EQUIPMENT FACILITY AND REVOLVING CREDIT AGREEMENT
This EQUIPMENT FACILITY AND REVOLVING CREDIT AGREEMENT (together with all
exhibits hereto and any amendments and modifications hereto in effect from time
to time, this "Agreement") is made as of this 13th day of August, 1997, by and
between SUMMIT BANK (the "Bank") a banking corporation organized under the laws
of the State of New Jersey, and VESTCOM INTERNATIONAL, INC., a New Jersey
corporation (the "Borrower"). All other capitalized terms used herein shall have
the meanings assigned to such terms in Article II hereof.
BACKGROUND
WHEREAS, the Borrower has requested that the Bank make available an
equipment purchase facility in the principal amount of up to $5,000,000 for the
purpose of financing the acquisition from time to time of certain equipment to
be used or useful in the ordinary course of the integrated and related business
of the Borrower and its Subsidiaries as presently conducted (the "Financed
Equipment");
WHEREAS, the Borrower has further requested that the Bank make available a
committed revolving credit facility pursuant to which the Borrower may request
advances from time to time in an aggregate principal amount of up to $25,000,000
outstanding at any time for the purposes herein specified; and
WHEREAS, the Bank is willing to make available to the Borrower such
equipment purchase facility and committed revolving credit facility upon the
terms and conditions herein stated;
AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the Bank and the Borrower agree as follows:
I. THE CREDIT ACCOMMODATIONS.
1.01 Equipment Facility. Subject to the terms and conditions herein set forth,
during the Equipment Facility Commitment Period, the Bank agrees to make
available to the Borrower an equipment finance facility (the "Equipment
Facility"), under which the Bank shall make advances (each an "Equipment
Loan" and collectively the "Equipment Loans") to the Borrower from time to
time to finance the acquisition of the Financed Equipment. Amounts borrowed
under the Equipment Facility and repaid may not be reborrowed. The amounts
outstanding under each Equipment Loan shall be evidenced by separate
promissory notes, substantially in the form of Exhibit A hereto (together
with any attachments thereto and amendments or modifications thereof in
effect from time to time, an "Equipment Loan Note" and collectively the
"Equipment Loan Notes"). The Equipment Loans shall be Fixed Rate Loans.
1.02 Equipment Facility Maximum Principal Amount. The maximum aggregate
principal amount of Equipment Loans outstanding at any time shall not
exceed FIVE MILLION 00/100 DOLLARS ($5,000,000.00), such amount being
hereinafter referred to as the "Maximum Equipment Facility Principal
Amount". If the aggregate principal amount of Equipment Loans outstanding
at any time under the Equipment Facility exceeds the Maximum Equipment
Facility Principal Amount, then the Borrower shall immediately repay to the
Bank the amount of such excess.
1.03 Borrowing Procedures Under Equipment Facility. If the Borrower desire to
borrow under the Equipment Facility, the Borrower shall give the Bank a
notice of the amount and date of such borrowing by no later than 3 Business
Days prior to the proposed funding of the relevant Equipment Loan. Such
notice shall be in the form of the "Notice of Borrowing Under Equipment
Facility" attached hereto as Exhibit B and shall be accompanied by (i) true
and complete description of the Financed Equipment to be acquired with the
proceeds of the proposed Equipment Loan, the location (or proposed
location) of such equipment, the identity of the record owner of such
location and if title to such equipment is to be held by a Subsidiary of
the Borrower, the identity of such Subsidiary, and (ii) a true and correct
copy of the vendor's invoice or xxxx of sale, as the case may be, rendered
in connection with the purchase of such equipment, which shall be
accompanied by the payment instructions of such vendor to permit the Bank
to fund the proceeds of the relevant Equipment Loan directly to such
vendor. Upon receipt of any such notice, the Bank may, in its sole
discretion, request any documents or instruments (including, without
limitation, additional financing statements, certificate or documents of
title and/or additional security agreements substantially in the form of
Exhibit G attached hereto that are necessary or advisable in order to
assure the Bank's first priority security interest in the relevant Financed
Equipment and in connection with such request, the Bank may refuse or
postpone the funding of the relevant Equipment Loan until such time as the
relevant Borrower has complied therewith. Said Notice of Borrowing Under
Equipment Facility shall also specify the desired term of the relevant
Equipment Loan, which shall be either 24, 36 or 48 months in duration (each
such proposed term, an "Equipment Loan Term"). Promptly upon receipt of
said notice, the Bank shall give the Borrower notice of the Fixed Rate to
be applicable to the proposed Equipment Loan base upon the desired
Equipment Loan Term. The principal amount of any Equipment Loan requested
hereunder shall not exceed one hundred percent (100%) of the purchase price
of the relevant Financed Equipment as stated on the invoice or xxxx of sale
accompanying the relevant notice of borrowing, but in no event shall any
Equipment Loan be in a principal amount of less than $100,000.
Notwithstanding anything in this Section 1.03 to the contrary, the
obligation of the Bank to fund any Equipment Loan is subject to the
satisfaction of the conditions set forth in Section 5.03 hereof. The
Borrower shall pay to, or reimburse, the Bank on demand the costs incurred
in connection with the preparation, filing or recordation of any document
or instrument requested pursuant to this Section 1.03 as well as the
reasonable costs and expense of Bank's counsel in connection with legal
services rendered to assure the Bank's first priority security interest in
the relevant Financed Equipment. The aforementioned payment or
reimbursement obligation, as the case may be, shall survive the funding of
any particular Equipment Loan.
1.04 Interest on Equipment Loans/Term Loan. Interest on each Equipment Loans
shall accrue at the Fixed Rate applicable thereto and be payable monthly,
in arrears, on each Payment Date during which such Loan is outstanding, and
upon payment in full of the aggregate outstanding balance thereof.
1.05 Equipment Loans Principal Payment Terms. The outstanding principal balance
of each Equipment Loan shall be repaid in consecutive monthly installments
and payable on each Payment Date applicable thereto. The amount of each
such principal installment will be equal to the amount necessary to
amortize the original principal amount of such Equipment Loan (on a
straight-line basis) over the Equipment Loan Term applicable thereto. In
any event, the final installment of principal applicable thereto shall be
due and payable on the applicable Equipment Loan Maturity Date and shall be
in an amount equal to the then remaining unpaid principal balance thereof,
together with any accrued and unpaid interest thereon.
1.06 The Revolving Credit Facility. Subject to the terms and conditions hereof,
the Bank agrees to make available to the Borrower, a revolving credit
facility (the "Revolving Credit Facility") under which the Bank shall make
advances to the Borrower from time to time during the Revolving Credit
Commitment Period in an aggregate principal amount outstanding at any one
time of up to TWENTY-FIVE MILLION 00/100 DOLLARS ($25,000,000.00) (each a
"Revolving Credit Loan" and collectively the "Revolving Credit Loans").
During the Revolving Credit Commitment Period, the Borrower may borrow,
repay and reborrow as provided herein. Revolving Credit Loans may be made
as Alternate Base Rate Loans or LIBOR Loans, as requested by the Borrower
pursuant to Section 1.12 hereof. The Revolving Credit Loans shall be
evidenced by a single promissory note, substantially in the form of Exhibit
C hereto (together with any attachments thereto and/or amendments or
modifications thereof in effect from time to time, the "Revolving Credit
Note"). The Revolving Credit Commitment Period may be extended for an
additional period not to exceed 3 years in the sole and absolute discretion
of the Bank. The Borrower shall be notified of the Bank's decision to so
extend the Revolving Credit Commitment Period by a date occurring no later
than 14 months prior to the Revolving Credit Expiration Date then in
effect. For the avoidance of doubt, it is hereby acknowledged that the
Bank's agreement to so extend the Revolving Credit Commitment Period may be
subject to the acceptance by the Borrower of such additional terms and
conditions, or the modification of the existing terms and conditions, of
the Revolving Credit Facility as the Bank may impose in its sole and
absolute discretion.
1.07 Revolving Credit Facility Maximum Principal Amount. The maximum aggregate
principal amount of the Revolving Credit Loans outstanding at any time,
when added to the Letter of Credit Outstanding at such time shall not
exceed TWENTY FIVE MILLION 00/100 DOLLARS ($25,000,000.00) such amount
being hereinafter referred to as the "Maximum Revolving Credit Principal
Amount". If the aggregate outstanding principal amount of the Revolving
Credit Loans plus the Letters of Credit Outstanding at any time exceed the
Maximum Revolving Credit Principal Amount, the Borrower shall immediately
repay to the Bank the amount of such excess.
1.08 Letter of Credit Sub-Facility. Within the limitations of the Revolving
Credit Facility herein set forth, the Borrower may from time to time
request that the Bank issue irrevocable standby or commercial letters of
credit for the account of the Borrower and in support of any obligation
deemed acceptable by the Bank in its sole discretion (any such letter of
credit so issued, a "Letter of Credit" and collectively the "Letters of
Credit"). Notwithstanding the foregoing (i) no Letter of Credit shall be
issued by the Bank in a Stated Amount which (x) when added to the Letters
of Credit Outstandings at such time, would exceed $2,000,000.00 or (y) when
added to the sum of the aggregate outstanding principal amount of the
Revolving Credit Loans plus the Letter of Credit Outstandings, at such
time, would exceed the Maximum Revolving Credit Principal Amount. Each
Letter of Credit issued in accordance herewith shall have an expiration
date occurring no later than 1 year from the date of issuance and in any
event no later than (i) 6 months, in the case of commercial letter of
credit, or (ii) 1 year, in the case of irrevocable automatically renewable
letter of credit, after the Revolving Credit Expiration Date. Each Letter
of Credit shall be denominated in U.S. dollars. When a Borrower desires
that a Letter of Credit be issued for its account, it shall give the Bank
at least 3 Business Days' written notice (or such lesser number of days as
may be agreed to by the Bank). Each such request shall be accompanied by a
completed and executed "Letter of Credit Application/Agreement" (or an
amendment to any then effective application) in the form furnished by the
Bank to the Borrower from time to time. The terms of each such
application/agreement are incorporated herein to the extent not consistent
herewith. In connection with the issuance of any Letters of Credit in
accordance herewith, the Borrower shall pay all letters of credit fees and
other expenses that are customarily charged by the Bank in connection
therewith.
1.09 Interest on Revolving Credit Loans. Interest on each Revolving Credit Loan
that is an Alternate Base Rate Loan shall accrue at the Alternate Base Rate
plus the Applicable Margin, if any, and shall be payable monthly, in
arrears, on each Payment Date during which such Loan is outstanding, and
upon payment in full of the outstanding balance of such Loan. Interest on
each Revolving Credit Loan that is a LIBOR Loan shall accrue at LIBOR plus
the Applicable Margin and shall be payable, in arrears, on each Payment
Date during which such Loan is outstanding, and upon payment in full of the
outstanding balance of such Loan.
1.10 Revolving Credit Principal Payment Terms. The aggregate outstanding
principal balance of the Revolving Credit Loans, together with all accrued
and unpaid interest thereon, shall be due and payable on the Revolving
Expiration Date.
1.11 Borrowing Procedures Under the Revolving Credit Facility. If the Borrower
desires to borrow under the Revolving Credit Facility, the Borrower shall
give the Bank irrevocable written notice of the amount and date of such
borrowing no later than 1 Business Day prior to the date of such proposed
borrowing in the case of Alternate Base Rate Loans and 2 Business Days
prior to the date of such proposed borrowing in the case of LIBOR Loans.
Such notice shall be in the form of a "Notice of Borrowing Under Revolving
Credit" attached hereto as Exhibit D. Each borrowing under the Revolving
Credit Facility shall be in an amount equal to $100,000 or any whole
multiple thereof. The Borrower shall not be permitted to request a
Revolving Credit Loan in the form of a LIBOR Loan, if the making of such
Loan would cause the aggregate number of LIBOR Loans outstanding under the
Revolving Credit Facility to exceed 10 at such time.
1.12 Revolving Credit Interest Conversion and Continuance Options Options.
(a) Subject to the limitation of the last sentence of Section 1.11 hereof,
during the Revolving Credit Commitment Period, the Borrower may elect to
convert any Revolving Credit Loan to a Loan maintained at the other rate of
interest available for Revolving Credit Loans hereunder by giving the Bank
irrevocable notice (which may be telephone notice promptly confirmed in
writing) of such election at least 2 Business Days prior to the conversion
to a LIBOR Loan and at least 1 Business Day prior to the conversion to a
Alternate Base Rate Loan. Said notice shall specify, in the case of a
conversion to a LIBOR Loan, the desired Interest Period with respect
thereto, which shall be either 1, 2, 3 or 6 months in duration as selected
by the Borrower. Conversions of LIBOR Loans to Alternate Base Rate Loans
shall be made only on the last day of the Interest Period applicable
thereto. Conversions of Alternate Base Rate Loans to LIBOR Loans shall only
be made on a Business Day.
(b) During the Revolving Credit Commitment Period, the Borrower may elect
to continue any Revolving Credit Loan that is a LIBOR Loan as such type of
Loan upon the expiration of the then current Interest Period with respect
thereto by giving the Bank an irrevocable notice (which may be telephone
notice promptly confirmed in writing) of such election at least 2 Business
Days prior to the expiration of the then current Interest Period with
respect thereto. Such notice shall also specify the desired Interest Period
for the Loan so continued, which may be 1, 2, 3 or 6 months in duration as
selected by the Borrower.
(c) If the Borrower fails to notify the Bank of the conversion or
continuance of any LIBOR Loan within the time specified in this Section
1.13, then any such Loan shall automatically convert to an Alternate Base
Rate Loan on the last day of the then expiring applicable Interest Period.
1.13 Arrangement Fees1.13 Arrangement Fees. The Borrower shall pay, or have
paid, to the Bank on or before the Closing Date a one time arrangement fee
in an amount equal to $75,000. The Borrower acknowledges that such fee is a
liquidated sum and, together with the amounts payable pursuant to Section
11.02 hereof, constitute reasonable compensation to the Bank for its
expenses and services in connection with the arrangement of the facilities
provided hereunder and the negotiation and preparation of this Agreement
and the other Credit Documents.
1.14 Commitment Fee.1.14 Commitment Fee. The Borrower shall pay to the Bank,
quarterly in arrears, a commitment fee for the period beginning from and
including the date that is 6 months from the Closing Date (the "Commitment
Fee Commencement Date") until the Revolving Credit Expiration Date,
computed for each quarter occurring in said period at a per annum rate
equal to the Applicable Commitment Fee multiplied by the average daily
amount of the Availability for such quarter. Such commitment fee shall be
payable commencing on May 1, 1998 and continuing quarterly on the first
Business Day of February, May, August, and November occurring thereafter
and on the Revolving Credit Expiration Date. Any such payment shall be in
respect of the immediately preceding full fiscal quarter then last ended,
except for the initial payment which shall be respect of the period
commencing on the Commitment Fee Commencement Date through the last day of
the fiscal quarter then last ended.
1.15 Computation. Interest and any fees or compensation based upon a per annum
rate shall be calculated on the basis of a 360 day year for the actual
number of days elapsed.
1.16 Payments Generally; Debiting of Account. All payments made hereunder shall
be paid in accordance with the payment terms set forth in the Notes.
Without limiting the generality of the foregoing, the Borrower agrees to
maintain a demand deposit account at the Bank (the "Account") continuously
until the Obligations due hereunder are paid in full. The Bank may, and the
Borrower authorizes the Bank to, debit the Account for the amount of any
payment as and when such payment becomes due hereunder. At any time during
the continuance of an Event of Default, the Bank may, and the Borrower
authorizes the Bank to debit any other account and/or certificate of
deposit maintained by the Borrower with the Bank for the amount of any
payment, as and when such payment becomes due hereunder, whether such
payment is for accrued interest, principal or expense, even if debiting
such account results in a loss or reduction of interest to the Borrower or
the imposition of a penalty applicable to the early withdrawal of time
deposits. Such authorization shall not affect the Borrower's obligation to
pay when due all amounts payable hereunder, whether or not there are
sufficient funds in any accounts of the Borrower. The Borrower agrees to
fund the Account from time to time in amounts sufficient to make any
regularly scheduled payments of principal and interest hereunder as and
when such payments become due. The foregoing rights of the Bank to debit
the Borrower's accounts shall be in addition to, and not in limitation of,
any rights of set-off which the Bank may have hereunder or under any Credit
Document.
II. DEFINITIONS.
2.01 Defined Terms. The following terms used throughout this Agreement shall
have the meanings assigned below:
Affiliate. The term "Affiliate" means, as applied to any Person, any other
Person that directly or indirectly controls, is controlled by, or is under
common control with, that Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to vote
twenty-five percent (25%) or more of the securities or other ownership
interests having voting power for the election of directors (or other
persons performing similar functions) of such Person or otherwise to direct
or cause the direction of the management and policies of that Person,
whether through the ownership of voting securities or by contract or
otherwise.
Alternate Base Rate. The term "Alternate Base Rate" means the higher of the
Announced Base Rate or the Federal Funds Rate.
Alternate Base Rate Loan. The term "Alternate Base Rate Loan" means any
Loan at all times during which such Loan bears interest based upon the
Alternate Base Rate.
Announced Base Rate. The term "Announced Base Rate" means the per annum
rate of interest established by the Bank as its reference rate in making
loans, and does not reflect the rate of interest charged to any particular
borrower or class of borrowers. The Borrower acknowledges that the
Announced Base Rate is not tied to any external rate of interest and that
the rate of interest charged hereunder (if any) which is based on the
Announced Base Rate shall change automatically and immediately as of the
date of any change in the Announced Base Rate, without notice to the
Borrower.
Applicable Commitment Fee. The term "Applicable Commitment Fee" means from
and after the first day of any Applicable Margin Adjustment Period to and
including the last day of such Applicable Margin Adjustment Period, the
Applicable Commitment Fee determined by reference to the table appearing in
the definition of "Applicable Margin".
Applicable Margin. The term "Applicable Margin" means initially the
percentage corresponding to the Consolidated Funded Debt to EBITDA Ratio of
the Borrower set forth on the table set forth below based on the quarterly
financial statements for the fiscal period ending as of June 30, 1997,
provided, however, that from and after the first day of any Applicable
Margin Adjustment Period to and including the last day of such Applicable
Margin Adjustment Period, the Applicable Margin shall be determined by
reference to percentages corresponding to the Consolidated Funded Debt to
EBITDA Ratio of the Borrower for the Test Period last ended, in accordance
with the following table:
Applicable
Applicable Nargin for
If Such Ratio Margin for LIBOR Alternate Base
Is: Commitment Fee Loans Rate Loans
Less than 1.15 to 1.00 25 basis points (.25%) 100 basis points (1.00%)
-0-
Greater than or equal to 25 basis points (.25%) 125 basis points (1.25%) -0-
1.15 to 1.00,
but less than
1.5 to 1.00
Greater than or equal to 30 basis points (.30%) 150 basis points (1.50%) 25 basis points (.25%)
1.50 to 1.00,
but less than
2.00 to 1.00
Greater than or equal to 37.5 basis points (.375%) 175 basis points (1.75%) 50 basis points (.50%)
2.0 to 1.00,
but less than
2.5 to 1.00
Greater than or equal to 50 basis points (.50%) 225 basis points (2.25%) 100 basis points (1.00%)
2.5 to 1.00
Notwithstanding the foregoing, at all times during which there exists
an Event of Default, the Applicable Margin (A) with respect to
Alternate Base Rate Loans, shall be 100 basis points (1.00%) and (B)
with respect to LIBOR Loans, shall be 225 basis points (2.25%), and
said margin shall be in addition to any margin added to the applicable
rate of interest to calculate the "Default Rate" pursuant to the
relevant Note.
Applicable Margin Adjustment Period means (A) with respect to the
determination of the Applicable Commitment Fee, initially the period
commencing 6 months from the Closing Date and ending on the last day
of the then current fiscal quarter and thereafter each fiscal quarter
occurring thereafter and (B) with respect to the determination of the
Applicable Margin, initially the period commencing October 1, 1997 and
ending December 31, 1997 and thereafter each fiscal quarter occurring
thereafter.
Approved Subordinated Indebtedness. The term "Approved Subordinated
Indebtedness" means any Indebtedness of the Borrower that (i) is
subordinated to the Obligations on terms and conditions approved in
writing by the Bank and (ii) does not constitute Guaranteed
Indebtedness of the Borrower or any of its Subsidiaries or Affiliates.
Availability. The Term "Availability" means, as of any relevant date,
the amount by which the Maximum Revolving Credit Amount exceeds the
amount of the aggregate outstanding principal amount of the Revolving
Credit Loan.
Business Day. The term "Business Day" means any day other than a
Saturday, Sunday, or a day on which commercial banks are authorized or
obligated by law or executive order to be closed in the State of New
Jersey.
Capital Expenditures. The term "Capital Expenditure" means, with
respect to any Person, without duplication and for any period, the
aggregate value attributed in accordance with GAAP, to acquisitions
during such period by such Person of any asset, tangible or
intangible, or replacements or substitutions therefor or additions
thereto which such Person treated as a non-current asset on such
Person's financial statement, including, without limitation, (x) the
acquisition or construction of assets having a useful life of more
than 1 year and (y) assets acquired during such period in connection
with Capitalized Leases.
Capitalized Lease. The term "Capitalized Lease" means any lease with
respect to which the obligation to pay rent or other amounts
constitutes Capitalized Lease Obligations.
Capitalized Lease Obligations. The term "Capitalized Lease
Obligations" means obligations 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 capital leases on a balance sheet in accordance with
GAAP.
Closing Date. The term "Closing Date" means the date on which the
conditions set forth in Section 5.01 hereof have been fulfilled to the
satisfaction of the Bank.
Confidential Information. The term "Confidential Information" means
information furnished to the Bank on a confidential basis by or on
behalf of the Borrower and designated as such, but does not include
any such information that is or becomes generally available to the
public (other than through any breach of any confidentiality
undertaking hereunder or in connection therewith) or that legally is
or becomes available to the Bank from a source other than the
Borrower.
Consolidated. The term "Consolidated" means an accounting presentation
which includes the consolidated Subsidiaries of the Borrower prepared
in accordance with GAAP, consistently applied.
Consolidated EBITDA. The term "Consolidated EBITDA" means the
Borrower's earnings (excluding any extraordinary or nonrecurring
items) before interest expense, taxes, depreciation and amortization,
determined for the relevant Test Period on a Consolidated basis in
accordance with GAAP, consistently applied.
Consolidated Fixed Charges Ratio. The term "Consolidated Fixed Charges
Ratio" means the ratio of (i) the Borrower's Consolidated EBITDA to
(ii) the Current Maturities of the Borrower's Funded Debt plus all
cash and non-cash interest (including, without limitation, capitalized
interest) payable during the relevant Test Period on or in connection
with any Indebtedness of the Borrower of any type, in each case
determined for the relevant Test Period on a Consolidated basis in
accordance with GAAP, consistently applied.
Consolidated Funded Debt to EBITDA Ratio. The term "Consolidated
Funded Debt to EBITDA Ratio" means the ratio of (A) the Borrower's
Funded Debt to (B) the Borrower's Consolidated EBITDA, in each case
determined for the relevant Test Period on a Consolidated basis in
accordance with GAAP, consistently applied.
Consolidated Stated Net Worth. The term "Consolidated Stated Net
Worth" means, at any time:
(a) the total assets of the Borrower which would be shown as assets on
a Consolidated balance sheet of the Borrower, prepared in accordance
with GAAP, consistently applied,
minus
(b) the total liabilities of the Borrower which would be shown as
liabilities on a Consolidated balance sheet of the Borrower, prepared
in accordance with GAAP, consistently applied.
Consolidated Tangible Net Worth. The term "Consolidated Tangible Net
Worth" mean, at any time:
(a) the total assets of the Borrower which would be shown as assets on
a Consolidated balance sheet of the Borrower and its Subsidiaries,
prepared in accordance with GAAP, consistently applied, after
subtracting therefrom the aggregate amount of any capitalized research
and development costs; capitalized interest; debt discount and
expense; goodwill; patents; trademarks; copyrights; franchises;
licenses; amounts owing from officers; directors, or other Affiliates
of the Borrower; and any investments in any Affiliate of any of the
foregoing; and such other assets as are properly classified as
"intangible assets" determined in accordance with GAAP, consistently
applied,
minus
(b) the total liabilities of the Borrower which would be shown as
liabilities on a Consolidated balance sheet of the Borrower, prepared
in accordance with GAAP, consistently applied.
Credit Documents. The term "Credit Documents" means this Agreement,
each Equipment Loan Note, the Revolving Credit Note, the Security
Agreements, the Guaranties, any Letters of Credits and any letter of
credit agreement/application executed in connection with the issuance
thereof, each of the other documents, referenced in the Closing
Checklist attached hereto as Exhibit E, each of the "Credit Documents"
referenced therein, and all other all credit accommodations, notes,
loan agreements, guaranties, security agreements, mortgages,
instruments, pledge agreements, assignments, acceptance agreements,
commitments, facilities, letters of credit, reimbursement agreements
and any other agreements and documents, of the Borrower, any
Guarantor, with or in favor of, the Bank, in each case now or
hereafter existing, creating, evidencing, guarantying, securing or
relating to any or all of the Obligations, together with in each case
all amendments, modifications, renewals, or extensions thereof.
Current Maturities. The term "Current Maturities" means with respect
to any item of Indebtedness, the portion of such Indebtedness which by
the terms of such Indebtedness or the terms of any instrument or
agreement related thereto was due and payable during the relevant Test
Period, whether such payment is required by a demand which may be made
during such Test Period, regularly scheduled principal payments,
mandatory prepayment, sinking fund requirements or final payment at
maturity.
Environmental Laws. The term "Environmental Laws" means all applicable
laws, regulations and other requirements of Governmental Authorities
relating to pollution or protection of the environment, including laws
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants, or hazardous or toxic materials or wastes
into ambient air, surface water, ground weather, or land, or otherwise
relating to the disposal, transport, or handling of pollutants,
contaminants, or hazardous or toxic material or wastes.
Equipment Facility. The term "Equipment Facility" shall have the
meaning assigned to such term in Section 1.01 hereof.
Equipment Facility Commitment Period. The term "Equipment Facility
Commitment Period" means the period commencing on the Closing Date and
ending on the Equipment Facility Expiration Date.
Equipment Facility Expiration Date. The term "Equipment Facility
Expiration Date" means the date that is the earlier to occur of (i)
the third anniversary of the Closing Date, (ii) the date on which the
Maximum Equipment Facility Amount has been funded by the Bank, or
(iii) the date on which this Agreement is terminated pursuant to
Section 3.03 hereof.
Equipment Loan and Equipment Loans. The terms "Equipment Loan" and
"Equipment Loans" shall have the meanings assigned to such terms in
Section 1.01 hereof.
Equipment Loan Maturity Date. The term "Equipment Loan Maturity Date"
means, with respect to any particular Equipment Loan, the date on
which the Equipment Loan Term applicable thereto shall have expired.
Equipment Loan Note and Equipment Loan Notes. The terms "Equipment
Loan Note" and "Equipment Loan Notes" shall have the meaning assigned
to such terms in Section 1.01 hereof.
Equipment Loan Term. The term "Equipment Loan Term" shall have the
meaning assigned to such term in Section 1.03 hereof.
Event of Default. The term "Event of Default" shall have the meaning
assigned to such term in Article IX hereof.
Facilities Management Arrangements. The term "Facilities Management
Arrangements" means any written contractual undertaking of the
Borrower or any of its Subsidiaries pursuant to which the Borrower or
any of its Subsidiaries is to perform services substantially similar
to the services rendered by the Borrower or any of its Subsidiary in
the ordinary course of their respective businesses at a facility that
is owned or otherwise operated by a Person other than the Borrower or
any of its Subsidiaries and in connection with the rendition of such
services, the Borrower or any of its Subsidiaries, as the case may be,
acquires title to, or assumes Indebtedness secured by a Lien upon, the
equipment and machinery located at such facility.
Federal Funds Rate. The term "Federal Funds Rate" means, for any
period, a fluctuating interest rate equal for each day during such
period to 50 basis points (.50%) above the weighted average of the
rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published
by the Federal Reserve Bank of New York on the Business Day next
preceding such day for amounts in immediately available funds
comparable to the principal amount of the relevant indebtedness or, if
such rate is not so published for any day for which the next preceding
day is a Business Day, the average of the quotations for such day on
such transactions received by the Bank from three (3) Federal Funds
brokers of recognized standing selected by the Bank.
Financed Equipment. The term "Financed Equipment" shall have the
meaning assigned to such term in the first recital clause of this
Agreement.
Fixed Rate. The term "Fixed Rate" means, for each Equipment Loan, the
per annum rate of interest equal to 200 basis points (2.00%) above the
average asked yield for "Govt. Bonds & Notes", as set forth in the
column designated "Treasury Bonds, Notes & Bills" in The Wall Street
Journal most recently published as of the date that is 2 Business Days
prior to the proposed date of funding of the relevant Equipment Loan,
having a maturity date that falls in the same month applicable
Equipment Loan Maturity Date, provided that if no such yield is
published for the relevant month, yields for the published month next
succeeding and the published month next preceding such month shall be
used to determine the Fixed Rate by interpolating such yields on a
straight-line basis. If The Wall Street Journal at the time
determination of the Fixed Rate is no longer publishing the yields
described above, then the Bank shall determine such yield based on any
other nationally recognized source for such published yields as it may
select in its reasonable discretion.
Fixed Rate Loan. The term "Fixed Rate Loan" means each Equipment Loan
at all time during which such Loan bears interest based upon the Fixed
Rate.
Funded Debt. The term "Funded Debt" means, with respect to any Person,
without duplication, (i) indebtedness of such Person for borrowed
money, (ii) obligations of such Person evidenced by bonds, debentures,
notes, or other similar instruments, (iii) obligations of such Person
to pay the deferred purchase price of property or services (other than
accounts payable to trade creditors and current operating liabilities
incurred in the ordinary course of business), and (iv) Capitalized
Lease Obligations of such Person, as lessee.
GAAP. The term "GAAP" means generally accepted accounting principles
in effect from time to time in the United States.
Governmental Authority. The term "Governmental Authority" means any
nation or government, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government.
Guaranteed Indebtedness. The term "Guaranteed Indebtedness" means, as
to any Person, all Indebtedness of the type referred to in clauses (i)
through (ix) of the definition of Indebtedness in this Agreement
guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement
(i) to pay or purchase such Indebtedness or to advance or supply funds
for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make
payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, (iii) to supply funds to or in any other
manner invest in the debtor (including any agreement to pay for
property or services irrespective of whether or not such property is
received or such services are rendered), or (iv) otherwise to assure a
creditor against loss. For the avoidance of doubt, it is acknowledged
that if the Borrower or any Guarantor is permitted to incur any
Indebtedness hereunder, it is also permitted to guaranty such
Indebtedness if incurred by the Borrower or any other Guarantor.
Guarantors. The term "Guarantors" means collectively, Computer Output
Systems, Inc., a Connecticut corporation, Comvestrix Corp., a Delaware
corporation, Electronic Imaging Services, Inc., a Delaware
corporation, Image Printing Systems, Inc., a Wisconsin corporation,
Direct Mail Services, Inc., a New Jersey corporation, Quality Control
Printing, Inc., a New Jersey corporation, First Class Presort, Inc., a
New Jersey corporation, Mystic Graphic Systems, Inc., a Massachusetts
corporation, 504087 N.B. Inc., a New Brunswick (Canada) corporation,
Lirpaco, Inc., a Canadian corporation, Cos Information Inc., a
Canadian corporation, and any Subsidiary of the Borrower that becomes
a guarantor of the Obligations in accordance with Section 8.08 hereof.
Guaranties. The term "Guaranties" means collectively Guaranty and
Suretyship Agreements executed by the Guarantors in favor of the Bank
on even date herewith and any other guaranty and suretyship agreement
executed and delivered by any other Subsidiary of the Borrower
pursuant to Section 8.08 hereof.
Indebtedness. The term "Indebtedness" means, as to any Person (i) all
indebtedness of such Person for borrowed money, (ii) all obligations
of such Person evidenced by bonds, debentures, notes, or other similar
instruments, (iii) all obligations of such Person to pay the deferred
purchase price of property or services (other than accounts payable to
trade creditors and current operating liabilities incurred in the
ordinary course of business), (iv) all indebtedness created or arising
under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property), (v)
all Capitalized Lease Obligations of such Person, as lessee, (vi) all
obligations, contingent or otherwise, of such Person under
acceptances, letters of credit or similar facilities, (vii) all
obligations of such Person to purchase, redeem, retire, defease or
otherwise acquire for value any capital stock of such person or any
warrants, rights or options to acquire such capital stock, valued, in
the case of redeemable preferred stock, at the greater of its
voluntary or involuntary liquidation preference plus accrued and
unpaid dividends, (viii) all obligations of such Person in respect of
interest rate swap agreements (as defined in 11 U.S.C. Secion 101),
currency swap agreements and other similar agreements designed to
hedge against fluctuations in interest rates or foreign exchange
rates, (ix) all obligations of production payments from property
operated by or on behalf of such Person and other similar arrangements
with respect to natural resources, (x) all Guaranteed Indebtedness of
such Person, and (xi) all Indebtedness of the type referred to in
clauses (i) through (x) above secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property (including, without limitation,
accounts and contracts rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such
Indebtedness.
Interest Period. The term "Interest Period" means, with respect to any
LIBOR Loan:
(a) initially, the period commencing on, as the case may be, the date
of borrowing or conversion with respect to such LIBOR Loan and ending
1, 2, 3 or 6 months thereafter as selected by the relevant Borrower in
its notice of borrowing as provided in Section 1.11 hereof or its
notice of conversion as provided in Section 1.12(a) hereof; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Loan and ending 1,
2, 3 or 6 months thereafter as selected by the relevant Borrower in
its notice of continuance as provided in Section 1.12(b) hereof;
provided that the foregoing provisions relating to Interest Periods
are subject to the following:
(i) if any Interest Period pertaining to a LIBOR Loan would otherwise
end on a day which is not a Business Day, that Interest Period shall
be extended to the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period into another
calendar month in which even such Interest Period shall end on the
immediately preceding Business Day;
(ii) any Interest Period pertaining to a LIBOR Loan 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 a calendar
month; and
(iii) no Borrower shall select any Interest Period that would extend
such Interest Period beyond the Revolving Credit Expiration Date.
Investments. The term "Investment" shall have the meaning assigned to
such term in Section 8.07 hereof.
Letter of Credit and Letters of Credit. The terms "Letter of Credit"
and "Letters of Credit" shall have the meanings assigned to such terms
in Section 1.08 hereof.
Letter of Credit Outstanding. The term "Letter of Credit Outstanding"
means, at any time, the sum of, without duplication (i) the aggregate
Stated Amount of all outstanding Letters of Credit; (ii) the aggregate
amount of all unreimbursed drawing thereunder; and (iii) the Stated
Amount of all Letters of Credit requested in accordance with Section
1.08 hereof but not yet issued.
LIBOR. The term "LIBOR" means, with respect to each day during each
Interest Period, the rate (rounded to the next higher 1/100 of 1%) for
U.S. dollar deposits with a maturity equal to the relevant Interest
Period in the London interbank market as determined by the Bank from a
recognized source for quotations of the London interbank offered rate,
on the second London business day before the relevant Interest Period
begins, adjusted for reserves by dividing that rate by 1.00 minus the
LIBOR Reserve.
LIBOR Loan. The term "LIBOR Loan" means any Revolving Credit Loan at
all times during which such Loan bears interest based upon LIBOR.
LIBOR Reserve. The term "LIBOR Reserve" means the maximum percentage
reserve requirement (rounded to the next higher 1/100 of 1% and
expressed as a decimal) in effect for any day during the relevant
Interest Period under the Federal Reserve Board's Regulation D for
Eurocurrency liabilities as defined therein.
Lien. The term "Lien" means any mortgage, pledge, security interest,
encumbrance, lien or other form of charge or preferential arrangement
of any kind (including, without limitation, any agreement to give any
of the foregoing, any conditional sale or other title retention or any
lease in the nature thereof).
Loan. The term "Loan" means a Revolving Credit Loan or an Equipment
Loan, as the context shall require, and the term "Loans" means,
collectively, the Revolving Credit Loans and the Equipment Loans.
Material Adverse Effect. The term "Material Adverse Effect" means a
material adverse effect on (a) the business, operations, property,
condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of the Borrower to
perform its obligations under this Agreement, the Notes or any of the
other Credit Documents, or (c) the validity or enforceability of this
Agreement, the Notes or any of the other Credit Documents, or the
rights or remedies of the Bank hereunder or thereunder.
Maximum Equipment Facility Principal Amount. The term "Maximum
Equipment Facility Principal Amount", shall have the meaning assigned
to such term in Section 1.02 hereof.
Maximum Revolving Credit Principal Amount. The term "Maximum Revolving
Credit Principal Amount" shall have the meaning assigned to such term
in Section 1.08 hereof.
Note. The term "Note" means an Equipment Loan Note or the Revolving
Credit Note, as the context shall require, and the term "Notes" means,
collectively, the Equipment Loan Notes and the Revolving Credit Note.
Obligations. The term "Obligations" means any and all obligations and
indebtedness of every kind and description of the Borrower owing to
the Bank, whether under the Credit Documents or other loan documents
or agreements, and whether such debts or obligations are primary or
secondary, direct or indirect, absolute or contingent, sole, joint or
several, secured or unsecured, due or to become due, contractual or
tortious, arising by operation of law or otherwise, or now or
hereafter existing, including, without limitation, principal interest,
fees, late fees, expenses, and/or attorneys' fees and costs (to the
extent reimbursable to the Bank by the Borrower pursuant to Section
11.02), that have been or may hereafter be contracted or incurred.
OEM Equipment Finance Transactions. The term "OEM Equipment Finance
Transactions" means equipment lease or purchase money financing with
respect to equipment or machinery leased or acquired by the Borrower
or any of its Subsidiaries pursuant to which the Indebtedness incurred
in connection therewith is held by the original manufacturer of such
equipment or machinery, or an Affiliate of said original manufacturer
that, in the ordinary course of its business, provides such financing
to purchasers of such equipment or machinery.
Payment Date. The term "Payment Date" means (i) in the case of a LIBOR
Loan, the last day of each Interest Period applicable thereto;
provided, however that, if the Interest Period applicable to any such
LIBOR Loan is in excess of 3 months, then the Payment Date with
respect to such Loan shall also include the date that is 3 months
after the initial funding thereof, (ii) in the case of a Alternate
Base Rate Loan, the first day of each month occurring after the
Closing Date, and (iii) in the case of an Equipment Loan, the date
that corresponds numerically in the next calendar month following the
funding of such Loan to the date of such funding, and the same date of
each successive month occurring thereafter, unless such funding date
is the last day of a calendar month, in which case, such Payment Date
shall be the last day of each such successive calendar month.
Permitted Investments. The term "Permitted Investments" means (i)
readily marketable direct obligations of the Government of the United
States of America or any agency or instrumentality thereof or any full
faith and credit obligations of the United States Government or
obligations guaranteed by the United States Government and its
agencies, (ii) any investment grade debt or equity securities issued
by any other Person, (iii) certificates of deposit of any United
States commercial bank, (iv) any investment arranged by the Bank, or
an affiliate of the Bank, on behalf of the Borrower pursuant to cash
management services provided to the Borrower by the Bank or such
affiliate, (v) instruments held for collection in the ordinary course
of business, (vi) any equity or debt securities or other form of debt
instrument obtained in settlement of debts previously contracted, and
(vii) any equity or debt security obtained in connection with an
acquisition permitted pursuant to Section 8.03 hereof.
Permitted Liens. The term "Permitted Liens" means those Liens
permitted to exist pursuant to Section 8.02 hereof.
Person. The term "Person" means any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or
any government or political subdivision or any agency, department or
instrumentality thereof.
Public Offering. The term "Public Offering" means that certain initial
public offering of no less than 3,850,000 shares of the common stock,
no par value, of the Borrower, as contemplated in that certain
Registration Statement of the Borrower on Form S-1 (Registration No.
333-23519) on file with the SEC, together with Amendment No. 1 through
5 thereto, as the same has been declared effective by the SEC on July
29, 1997 and the 424(b) prospectus filed on July 30, 1997 with the
SEC.
Revolving Credit Commitment Period. The term "Revolving Credit
Commitment Period" mean the period commencing on the Closing Date and
ending on the Revolving Credit Expiration Date.
Revolving Credit Expiration Date. The term "Revolving Credit
Expiration Date" means the earlier to occur of (a) August 12, 2000, as
the same may be extended from time to time in the sole and absolute
discretion of the Bank or (b) the date on which this Agreement is
terminated pursuant to Section 3.03 hereof.
Revolving Credit Facility. The term "Revolving Credit Facility" shall
have the meaning assigned to such term in Section 1.07 hereof.
Revolving Credit Loan and Revolving Credit Loans. The terms "Revolving
Credit Loan" and "Revolving Credit Loans" shall have the meanings
assigned to such term in Section 1.07 hereof.
Revolving Credit Note. The term "Revolving Credit Note" shall have the
meanings assigned to such term in Section 1.07 hereof.
SEC. The term "SEC" shall mean the Securities and Exchange Commission
or any Governmental Authority which may succeed to the authority
thereof or be substituted therefor.
Security Agreements. The term "Security Agreements" means collectively
each of the security agreements in favor of the Bank executed and
delivered in connection with the funding of any Equipment Loan.
Stated Amount. The term "Stated Amount" means with respect to any
Letter of Credit, the maximum amount available to be drawn thereunder,
determined without regard to whether any conditions to drawing could
then be met.
Subsidiary. The term "Subsidiary" means, as to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the
board of directors or other persons performing similar functions are
at the time directly or indirectly owned or controlled by such Person,
one or more of the other Subsidiaries of such Person or any
combination thereof.
Term Loan. The term "Term Loan" shall have the meaning assigned to
such term in Section 1.04 hereof.
Term Loan Maturity Date. The term "Term Loan Maturity Date" shall have
the meaning assigned to such term in Section 1.04 hereof.
Test Period shall mean, with respect to any applicable determination
under this Agreement, a period of twelve (12) consecutive months
(taken as one accounting period) and ending on the last day of the
fiscal quarter of the Borrower then last ended, provided that during
the period immediately following the consummation of the Public
Offering, this term shall mean the shorter period commencing on such
consummation date and ending on the last day of the latest fiscal
quarter until there has elapsed 4 complete fiscal quarters; provided,
further that for purposes of any computation hereunder during the
period contemplated in the foregoing proviso, such computation shall
be annualized by the Bank in accordance with methodologies customarily
utilized by the Bank for such purposes.
2.02 Principles of Construction.truction
(a) References. All references to articles, Sections, schedules and
exhibits are to articles, Sections, schedules and exhibits in or to
this Agreement unless otherwise specified. The words "hereof",
"herein", and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.
(b) Accounting Terms. All accounting terms not specifically defined
herein or in any exhibit hereto shall be construed in accordance with
GAAP in conformity with those principles used in the preparation of
the financial statements referred to in Section 6.04 hereof.
III. PREPAYMENT.
3.01 Prepayment of Revolving Credit Loans. The Revolving Credit Loans may be
prepaid, in whole or in part, at any time, provided that any prepayment in
respect of a LIBOR Loan shall be made only on the last day of the Interest
Period applicable thereto, and provided, further, that any partial
prepayments of the Revolving Credit Loans shall be in a principal amount of
not less than $250,000, or any whole multiple thereof. All prepayments
shall include accrued and unpaid interest to the date of prepayment on the
principal amount prepaid. All partial prepayments received pursuant to this
Section 3.01 shall be applied to the Obligations that are in respect of the
Revolving Credit Loans in the manner determined by the Bank in its
reasonable discretion.
3.02 Prepayments of Equipment Loans. Any Equipment Loan may be prepaid, in whole
or in part at any time, without premium or penalty; provided, that any
partial prepayment of an Equipment Loan shall be in a principal amount of
not less than $250,000, or any whole multiple thereof. All prepayments of
an Equipment Loan shall include accrued and unpaid interest to the date of
prepayment on the principal amount prepaid. All partial prepayments of the
principal balance of any Equipment Loan shall be applied to the Equipment
Loan specified by the Borrower in inverse order of maturity of such
Equipment Loan.
3.03 Termination. If the Borrower has prepaid the Revolving Credit Loans and all
Equipment Loans in full and has paid or otherwise discharged all other
Obligations, then upon written notice to the Bank, the Borrower may
irrevocably terminate this Agreement without premium or penalty, whereupon
no further Loans will be made hereunder, such termination to be effective
as of the date set forth in said notice.
IV. YIELD MAINTENANCE PROVISIONS.
4.01 Inability to Determine Rate. If with respect to any Interest Period, the
Bank determines that extraordinary and unforeseen circumstances beyond the
control of the Bank exists with respect to the relevant market which make
it impracticable to ascertain the interest rate applicable for such
Interest Period, the Bank shall promptly notify the Borrower of such
determination. Upon such determination, no additional LIBOR Loans shall be
permitted under the Revolving Credit Facility and no conversions to, or
continuances of, LIBOR Loans shall be permitted pursuant to Section 1.12
hereof until the notice of such determination has been withdrawn. If such
notice has not been withdrawn by the last day of the then current Interest
Period applicable to any then outstanding LIBOR Loans, the Borrower must
elect on the last day of such Interest Period to either convert such LIBOR
Loan to an Alternate Base Rate Loan or prepay the outstanding principal
balance thereof and accrued interest thereon in full.
4.02 Illegality. Notwithstanding any other provisions herein, if any law,
regulation, treaty or directive or any change therein or in the
interpretation or application thereof, shall make it unlawful for the Bank
to make or maintain any of the Loans as LIBOR Loans as contemplated by this
Agreement, (i) the Bank's commitment hereunder to make LIBOR Loans under
the Revolving Credit Facility or to permit conversions to, or continuances
of, LIBOR Loans pursuant to Section 1.12 hereof shall forthwith be
suspended until the circumstances surrounding such unlawfulness shall no
longer exit and (ii) any of the then outstanding LIBOR Loans shall be
converted to a Alternate Base Rate Loan on the last day of the Interest
Period applicable thereto or within such earlier period as may be required
by law.
4.03 Requirement of Law. In the event that any law, regulation, treaty or
directive or any change therein or in the interpretation or application
thereof or compliance by the Bank with any request or directive (whether or
not having the force of law) from any central bank or other Governmental
Authority (a "Requirement of Law"):
(a) does or shall subject the Bank to any tax of any kind whatsoever with
respect to this Agreement, the Notes or any loan made hereunder, or change
the basis of taxation of payments to the Bank of principal, commitment fee,
interest or any other amount payable hereunder (except for changes in the
rate of any tax presently imposed on the Bank);
(b) does or shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, or
deposits or other liabilities in or for the account of, advances or loans
by, or other credit extended by, or any other acquisition of funds by, any
office of the Bank which are not otherwise included in the determination of
LIBOR hereunder; or
(c) does or shall impose on the Bank any other condition;
and the result of any of the foregoing is to increase the cost to the Bank
of making, renewing or maintaining advances or extensions of credit to the
Borrower or to reduce any amount receivable from the Borrower hereunder
then, in any such case, the Borrower shall promptly pay to the Bank, upon
its demand, any additional amounts necessary to compensate the Bank for
such additional cost or reduced amount receivable which the Bank deems to
be material as determined by the Bank with respect to this Agreement, the
Notes or the Loans made hereunder. If the Bank becomes entitled to claim
any additional amounts pursuant to this Section 4.03, it shall promptly
notify the Borrower of the event by reason of which it has become so
entitled. A certificate setting forth calculations as to any additional
amounts payable pursuant to the foregoing sentence submitted by the Bank to
the Borrower shall be conclusive in the absence of manifest error. The
foregoing shall in no way be construed to permit the Bank to seek
compensation or payment of additional amounts pursuant to this Section 4.03
in connection with any Requirements of Law imposed upon the Bank as a
result of the Bank's violation of a Requirement of Law.
4.04 Capital Adequacy. If after the date hereof, the Bank shall have determined
that the adoption of any applicable law, rule or regulation regarding
capital adequacy which is generally applicable to banks subject to the
jurisdiction of Governmental Authorities having jurisdiction over the Bank,
or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or compliance by the Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect
of reducing the rate of return on the Bank's capital as a consequence of
its obligations hereunder to a level below that which the Bank could have
achieved but for such adoption, change or compliance (taking into
consideration the Bank's policies with respect to capital adequacy) by an
amount deemed by the Bank to be material, then from time to time, within 30
days after demand by the Bank, the Borrower shall pay to the Bank such
additional amount or amounts as will compensate the Bank for such
reduction. The Bank will promptly notify the Borrower of any event of which
it has knowledge, occurring after the date hereof, which will entitle the
Bank to compensation pursuant to this Section 4.04, and such notification
of the amount due pursuant to this Section 4.04 shall be conclusive absent
manifest error.
4.05 Funding Indemnity. The Borrower agrees to indemnify the Bank and to hold
the Bank harmless from any loss or expense which the Bank may sustain or
incur as a consequence of (i) default by the Borrower in payment of the
principal of or interest on any LIBOR Loan, including, but not limited to,
any such loss or reasonable expense arising from additional interest or
fees payable by the Bank to lenders of funds obtained by it in order to
maintain any Loan as a LIBOR Loan, (ii) except for prepayments required
pursuant to Section 4.01 or 4.02, any prepayment of any LIBOR Loan received
(from any source) on any date other than the last day of the Interest
Period applicable thereto, including, but not limited to, any such loss or
expense in connection with the employing of deposits as a consequence
thereof, (iii) default by the Borrower in making any borrowing of a LIBOR
Loan under the Revolving Credit Facility after such Borrower has given
notice thereof in accordance with Section 1.12 hereof, of a LIBOR Loan or
(iv) default by the Borrower in making any prepayment after the Borrower
has given a notice thereof. This covenant shall survive termination of this
Agreement and payment of the Notes.
4.06 Match Funding. The amount payable or indemnifiable under Sections 4.03,
4.04 and 4.05 hereof shall be determined, in the Bank's sole discretion,
based upon the assumption that the Bank funded 100% of any affected LIBOR
Loan in the applicable London interbank market.
V. CONDITIONS.
5.01 Requirements for Initial Funding. The obligation of the Bank to make the
initial advance of any Loan available hereunder is subject to the Bank's
receipt of each of the documents listed on the Closing Checklist attached
hereto as Exhibit E, and such other documents as the Bank may reasonably
request, each, as appropriate, duly executed and delivered by the parties
thereto and in form and substance satisfactory to the Bank. The obligation
of the Bank to make the initial advance of any Loan available hereunder is
subject to the further condition that the Borrower shall have consummated
the Public Offering and the "Acquisitions" (as defined in the registration
statement, as amended, referred to in the definition of Public Offering)
and gross proceeds of not less than $42,000,000 shall have been received by
the Borrower in connection therewith and used for the purposes described in
said registration statement.
5.02 Requirements for Any Advance or Conversion. The obligation of the Bank to
(i) make any advance under the Revolving Credit Facility or the Equipment
Facility, or (ii) permit the conversion of any Revolving Credit Loan to a
LIBOR Loan pursuant to Section 1.12 hereof, is subject to and conditioned
upon the following:
(a) the representations and warranties contained in Article VI hereof are
correct in all material respects on and as of the date of each such
advance, conversion or continuation, except for representations and
warranties specifically stated to relate to an earlier date, in which event
such representations and warranties shall be correct in all material
respects as of such earlier date;
(b) no Event of Default, and no event which, with the giving of notice, or
the passage of time, or both, would become an Event of Default, has
occurred and is continuing; and
(c) all of the Credit Documents then in effect by their terms remain in
full force and effect.
5.03 Additional Requirements for Advances Under Equipment Facility. The
obligation of the Bank to make any advance under the Equipment Facility is
subject to and conditioned upon, in addition to satisfaction of the
conditions specified in Section 5.02, the satisfaction of the following
conditions:
(a) the Borrower shall have complied with the procedures set forth in
Section 1.03, including, without limitation, the furnishing of all
information required thereunder;
(b) the Borrower or the relevant Subsidiary Guarantor, as the case may be,
shall have furnished to the Bank executed originals of (i) a Security
Agreement substantially in the form of Exhibit G attached hereto (with such
modifications thereto as may be required by the law of the jurisdiction
governing the creation and perfection of the Bank's security interest in
the relevant Financed Equipment in order to provide the Bank with all the
right, benefits and remedies of a secured creditor with a first priority
lien in such equipment) and (ii) such UCC-1 financing statements (state
and/or local), in each case as may be reasonably requested by the Bank;
(c) the Borrower or the relevant Subsidiary Guarantor, as the case may be,
shall have caused to be delivered to the Bank a landlord consent and
waiver, in substantially the form of Exhibit G hereto, from each landlord
of the premises in which the relevant Financial Equipment is to be located;
(d) the Borrower or the relevant Subsidiary Guarantor as the case may be,
shall have authorized the Bank to fund the proceeds of the relevant
Equipment Loan directly to the vendor of the relevant Financed Equipment
and, in that connection, the Borrower or such Subsidiary Guarantor shall
have furnished to the Bank all such information and payment instructions as
the Bank may request to effect such funding;
(e) the Borrower or the relevant Subsidiary Guarantor, shall have taken all
such additional steps and/or, as the case may be, provided the Bank with
all such other further assurances as the Bank may reasonably request to
assure the Bank that the Lien of the Bank in the relevant Financed
Equipment is of the first priority, subject to no other Liens; and
(f) the Borrower shall have caused to be delivered to the Bank an Equipment
Loan Note substantially in the form of Exhibit A hereto, appropriately
completed by the Bank to reflect the specific terms of the applicable
Equipment Loan in accordance with the terms of this Agreement.
VI. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants that:
6.01 Organization; Authority. The Borrower (a) is a corporation duly organized,
validly existing and in good standing under the laws of the State of New
Jersey, is duly qualified as a foreign corporation and is in good standing
under the laws of each jurisdiction in which it is required to be qualified
because of the business it conducts or the property it owns, and (b) has
the necessary power and authority to enter into and perform its obligations
under the Credit Documents and all other documents required by the Bank in
connection therewith. The execution and performance of the Credit Documents
have been duly authorized by all necessary proceedings on the part of the
Borrower, and, upon their execution and delivery, they will be valid,
binding, and enforceable in accordance with their terms. The execution and
performance of the Credit Documents by the Borrower will not violate any
orders, laws or regulations applicable to it, any of its organizational
documents, or any instruments, indentures or agreements (including any
provisions pertaining to subordinated debt) to which the Borrower is a
party or by which the Borrower or any of its properties are bound, except
to the extent that any such violation would not have a Material Adverse
Effect. All consents, approvals, licenses, franchises, trademarks and other
general intangibles that are necessary or appropriate in connection with
this Agreement, the other Credit Documents or the operation of the business
of the Borrower have been obtained and are in full force and effect, except
to the extent that any such failure to so obtain and maintain such general
intangibles would not have a Material Adverse Effect.
6.02 Subsidiaries. The corporations listed on Annex I are the only Subsidiaries
of Borrower as of the date hereof and each such Subsidiary is a
corporation, duly organized, valid existing and in good standing, under the
law of the jurisdiction of its organization, is duly qualified as a foreign
corporation and is in good standing under the law of each jurisdiction in
which it is required to be qualified because of the business it conducts or
the property it owns and have all necessary power and authority to own its
property and conduct its business as then conducted. All consents,
approvals, licenses, franchises, trademarks and other general intangibles
that are necessary or appropriate in connection with the operation of the
business of each Subsidiary, have been obtained and are in full force and
effect, except to the extent that any such failure to so obtain and
maintain such general intangibles would not have a Material Adverse Effect.
Each such Subsidiary is a wholly owned Subsidiary of the Borrower and no
other Person has any direct or indirect interest in such Subsidiary, other
than such interests which may exist as a result of any stock ownership
interest of any Person in the Borrower.
6.03 Use of Proceeds; Margin Regulation. The proceeds of the Equipment Loans
shall be used exclusively for purchase money financing of Financed
Equipment. The proceeds of borrowings under the Revolving Credit Facility
shall be used by the Borrower for the following purposes: (i) to fund
acquisitions permitted pursuant to Section 8.03 hereof, (ii) to refinance
certain existing Indebtedness of the Borrower and certain of its
Subsidiaries as and to the extent disclosed in writing to the Bank prior to
the Closing Date, and (iii) working capital and other general corporate
purposes. The Borrower (nor any of its Subsidiaries) is not engaged in the
business of extending credit for the purpose of buying or carrying "margin
stock" (within the meaning of Regulation U issued by the Board of Governors
of the Federal Reserve System). Neither the making of any Loan nor use of
the proceeds thereof will violate or be inconsistent with the provisions of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System.
6.04 Financial Statements. The financial statements included in the Borrower's
Form S-1 (as amended) as filed with the SEC in connection with the Public
Offering, were prepared in accordance with GAAP, consistently applied, are
true and correct, and disclose all presently outstanding indebtedness or
obligations of the Borrower as of the date thereof to the extent required
under GAAP, including contingent obligations, obligations under leases of
property from others, and all liens and encumbrances, including tax liens,
against its properties and assets; and there have been no material adverse
changes in the Borrower's financial condition or business since the date of
such statements through the Closing Date.
6.05 Suits. Other than as disclosed on Annex I hereof, there are no actions,
suits, proceedings, or claims pending or threatened against the Borrower,
any of its Subsidiaries, or any of their respective properties, which, if
adversely determined, would have a Material Adverse Effect.
6.06 Burdensome Agreements. Neither the Borrower nor any of its Subsidiaries is
a party to any indenture, loan or credit agreement or any other agreement,
contract or instrument, or subject to any certificate of incorporation,
by-law, or corporate restriction, the compliance with, or the performance
of, which may reasonably be expected to have a Material Adverse Effect.
6.07 Defaults. Neither the Borrower nor any of its Subsidiaries are in default
under any agreement to which it is a party or by which it is or any of its
properties are bound, or under any indenture or instrument evidencing any
its indebtedness and neither the execution of nor performance by the
Borrower under the Credit Documents will create a default or any lien or
encumbrance under any such agreement, indenture or instrument other than a
lien or encumbrance in favor of the Bank, except, in each case, to the
extent that the occurrence of any such defaults or the existence of any
such liens would not have a Material Adverse Effect.
6.08 ERISA. No employee benefit plan established or maintained by the Borrower
which is subject to the Employee Retirement Income Security Act, 29 U.S.C.
Section 1001 et seq. ("ERISA") has an accumulated funding deficiency (as
such term is defined in ERISA). No material liability to the Pension
Benefit Guaranty Corporation (or any successor thereto under ERISA) has
been incurred by the Borrower or any of its Subsidiaries with respect to
any such plan and no Reportable Event under ERISA has occurred. Neither the
Borrower nor any of its Subsidiaries has an actual or anticipated liability
under Section 4971 of the Internal Revenue Code ("Code") (relating to tax
on failure to meet the minimum funding standard of Section 412 of the Code)
with respect to any employee benefit plan to which any of them contributes
but which is not maintained or established by any of them. No proceedings
have been instituted to terminate any employee benefit plan of the type
described in this Section 6.08 and no condition exists which presents a
material risk, to the Borrower or any of its Subsidiaries of incurring
liabilities to or on account of any such plan pursuant to the provisions of
ERISA or the applicable provisions of the Code.
6.09 Tax Returns and Taxes. Each of the Borrower and its Subsidiaries has filed
all federal, state and local tax returns required to be filed and has paid
all taxes, assessments and governmental charges and levies thereon,
including interest and penalties, except where the same are being contested
in good faith by appropriate proceedings and for which adequate reserves
have been set aside, and no liens for taxes have been filed by a
Governmental Authority with respect to any taxes. The charges, accruals and
reserves on the books of the Borrower or its Subsidiary, as the case may
be, with respect to taxes or other governmental charges are adequate.
6.10 Compliance with Statutes, etc. Each of the Borrower and its Subsidiary is
in compliance with all applicable statutes, regulations and orders of, and
all applicable restrictions imposed by, any Government Authority, in
respect of the conduct of its business and the ownership of its property
(including, without limitation, any applicable Environmental Laws), except
such instances of noncompliances as would not have a Material Adverse
Effect.
6.11 Not an Investment Company. Neither the Borrower nor any of its Subsidiaries
is an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as
amended.
6.12 No Authorizations or Approvals. No authorization or approval or action by,
and no notice to or filing with, any Governmental Authority is required for
the due execution, delivery and performance by the Borrower of this
Agreement and the other Credit Documents.
6.13 Intellectual Property, etc. Each of the Borrower and its Subsidiaries has
obtained all material patents, trademarks, servicemarks, trade names,
copyrights, technology, processes, licenses and other rights ("Intellectual
Property"), free from any burdensome restrictions, that are necessary for
the operation of their respective businesses as presently conducted and as
proposed to be conducted. No material claim has been asserted or threatened
questioning the use of such Intellectual Property, nor does the Borrower or
any of its Subsidiaries know of any valid basis for any such material
claim.
6.14 Assets and Properties. Each of the Borrower and its Subsidiaries has good
(and, with respect to real property, marketable) title to all of its assets
and properties (tangible and intangible) and all such assets and properties
are free and clear of all Liens (except Permitted Liens). Substantially all
of the assets and properties owned by, leased to or used by each of the
Borrower and its Subsidiaries are in adequate operating condition and
repair, ordinary wear and tear excepted, are free and clear of known
defects except such defects as do not substantially increase with the
continued use thereof in the conduct of normal operation, and such assets
are able to serve the function for which they are currently being used,
except in each case, where the failure of such asset or property to meet
such requirements would not have a Material Adverse Effect.
6.15 Labor Matters. Except as disclosed on Annex I, neither the Borrower nor any
of its Subsidiaries is a party to a collective bargaining or union
contract. There are no strikes, lockouts or other disputes relating to any
collective bargaining or similar agreement to which the Borrower of any of
its Subsidiaries is a party.
6.16 Insurance. Annex I hereto lists all material insurance contracts and
binders of the Borrower and its Subsidiaries which are in full force and
effect on the date hereof. Such contracts and binders provide coverages
which are usual and customary in the business of the Borrower and its
Subsidiaries as to amount and scope. With respect to coverages pertaining
to any Financed Equipment, each such insurance contract and binder shall
contain standard lender's endorsement and loss payee endorsements in favor
of the Bank, and subject to cancellation or reduction in coverage only upon
30 days' prior written notice thereto to the Bank.
6.17 True and Complete Disclosure. All factual information (taken as a whole)
heretofore or contemporaneously furnished by the Borrower to the Bank for
the purposes of or in connection with this Agreement or any transactions
contemplated herein is, and all other such factual information (taken as a
whole) hereafter furnished by or on behalf of the Borrower in writing to
the Bank will be, true and accurate in all material respects on the date as
of which such information is dated or certified and does not omit to state
any fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
VII. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that for so long as there are any
outstanding Obligations hereunder, or the Bank shall have any obligation
hereunder, the Borrower shall (and, as applicable, shall cause each of its
Subsidiaries (including the Guarantors) to):
7.01 Financial Statements. Furnish to the Bank the following financial
information: (i) as soon as available but in any event within 90 days (or
105 days, if the Borrower is operating under an automatic extension
afforded pursuant to the rules and regulations promulgated by the SEC)
after the close of each fiscal year of the Borrower, to the extent prepared
to comply with SEC requirements, a copy of the SEC Form 10-K (or successor
form promulgated by the SEC) filed by the Borrower with the SEC for such
fiscal year, or, if no such form was so filed for such fiscal year,
Consolidated audited year-end financial statements for the Borrower,
including, but not limited to, statements of financial condition, income
and cash flows, a reconciliation of net worth, notes and other supporting
schedules to such financial statements and any other information reasonably
requested by the Bank that may assist the Bank in assessing the Borrower's
financial condition (prepared in accordance with GAAP consistently applied,
and accompanied by an opinion, satisfactory in substance to the Bank, by an
independent certified public accountant acceptable to the Bank, and
certified as true, correct and complete by the Borrower's chief financial
officer); (ii) as soon as available but in any event within 45 days (or 50
days, if the Borrower is operating under an automatic extension afforded
pursuant to the rules and regulations promulgated by the SEC) after each
interim fiscal quarter, to the extent prepared to comply with SEC
requirements, a copy of the SEC Form 10-Q (or successor form promulgated by
the SEC) filed by the Borrower with the SEC for such fiscal quarter; or, if
no such form was so filed for such fiscal quarter, unaudited management
prepared consolidated financial statements for the Borrower for such
quarter, including, but not limited to, statements of financial condition,
incoming cash flows, a reconciliation of net worth, and supporting
schedules (prepared in accordance with GAAP consistently applied, and
certified as true, correct and complete by the Borrower's chief financial
officer); (iii) promptly upon filing the same with the SEC, copies of any
filings and registrations with, and any reports to, the SEC by the
Borrower, including, but not limited to, any reports on Form 8-K (or
successor term promulgated by the SEC), or any proxy or registration
statement or any other form of public disclosure prescribed by the SEC; and
(iv) such other information respecting the operations, financial or
otherwise, of the Borrower as the Bank may from time to time reasonably
request.
7.02 Compliance Certificate. Furnish to the Bank, together with each set of
financial statements described in clauses (i) and (ii) of Section 7.01
hereof, a compliance certificate, substantially in the form of Exhibit F
hereto, signed by the Borrower's chief financial officer, certifying that:
(i) all representations and warranties set forth in this Agreement and in
the other Credit Documents are true and correct in all material respects as
of the date thereof, except for representations and warranties specifically
stated to relate to an earlier date in which event such representations and
warranties shall be correct in all material respects as of such earlier
date; (ii) none of the covenants in this Agreement or in the other Credit
Document have been breached which breach is continuing; and (iii) no event
has occurred which, alone, or with the giving of notice or the passage of
time, or both, would constitute an Event of Default under this Agreement or
the other Credit Documents.
7.03 Notice of Certain Events. Promptly give written notice to the Bank of: (i)
the details of any Reportable Events (as defined in ERISA) which have
occurred, (ii) the occurrence of any event which alone or with notice, the
passage of time, or both, would constitute an Event of Default, and (iii)
the commencement of any proceeding or litigation which, if adversely
determined, would have a Material Adverse Effect.
7.04 Preservation of Property; Insurance. Keep and maintain, and require each of
its Subsidiaries to keep and maintain, all of its and their material
properties and assets in good order and repair, ordinary wear and tear
excepted; maintain in all material respects all insurance coverages
described in Section 6.16 hereof and such other extended coverage, general
liability, hazard, business interruption, property and other insurance in
amounts reasonably satisfactory to the Bank and as is customary for
businesses similar to such corporation's business and deliver to the Bank
certificates of all such insurance in effect; and cause all such policies
covering any of the Financed Equipment to contain loss payee endorsements
in favor of the Bank and to be subject to cancellation or reduction in
coverage only upon 30 days prior written notice thereof to the Bank at its
address set forth in this Agreement. The foregoing insurance requirements
are in addition to any insurance requirements set forth in the Security
Agreements.
7.05 Taxes. Pay and discharge, and require each of the its Subsidiaries to pay
and discharge, when due, all taxes, assessments or other governmental
charges imposed on them or any of their respective properties, unless the
same are currently being contested in good faith by appropriate proceedings
and adequate reserves are maintained therefor.
7.06 Conduct of Business and Maintenance of Existence. Continue to engage in
business of the same general type as now conducted, and preserve, renew and
keep in full force and effect its corporate existence and rights,
privileges and franchises necessary in the normal conduct of business and
which are material to the Borrower and its Subsidiaries, taken as a whole.
For the avoidance of doubt, it is hereby acknowledged that the foregoing
shall not be construed to prohibit the corporate transactions permitted to
occur under Section 8.03(A) hereof.
7.07 Operation of Business and Properties. Operate its business and properties,
and cause those of its Subsidiaries to be operated, in compliance with all
applicable orders, rules, regulations and other requirements of any
Governmental Authority applicable thereto, and duly file or cause to be
filed such reports and/or information returns as may be required or
appropriate under applicable orders, rules, regulations or other
requirements of any Governmental Authority, including, without limitation,
any Environmental Laws, except to the extent that such non-compliance would
not have a Material Adverse Effect.
7.08 Access to Properties, Books and Records. Keep adequate books and records of
accounts reflecting all of its financial transactions and permit the Bank's
representatives and/or agents full and complete access to any or all of the
Borrower's properties and financial records, to make extracts from and/or
audit such records and to examine and discuss their properties, business,
finances and affairs with the Borrower's officers and outside accountants,
provided that such access need only be provided by the Borrower during
normal business hours and on not less than 72 hours' prior notice and the
costs incurred in connection with any such examination conducted prior to
the occurrence of an Event of Default shall be borne by the Bank.
7.09 Environmental Liens. In the event that there shall be filed a Lien against
any property of the Borrower or any of its Subsidiaries by any Governmental
Authority arising from an act or omission of the Borrower or any of its
Subsidiaries, resulting in the discharge of hazardous substances or wastes
into the atmosphere or waters or onto lands, then, within 60 days from the
date that the Borrower or any of its Subsidiaries is given notice that the
Lien has been placed against such property or within such shorter period of
time in the event that such Governmental Authority has commenced steps to
cause such property to be sold pursuant to the lien, either (i) pay the
claim and remove the Lien from the applicable property or (ii) furnish to
such Governmental Authority with one of the following: (x) a bond
satisfactory to Governmental Authority in the amount of the claim out of
which the Lien arises, (y) a cash deposit in the amount of the claim out of
which the Lien arises, or (z) other security reasonably satisfactory to
such Governmental Authority in an amount sufficient to discharge the claim
out of which the Lien arises.
7.10 Removal of Hazardous Substances. Should the Borrower and any of its
Subsidiaries cause or permit any act or omission resulting in the discharge
of hazardous substances or wastes into the atmosphere or waters, or onto
the lands in violation of any applicable Environmental Law, promptly clean
up same in accordance with all applicable Environmental Laws.
7.11 Further Assurances. Do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged and delivered, all such further instruments,
acts, deeds, and assurances as may be reasonably requested by the Bank for
the purpose of carrying out the provisions and intent of the Credit
Documents.
VIII. NEGATIVE COVENANTS
So long as any Obligations are outstanding, or the Bank shall have any
obligation hereunder, without the prior written consent of the Bank (which
consent shall not be unreasonably withheld), the Borrower shall not (and shall
not, as applicable, permit any of its Subsidiaries (including the Guarantor)
to):
8.01 Incur Indebtedness. Incur, create, assume, or permit to exist any
Indebtedness at any time, except:
(a) Indebtedness of the Borrower owing to the Bank under this Agreement
and the Notes;
(b) other Indebtedness of the Borrower owing to the Bank;
(c) Indebtedness existing on the date hereof that is described on Annex I
hereof;
(d) Approved Subordinated Indebtedness;
(e) Indebtedness in respect of normal trade debt arising in the ordinary
course of business;
(f) Indebtedness secured by Liens permitted to exist pursuant to Section
8.02(h); Notwithstanding the foregoing provisions of this clause (f),
before the Borrower or any of its Subsidiaries incurs Indebtedness for
borrowed money under this clause (f) the Borrower shall give the Bank
written notice of the intention to borrow, setting forth a description
of the proposed borrowing, and the Bank shall have 5 Business Days to
notify the Borrower that it elects to make the proposed loan. If the
Bank fails to make such election, then the Borrower and its
Subsidiaries shall be free to incur the proposed Indebtedness on
substantially as favorable terms to the Borrower and its Subsidiaries,
as applicable, as proposed to the Bank free of the right of the Bank
to make such loan under this clause (f). If the Bank elects to make
the proposed loan, then the Borrower and the Bank shall negotiate in
good faith to consummate the proposed loan within a reasonable time.
If such negotiations do not result in the closing of the proposed
loan, then the Borrower and its Subsidiaries, as applicable, shall be
entitled to borrow on substantially as favorable terms to the Borrower
and its Subsidiaries, as applicable, as proposed free of the right of
the Bank to make the proposed loan under this clause (f);
(g) Indebtedness that constitutes Guaranteed Indebtedness of the Borrower
or any of its Subsidiaries that has been incurred by the Borrower or
any of its Subsidiaries solely by virtue of an endorsement of checks
or drafts negotiated in the ordinary course of the business;
(h) Indebtedness incurred or assumed in connection with acquisitions
permitted pursuant to Section 8.03 hereof, but only to the extent that
such Indebtedness would otherwise be permitted to exist pursuant to
clauses (d), (e), (f)(but without regard to the monetary threshold set
forth in clause (h) of Section 8.02 hereof), (g), (j) or (l) of this
Section 8.01;
(i) Indebtedness owing from or to Borrower or any of its Subsidiaries to
or from any other of its Subsidiaries or Borrower;
(j) Indebtedness arising under any OEM Equipment Finance Transactions;
(k) Indebtedness convertible into capital stock of the Borrower, or
warrants or other rights to acquire such capital stock; or
(l) Indebtedness incurred in connection with Facilities Management
Arrangements.
8.02 Negative Pledge. Create, permit to exist, or suffer the creation of, any
Lien, on any of its properties or assets (real or personal, tangible or
intangible), except:
(a) Liens in favor of the Bank;
(b) Liens existing on the date hereof that are listed on Annex I hereto;
(c) Liens for taxes, assessments or governmental charges or levies to the
extent not required to be paid by Section 7.05 hereof;
(d) Liens imposed by law, such as materialmen's, mechanics', carrier's,
workmen's, and repairmen's Liens and other similar Liens arising in
the ordinary course of business securing obligations which are not
overdue for a period of more than 30 days;
(e) pledges or deposits to secure obligations under workmen's compensation
laws or similar legislation or to secure public or statutory
obligations of the Borrower or any of its Subsidiaries;
(f) Liens with respect to any OEM Equipment Finance Transaction but only
in respect of the equipment acquired therein;
(g) Liens incurred, assumed or created in connection with Facilities
Management Arrangements, but only as to equipment and machinery that
(i) is pertinent to the performance by the Borrower or the relevant
Subsidiary of its obligations thereunder and (ii) was not an asset of
the Borrower or such relevant Subsidiary prior to such arrangement;
(h) Liens for finance leases of equipment leased by the Borrower or any of
its Subsidiaries (including Capitalized Leases), or purchase money
Liens upon or in equipment acquired or held by the Borrower or any of
its Subsidiaries in the ordinary course of business to secure the
purchase price of such equipment or to secure Indebtedness incurred
solely for the purpose of financing the acquisition of any such
equipment to be subject to such Liens, or Liens existing on any such
equipment at the time of the leasing, acquisition, or extensions,
renewals or replacements of any of the foregoing for the same or a
lesser amount, provided that no such Lien shall extend to or cover any
equipment (including, but not limited to, the Financed Equipment)
other than the equipment being leased or acquired and no such
extension, renewal or replacement shall extend to or cover any
equipment not theretofore subject to the Lien being extended, renewed
or replaced, and provided, further, that (i) the aggregate principal
amount of the Indebtedness at any one time outstanding secured by
Liens permitted pursuant to this clause (h) shall not exceed
$5,000,000 at any one time outstanding and (ii) any such Indebtedness
shall not otherwise be prohibited by the terms of this Agreement; or
(i) the replacement, extension or renewal of any Lien permitted by clauses
(a) through (h) above upon or in the same property theretofore subject
thereto or the replacement, extension or renewal (without increase of
principal amount) of the Indebtedness secured thereby.
8.03 Sale of Assets; Liquidation; Merger; Acquisitions. (i) Convey, lease, sell,
transfer or assign any assets or properties presently owned or hereafter
acquired by it, except dispositions of inventory in the ordinary course of
business for value received and such other dispositions of assets and
properties that are not material to the business or operations of the
Borrower or any of its Subsidiaries, if such asset or property is replaced
with reasonable promptness or is otherwise obsolete or not needed, (ii)
liquidate or discontinue its normal operations with intent to liquidate;
(iii) enter into any merger or consolidation; (iv) acquire all or
substantially all of the assets, stock or other equity interests of any
other Person; or (v) take any action, or enter into any agreements, to
effect any of the foregoing. Notwithstanding the foregoing or anything to
the contrary set forth in this Agreement, the following transactions shall
be permitted upon the satisfaction of the condition pertaining thereto set
forth below:
(A) The consolidation, merger or liquidation of any Subsidiary of the
Borrower with or into the Borrower or another Subsidiary of the
Borrower, if and only if, the Borrower or such other Subsidiary shall
be the surviving or resulting entity of any such proposed transaction.
(B) The acquisition by the Borrower of any other Person or substantially
all of the assets of such Person, if and only if, the following
conditions were fulfilled:
(i) said acquisition is of a Person or of a business or product of
such Person that is related or complimentary to the business or
products of the Borrower and its Subsidiaries as presently
conducted;
(ii) no later than 5 Business Days prior to the consummation of any
such proposed acquisition, the Bank shall have received a true
and correct copy of any and all contractual undertakings related
to the proposed acquisition together (w) evidence of receipt of
approvals of Governmental Authorities to such acquisition, if any
such approvals are required, (x) with full and complete written
description of such proposed acquisition, (y) a pro forma balance
sheet and income statement of the Borrower on a combined and
combining basis giving effect to such proposed acquisition, based
on the most recent quarterly financial statements and (z) such
financial information and computations as the Bank may deem
necessary to demonstrate that, immediately after giving effect to
such proposed acquisition, none of the covenants set forth in
Sections 8.12 through 8.15 hereof shall be violated;
(iii)the Borrower or one of its Subsidiaries shall be the surviving
or resulting entity of any such proposed acquisition, or the
purchaser of any stock or assets being acquired in such
transaction;
(iv) the aggregate cash and non-cash consideration paid or exchanged
by the Borrower (including, without limitation, any Indebtedness
assumed by the Borrower, and all amounts payable under or in
respect of any non-compete covenants or similar agreements shall
not exceed (x) $12,500,000 in any single acquisition and (y)
$30,000,000 in the aggregate for all such acquisitions, in each
cash in any period of 12 consecutive months. For the purposes of
determining the consideration paid or exchanged in any such
acquisition, the value attributed to any capital stock of the
Borrower given or exchanged shall not be included therein; and
(v) immediately after giving effect to such proposed acquisition and
the incurrence or assumption of Indebtedness, if any, in
connection therewith, Sections 8.01, 8.02, 8,13, 8.14, 8.15, 8.16
and 8.17 hereof shall not have been violated.
8.04 Intentionally Omitted.
8.05 Sale-Leaseback Transactions. Enter into any sale-leaseback transaction or
any transaction howsoever termed which would have the same or substantially
the same result or effect as a sale-leaseback, except in connection with an
acquisition permitted under Section 8.03(B) hereof for the purpose of
effectively conveying or otherwise transferring real property of the Person
acquired in any such transaction, or to permit such Person to effectively
retain its interest in any real property which is not being acquired in any
such transaction.
8.06 Prepayment of Other Indebtedness. Prepay any amounts on any outstanding
Indebtedness permitted to exist pursuant to clauses (d) or (k) of Section
8.01 hereof, which is not required to be prepaid by the express terms
thereof, or cause or permit the acceleration of any amounts on any
outstanding Indebtedness now existing or hereafter arising.
8.07 Investments. Purchase or make any investment in the stock, securities or
evidences of indebtedness of, or make capital contributions or loans or
advances to, or other forms of investments in, any Person ("Investments"),
except Permitted Investments. Notwithstanding the foregoing, the Borrowers
shall be permitted to make loans to its employees for corporate purposes;
provided that the aggregate principal amount of such loans outstanding at
any one time shall not exceed $250,000.
8.08 Create Subsidiaries. Create, permit to exist, or invest or otherwise
participate in any Subsidiaries (other than the Subsidiaries listed on
Annex I hereto) or any partnership or other separate legal entity; provided
that the foregoing shall not apply to any new Subsidiaries that executes
and delivers in favor of the Bank a guaranty and suretyship agreement (as
well as resolutions authorizing the same), in each case substantially the
same as the guaranty executed and delivered by the Guarantors in connection
with the transactions herein contemplated.
8.09 Hazardous Substances. Cause or permit to exist a discharge of hazardous
substances or wastes into the atmosphere or waters or onto lands unless
such discharge is pursuant to and in compliance with the conditions of a
permit issued by the appropriate Governmental Authorities or otherwise in
compliance with applicable Environmental Law or the discharge does not have
a Material Adverse Effect and is properly being remedied by the Borrower or
one of its Subsidiaries.
8.10 Dividends, Etc8.10 Dividends, Etc. Declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of stock of the Borrower,
or purchase, redeem, or otherwise acquire for value (or permit any of its
Subsidiaries to do so) any shares of any class of stock of the Borrower or
any warrants, rights or options to acquire any such shares, now or
hereafter outstanding; except that the Borrower may declare and pay
quarterly cash dividends in respect of its common stock; provided, however,
that if immediately after giving effect to any such proposed dividend
payment, a violation of any provision of Section 8.12 through 8.17 or any
other Events of Default would exist, then no such dividend payments shall
be permitted hereunder. The Borrower may from time to time request that the
Bank permit the payment of quarterly dividends in addition to the amount
set forth in this Section 8.10 by written notice to the Bank specifying the
time and amount of such additional dividends; provided, however, that no
such additional dividends shall be permitted hereunder without the prior
written consent of the Bank (which consent may or may not be given in each
Bank's sole and absolute discretion) and any such consent shall be
effective only in the specific instance requested.
8.11 Redemption of Common Stock8.11 Redemption of Common Stock. Enter into any
agreement to, or purchase or retire shares of the Borrower's common stock
or pay or make other similar payments in respect thereof.
8.12 Consolidated Stated Net Worth. Permit as at the end of any Test Period the
sum of (A) the Consolidated Stated Net Worth plus (B) if a positive number,
the Borrower's net income for the relevant Test Period (excluding any
extraordinary items or non-recurring items) to be less than 90% of said sum
determined as of the last day of the immediately preceding Test Period,
tested no less frequently than quarterly and determined in each case on a
Consolidated basis in accordance with GAAP, consistently applied.
8.13 Consolidated Tangible to Stated Net Worth. Permit at any time, its
Consolidated Tangible Net Worth to be any less than 25% of the Consolidated
Stated Net Worth, tested no less frequently than quarterly and determined
in accordance with GAAP, consistently applied.
8.14 Consolidated Funded Debt to EBITDA Ratio. Permit at any time the
Consolidated Funded Debt to EBITDA Ratio to exceed 3.25 to 1.00, tested no
less frequently than quarterly for each Test Period and determined in each
case in accordance with GAAP, consistently applied.
8.15 Consolidated Fixed Charges Ratio. Permit at any time its Consolidated Fixed
Charges Ratio to exceed 1.50 to 1.00, tested no less frequently than
quarterly for each Test Period and determined in each case in accordance
with GAAP, consistently applied.
8.16 Transactions with Affiliates8.16 Transactions with Affiliates. Except as
expressly permitted by this Agreement, directly or indirectly: (i) make any
Investment in an Affiliate; (ii) transfer, sell, lease, assign or otherwise
dispose of any assets to an Affiliate, (iii) merge into or consolidate with
or purchase or acquire assets from an Affiliate; (iv) make any payments to
any Affiliate or otherwise suffer to exist any transaction with any
Affiliate or (v) enter into any other transaction directly or indirectly
with or for the benefit of any Affiliate (including, without limitation,
guarantees and assumptions of obligations of an Affiliate); provided,
however, that (a) any Affiliate who is an individual may serve as an
employee, director, consultant or independent contractor of the Borrower or
any of its Subsidiaries and receive reasonable compensation for services
rendered in such capacity and (b) any of the Borrower's Subsidiaries or the
Borrower may enter into any transaction with another Subsidiary or the
Borrower which is not otherwise prohibited by this Agreement or any of the
other Credit Documents, provided that the terms of any transaction pursuant
to which any Affiliate (other than Affiliates that are also Subsidiaries of
the Borrower) owes money to the Borrower shall be at least arms length and
the terms of any transaction pursuant to which the Borrower and/or any
Subsidiary owes money to an Affiliate (other than Affiliates that are also
Subsidiaries of the Borrower) shall not be more onerous than would obtain
in an arms length transaction.
8.17 Use of Proceeds. Use the proceeds of any Loan made hereunder for any
purpose other than the purposes described in Section 6.03 hereof.
8.18 Change Fiscal Year. As to the Borrower only, change its fiscal year to end
on any date other than December 31.
IX. EVENTS OF DEFAULT
Each of the following shall constitute an event of default ("Event of
Default") hereunder:
9.01 Payment Default. The Borrower shall (i) fail to pay any principal of, or
interest on, the Loans within 2 Business Days of the due date thereof or
(ii) default in the payment any other amounts owing hereunder, under the
Notes or under any other Credit Document and such default shall continue
for a period of 2 Business Days after the Bank provides notice thereof to
the Borrower;
9.02 Negative Covenant Breach. The Borrower shall default in the due performance
or observance by it of any term, covenant or agreement contained in Article
VIII hereof;
9.03 Other Covenant Breaches. The Borrower, or any Subsidiary of the Borrower,
shall default in the due performance or observance of any term, covenant or
agreement (other than those referred to in Sections 9.01 and 9.02 above)
contained in this Agreement, the Notes or any other Credit Document, and
such default shall continue unremedied for a period of at least 10 days
after the earlier to occur of (i) the date the Borrower obtains actual
knowledge of such default or (ii) the date notice of such default is given
to the Borrower by the Bank;
9.04 Default Under Agreements for Borrowed Money. (i) The Borrower or any
Subsidiary of the Borrower shall default in any payment with respect to any
Indebtedness in excess of $750,000 (individually or in the aggregate as to
the Borrower and its Subsidiaries) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice or lapse of time is
required), any such Indebtedness to become due prior to its stated
maturity, or (ii) any such Indebtedness shall be declared to be due and
payable, or required to be prepaid as a mandatory prepayment, prior to the
stated maturity thereof; provided, however, that there shall not exist an
Event of Default under this Section 9.04 if immediately upon obtaining
knowledge of any potential Event of Default under this Section 9.04, the
Borrower provides the Bank written notice of the facts and circumstances
pertaining thereto and the manner in which the Borrower intends to contest,
remedy or otherwise resolve the same and the Bank consents to such contest,
remedial action or other form of resolution, which consent shall not be
unreasonably withheld; provided, further that the consent of the Bank may
be limited in duration to any reasonable time period under the
circumstances;
9.05 Default Under Other Material Contracts. The Borrower or any Subsidiary of
the Borrower shall default in the due performance or observance of any
material term, covenant or agreement contained in any contract, agreement,
understanding or arrangement, beyond the period of grace, if any, provided
in the relevant contract, and such default shall result, or is reasonably
expected to result, in a Material Adverse Effect; provided, however that
there shall not exist an Event of Default under this Section 9.05 if
immediately upon obtaining knowledge of any potential Event of Default
under this Section 9.05, the Borrower provides the Bank written notice of
the facts and circumstances pertaining thereto and the manner in which the
Borrower intends to contest, remedy or otherwise resolve the same and the
Bank consents to such contest, remedial action or other form of resolution,
which consent shall not be unreasonably withheld; provided, further that
the consent of the Bank may be limited in duration to any reasonable time
period under the circumstances;
9.06 Voluntary Bankruptcy. The Borrower or any Subsidiary of the Borrower
commences any bankruptcy, reorganization, debt arrangement, or other case
or proceeding under the United States Bankruptcy Code or under any similar
foreign, federal, state, or local statute, or any dissolution or
liquidation proceeding, or makes a general assignment for the benefit of
creditors, or takes any action for the purpose of effecting any of the
foregoing;
9.07 Involuntary Bankruptcy. Any bankruptcy, reorganization, debt arrangement,
or other case or proceeding under the United States Bankruptcy Code or
under similar foreign, federal, state or local statute, or any dissolution
or liquidation proceeding, is involuntarily commenced against or in respect
of the Borrower or any of its Subsidiaries and such case or proceeding is
not dismissed or stayed within 30 days of such commencement;
9.08 Appointment of Receiver. The appointment, or the filing of a petition
seeking the appointment of a custodian, receiver, trustee, or liquidator
for any Borrower or any of their respective property, or the taking of
possession of any part of the property of the Borrower or of any of its
Subsidiaries, at the instance of any Governmental Authority;
9.09 Insolvency. The Borrower or any of its Subsidiaries becomes insolvent
(however defined), is generally not paying its debts as they become due, or
has suspended transaction of its usual business (except any suspension
incidental to any corporate transaction permitted pursuant to Section
8.03(A) hereof); provided however that, with respect to any Subsidiary of
the Borrower, the foregoing shall not be an Event of Default unless it
shall result, or is reasonably expected to result, in a Material Adverse
Effect;
9.10 Reorganization. The dissolution, merger, consolidation, or reorganization
of the Borrower or any Subsidiary of the Borrower; provide however that,
with respect to any Subsidiary of the Borrower, the foregoing shall not be
an Event of Default unless it shall result, or is reasonably expected to
result, in a Material Adverse Effect;
9.11 Material Misstatement. Any statement, representation or warranty made in or
pursuant to this Agreement or any other Credit Document shall prove to be
untrue or misleading in any material respect;
9.13 Entry of Judgment. The entry or issuance of judgments, orders, decrees or
fines against the Borrower or any Subsidiary of the Borrower which, in the
aggregate, involve liabilities in excess of the sum of $250,000 (the
discharge of which is not the obligation of any insurance company) and any
such judgments or orders involving liabilities in excess of said sum shall
have continued unbonded or unsatisfied and without stay of execution or
agreement between the parties thereon for a period of 30 days after the
entry or issuance of such judgment; or
9.14 Change of Control. The failure of any 2 of either Xxxx Xxxxxx, Xxxxxx X.
Xxxxx or Xxxx X. Xxxxxxxx, to continue to function as executive officers of
the Borrower or its Subsidiaries in substantially the same manner and with
substantially the same responsibilities with respect to the day-to-day
operations of the Borrower and its Subsidiaries as exists as of the Closing
Date.
X. REMEDIES.
10.01 Acceleration of Obligations; Other Remedies. Upon and following the
occurrence of an Event of Default described in Article IX hereof (other
than the Events of Default described in Sections 9.06, 9.07, and 9.08
hereof), at the Bank's sole option, the Bank's commitment, if any, to
make any further advance or Loans hereunder shall terminate and all
Obligations shall immediately become due and payable in full, all without
protest, presentment, demand or further notice of any kind to the
Borrower, all of which are expressly waived. Upon the occurrence of the
Event of Default described in Sections 9.06, 9.07, and 9.08 hereof,
immediately and automatically, the Bank's commitment, if any, to make any
further advances or Loans hereunder shall terminate and all Obligations
shall immediately become due and payable in full, all without protest,
presentment, demand or further notice of any kind to the Borrower, all of
which are expressly waived. Upon and following an Event of Default, the
Bank may, at its option, exercise any and all rights and remedies it has
under this Agreement, any other Credit Document and/or applicable law,
including, without limitation, the right to charge and collect interest
on the principal portion of the Obligations at a rate equal to the lesser
of: (i) the highest rate of interest set forth in the Credit Documents,
or (ii) the highest rate of interest allowed by law, such rate of
interest to apply to the Obligations, at the Bank's option, upon and
after an Event of Default so long as of it shall continue, maturity,
whether by acceleration or otherwise, and the entry of a judgment in
favor of the Bank with respect to any or all of the Obligations. Upon and
following an Event of Default, the Bank may proceed to protect and
enforce the Bank's rights under any Credit Document and/or under
applicable law by action at law, in equity or other appropriate
proceeding including, without limitation, an action for specific
performance to enforce or aid in the enforcement of any provision
contained herein or in any other Credit Document.
10.02 Right of Set-off. If any of the Obligations shall be due and payable or
any one or more Events of Default shall have occurred and be continuing,
whether or not the Bank shall have made demand under any Credit Document
and regardless of the adequacy of any collateral for the Obligations or
other means of obtaining repayment of the Obligations, the Bank shall
have the right, without notice to any Borrower, and is specifically
authorized hereby to set-off against and apply to the then unpaid balance
of the Obligations any items or funds of any Borrower held by the Bank,
any and all deposits (whether general or special, time or demand, matured
or unmatured) or any other property of the Borrower, including, without
limitation, securities and/or certificates of deposit, now or hereafter
maintained by the Borrower for its or their own account with the Bank,
and any other indebtedness at any time held or owing by the Bank to or
for the credit or the account of any Borrower, even if effecting such
set-off results in a loss or reduction of interest or the imposition of a
penalty applicable to the early withdrawal of time deposits. For such
purpose, the Bank shall have, and the Borrower hereby grants to the Bank,
a lien on and security interest in such deposits, property, funds and
accounts and the proceeds thereof.
10.03 Remedies Cumulative; No Waiver or Impairment. The rights, powers and
remedies of the Bank provided in this Agreement and any of the Credit
Documents are cumulative and not exclusive of any right, power or remedy
provided by law or equity. No failure or delay on the part of the Bank in
the exercise of any right, power or remedy shall operate as a waiver
thereof, nor shall any single or partial exercise preclude any other or
further exercise thereof, or the exercise of any other right, power or
remedy.
XI. MISCELLANEOUS.
11.01 Notices. Notices and communications under this Agreement and the other
Credit Documents shall be in writing and shall be given by either (i)
hand-delivery, (ii) certified mail (return receipt requested, postage
prepaid), (iii) reliable overnight commercial courier (charges prepaid),
or (iv) telecopy, to the addresses and telecopy numbers listed in this
Agreement. Notice given by telecopy shall be deemed to have been given
and received when sent. Notice by overnight courier shall be deemed to
have been given and received on the date scheduled for delivery. Notice
by certified mail shall be deemed to have been given and received on the
dates indicated on the receipt returned to the sender thereof. A party
may change its address and/or telecopier number by giving written notice
to the other party as specified herein.
11.02 Costs and Expenses. Whether or not the transactions contemplated by the
Credit Documents are fully consummated, the Borrower shall promptly pay
(or reimburse, as the Bank may elect) all reasonable costs and expenses
which the Bank has incurred or may hereafter incur in connection with the
negotiation, preparation, reproduction, interpretation, perfection,
monitoring, administration and enforcement of the Credit Documents, the
collection of all amounts due under the Credit Documents, and all
amendments, modifications, consents or waivers, if any, to the Credit
Documents. Such costs and expenses shall include, without limitation, the
reasonable fees and disbursements of counsel to the Bank, searches of
public records, costs of filing and recording documents with public
offices, internal and/or external audit and/or examination fees and costs
(but only to the extent that the Borrower shall be responsible for such
audit and examination fees and expenses pursuant to Section 7.08 hereof),
stamp, excise and other taxes and costs and expenses incurred by the
Bank, and the fees of the Bank's accountants, consultants or other
professionals; provided, that it is hereby acknowledged and agreed that
the Borrower shall not be responsible and the Bank may not seek payment
or reimbursement from the Borrower for the legal fees (exclusive of
reasonable disbursements) of the Bank's outside counsel in excess of
$15,000 for professional services rendered in connection with the
negotiations and preparation of the Credit Documents executed and
delivered on the Closing Date and the consummation of the transactions
therein contemplated. The Borrower's reimbursement obligations under this
paragraph shall survive any termination of the Credit Documents.
11.03 Payment Due on a Day Other Than a Business Day. If any payment due or
action to be taken under this Agreement or any Credit Document falls due
or is required to be taken on a day that is not a Business Day, such
payment or action shall be made or taken on the next succeeding Business
Day and such extended time shall be included in the computation of
interest.
11.04 Governing Law. This Agreement shall be construed in accordance with and
governed by the substantive laws of the State of New Jersey without
reference to conflict of laws principles.
11.05 Integration. This Agreement and the other Credit Documents constitute the
sole agreement of the parties with respect to the subject matter hereof
and thereof and supersede all oral negotiations and prior writings with
respect to the subject matter hereof and thereof.
11.06 Amendment; Waiver. No amendment of this Agreement, and no waiver of any
one or more of the provisions hereof shall be effective unless set forth
in writing and signed by the parties hereto.
11.07 Successors and Assigns. This Agreement (i) shall be binding upon the
Borrower and the Bank and their respective successors and permitted
assigns, and (ii) shall inure to the benefit of the Borrower and the Bank
and their respective successors and permitted assigns; provided, however,
that the Borrower may not assign its rights hereunder or any interest
herein without the prior written consent of the Bank, and any such
assignment or attempted assignment by the Borrower shall be void and of
no effect with respect to the Bank.
11.08 Sale, Assignment or Participations. The Bank may from time to time sell
or assign, in whole or in part, or grant participations in some or all of
the Credit Documents and/or the obligations evidenced thereby. The holder
of any such sale, assignment or participation, if the applicable
agreement between the Bank and such holder so provides, (i) shall be
entitled to all of the rights, obligations and benefits of the Bank and
(ii) shall be deemed to hold and may exercise the rights of set-off or
banker's lien with respect to any and all obligations of such holder to
the Borrower, in each case as fully as though the Borrower were directly
indebted to such holder. The Bank may, in its discretion, give notice to
the Borrower of such sale, assignment or participation; however, the
failure to give such notice shall not affect any of the Bank's or such
holder's rights hereunder. The Borrower authorizes the Bank to provide
information concerning the Borrower to any prospective purchaser,
assignee or participant, subject to such other party's agreement to the
provisions of Section 11.15 hereof. The information provided may include,
but is not limited to, amounts, terms, balances, payment history, return
item history and any financial or other information about the Borrower.
The Borrower agrees to indemnify, defend, and hold the Bank harmless at
the Borrower's cost and expense, from and against any and all lawsuits,
claims, actions, proceedings, or suits against the Bank or against the
Borrower and the Bank, arising out of or relating to the disclosure by
the Bank of such information to any prospective purchaser, assignee or
participant to the extent that such information does not comport with the
requirements set forth in Section 6.17 hereof as of the date such
information was furnished to the Bank by, or on behalf of, the Borrower.
11.09 Severability. The illegality or unenforceability of any provision of this
Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required
hereunder. In lieu of any illegal or unenforceable provision in this
Agreement, there shall be added automatically as a part of this Agreement
a legal and enforceable provision as similar in terms to such illegal or
unenforceable provision as may be possible.
11.10 Consent to Jurisdiction and Service of Process. The Borrower irrevocably
appoints each and every corporate officer of the Borrower as its
attorneys upon whom may be served, by regular or certified mail at the
address set forth in this Agreement, any notice, process or pleading in
any action or proceeding against it arising out of or in connection with
this Agreement or any of the other Credit Documents. The Borrower hereby
consents that any action or proceeding against it may be commenced and
maintained in any court within the State of New Jersey or in the United
States District Court for the District of New Jersey by service of
process on any such officer. The Borrower further agrees that such courts
of the State of New Jersey and the United States District Court for the
District of New Jersey shall have jurisdiction with respect to the
subject matter hereof and the person of the Borrower and all collateral
for the Obligations. Notwithstanding the foregoing, the Borrower agrees
that any action brought by the Borrower shall be commenced and maintained
only in a court in the federal judicial district or county in which the
Bank has its principal place of business in New Jersey.
11.11 Indemnification.fication
(a) The Borrower agrees to indemnify and hold harmless the Bank and its
officers, directors, employees, agents and advisors (each, an
"Indemnified Party") from the against any and all claims, damages,
losses, liabilities and reasonable expenses (including, without
limitation, reasonable fees and expenses of counsel; provided, that, in
the case of fees and expenses of counsel for the Indemnified Parties, the
Borrower shall be obligated to pay only the fees and expenses of a single
counsel in any one jurisdiction) that may be incurred by or asserted or
awarded against any Indemnified Party, in each case arising out of or in
connection with or by reason of, or in connection with the preparation
for a defense of any investigation, litigation or proceeding arising out
of, related to or in connection with (i) the actual proposed use of the
proceeds or the Loan or Letter of Credit, the Credit Documents or any of
the transactions contemplated thereby, including, without limitation, any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries in each case whether or not such investigation, litigation
or proceeding is brought by any Indemnified Party or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated, except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct.
(b) If, after receipt of any payment of all or any part of the
Obligations, the Bank is compelled or (after notice to the Borrower)
agrees, for settlement purposes, to surrender such payment to any person
or entity for any reason (including, without limitation, a determination
that such payment is void or voidable as a preference or fraudulent
conveyance, an impermissible set-off, or a diversion of trust funds),
then this Agreement and the other Credit Documents shall continue in full
force and effect, and the Borrower shall be liable for, and shall
indemnify, defend and hold harmless the Bank with respect to the full
amount so surrendered.
(c) Without limiting the applicability of the clause (a) of this
Section 11.11, the Borrower shall indemnify, defend and hold harmless the
Bank with respect to any and all claims, expenses, demands, losses,
costs, fines or liabilities of any kind (including, without limitation,
those involving death, personal injury or property damage and including
reasonable attorneys fees and costs) arising from or in any way related
to any hazardous materials or a dangerous environmental condition within,
on, from, related to or affecting any real property owned or occupied by
the Borrower including, without limitation, any and all claims that may
arise as a result of an intentional or unintentional act or omission of
any Borrower, any previous owner and/or operator of real property owned
or occupied by the Borrower that resulted in the discharge of hazardous
substances or wastes into the atmosphere or waters or onto the lands.
(d) The provisions of this Section 11.11 shall survive the termination of
this Agreement and the other Credit Documents and shall be and remain
effective notwithstanding the payment of the Obligations, the release of
any security interest, lien or encumbrance securing the Obligations or
any other action which the Bank may have taken in reliance upon its
receipt of such payment. Any action by the Bank shall be deemed to have
been conditioned upon any payment of the Obligations having become final
and irrevocable.
11.12 Inconsistencies. The Credit Documents are intended to be consistent.
However, in the event of any inconsistencies among any of the Credit
Documents, such inconsistency shall not affect the validity or
enforceability of each Credit Document. The Borrower agrees that in the
event of any inconsistency or ambiguity in any of the Credit Documents,
the Credit Documents shall not be construed against any one party but
shall be interpreted consistent with the Bank's policies and procedures.
11.13 Headings. The headings of articles, Sections and paragraphs have been
included herein for convenience only and shall not be considered in
interpreting this Agreement.
11.14 Schedules. All Schedules, Annexes and/or an Exhibits attached hereto are
incorporated herein.
11.15 Confidentiality. The Bank shall not disclose any Confidential Information
to any Person without the prior consent of the Borrower, other than
(i) to its officers, directors, employees, agents and advisors and to
actual or prospective purchaser, assignee, or participant of or in the
Loans and participants, and then only on a confidential basis, (ii) as
required by any law, rule or regulation or judicial process and (iii) as
requested or required by any Governmental Authority or examiner regarding
banks or banking.
11.16 Judicial Proceeding; Waivers. aivers
(a) EACH PARTY TO THIS AGREEMENT AGREES THAT ANY SUIT, ACTION OR
PROCEEDING, WHETHER CLAIM OR COUNTER-CLAIM, BROUGHT OR INSTITUTED BY ANY
PARTY HERETO OR ANY SUCCESSOR OR ASSIGN OF ANY PARTY, ON OR WITH RESPECT
TO THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS OR THE DEALINGS OF
THE PARTIES WITH RESPECT HERETO, OR THERETO, SHALL BE TRIED ONLY BY A
COURT AND NOT BY A JURY.
(b) EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER,
EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH
SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES.
(c) THE BORROWER ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC
AND MATERIAL ASPECT OF THIS AGREEMENT AND THAT THE BANK WOULD NOT EXTEND
CREDIT TO ANY BORROWER IF THE WAIVERS SET FORTH IN THIS SECTION WERE NOT
A PART OF THIS AGREEMENT.
11.17 Counterparts. This Agreement may be executed in as many counterparts as
may be deemed necessary or convenient, and by the different parties
hereto on separate counterparts, each of which, when so executed, shall
be deemed an original but all such counterparts shall constitute but one
and the same instrument.
IN WITNESS WHEREOF, the parties by their duly authorized representatives
have executed this Agreement as of the day and year first above written.
WITNESS/ATTEST: VESTCOM INTERNATIONAL, INC.
By:/s/ Xxxxx X. Xxxx By:/s/Xxxxxx X. Xxxxx
_____________________________ _______________________________
Name: Xxxxx X. Xxxx Name: Xxxxxx X. Xxxxx
Title:Controller Comvestrix Corp. Title: Vice President - Finance
and Administration
Address: 0000 Xxxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention:_________________
Telecopier:____________________
SUMMIT BANK
By:/s/Xxxxxxx Xxxxxx
____________________________
Name: Xxxxxxx Xxxxxx
Title: Vice President
Address: 000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxx
Vice President
Telecopier: (000) 000-0000
