepaid and any amounts required to
be paid pursuant to Section 3.05. Within the parameters of the applications set
forth above, prepayments shall be applied first to Base Rate Loans and then to
LIBOR Loans in direct order of Interest Period maturities. All prepayments shall
be subject to Section 3.05. 2.05. Termination or Reduction of Commitments. The
Borrower may, upon notice to the Lender, terminate the Revolving Credit
Commitment, or from time to time permanently reduce the Revolving Credit
Commitment; provided that (i) any such notice shall be received by the Lender
not later than 11:00 a.m. five Business Days prior to the date of termination or
reduction, (ii) any such partial reduction shall be in an aggregate amount of
$500,000 or any whole multiple of $500,000 in excess thereof, (iii) the Borrower
shall not terminate or reduce the Revolving Credit Commitment if, after giving
effect thereto and to any concurrent prepayments hereunder, the Total
Outstandings would exceed the Aggregate Commitment, or the aggregate outstanding
Revolving Credit Loans would exceed the Revolving Credit Commitment. All fees
accrued until the effective date of any termination of the Revolving Credit
Commitment shall be paid on the effective date of such termination.
2.06. Repayment of Loans.
(a) The Borrower shall repay to the Lenders on the Revolving Credit
Maturity Date the aggregate principal amount of Revolving Credit Loans
outstanding on such date.
(b) Unless accelerated sooner pursuant hereto, the aggregate principal
amount of the Term Loan shall be repaid in twenty (20) consecutive quarterly
principal installments, the first nineteen (19) of which shall each be in the
amount of TWO HUNDRED TWENTY FIVE THOUSAND DOLLARS ($225,000) and payable on the
first day of each January, April, July and October, commencing July 1, 2005
through and including April 1, 2010, and the final and twentieth (20th) such
principal installment shall be payable on the Term Maturity Date and shall be in
an amount equal to the entire then remaining outstanding principal balance,
together with all accrued and unpaid interest.
2.07. Interest.
(a) Subject to the provisions of subsection (b) below, (i) each LIBOR Loan
shall bear interest on the outstanding principal amount thereof for each
Interest Period at a rate per annum equal to LIBOR for such Interest Period plus
the Applicable Rate; (ii) each Base Rate Loan shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Rate.
(b) (i) If any amount of principal of any Loan is not paid when due
(without regard to any applicable grace periods), whether at stated maturity, by
acceleration or otherwise, such amount shall thereafter bear interest at a
fluctuating interest rate per annum at all times until paid equal to the Default
Rate to the fullest extent permitted by applicable Laws.
35
(i) If any amount (other than principal of any Loan) payable by the
Borrower under any Loan Document is not paid when due (without regard to any
applicable grace periods), whether at stated maturity, by acceleration or
otherwise, then upon the request of the Lender, such amount until paid shall
thereafter bear interest at a fluctuating interest rate per annum at all times
equal to the Default Rate to the fullest extent permitted by applicable Laws.
(ii) Upon the request of the Lender, while any Event of Default
exists, the Borrower shall pay interest on the principal amount of all
outstanding Obligations hereunder at a fluctuating interest rate per annum at
all times equal to the Default Rate to the fullest extent permitted by
applicable Laws.
(iii) Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
2.08. Fees.
(a) Commitment Fee. The Borrower shall pay to the Lender a commitment fee
equal to the Applicable Rate times the actual daily amount by which the
Revolving Credit Commitment exceeds the sum of (i) the Outstanding Amount of
Revolving Credit Loans and (ii) the Outstanding Amount of L/C Obligations. The
commitment fee shall accrue at all times during the Revolving Credit
Availability Period, including at any time during which one or more of the
conditions in Article IV is not met, and shall be due and payable quarterly in
arrears on the last Business Day of each March, June, September and December,
commencing with the first such date to occur after the Closing Date, and on the
Maturity Date. The commitment fee shall be calculated quarterly in arrears, and
if there is any change in the Applicable Rate during any quarter, the actual
daily amount shall be computed and multiplied by the Applicable Rate separately
for each period during such quarter that such Applicable Rate was in effect.
(b) Origination Fee. The Borrower shall pay to the Lender on the Closing
Date a $75,000 origination fee, which fee shall be in addition to the $25,000
acceptance fee that Borrower paid to Lender upon acceptance of the term sheet.
Such origination fee shall be fully earned when paid and shall not be refundable
for any reason whatsoever.
2.09. Computation of Interest and Fees. All computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Loan for
the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid, provided
that any Loan that is repaid on the same day on which it is made shall, subject
to Section 2.12(a), bear interest for one day. Each determination by the Lender
of an interest rate or fee hereunder shall be conclusive and binding for all
purposes, absent manifest error.
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2.10. Evidence of Debt. The Loans made by the Lender shall be evidenced by
one or more accounts or records maintained by the Lender in the ordinary course
of business. The accounts or records maintained by the Lender shall be
conclusive absent manifest error of the amount of the Borrowings made by the
Lender to the Borrower and the interest and payments thereon. Any failure to so
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrower hereunder to pay any amount owing with respect to
the Obligations. Upon the request of the Lender, the Borrower shall execute and
deliver to the Lender a Revolving Credit Note and a Term Note, which shall
evidence the Lender's Loans in addition to such accounts or records. The Lender
may attach schedules to the Notes and endorse thereon the date, Type (if
applicable), amount and maturity of the Loans and payments with respect thereto.
2.11. Payments Generally.
(a) General. All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Lender, at the Lender's Office in Dollars and in
immediately available funds not later than 2:00 p.m. on the date specified
herein. All payments received by the Lender after 2:00 p.m. shall be deemed
received on the next succeeding Business Day and any applicable interest or fee
shall continue to accrue. If any payment to be made by the Borrower shall come
due on a day other than a Business Day, payment shall be made on the next
following Business Day, and such extension of time shall be reflected in
computing interest or fees, as the case may be.
(b) Funding Source. Nothing herein shall be deemed to obligate the Lender
to obtain the funds for any Loan in any particular place or manner or to
constitute a representation by the Lender that it has obtained or will obtain
the funds for any Loan in any particular place or manner.
ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01. Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes, provided that if the Borrower shall be required by
applicable law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Lender receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall timely pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.
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(b) Payment of Other Taxes by the Borrower. Without limiting the
provisions of subsection (a) above, the Borrower shall timely pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Borrower. The Borrower shall indemnify the
Lender, within 10 days after demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Lender, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by the Lender shall be conclusive absent
manifest error.
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Lender the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy of
the return reporting such payment or other evidence of such payment reasonably
satisfactory to the Lender.
(e) Treatment of Certain Refunds. If the Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Lender, and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund), provided that the Borrower, upon the request of the Lender agrees to
repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the Lender in
the event the Lender is required to repay such refund to such Governmental
Authority. This subsection shall not be construed to require the Lender to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to the Borrower or any other Person.
3.02. Illegality. If the Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for the Lender or its applicable Lending Office to make, maintain or fund LIBOR
Loans, or to determine or charge interest rates based upon LIBOR, or any
Governmental Authority has imposed material restrictions on the authority of the
Lender to purchase or sell, or to take deposits of, Dollars in the London
interbank market, then, on notice thereof by the Lender to the Borrower, any
obligation of the Lender to make or continue LIBOR Loans or to convert Base Rate
Loans to LIBOR Loans shall be suspended until the Lender notifies the Borrower
that the circumstances giving rise to such determination no longer exist. Upon
receipt of such notice, the Borrower shall, upon demand from the Lender, prepay
or, if applicable, convert all LIBOR Loans to Base Rate Loans, either on the
last day of the Interest Period therefor, if the Lender may lawfully continue to
maintain such LIBOR Loans to such day, or immediately, if the Lender may not
lawfully continue to maintain such LIBOR Loans. Upon any such prepayment or
conversion, the Borrower shall also pay accrued interest on the amount so
prepaid or converted.
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3.03. Inability to Determine Rates. If the Lender determines that for any
reason in connection with any request for a LIBOR Loan or a conversion to or
continuation thereof that (a) Dollar deposits are not being offered to banks in
the London interbank eurodollar market for the applicable amount and Interest
Period of such LIBOR Loan, (b) adequate and reasonable means do not exist for
determining LIBOR for any requested Interest Period with respect to a proposed
LIBOR Loan, or (c) LIBOR for any requested Interest Period with respect to a
proposed LIBOR Loan does not adequately and fairly reflect the cost to the
Lender of funding such Loan, the Lender will promptly so notify the Borrower.
Thereafter, the obligation of the Lender to make or maintain LIBOR Loans shall
be suspended until the Lender revokes such notice. Upon receipt of such notice,
the Borrower may revoke any pending request for a Borrowing of, conversion to or
continuation of LIBOR Loans or, failing that, will be deemed to have converted
such request into a request for a Borrowing of Base Rate Loans in the amount
specified therein.
3.04. Increased Costs; Reserves on LIBOR Loans.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit,
compulsory loan, insurance charge or similar requirement against assets
of, deposits with or for the account of, or credit extended or
participated in by, the Lender (except any reserve requirement
contemplated by Section 3.04(e));
(ii) subject the Lender to any tax of any kind whatsoever with
respect to this Agreement or any LIBOR Loan made by it, or change the
basis of taxation of payments to the Lender in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 3.01 and the
imposition of, or any change in the rate of, any Excluded Tax payable by
the Lender); or
(iii) impose on the Lender or the London interbank market any other
condition, cost or expense affecting this Agreement or LIBOR Loans made by
the Lender;
and the result of any of the foregoing shall be to increase the cost to the
Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation
to make any such Loan), or to reduce the amount of any sum received or
receivable by the Lender hereunder (whether of principal, interest or any other
amount) then, upon request of the Lender, the Borrower will pay to the Lender,
such additional amount or amounts as will compensate the Lender for such
additional costs incurred or reduction suffered.
(b) Capital Requirements. If the Lender determines that any Change in Law
affecting the Lender or any Lending Office of the Lender or the Lender's holding
company, if any, regarding capital requirements has or would have the effect of
reducing the rate of return on the Lender's capital or on the capital of the
Lender's holding company, if any, as a consequence of this Agreement, the
Aggregate Commitment of the Lender or the Loans made by the Lender, to a level
below that which the Lender or the Lender's holding company could have achieved
but for such Change in Law (taking into consideration the Lender's policies and
the policies of the Lender's holding company with respect to capital adequacy),
then from time to time the Borrower will pay to the Lender, such additional
amount or amounts as will compensate the Lender or the Lender's holding company
for any such reduction suffered.
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(c) Certificates for Reimbursement. A certificate of the Lender setting
forth the amount or amounts necessary to compensate the Lender or its holding
company, as the case may be, as specified in subsection (a) or (b) of this
Section and delivered to the Borrower shall be conclusive absent manifest error.
The Borrower shall pay the Lender the amount shown as due on any such
certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of the Lender to
demand compensation pursuant to the foregoing provisions of this Section shall
not constitute a waiver of the Lender's right to demand such compensation,
provided that the Borrower shall not be required to compensate the Lender
pursuant to the foregoing provisions of this Section for any increased costs
incurred or reductions suffered more than nine months prior to the date that the
Lender notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of the Lender's intention to claim compensation therefor
(except that, if the Change in Law giving rise to such increased costs or
reductions is retroactive, then the nine-month period referred to above shall be
extended to include the period of retroactive effect thereof).
3.05. Compensation for Losses. Upon demand of the Lender from time to
time, the Borrower shall promptly compensate the Lender for and hold the Lender
harmless from any loss, cost or expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan other
than a Base Rate Loan on a day other than the last day of the Interest Period
for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of
the Lender to make a Loan) to prepay, borrow, continue or convert any Loan other
than a Base Rate Loan on the date or in the amount notified by the Borrower; or
(c) any assignment of a LIBOR Loan on a day other than the last day of the
Interest Period therefor as a result of a request by the Borrower pursuant to
Section 10.13.
In furtherance of the foregoing, the Borrower shall pay to the Lender a "yield
maintenance fee" in an amount computed as follows: The current rate for United
States Treasury securities (bills on a discounted basis shall be converted to a
bond equivalent) with a maturity date closest to the term chosen pursuant to the
Fixed Rate Election as to which the prepayment is made, shall be subtracted from
LIBOR in effect at the time of prepayment. If the result is zero or a negative
number, there shall be no yield maintenance fee. If the result is a positive
number, then the resulting percentage shall be multiplied by the amount of the
principal balance being prepaid. The resulting amount shall be divided by 360
and multiplied by the number of days remaining in the term chosen pursuant to
the Fixed Rate Election as to which the prepayment is made. Said amount shall be
reduced to present value calculated by using the above referenced United States
Treasury securities rate and the number of days remaining in the term chosen
pursuant to the Fixed Rate Election as to which prepayment is made. The
resulting amount shall be the yield maintenance fee due to the Lender upon the
payment of a LIBOR Loan. Each reference in this paragraph to "Fixed Rate
Election" shall mean the election by the Borrower of a Loan to bear interest
based on LIBOR. If by reason of an Event of Default, the Lender elects to
declare the Loans and/or the Notes to be immediately due and payable, then any
yield maintenance fee with respect to a LIBOR Loan shall become due and payable
in the same manner as though the Borrower has exercised such right of prepayment
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by the
Lender in connection with the foregoing.
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3.06. Mitigation Obligations. If the Lender requests compensation under
Section 3.04, or the Borrower is required to pay any additional amount to the
Lender or any Governmental Authority for the account of the Lender pursuant to
Section 3.01, or if the Lender gives a notice pursuant to Section 3.02, then the
Lender shall use reasonable efforts to designate a different Lending Office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of the Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the
future, or eliminate the need for the notice pursuant to Section 3.02, as
applicable, and (ii) in each case, would not subject the Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to the
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by the Lender in connection with any such designation or assignment.
3.07. Survival. All of the Borrower's obligations under this Article III
shall survive termination of the Aggregate Commitment and repayment of all other
Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO Credit Extensions
4.01. Conditions of Initial Loans. The obligation of the Lender and the
L/C Issuer to make its initial Credit Extension hereunder is subject to
satisfaction of the following conditions precedent:
(a) The Lender's receipt of the following, each of which shall be
originals or telecopies (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing Loan
Party, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Lender:
(i) executed counterparts of this Agreement, the Guaranty(ies), the
Security Agreement(s) and the other Security Documents, sufficient in
number for distribution to the Lender and the Borrower;
(ii) a Revolving Credit Note and a Term Note executed by the
Borrower in favor of the Lender;
41
(iii) such certificates of resolutions or other action, incumbency
certificates and/or other certificates of Responsible Officers of each
Loan Party as the Lender may require evidencing the identity, authority
and capacity of each Responsible Officer thereof authorized to act as a
Responsible Officer in connection with this Agreement and the other Loan
Documents to which such Loan Party is a party;
(iv) such documents and certifications as the Lender may reasonably
require to evidence that each Loan Party is duly organized or formed, and
that each of the Borrower and its Subsidiaries is validly existing, in
good standing and qualified to engage in business in each jurisdiction
where its ownership, lease or operation of properties or the conduct of
its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material
Adverse Effect;
(v) a favorable opinion of Xxxx Xxxxxxx, P.C., counsel to the Loan
Parties, addressed to the Lender, in substantially the form attached
hereto in Exhibit G;
(vi) a certificate of a Responsible Officer of each Loan Party
either (A) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by
such Loan Party and the validity against such Loan Party of the Loan
Documents to which it is a party, and such consents, licenses and
approvals shall be in full force and effect, or (B) stating that no such
consents, licenses or approvals are so required;
(vii) a certificate signed by a Responsible Officer of the Borrower
certifying (A) that the conditions specified in Sections 4.02(a), (b) and
(d) have been satisfied, and (B) that there has been no event or
circumstance since the date of the Audited Financial Statements that has
had or could be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect;
(viii) a duly completed Pro-Forma Compliance Certificate as of
December 31, 2004 and giving effect to the consummation of the
transactions contemplated by the Transaction Documents, signed by a
Responsible Officer of the Borrower;
(ix) evidence that all insurance required to be maintained pursuant
to the Loan Documents has been obtained and is in effect;
(x) evidence that each Existing Credit Agreement has been or
concurrently with the Closing Date is being terminated and all Liens
securing obligations under each Existing Credit Agreement have been or
concurrently with the Closing Date are being released;
(xi) promptly, and in no event later than 90 days following the
Closing Date, executed counterparts of a landlord waiver agreement
satisfactory in form and substance to the Lender, covering the New York
headquarters location of the Borrower, which are the leased premises where
its principal books and records, customer lists and principal library is
located;
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(xii) copies of, or certificates of the issuing companies with
respect to, policies of insurance owned by each Loan Party covering or in
any manner relating to the Collateral together with endorsements thereto
that comply with the terms of the Security Agreement(s) on an "Accord 27"
form and are otherwise in form and substance satisfactory to the Lender,
naming the Lender as additional insured and loss payee as its interests
may appear;
(xiii) the results of searches of the Uniform Commercial Code and
other Lien filings with respect to each Loan Party in the State of New
York and each other state in which a Loan Party conducts business and such
searches shall disclose no Liens on any asset encumbered, except for Liens
permitted under Section 7.01 or Liens terminated on or prior to the
Closing Date;
(xiv) the legal structure and capitalization of the Borrower and its
Subsidiaries shall be reasonably satisfactory to the Lender;
(xv) the Lender shall be reasonably satisfied (i) that there shall
be no litigation or administrative proceeding, or regulatory development,
that would reasonably be expected to have a Material Adverse Effect and
(ii) with the current status of, and the terms of any settlement or other
resolution of, any litigation or other proceedings brought against the
Borrower or any Subsidiary by or on behalf of its customers or competitors
or by any Governmental Authority relating to its business;
(xvi) a certificate of a Responsible Officer of the Borrower, dated
the date of this Agreement, in all respects satisfactory to the Lender
certifying that after giving effect to the (i) consummation of the ARC
Acquisition and the Signia Acquisition and the release or termination of
all Liens (other than those of the Bank), if any, on the ARC Assets and
Signia Assets, and (ii) the first Borrowings to be made, to the best
knowledge of such Responsible Officer, the Borrower and each of its
Subsidiaries is Solvent.
(xvii) a certificate of a Responsible Officer of the Borrower, dated
the date of this Agreement, in all respects satisfactory to the Lender (i)
attaching a true and complete copy of each of the fully executed Signia
and ARC Acquisition Documents, and (ii) certifying that (A) each such
Acquisition is in full force and effect, (B) has been consummated in
accordance with its respective Acquisition Documents, and (C) no material
adverse change in the business, assets, liabilities, financial condition
or results of operations of the Signia Business or the ARC Business has
occurred.
(xviii) to the extent not already delivered in connection with the
foregoing certificates, a fully executed copy of each of the Material
Agreements, in each case certified to be a true and complete copy thereof
by a Responsible Officer of the Borrower, each of which shall be in form
and substance satisfactory to the Lender.
(xix) a Borrowing Base Certificate for the period ending February
28, 2005 (which shall include pro forma calculation of the Eligible
Accounts Receivable of ARC and Signia), as set forth in Section 6.02
hereof.
43
(xx) such other assurances, certificates, documents, consents or
opinions as the Lender reasonably may require.
(b) All fees and expenses incurred by the Lender in connection with the
field examination conducted by Lender or its designee prior to the Closing Date,
and any other fees required to be paid on or before the Closing Date, shall have
been paid.
(c) Unless waived by the Lender, the Borrower shall have paid all fees,
charges and disbursements of counsel to the Lender to the extent invoiced prior
to or on the Closing Date, plus such additional amounts of such fees, charges
and disbursements as shall constitute its reasonable estimate of such fees,
charges and disbursements incurred or to be incurred by it through the closing
proceedings (provided that such estimate shall not thereafter preclude a final
settling of accounts between the Borrower and the Lender).
4.02. Conditions to all Credit Extensions. The obligation of the Lender to
honor any Request for Credit Extension (other than a Loan Notice requesting only
a conversion of Loans to the other Type, or a continuation of LIBOR Loans) is
subject to the following conditions precedent:
(a) The representations and warranties of the Borrower and each other Loan
Party contained in Article V or any other Loan Document, or which are contained
in any document furnished at any time under or in connection herewith or
therewith, shall be true and correct (except where already qualified with a
materiality modifier) in all material respects on and as of the date of such
Credit Extension, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they shall be true and
correct as of such earlier date, and except that for purposes of this Section
4.02, the representations and warranties contained in subsections (a) and (b) of
Section 5.05 shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b), respectively, of Section 6.01.
(b) No Default shall exist, or would result from such proposed Credit
Extension or from the application of the proceeds thereof.
(c) The Lender shall have received a Request for Credit Extension in
accordance with the requirements hereof.
(d) Compliance with Borrowing Base and Revolver Borrowing Base. After
taking into account such Credit Extension, Total Outstandings shall not exceed
the Borrowing Base or the Revolver Borrowing Base, as applicable.
Each Request for Credit Extension (other than a Loan Notice requesting
only a conversion of Loans to the other Type or a continuation of LIBOR Loans)
submitted by the Borrower shall be deemed to be a representation and warranty
that the conditions specified in Sections 4.02(a), (b) and (d) have been
satisfied on and as of the date of the applicable Credit Extension.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
5.01. Existence, Qualification and Power; Compliance with Laws. Each Loan
Party (a) is duly organized or formed, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation or organization, (b) has
all requisite power and authority and all requisite governmental licenses,
authorizations, consents and approvals to (i) own its assets and carry on its
business and (ii) execute, deliver and perform its obligations under the Loan
Documents to which it is a party, (c) is duly qualified and is licensed and in
good standing under the Laws of each jurisdiction where its ownership, lease or
operation of properties or the conduct of its business requires such
qualification or license, and (d) is in compliance with all Laws; except in each
case referred to in clause (b)(i), (c) or (d), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.
5.02. Authorization; No Contravention.
(a) The execution, delivery and performance by each Loan Party of each
Loan Document to which such Person is party, have been duly authorized by all
necessary corporate or other organizational action, and do not and will not (a)
contravene the terms of any of such Person's Organization Documents; (b)
conflict with or result in any breach or contravention of, or the creation of
any Lien under, or require any payment to be made under (i) any Contractual
Obligation to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law. Each
Loan Party is in compliance with the foregoing representation regarding all
Contractual Obligations referred to in clause (b)(i) of this paragraph, except
to the extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect.
(b) The execution, delivery and performance by each Loan Party of each
Acquisition Document to which such Person is party, have been duly authorized by
all necessary corporate or other organizational action, and do not and will not
(a) contravene the terms of any of such Person's Organization Documents; (b)
conflict with or result in any breach or contravention of, or the creation of
any Lien under, or require any payment to be made under (i) any Contractual
Obligation to which such Person is a party or affecting such Person or the
properties of such Person or any of its Subsidiaries or (ii) any order,
injunction, writ or decree of any Governmental Authority or any arbitral award
to which such Person or its property is subject; or (c) violate any Law. Each
Loan Party is in compliance with the foregoing representation regarding all
Contractual Obligations referred to in clause (b)(i) of this paragraph and the
foregoing representation regarding all Laws referred to in clause (c) of this
paragraph, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.
5.03. Governmental Authorization; Other Consents.
(a) Other than the filing of any UCC financing statements by the Lender to
perfect its Lien in the Collateral, no approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority or any other Person is necessary or required in
connection with the execution, delivery or performance by, or enforcement
against, any Loan Party of this Agreement or any other Loan Document.
45
(b) Except as provided in the Acquisition Documents, each of which has
been duly and validly obtained on or prior to the Closing Date and is now in
full force and effect, no consent, authorization or approval of, filing with,
notice to, or exemption by, stockholders or holders of any other equity
interest, any Governmental Authority or any other Person is required to
authorize, or is required in connection with the execution, delivery and
performance of the Acquisition Documents or is required as a condition to the
validity or enforceability thereof, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.
5.04. Binding Effect. This Agreement has been, and each other Transaction
Document, when delivered hereunder, will have been, duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Transaction Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.
5.05. Financial Statements; No Material Adverse Effect.
(a) The Audited Financial Statements (i) were prepared in accordance with
GAAP consistently applied throughout the period covered thereby, except as
otherwise expressly noted therein; (ii) fairly present in all material respects
the financial condition of the Borrower and its Subsidiaries as of the date
thereof and their results of operations for the period covered thereby in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; and (iii) show all material
indebtedness and other material liabilities, direct or contingent, of the
Borrower and its Subsidiaries as of the date thereof, including liabilities for
taxes, material commitments and Indebtedness to the extent disclosure of same
(including disclosure in the notes to the financial statements) would be
required to be disclosed under GAAP.
(b) Since the date of the Audited Financial Statements, there has been no
event or circumstance, either individually or in the aggregate, that has had or
could reasonably be expected to have a Material Adverse Effect.
(c) The consolidated pro forma balance sheet of the Borrower and its
Subsidiaries as at December 31, 2004 (including giving pro forma effect to ARC
and Signia), and the related consolidated pro forma statements of income and
cash flows of the Borrower and its Subsidiaries for the twelve (12) months then
ended, certified by the chief financial officer of the Borrower, copies of which
have been furnished to the Lender, fairly present in all material respects the
consolidated pro forma financial condition of the Borrower and its Subsidiaries
as at such date and the consolidated pro forma results of operations of the
Borrower and its Subsidiaries for the period ended on such date, all prepared
using applicable accounting principles of GAAP.
(d) Commencing with the first ones required thereunder, the consolidated
and consolidating forecasted balance sheet and statements of income and cash
flows of the Borrower and its Subsidiaries delivered pursuant to Section 6.01(c)
were prepared in good faith on the basis of the assumptions stated therein,
which assumptions were believed to be reasonable at the time of delivery of such
forecasts.
46
5.06. Litigation. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Borrower after due and diligent
investigation, threatened or contemplated, at law, in equity, in arbitration or
before any Governmental Authority, by or against the Borrower or any of its
Subsidiaries or against any of their properties or revenues that (a) purport to
affect or pertain to this Agreement or any other Loan Document, or any of the
transactions contemplated hereby, or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect, or (c) seek to prevent or delay the consummation of the
Signia Acquisition or the ARC Acquisition.
5.07. No Default. Neither the Borrower nor any Subsidiary is in default
under or with respect to any Contractual Obligation that could, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. No Default has occurred and is continuing or would result from
the consummation of the transactions contemplated by this Agreement or any other
Loan Document.
5.08. Ownership of Property; Liens. Subject to Liens permitted by Section
7.01, each of the Borrower and each Subsidiary has good record and marketable
title in fee simple to, or valid leasehold interests in, all real property
necessary or used in the ordinary conduct of its business, except for such
defects in title as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. The property of the Borrower and its
Subsidiaries is subject to no Liens, other than Liens permitted by Section 7.01.
5.09. Environmental Compliance. The Borrower and its Subsidiaries conduct
in the ordinary course of business a review of the effect of existing
Environmental Laws and claims alleging potential liability or responsibility for
violation of any Environmental Law on their respective businesses, operations
and properties, and as a result thereof the Borrower has reasonably concluded
that such Environmental Laws and claims could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.10. Insurance. The properties of the Borrower and its Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the applicable Subsidiary
operates.
5.11. Taxes. Except as specifically disclosed in Schedule 5.11, the
Borrower and its Subsidiaries have filed all Federal, state and other material
tax returns and reports required to be filed, and have paid all Federal, state
and other material taxes, assessments, fees and other governmental charges
levied or imposed upon them or their properties, income or assets otherwise due
and payable, except those which are being contested in good faith by appropriate
proceedings diligently conducted and for which adequate reserves have been
provided in accordance with GAAP. There is no proposed tax assessment against
the Borrower or any Subsidiary that would, if made, have a Material Adverse
Effect. Neither any Loan Party nor any Subsidiary thereof is party to any tax
sharing agreement.
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5.12. ERISA Compliance.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of the Borrower, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower and each ERISA Affiliate have made
all required contributions to each Plan subject to Section 412 of the Code, and
no application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under Section 4219 of ERISA, would result in such liability) under Sections 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.
5.13. Subsidiaries; Equity Interests. The Borrower has no Subsidiaries
other than those specifically disclosed in Part (a) of Schedule 5.13, and all of
the outstanding capital stock in such Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by a Loan Party in the amounts
specified on Part (a) of Schedule 5.13 free and clear of all Liens other than
Liens permitted under Section 7.01 hereof. The Borrower has no equity
investments in any other corporation or entity other than those specifically
disclosed in Part(b) of Schedule 5.13. All of the outstanding capital stock in
the Borrower has been validly issued, are fully paid and nonassessable.
5.14. Margin Regulations; Investment Company Act; Public Utility Holding
Company Act.
(a) The Borrower is not engaged and will not engage, principally or as one
of its important activities, in the business of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the FRB), or extending
credit for the purpose of purchasing or carrying margin stock.
48
(b) None of the Borrower, any Person Controlling the Borrower, or any
Subsidiary (i) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, or (ii) is or is required to be registered as an "investment
company" under the Investment Company Act of 1940.
5.15. Disclosure. The Borrower has disclosed to the Lender all agreements,
instruments and corporate or other restrictions to which it or any of its
Subsidiaries is subject, and all other matters known to it, that, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect. No report, financial statement, certificate or other information
furnished (whether in writing or orally) by or on behalf of any Loan Party to
the Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement or delivered hereunder or under any other Loan
Document (in each case, as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
5.16. Compliance with Laws. Each of the Borrower and each Subsidiary is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.17. Intellectual Property; Licenses, Etc. The Borrower and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP Rights") that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. To the best knowledge of the
Borrower, no slogan or other advertising device, product, process, method,
substance, part or other material now employed, or now contemplated to be
employed, by the Borrower or any Subsidiary infringes upon any rights held by
any other Person that may give rise to a claim against the Borrower or any
Subsidiary that, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. No claim or litigation regarding any
of the foregoing is pending or, to the best knowledge of the Borrower,
threatened, which, either individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
5.18. Condition of Assets. All of the assets and properties of the
Borrower and its Subsidiaries, that are reasonably necessary for the operation
of its business, are in good working condition, ordinary wear and tear excepted,
and are able to serve the function for which they are currently being used.
49
5.19. ARC Acquisition. The Borrower has heretofore delivered to the Lender
true, correct and complete copies of the ARC Acquisition Documents. The Borrower
has, on or before the Closing Date, consummated in all material respects the ARC
Acquisition pursuant to the ARC Acquisition Documents, and the ARC Acquisition
Documents set forth the entire agreement among the parties thereto with respect
to the subject matter thereof. No party to the ARC Acquisition Documents has
waived the fulfillment of any material condition precedent set forth therein to
the consummation of the ARC Acquisition, no party has failed to perform any of
its obligations thereunder or under any instrument or document executed and
delivered in connection therewith, and nothing has come to the attention of the
Borrower that would cause it to believe that any of the representations or
warranties of ARC contained in the ARC Acquisition Documents were false or
misleading in any material respect when made or when reaffirmed on the Closing
Date. Neither the execution and delivery of the ARC Acquisition Documents, nor
the performance of the Borrower's obligations thereunder, will violate any
provision of law or will conflict with or result in a breach of, or create (with
or without the giving of notice or lapse of time, or both) a default under, any
agreement to which the Borrower is a party or by which it is bound or any of its
properties is affected, except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, the Borrower has acquired by virtue of the consummation of the ARC
Acquisition and has valid, legal and marketable title to all of the issued and
outstanding capital stock of ARC, free and clear of any Lien other than Liens
permitted by Section 7.01 hereof. In addition to the other Earnout Obligations
set forth therein, the Earnout Obligations in respect of the ARC Acquisition are
listed on Schedule 5.19 hereto.
5.20. Signia Acquisition. The Borrower has heretofore delivered to the
Lender true, correct and complete copies of the Signia Acquisition Documents.
The Borrower has, on or before the Closing Date, consummated in all material
respects the Signia Acquisition pursuant to the Signia Acquisition Documents,
and the Signia Acquisition Documents set forth the entire agreement among the
parties thereto with respect to the subject matter thereof. No party to the
Signia Acquisition Documents has waived the fulfillment of any material
condition precedent set forth therein to the consummation of the Signia
Acquisition, no party has failed to perform any of its obligations thereunder or
under any instrument or document executed and delivered in connection therewith,
and nothing has come to the attention of the Borrower that would cause it to
believe that any of the representations or warranties of Signia contained in the
Signia Acquisition Documents were false or misleading in any material respect
when made or when reaffirmed on the Closing Date. Neither the execution and
delivery of the Signia Acquisition Documents, nor the performance of the
Borrower's obligations thereunder, will violate any provision of law or will
conflict with or result in a breach of, or create (with or without the giving of
notice or lapse of time, or both) a default under, any agreement to which the
Borrower is a party or by which it is bound or any of its properties is
affected, except to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, the Borrower
has acquired by virtue of the consummation of the Signia Acquisition and has
valid, legal and marketable title to all of the issued and outstanding capital
stock of Signia, free and clear of any Lien other than Liens permitted by
Section 7.01 hereof. In addition to the other Earnout Obligations set forth
therein, the Earnout Obligations in respect of the Signia Acquisition are listed
on Schedule 5.19 hereto.
50
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as the Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall, and shall (except in the
case of the covenants set forth in Sections 6.01, 6.02, and 6.03) cause each
Subsidiary to:
6.01. Financial Statements. Deliver to the Lender, in form and detail
satisfactory to the Lender:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower (commencing with the fiscal year ended 2005), a
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such fiscal year, and the related consolidated and
consolidating statements of income or operations, shareholders' equity and cash
flows for such fiscal year, setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail and prepared in
accordance with GAAP, such consolidated statements to be audited and accompanied
by a report and opinion of an independent certified public accountant of
nationally recognized standing reasonably acceptable to the Lender, which report
and opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any "going concern" or like qualification
or exception or any qualification or exception as to the scope of such audit and
such consolidating statements to be certified by a Responsible Officer of the
Borrower to the effect that such statements are fairly stated in all material
respects when considered in relation to the consolidated financial statements of
the Borrower and its Subsidiaries;
(b) as soon as available, but in any event within 60 days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower
(commencing with the fiscal quarter ended March 31, 2005), a consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal quarter, and the related consolidated and consolidating
statements of income or operations, shareholders' equity and cash flows for such
fiscal quarter and for the portion of the Borrower's fiscal year then ended,
setting forth in each case in comparative form the figures for the corresponding
fiscal quarter of the previous fiscal year and the corresponding portion of the
previous fiscal year, all in reasonable detail, such consolidated statements to
be certified by a Responsible Officer of the Borrower as fairly presenting the
financial condition, results of operations, shareholders' equity and cash flows
of the Borrower and its Subsidiaries in accordance with GAAP, subject only to
normal year-end audit adjustments and the absence of footnotes and such
consolidating statements to be certified by a Responsible Officer of the
Borrower to the effect that such statements are fairly stated in all material
respects when considered in relation to the consolidated financial statements of
the Borrower and its Subsidiaries; and
(c) as soon as available, but in any event no later than 30 days after the
end of each fiscal year of the Borrower (commencing with the end of Borrower's
2005 fiscal year, for its fiscal year 2006), forecasts prepared by management of
the Borrower, in form satisfactory to the Lender, of consolidated balance sheets
and statements of income or operations and cash flows of the Borrower and its
Subsidiaries on a monthly basis for the immediately following fiscal year
(including the fiscal year in which the Term Maturity Date occurs).
51
As to any information contained in materials furnished pursuant to Section
6.02(d), the Borrower shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation of the obligation of the Borrower to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.
6.02. Certificates; Other Information. Deliver to the Lender, in form and
detail satisfactory to the Lender:
(a) concurrently with the delivery of the financial statements referred to
in Section 6.01(a), a certificate of its independent certified public
accountants certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default under
the financial covenants set forth herein or, if any such Default shall exist,
stating the nature and status of such event;
(b) concurrently with the delivery of the financial statements referred to
in Sections 6.01(a) and (b) (commencing with the delivery of the financial
statements for the fiscal quarter] ended June 30, 2005), a duly completed
Compliance Certificate signed by a Responsible Officer of the Borrower
evidencing a computation of compliance with the provisions of Section 7.11
hereof and stating that in each case except as disclosed in such certificate,
the person making such certificate has no knowledge of any Default or Event of
Default;
(c) promptly after any request by the Lender, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of the Borrower by
independent accountants in connection with the accounts or books of the Borrower
or any Subsidiary, or any audit of any of them;
(d) promptly after the same are available, copies of each annual report,
proxy or financial statement or other report or communication sent to the
stockholders of the Borrower, and copies of all annual, regular, periodic and
special reports and registration statements which the Borrower may file or be
required to file with the SEC under Section 13 or 15(d) of the Securities
Exchange Act of 1934, and not otherwise required to be delivered to the Lender
pursuant hereto;
(e) promptly, and in any event within five Business Days after receipt
thereof by any Loan Party or any Subsidiary thereof, copies of each notice or
other correspondence received from the SEC (or comparable agency in any
applicable non-U.S. jurisdiction) concerning any investigation or possible
investigation or other inquiry by such agency regarding financial or other
operational results of any Loan Party or any Subsidiary thereof;
(f) an accounts receivable agings and sales report accompanied by a
Borrowing Base Certificate indicating a computation of the Borrowing Base and
Revolver Borrowing Base covering the period ending the last day of the
immediately preceding month, (A) monthly (not later than 15 days after the last
day of each month), and (B) on the date a Loan is requested, covering the period
commencing with the first day of the month such Loan is requested through the
date thereof; and
52
(g) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary, or compliance
with the terms of the Loan Documents, as the Lender may from time to time
reasonably request.
Documents required to be delivered pursuant to Section 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Borrower's behalf on an Internet or
intranet website, if any, to which the Lender has access (whether a commercial,
third-party website or whether sponsored by the Lender); provided that: (i) the
Borrower shall deliver paper copies of such documents to the Lender until a
written request to cease delivering paper copies is given by the Lender and (ii)
the Borrower shall notify the Lender (by telecopier or electronic mail) of the
posting of any such documents and provide to the Lender by electronic mail
electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Borrower shall be required to
provide paper copies of the Compliance Certificates required by Section 6.02(b)
to the Lender. Except for such Compliance Certificates, the Lender shall have no
obligation to request the delivery or to maintain copies of the documents
referred to above, and in any event shall have no responsibility to monitor
compliance by the Borrower with any such request for delivery, and the Lender
shall be solely responsible for requesting delivery to it or maintaining its
copies of such documents.
6.03. Notices. Promptly notify the Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension between the Borrower or any Subsidiary and any Governmental
Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Borrower or any Subsidiary, including
pursuant to any applicable Environmental Laws;
(c) of the occurrence of any ERISA Event;
(d) of any material change in accounting policies or financial reporting
practices by the Borrower or any Subsidiary; and
(e) of any Internal Control Event.
Each notice pursuant to this Section shall be accompanied by a statement
of a Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower has taken and proposes
to take with respect thereto. Each notice pursuant to Section 6.03(a) shall
describe with particularity any and all provisions of this Agreement and any
other Loan Document that have been breached.
53
6.04. Payment of Obligations. Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) all tax
liabilities, assessments and governmental charges or levies upon it or its
properties or assets, unless the same are being contested in good faith by
appropriate proceedings diligently conducted and adequate reserves in accordance
with GAAP are being maintained by the Borrower or such Subsidiary; (b) all
lawful claims which, if unpaid, would by law become a Lien upon its property
(other than during the period in which such Lien is permitted under Section 7.01
hereof); and (c) all Indebtedness, as and when due and payable, but subject to
any subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
6.05. Preservation of Existence, Etc. (a) Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
Section 7.04 or 7.05; (b) take all reasonable action to maintain all rights,
privileges, permits, licenses and franchises necessary or desirable in the
normal conduct of its business, except to the extent that failure to do so could
not reasonably be expected to have a Material Adverse Effect; and (c) preserve
or renew all of its registered patents, trademarks, trade names and service
marks, the non-preservation of which could reasonably be expected to have a
Material Adverse Effect.
6.06. Maintenance of Properties. (a) Maintain, preserve and protect all of
its material properties and equipment necessary in the operation of its business
in good working order and condition, ordinary wear and tear excepted; (b) make
all necessary repairs thereto and renewals and replacements thereof except where
the failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (c) use the standard of care typical in the industry in the
operation and maintenance of its facilities.
6.07. Maintenance of Insurance. Maintain with financially sound and
reputable insurance companies not Affiliates of the Borrower, insurance with
respect to its properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons and providing for not less than 30 days'
prior notice to the Lender of termination, lapse or cancellation of such
insurance.
6.08. Compliance with Laws. Comply in all material respects with the
requirements of all Laws and all orders, writs, injunctions and decrees
applicable to it or to its business or property, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree is being
contested in good faith by appropriate proceedings diligently conducted; or (b)
the failure to comply therewith could not reasonably be expected to have a
Material Adverse Effect.
6.09. Books and Records. (a) Maintain proper books of record and account,
in which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be; and
(b) maintain such books of record and account in material conformity with all
applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Borrower or such Subsidiary, as the case may be.
54
6.10. Inspection Rights. Permit representatives and independent
contractors of the Lender to visit and inspect any of its properties, to examine
its corporate, financial and operating records, and make copies thereof or
abstracts therefrom, and to discuss its affairs, finances and accounts with its
directors, officers, and independent public accountants, all at the expense of
the Borrower and at such reasonable times during normal business hours and as
often as may be reasonably desired, upon reasonable advance notice to the
Borrower; provided, however, that when an Event of Default exists the Lender (or
any of their respective representatives or independent contractors) may do any
of the foregoing at the expense of the Borrower at any time during normal
business hours and without advance notice.
6.11. Use of Proceeds. Use the proceeds of the Borrowings to finance the
Acquisitions and for general corporate purposes not in contravention of any Law
or of any Loan Document.
6.12. Additional Subsidiaries. Notify the Lender at the time that any
Person meeting the definition of Material Subsidiary becomes a Subsidiary of the
Borrower, and promptly thereafter (and in any event within 30 days), cause such
Person to (a) become a Guarantor by executing and delivering to the Lender a
counterpart of the Guaranty or such other document as the Lender shall deem
appropriate for such purpose, (b) grant to the Lender a first priority perfected
Lien on its assets by executing and delivering a Security Agreement or such
supplements to the Security Documents as the Lender shall deem appropriate for
such purpose; and (c) deliver to the Lender documents of the types referred to
in clauses (iii) and (iv) of Section 4.01(a) and favorable opinions of counsel
to such Person (which shall cover, among other things, the legality, validity,
binding effect and enforceability of the documentation referred to in clauses
(a) and (b)), all in form, content and scope reasonably satisfactory to the
Lender.
6.13. Maintain Principal Operating Account. Use commercially reasonable
efforts to transfer as soon as practicable its principal operating accounts to
Fleet and/or Bank of America.
ARTICLE VII.
NEGATIVE COVENANTS
So long as the Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall not, nor shall it permit any
Subsidiary to, directly or indirectly:
7.01. Liens. Create, incur, assume or suffer to exist any Lien upon any of
its property, assets or revenues, whether now owned or hereafter acquired, other
than the following:
(a) Liens pursuant to any Loan Document;
(b) Liens existing on the Closing Date and listed on Schedule 7.01 and any
renewals or extensions thereof, provided that (i) the property covered thereby
is not changed in any material respect, (ii) the amount secured or benefited
thereby is not increased, (iii) the direct or any contingent obligor with
respect thereto which is a Loan Party is not changed, and (iv) any renewal or
extension of the obligations secured or benefited thereby is permitted by
Section 7.03(b);
55
(c) Liens for taxes not yet due or which are being contested in good faith
and by appropriate proceedings diligently conducted, if adequate reserves with
respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) landlords', carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or which are being contested
in good faith and by appropriate proceedings diligently conducted, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person;
(e) pledges or deposits in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other social security
legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and leases
(other than Indebtedness), statutory obligations, surety bonds (other than bonds
related to judgments or litigation), performance bonds and other obligations of
a like nature incurred in the ordinary course of business;
(g) easements, rights-of-way, restrictions and other similar encumbrances
affecting real property which, in the aggregate, are not substantial in amount,
and which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
(h) Liens securing judgments for the payment of money not constituting an
Event of Default under Section 8.01(h) or securing appeal or other surety bonds
related to such judgments;
(i) Liens securing Indebtedness permitted under Section 7.03(e); provided
that (i) such Liens do not at any time encumber any property other than the
property financed by such Indebtedness and (ii) the Indebtedness secured thereby
does not exceed 75% of the cost or 100% of the fair market value, whichever is
lower, of the property being acquired on the date of acquisition;
(j) statutory restrictions on transfer created pursuant to Securities Laws
of general application; and
(k) incidental Liens in an aggregate amount not exceeding $100,000.
7.02. Investments. Make any Investments, except:
(a) Investments held by the Borrower or such Subsidiary in the form of
Cash Equivalents;
(b) advances to officers, directors and employees of the Borrower and
Subsidiaries in an aggregate amount not to exceed $100,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
56
(c) Investments of the Borrower in any Material Subsidiary and Investments
of any Material Subsidiary in the Borrower or in another Material Subsidiary;
(d) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
(e) Guarantees permitted by Section 7.03;
(f) Investments existing on the Closing Date and listed on Schedule 7.02;
(g) Investments permitted by Sections 7.04 or 7.09; and
(h) other Investments not exceeding $250,000 in the aggregate in any
fiscal year of the Borrower.
7.03. Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Indebtedness outstanding on the Closing Date and listed on Schedule
7.03 and any refinancings, refundings, renewals or extensions thereof; provided
that the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder;
(c) Guarantees of the Borrower or any Material Subsidiary in respect of
Indebtedness otherwise permitted hereunder of the Borrower or any Material
Subsidiary;
(d) obligations (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under any Swap Contract, provided that (i) such
obligations are (or were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks associated with
liabilities, commitments, investments, assets, or property held or reasonably
anticipated by such Person, or changes in the value of securities issued by such
Person, and not for purposes of speculation or taking a "market view;" and (ii)
such Swap Contract does not contain any provision exonerating the non-defaulting
party from its obligation to make payments on outstanding transactions to the
defaulting party; and
(e) Indebtedness in respect of capital leases, Synthetic Lease Obligations
and purchase money obligations for fixed or capital assets within the
limitations set forth in Section 7.01(i); provided, however, that the aggregate
amount of all such Indebtedness at any one time outstanding shall not exceed
$500,000;
(f) the Earnout Obligations;
(g) the Petra Series A Preferred Stock Dividends;
57
(h) the Petra Series A Preferred Stock Redemption;
(i) the Guideline Redemption; and
(j) unsecured Indebtedness in an aggregate principal amount not to exceed
$500,000 at any time outstanding.
7.04. Fundamental Changes. Merge, dissolve, liquidate, consolidate with or
into another Person or enter into any Acquisition, or Dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to or in favor of any Person,
except that, so long as no Default exists or would result therefrom:
(a) any Subsidiary may merge with (i) the Borrower, provided that the
Borrower shall be the continuing or surviving Person, or (ii) any one or more
other Material Subsidiaries of the Borrower; provided that (in the case of
clauses (i) and (ii) the Lender shall have received no less than ten days' prior
written notice thereof;
(b) any Subsidiary may Dispose of all or substantially all of its assets
(upon voluntary liquidation or otherwise) to the Borrower or to a Material
Subsidiary of the Borrower; provided that if the transferor in such a
transaction is a Guarantor, then the transferee must either be the Borrower or a
Guarantor; and
(c) the actions described on Schedule 7.04.
7.05. Dispositions. Make any Disposition or enter into any agreement to
make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of equipment or real property to the extent that (i) such
property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property;
(d) Dispositions of property by any Subsidiary to the Borrower or to a
Material Subsidiary; provided that if the transferor of such property is a
Guarantor, the transferee thereof must either be the Borrower or a Guarantor;
(e) subject to any conditions thereto set forth herein or in any other
Loan Document, Dispositions permitted by Section 7.04;
(f) non-exclusive licenses of IP Rights in the ordinary course of business
and substantially consistent with past practice for terms not exceeding five
years;
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(g) Disposition of Investment in Xxxx.xxx or sale of assets therein;
provided, that, (A) the Net Proceeds thereof shall be applied immediately to
prepay the Outstanding Amount of any Revolving Credit Loans (and if none are
outstanding, to Cash Collateralize any L/C Obligations), and (B) such
Disposition shall be fully consummated no later than December 31, 2005; and
(h) Dispositions by the Borrower and its Subsidiaries not otherwise
permitted under this Section 7.05; provided that (i) at the time of such
Disposition, no Default shall exist or would result from such Disposition and
(ii) the aggregate book value of all property Disposed of in reliance on this
clause (h) in any fiscal year shall not exceed $150,000;
provided, however, that any Disposition pursuant to clauses (a) through (h)
shall be for fair market value.
7.06. Restricted Payments. Declare or make, directly or indirectly, any
Restricted Payment, or incur any obligation (contingent or otherwise) to do so,
except that, so long as no Default shall have occurred and be continuing at the
time of any action described below or would result therefrom:
(a) each Subsidiary may make Restricted Payments to the Borrower;
(b) the Borrower and each Material Subsidiary may declare and make
dividend payments or other distributions payable in the common stock or other
common Equity Interests of such Person;
(c) the Borrower and each Material Subsidiary may purchase, redeem or
otherwise acquire Equity Interests issued by it with the proceeds received from
the substantially concurrent issue of new shares of its common stock or other
common Equity Interests;
(d) The Borrower may declare or pay cash dividends to its stockholders and
purchase, redeem or otherwise acquire for cash Equity Interests issued by it
solely out of 50% of net income of the Borrower and its Subsidiaries arising
after December 31, 2005 and computed on a cumulative consolidated basis with
other such transactions by the Borrower since that date;
(e) the Earnout Obligations may be paid;
(f) the Petra Series A Preferred Stock Dividends may be paid;
(g) the Petra Series A Preferred Stock Redemption may occur; and
(h) the Guideline Redemption may occur.
7.07. Change in Nature of Business. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the Closing Date or any business substantially
related or incidental thereto.
7.08. Transactions with Affiliates. Enter into any transaction of any kind
with any Affiliate of the Borrower, whether or not in the ordinary course of
business, other than on fair and reasonable terms substantially as favorable to
the Borrower or such Subsidiary as would be obtainable by the Borrower or such
Subsidiary at the time in a comparable arm's length transaction with a Person
other than an Affiliate.
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7.09. Burdensome Agreements. Enter into any Contractual Obligation (other
than this Agreement or any other Loan Document) that (a) limits the ability (i)
of any Subsidiary to make Restricted Payments to the Borrower or any Guarantor
or to otherwise transfer property to the Borrower or any Guarantor, (ii) of any
Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of the
Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens on
property of such Person; provided, however, that this clause (iii) shall not
prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under Section 7.03(e) solely to the extent any such
negative pledge relates to the property financed by or the subject of such
Indebtedness; or (b) requires the grant of a Lien to secure an obligation of
such Person if a Lien is granted to secure another obligation of such Person.
7.10. Use of Proceeds. Use the proceeds of any Borrowing, whether directly
or indirectly, and whether immediately, incidentally or ultimately, to purchase
or carry margin stock (within the meaning of Regulation U of the FRB) or to
extend credit to others for the purpose of purchasing or carrying margin stock
or to refund indebtedness originally incurred for such purpose.
7.11. Financial Covenants. The following financial covenants shall be
calculated on a consolidated basis and shall include in each case the pro forma
unadjusted pre-acquisition results of Signia and ARC. Except where otherwise
indicated, such financial covenants shall be measured quarterly on a trailing
four quarter basis.
(a) Consolidated Net Worth. Permit Consolidated Net Worth at any time to
be less than the sum of (i) $20,250,000, and (ii) an amount equal to 50% of the
cumulative positive Consolidated Net Income of the Borrower and its Subsidiaries
earned in each full fiscal quarter ending after March 31, 2005 (with no
deduction for a net loss in any such fiscal quarter).
(b) Consolidated EBITDA. Permit the Consolidated EBITDA as of the end of
three fiscal quarters of the Borrower listed below to be less than the amount
set forth below opposite such fiscal quarter:
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Minimum
Consolidated
Four Fiscal Quarter Ending EBITDA
------------------------------------------------------------
March 31, 2005 $600,000
June 30, 2005 $1,000,000
September 30, 2005 $1,100,000
(For subsequent quarters, this covenant shall no
longer be applicable, and the covenant listed in
Section 7.11(c) shall apply.)
(c) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio of
the Borrower and its Subsidiaries as of the end of each fiscal quarter of the
Borrower, commencing with the fiscal quarter of the Borrower ending December 31,
2005, to be less than 1.25 to 1.00, as determined on a Rolling Four Quarter
Basis.
(d) Consolidated Funded Debt to Consolidated EBITDA Ratio. Permit as of
the end of each fiscal quarter of the Borrower a ratio of Consolidated Funded
Debt as at such date to Consolidated EBITDA for the most recently completed four
fiscal quarters of the Borrower to exceed the ratio set forth below:
--------------------------------------------------------------------------------
Four Fiscal Quarters ending on: Ratio
--------------------------------------------------------------------------------
Closing Date through December 31, 2005 2.0 to 1.00
--------------------------------------------------------------------------------
March 31, 2006 & thereafter 1.75 to 1.00
--------------------------------------------------------------------------------
(e) Minimum Profitability. Commencing with the quarter ending March 31,
2005, for the Borrower and its Subsidiaries on a consolidated basis, permit
there to be a net loss in any fiscal quarter.
7.12. Sale of Receivables; Sale - Leasebacks. Except as otherwise
permitted hereunder, sell, discount or otherwise dispose of notes, accounts
receivable or other obligations owing to the Borrower or any Subsidiary, with or
without recourse, except for the purpose of collection in the ordinary course of
business; or sell any asset pursuant to an arrangement to thereafter lease such
asset from the purchaser thereof.
7.13. Amendments, Etc. of Certain Agreements. Enter into or agree to any
amendment, modification or waiver of any term or condition of its Organization
Documents or any of the Material Agreements in any way which could reasonably be
expected to have a Material Adverse Effect, or permit any of its Subsidiaries so
to do.
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7.14. Accounting Changes. Make, or permit any Subsidiary to make any
change in their accounting treatment or financial reporting practices except as
required or permitted by GAAP in effect from time to time.
7.15. Swap Contracts. Enter into any Swap Contract other than a Swap
Contract to which a Lender or its Affiliate is a party.
7.16. Formation of Subsidiaries. Form or acquire any Subsidiary except in
compliance with the provisions of Section 6.12.
7.17. Prepayments of Indebtedness. Prepay or obligate itself to prepay, in
whole or in part, any Indebtedness (other than the Indebtedness under the Loan
Documents), or permit any of its Subsidiaries so to do.
7.18. Nature of Business; Name Changes. Materially alter the nature of its
business or alter or modify its name, state of organization, structure or
status, or change its fiscal year from that in effect on the Closing Date, or
permit any of its Subsidiaries so to do without the prior written consent of the
Lender.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01. Events of Default. Any of the following shall constitute an Event of
Default:
(a) Non-Payment. The Borrower or any other Loan Party fails to pay (i)
when and as required to be paid herein, any amount of principal of any Loan or
any L/C Obligation, or (ii) within three Business Days after the same becomes
due, any interest on any Loan or on any L/C Obligation, or any fee due
hereunder, or (iii) within five Business Days after the same becomes due, any
other amount payable hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe any term,
covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.10,
6.11 or 6.12 or Article II or Article VII, and, solely as to the covenants
contained in Sections 7.05, 7.08 or 7.09 and such failure with respect to any of
those three covenants continues for three (3) Business Days; or
(c) Other Defaults. Any Loan Party fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in this Agreement or, except as provided in subsection (j) below, any Loan
Document on its part to be performed or observed and such failure continues for
30 days; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower or any other Loan Party herein, in any other Loan Document, or in any
document delivered in connection herewith or therewith shall be incorrect or
misleading when made or deemed made; or
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(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the Threshold Amount, or (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event occurs, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to be demanded or to become
due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable or cash collateral in respect thereof to be demanded; or (ii)
there occurs under any Swap Contract an Early Termination Date (as defined in
such Swap Contract) resulting from (A) any event of default under such Swap
Contract as to which the Borrower or any Subsidiary is the Defaulting Party (as
defined in such Swap Contract) or (B) any Termination Event (as so defined)
under such Swap Contract as to which the Borrower or any Subsidiary is an
Affected Party (as so defined) and, in either event, the Swap Termination Value
owed by the Borrower or such Subsidiary as a result thereof is greater than the
Threshold Amount; or
(f) Insolvency Proceedings, Etc. Any Loan Party or any of its Subsidiaries
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors; or applies for
or consents to the appointment of any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer for it or for all or any material
part of its property; or any receiver, trustee, custodian, conservator,
liquidator, rehabilitator or similar officer is appointed without the
application or consent of such Person and the appointment continues undischarged
or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law
relating to any such Person or to all or any material part of its property is
instituted without the consent of such Person and continues undismissed or
unstayed for 60 calendar days, or an order for relief is entered in any such
proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or any Subsidiary
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or
(h) Judgments. There is entered against the Borrower or any Subsidiary (i)
a final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of 10 consecutive days
during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; or
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(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) the Borrower or any ERISA Affiliate fails to pay when due, after
the expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or
(j) Invalidity of Loan Documents; Other Loan Document Events of Default.
Any Loan Document, at any time after its execution and delivery and for any
reason other than as expressly permitted hereunder or thereunder or satisfaction
in full of all the Obligations, ceases to be in full force and effect; or any
Loan Party or any other Person contests in any manner the validity or
enforceability of any provision of any Loan Document; or any Loan Party denies
that it has any or further liability or obligation under any Loan Document, or
purports to revoke, terminate or rescind any provision of any Loan Document or
any "Event of Default" shall have occurred under, and as such term is defined
in, any Loan Document; or
(k) Change of Control. There occurs any Change of Control of the Borrower;
or
(l) Operating Licenses. Any license, franchise, permit, right, approval or
agreement of the Borrower, any of its Subsidiaries or any other Loan Party, is
not renewed, or is suspended, revoked or terminated and the non-renewal,
suspension, revocation or termination thereof would have a Material Adverse
Effect; or
(m) Liens. Any of the Liens created and granted pursuant to the Security
Documents shall fail to be valid, first, perfected Liens subject to no prior or
equal Lien except as permitted by Section 7.01 of this Agreement; or
(n) Change in Management. Any two of the following four individuals, at
any point in time, no longer continues in his present or a substantially similar
capacity (as that appearing alongside his name below) as an officer or director,
as the case may be, of the Borrower and who, in the case of the officers, is
actively involved on a full-time basis in the management of the Borrower:
Xxxxx Xxxxx - chief executive officer
Xxxxx Xxxxx - chief financial officer
Xxxx Xxxxxxxxx - chief operating officer
Xxxxxx Xxxxxxxx - a member of the Board of Directors
;provided, however, that the foregoing shall not constitute an Event of Default
if the Borrower replaces such two exiting officers (or director, as the case may
be) within ten (10) days of the departure of the latter of the two exiting
officers (or director, as the case may be) with successors who are satisfactory
to the Lender in its sole and absolute discretion; or
(o) Petra Series A Preferred Stock Redemption. If at any time the Lender
determines, in its sole discretion that, if and when any Petra Series A
Preferred Stock Redemption is or would be requested or exercised, any Default or
Event of Default exists or is likely to arise or exist as a result thereof, or
that the Borrower would likely fall out of compliance with any covenant
hereunder or under any other Loan Document, either before or after giving effect
to such redemption, then, notwithstanding anything to the contrary contained
herein, the Lender shall have the right to declare an immediate Event of Default
hereunder and exercise any and all remedies in respect thereof without waiting
for any actual request or exercise of such redemption right or notice thereof;
or
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(p) Material Adverse Change The Lender shall have determined in its sole
discretion that one or more conditions exist or events have occurred which have
resulted or may result in a Material Adverse Change.
8.02. Remedies Upon Event of Default. If any Event of Default occurs and
is continuing, the Lender may take any or all of the following actions:
(a) declare the Aggregate Commitment of the Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitment and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations (in
an amount equal to the then Outstanding Amount thereof); and
(d) exercise all rights and remedies available to it under the Loan
Documents;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to the Borrower or any Subsidiary under the
Bankruptcy Code of the United States, the obligation of the Lender to make Loans
and any obligation of the L/C Issuer to make L/C Credit Extensions shall
automatically terminate, the unpaid principal amount of all outstanding Loans
and all interest and other amounts as aforesaid shall automatically become due
and payable, and the obligation of the Borrower to Cash Collateralize the L/C
Obligations as aforesaid shall automatically become effective, in each case
without further act of the Lender.
8.03. Application of Funds. After the exercise of remedies provided for in
Section 8.02 (or after the Loans have automatically become immediately due and
payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Lender in the
following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including fees, charges and
disbursements of counsel to the Lender and amounts payable under Article III)
payable to the Lender;
65
Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lender (including fees, charges and disbursements of counsel to the Lender and
amounts payable under Article III);
Third, to payment of that portion of the Obligations constituting accrued
and unpaid interest on the Loans, L/C Borrowings and other Obligations;
Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans and L/C Borrowings;
Fifth, to the L/C Issuer, to Cash Collateralize that portion of L/C
Obligations comprised of the aggregate undrawn amount of Letters of Credit;
Sixth, to the Lender to cash collateralize or pay that portion of the
Obligations represented by a Swap Contract; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX.
COLLATERAL SECURITY
9.01. Collateral Security. In addition to any and all possessory
collateral securing the Obligations, payment of the Obligations is also secured
by security interests as set forth in the Security Documents executed or to be
executed and delivered by the Loan Parties to the Lender.
ARTICLE X.
MISCELLANEOUS
10.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower or any other Loan Party therefrom, shall be effective unless in writing
signed by the Lender and the Borrower or the applicable Loan Party, as the case
may be, and acknowledged by the Lender, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
10.02. Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
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The Borrower: FIND/SVP, Inc.
652 Avenue of the Americas, 2d Floor
New York, New York 10011
Att: Xxxxx Xxxxx, CEO
Xxxxx Xxxxx, CFO
Fax Number: 000-000-0000
with a copy to: Xxxx Xxxxxxx, P.C.
1350 Avenue of the Xxxxxxxx, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Xxxxxxxx X. Xxxxxxxxx, Esq.
Fax Number: 000-000-0000
The Bank: Fleet National Bank, a Bank of America company
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att: Xxxxxxxx X. Xxxxxxxx
Fax Number: 000-000-0000
with a copy to: Xxxxxxx, Xxxxxxxxx LLP
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Att: Xxx X. Xxxxxxxxx, Esq.
Fax Number: 000-000-0000
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).
(b) Electronic Communications. Notices and other communications to the
Lender hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Lender. The Lender or the Borrower may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it, provided that approval of
such procedures may be limited to particular notices or communications.
Unless the Lender otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
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(c) Change of Address, Etc. Each of the Borrower and the Lender may change
its address, telecopier or telephone number for notices and other communications
hereunder by notice to the other parties hereto.
(d) Reliance by Lender. The Lender shall be entitled to rely and act upon
any notices (including telephonic Loan Notices) purportedly given by or on
behalf of the Borrower even if (i) such notices were not made in a manner
specified herein, were incomplete or were not preceded or followed by any other
form of notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
the Lender and the Related Parties from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice
purportedly given by or on behalf of the Borrower. All telephonic notices to and
other telephonic communications with the Lender may be recorded by the Lender,
and each of the parties hereto hereby consents to such recording.
10.03. No Waiver; Cumulative Remedies. No failure by the Lender to
exercise, and no delay by any such Person in exercising, any right, remedy,
power or privilege hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
10.04. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Lender and its Affiliates (including the
reasonable fees, charges and disbursements of outside counsel for the Lender),
in connection with the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), and (ii) all
out-of-pocket expenses incurred by the Lender (including the fees, charges and
disbursements of any outside counsel for the Lender) in connection with the
enforcement or protection of its rights (A) in connection with this Agreement
and the other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans made hereunder, including all such out-of-pocket
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans.
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(b) Indemnification by the Borrower. The Borrower shall indemnify the
Lender (and any sub-agent thereof) and each Related Party of the Lender (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses (including the fees, charges and disbursements of any counsel for any
Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any
third party or by the Borrower or any other Loan Party arising out of, in
connection with, or as a result of (i) the execution or delivery of this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Loan or the use or proposed use of the
proceeds therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any other Loan Party, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrower or any other Loan Party against an Indemnitee for breach
in bad faith of such Indemnitee's obligations hereunder or under any other Loan
Document, if the Borrower or such Loan Party has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court of
competent jurisdiction.
(c) Waiver of Consequential Damages, Etc. To the fullest extent permitted
by applicable law, the Lender and the Borrower shall not assert, and hereby
waive, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or the use of
the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be
liable for any damages arising from the use by unintended recipients of any
information or other materials distributed by it through telecommunications,
electronic or other information transmission systems in connection with this
Agreement or the other Loan Documents or the transactions contemplated hereby or
thereby.
(d) Payments. All amounts due under this Section shall be payable not
later than ten Business Days after demand therefore in writing.
(e) Survival. The agreements in this Section shall survive the termination
of the Aggregate Commitment and the repayment, satisfaction or discharge of all
the other Obligations.
10.05. Payments Set Aside. To the extent that any payment by or on behalf
of the Borrower is made to the Lender, or the Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the Lender in
its discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then to
the extent of such recovery, the obligation or part thereof originally intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been made or such setoff had not occurred.
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10.06. Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Lender. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided herein and, to the extent expressly
contemplated hereby, the Related Parties of the Lender) any legal or equitable
right, remedy or claim under or by reason of this Agreement. The term "Bank" as
used herein shall be deemed to include the Lender and its successors, endorsees
and assigns.
(b) Assignment by Lender. The Lender shall have the right at any time or
from time to time, and without Borrower's or any Guarantor's consent, to assign
all (as to all, subject to the Borrower's prior consent which shall not be
unreasonably withheld or delayed) or any portion of its rights and obligations
hereunder to one or more lenders or other financial institutions (each, an
"Assignee"), and the Borrower and each Guarantor agree that it shall execute, or
cause to be executed, such documents, including without limitation, amendments
to this Agreement and to any other documents, instruments and agreements
executed in connection herewith as the Lender shall deem necessary to effect the
foregoing. In addition, at the request of the Lender and any such Assignee, the
Borrower shall issue one or more new promissory notes, as applicable, to any
such Assignee and, if the Lender has retained any of its rights and obligations
hereunder following such assignment, to the Lender, which new promissory notes
shall be issued in replacement of, but not in discharge of, the liability
evidenced by the promissory note held by the Lender prior to such assignment and
shall reflect the amount of the respective commitments and loans held by such
Assignee and the Lender after giving effect to such assignment. Upon the
execution and delivery of appropriate assignment documentation, amendments and
any other documentation required by the Lender in connection with such
assignment, and the payment by Assignee of the purchase price agreed to by the
Lender, and such Assignee, such Assignee shall be a party to this Agreement and
shall have all of the rights and obligations of the Lender hereunder (and under
any and all other guaranties, documents, instruments and agreements executed in
connection herewith) to the extent that such rights and obligations have been
assigned by the Lender pursuant to the assignment documentation between the
Lender and such Assignee, and the Lender shall be released from its obligations
hereunder and thereunder to a corresponding extent.
(c) Participations. The Lender may at any time, without the consent of, or
notice to, the Borrower, sell participations to any Person (other than a natural
person or the Borrower or any of the Borrower's Affiliates or Subsidiaries)
(each, a "Participant") in all or a portion of the Lender's rights and/or
obligations under this Agreement (including all or a portion of its Aggregate
Commitment and/or the Loans owing to it); provided that (i) the Lender's
obligations under this Agreement shall remain unchanged, (ii) the Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower shall continue to deal solely and
directly with the Lender in connection with the Lender's rights and obligations
under this Agreement.
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(d) Certain Pledges. The Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of the Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release the Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
the Lender as a party hereto.
(e) Electronic Execution of Assignments. The words "execution," "signed,"
"signature," and words of like import shall be deemed to include electronic
signatures or the keeping of records in electronic form, each of which shall be
of the same legal effect, validity or enforceability as a manually executed
signature or the use of a paper-based recordkeeping system, as the case may be,
to the extent and as provided for in any applicable law, including the Federal
Electronic Signatures in Global and National Commerce Act, the New York State
Electronic Signatures and Records Act, or any other similar state laws based on
the Uniform Electronic Transactions Act.
10.07. Treatment of Certain Information; Confidentiality. The Lender
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its and
its Affiliates' respective partners, directors, officers, employees, agents,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any action or proceeding relating
to this Agreement or any other Loan Document or the enforcement of rights
hereunder or thereunder, (f) subject to an agreement containing provisions
substantially the same as those of this Section, to (i) any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower or (h) to
the extent such Information (x) becomes publicly available other than as a
result of a breach of this Section or (y) becomes available to the Lender, any
of their respective Affiliates on a nonconfidential basis from a source other
than the Borrower.
For purposes of this Section, "Information" means all information received
from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary
or any of their respective businesses, other than any such information that is
available to the Lender on a nonconfidential basis prior to disclosure by the
Borrower or any Subsidiary, provided that, in the case of information received
from the Borrower or any Subsidiary after the Closing Date, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
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10.08. Right of Setoff. If an Event of Default shall have occurred and be
continuing, the Lender and each of its Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by applicable law,
to set off and apply any and all deposits (general or special, time or demand,
provisional or final, in whatever currency) at any time held and other
obligations (in whatever currency) at any time owing by the Lender or any such
Affiliate to or for the credit or the account of the Borrower or any other Loan
Party against any and all of the obligations of the Borrower or such Loan Party
now or hereafter existing under this Agreement or any other Loan Document to the
Lender , irrespective of whether or not the Lender shall have made any demand
under this Agreement or any other Loan Document and although such obligations of
the Borrower or such Loan Party may be contingent or unmatured or are owed to a
branch or office of the Lender different from the branch or office holding such
deposit or obligated on such indebtedness. The rights of the Lender and its
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that the Lender or its respective Affiliates
may have. The Lender agrees to notify the Borrower promptly after any such
setoff and application, provided that the failure to give such notice shall not
affect the validity of such setoff and application.
10.09. Interest Rate Limitation. Notwithstanding anything to the contrary
contained in any Loan Document, the interest paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "Maximum Rate"). If the Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Loans or, if it exceeds such unpaid
principal, refunded to the Borrower. In determining whether the interest
contracted for, charged, or received by the Lender exceeds the Maximum Rate,
such Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations
hereunder.
10.10. Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Lender and when the Lender shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
10.11. Survival of Representations and Warranties. All representations and
warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the Lender,
regardless of any investigation made by the Lender or on its behalf and
notwithstanding that the Lender may have had notice or knowledge of any Default
at the time of any Borrowing, and shall continue in full force and effect as
long as any Loan or any other Obligation hereunder shall remain unpaid or
unsatisfied.
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10.12. Severability. If any provision of this Agreement or the other Loan
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Loan Documents shall not be affected or impaired thereby and (b) the
parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.13. Governing Law; Jurisdiction; Etc.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. EACH OF THE BORROWER AND THE LENDER
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW
YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF
NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR
RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT
OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY
SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS
AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE LENDER,
THE LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST THE BORROWER OR ITS PROPERTIES IN
THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. EACH OF THE BORROWER AND THE LENDER IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.
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(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS
AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY APPLICABLE LAW.
10.14. Waiver of Jury Trial. BY AGREEING TO BINDING ARBITRATION AS
PROVIDED IN SECTION 10.17, EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10.15. USA PATRIOT Act Notice. The Lender hereby notifies the Borrower
that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56 (signed into law October 26, 2001)) (the "Act"), it is required to
obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow the Lender to identify the Borrower in accordance with the Act.
10.16. Time of the Essence. Time is of the essence of the Loan Documents.
10.17. Arbitration
(a) This paragraph concerns the resolution of any controversies or claims
between the Borrower and the Lender, whether arising in contract, tort or by
statute, including but not limited to controversies or claims that arise out of
or relate to: (i) this Agreement (including any renewals, extensions or
modifications); or (ii) any document related to this Agreement; (collectively a
"Claim").
(b) At the request of the Borrower or the Lender, any Claim shall be
resolved by binding arbitration in accordance with the Federal Arbitration Act
(Title 9, U. S. Code) (the "Act"). The Act will apply even though this Agreement
provides that it is governed by the law of a specified state.
(c) Arbitration proceedings will be determined in accordance with the Act,
the applicable rules and procedures for the arbitration of disputes of JAMS or
any successor thereof ("JAMS"), and the terms of this paragraph. In the event of
any inconsistency, the terms of this paragraph shall control.
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(d) The arbitration shall be administered by JAMS and conducted in the
State of New York. All Claims shall be determined by one arbitrator; however, if
Claims exceed $5,000,000, upon the request of any party, the Claims shall be
decided by three arbitrators. All arbitration hearings shall commence within 90
days of the demand for arbitration and close within 90 days of commencement and
the award of the arbitrator(s) shall be issued within 30 days of the close of
the hearing. However, the arbitrator(s), upon a showing of good cause, may
extend the commencement of the hearing for up to an additional 60 days. The
arbitrator(s) shall provide a concise written statement of reasons for the
award. The arbitration award may be submitted to any court having jurisdiction
to be confirmed and enforced.
(e) The arbitrator(s) will have the authority to decide whether any Claim
is barred by the statute of limitations and, if so, to dismiss the arbitration
on that basis. For purposes of the application of the statute of limitations,
the service on JAMS under applicable JAMS rules of a notice of Claim is the
equivalent of the filing of a lawsuit. Any dispute concerning this arbitration
provision or whether a Claim is arbitrable shall be determined by the
arbitrator(s). The arbitrator(s) shall have the power to award legal fees
pursuant to the terms of this Agreement.
(f) This paragraph does not limit the right of the Borrower or the Lender
to: (i) exercise self-help remedies, such as but not limited to, setoff; (ii)
initiate judicial or nonjudicial foreclosure against any real or personal
property collateral; (iii) exercise any judicial or power of sale rights, or
(iv) act in a court of law to obtain an interim remedy, such as but not limited
to, injunctive relief, writ of possession or appointment of a receiver, or
additional or supplementary remedies.
(g) The filing of a court action is not intended to constitute a waiver of
the right of the Borrower or the Lender, including the suing party, thereafter
to require submittal of the Claim to arbitration.
10.18. Late Fee. If the entire amount of any required principal and/or
interest is not paid in full within ten (10) days after the same is due, the
Borrower shall pay to the Lender a late fee equal to five percent (5%) of the
required payment.
10.19. Lost Note. Upon receipt of the affidavit of an officer of the
Lender as to the loss, theft, destruction or mutilation of any of the Notes or
any other Security Document which is not of public record, and in the case of
any such loss, theft, destruction or mutilation, upon surrender and cancellation
of such Note or other Security Document, the Borrower will issue, in lieu
thereof, a replacement note or other security document in the same principal
amount thereof and otherwise of like tenor.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
FIND/SVP, INC.
By: /s/ Xxxxx Xxxxx
---------------------------------------
Name: Xxxxx Xxxxx
-------------------------------------
Title: Chief Financial Officer, Senior Vice
President, Secretary and Treasurer
------------------------------------
FLEET NATIONAL BANK, A BANK OF AMERICA COMPANY, as
Lender
By: /s/ Xxxxxxxx Xxxxxxxx
-------------------------------------------
Name: Xxxxxxxx Xxxxxxxx
-----------------------------------------
Title: Vice President
----------------------------------------
