1
Exhibit 10.31
RESTATED AND AMENDED
LOAN AGREEMENT
BY AND BETWEEN
XXXXXX, XXXXXXXX & ASSOCIATES, INC.
AND
FLEET NATIONAL BANK, AS AGENT AND A LENDER
AND
THE OTHER FINANCIAL INSTITUTIONS NOW OR
HEREAFTER PARTIES HERETO
$20,000,000 SECURED TERM LOAN
AND
$7,500,000 SECURED REVOLVING CREDIT LOAN
JANUARY 12, 1999
2
INDEX TO
LOAN AGREEMENT
Page
----
RECITALS.........................................................................................................1
ARTICLE 1. DEFINITIONS AND ACCOUNTING AND OTHER TERMS............................................................1
SECTION 1.1. CERTAIN DEFINED TERMS..........................................................................1
SECTION 1.2. ACCOUNTING TERMS..............................................................................15
SECTION 1.3. OTHER TERMS...................................................................................15
ARTICLE 2. AMOUNT AND TERMS OF THE LOANS........................................................................16
SECTION 2.1. THE LOANS.....................................................................................16
Section 2.1.0. The Revolving Credit Loans.............................................................16
Section 2.1.1. Term Loans.............................................................................17
SECTION 2.2. INTEREST AND FEES ON THE LOANS................................................................18
Section 2.2.1. Interest...............................................................................18
Section 2.2.2. Fees...................................................................................19
Section 2.2.3. Increased Costs - Capital..............................................................19
SECTION 2.3. NOTATIONS.....................................................................................20
SECTION 2.4. COMPUTATION OF INTEREST.......................................................................20
SECTION 2.5. TIME OF PAYMENTS AND PREPAYMENTS IN IMMEDIATELY AVAILABLE FUNDS...............................20
Section 2.5.1. Time...................................................................................20
Section 2.5.2. Setoff, etc............................................................................21
Section 2.5.3. Unconditional Obligations and No Deductions............................................22
SECTION 2.6. PREPAYMENT AND CERTAIN PAYMENTS...............................................................24
Section 2.6.1. Mandatory Payments.....................................................................24
Section 2.6.2. Voluntary Prepayments..................................................................25
Section 2.6.3. Prepayment of Libor Loans..............................................................25
Section 2.6.4. Permanent Reduction of Commitment......................................................25
SECTION 2.7. PAYMENT ON NON-BUSINESS DAYS..................................................................25
SECTION 2.8. USE OF PROCEEDS...............................................................................26
SECTION 2.9. SPECIAL LIBOR LOAN PROVISIONS.................................................................26
Section 2.9.1. Requests...............................................................................26
Section 2.9.2. Libor Loans Unavailable................................................................26
Section 2.9.3. Libor Lending Unlawful.................................................................27
Section 2.9.4. Additional Costs on Libor Loans........................................................28
Section 2.9.5. Libor Funding Losses...................................................................29
Section 2.9.6. Banking Practices......................................................................29
Section 2.9.7. Borrower's Options on Unavailability or Increased Cost of Libor Loans.................30
Section 2.9.8. Assumptions Concerning Funding of Libor Loans..........................................30
SECTION 2.10. INTEREST RATE PROTECTION.....................................................................30
ARTICLE 3. CONDITIONS OF LENDING................................................................................31
SECTION 3.1. CONDITIONS PRECEDENT TO THE COMMITMENT AND TO ALL LOANS.......................................31
Section 3.1.1. The Commitment and Initial Loans.......................................................31
i
3
Section 3.1.2. The Commitment and the Loans...........................................................34
ARTICLE 4. REPRESENTATIONS AND WARRANTIES.......................................................................34
SECTION 4.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER................................................34
Section 4.1.1. Organization and Existence.............................................................34
Section 4.1.2. Authorization and Absence of Defaults..................................................35
Section 4.1.3. Acquisition of Consents................................................................35
Section 4.1.4. Validity and Enforceability............................................................35
Section 4.1.5. Financial Information..................................................................35
Section 4.1.6. No Litigation..........................................................................36
Section 4.1.7. Regulation U...........................................................................36
Section 4.1.8. Absence of Adverse Agreements..........................................................36
Section 4.1.9. Taxes..................................................................................37
Section 4.1.10. ERISA.................................................................................37
Section 4.1.11. Ownership of Properties...............................................................37
Section 4.1.12. Accuracy of Representations and Warranties............................................38
Section 4.1.13. No Investment Company.................................................................38
Section 4.1.14. Solvency, etc.........................................................................38
Section 4.1.15. Approvals.............................................................................38
Section 4.1.16. Ownership Interests...................................................................38
Section 4.1.17. Licenses, Registrations, Compliance with Laws, etc....................................39
Section 4.1.18. Principal Place of Business; Books and Records........................................39
Section 4.1.19. Subsidiaries..........................................................................39
Section 4.1.20. Copyright.............................................................................39
Section 4.1.21. Environmental Compliance..............................................................39
Section 4.1.22. Material Agreements, etc..............................................................40
Section 4.1.23. Patents, Trademarks and Other Property Rights.........................................40
Section 4.1.24. Related Transaction Documents.........................................................40
Section 4.1.25. Material Adverse Effect...............................................................40
Section 4.1.26. Year 2000.............................................................................40
ARTICLE 5. COVENANTS OF THE BORROWER............................................................................41
SECTION 5.1. AFFIRMATIVE COVENANTS OF THE BORROWER OTHER THAN REPORTING REQUIREMENTS.......................41
Section 5.1.1. Payment of Taxes, etc..................................................................41
Section 5.1.2. Maintenance of Insurance...............................................................41
Section 5.1.3. Preservation of Existence, etc.........................................................42
Section 5.1.4. Compliance with Laws, etc..............................................................42
Section 5.1.5. Visitation Rights......................................................................42
Section 5.1.6. Keeping of Records and Books of Account................................................42
Section 5.1.7. Maintenance of Properties, etc.........................................................42
Section 5.1.8. Post-Closing Items.....................................................................42
Section 5.1.9. Other Documents, etc...................................................................42
Section 5.1.10. Minimum Interest Coverage Ratio.......................................................43
Section 5.1.11. Minimum Fixed Charge Coverage Ratio...................................................43
Section 5.1.12. Maximum Ratio of Total Indebtedness for Borrowed Money to EBITDA......................43
Section 5.1.13. Officer's Certificates and Requests...................................................43
Section 5.1.14. Depository............................................................................43
Section 5.1.15. Chief Executive Officer...............................................................43
Section 5.1.16. Notice of Purchase of Real Estate and Leases..........................................43
Section 5.1.17. Additional Assurances.................................................................44
Section 5.1.18. Appraisals............................................................................44
Section 5.1.19. Environmental Compliance..............................................................44
Section 5.1.20. Remediation...........................................................................44
Section 5.1.21. Site Assessments......................................................................44
Section 5.1.22. Indemnity.............................................................................44
ii
4
Section 5.1.23. Trademarks, Copyrights, etc................................................................45
SECTION 5.2. NEGATIVE COVENANTS OF THE BORROWER.................................................................45
Section 5.2.1. Liens, etc..................................................................................45
Section 5.2.2. Assumptions, Guaranties, etc. of Indebtedness of Other Persons..............................46
Section 5.2.3. Acquisitions, Dissolution, etc..............................................................46
Section 5.2.4. Change in Nature of Business................................................................47
Section 5.2.5. Ownership...................................................................................47
Section 5.2.6. Sale and Leaseback..........................................................................47
Section 5.2.7. Sale of Accounts, etc.......................................................................47
Section 5.2.8. Indebtedness................................................................................47
Section 5.2.9. Other Agreements............................................................................48
Section 5.2.11. Dividends, Payments and Distributions......................................................48
Section 5.2.12. Investments in or to Other Persons.........................................................48
Section 5.2.13. Transactions with Affiliates...............................................................48
Section 5.2.14. Change of Fiscal Year......................................................................48
Section 5.2.15. Subordination of Claims....................................................................48
Section 5.2.16. Compliance with ERISA......................................................................48
Section 5.2.17. Capital Expenditures.......................................................................49
Section 5.2.18. Hazardous Waste............................................................................49
Section 5.2.19 Other Restrictions on Liens or Dividends....................................................49
Section 5.2.20 Limitation on Creation of Subsidiaries, etc.................................................49
SECTION 5.3. REPORTING REQUIREMENTS.............................................................................49
ARTICLE 6. EVENTS OF DEFAULT.........................................................................................51
SECTION 6.1. EVENTS OF DEFAULT..................................................................................51
ARTICLE 7. REMEDIES OF LENDERS.......................................................................................53
ARTICLE 8. AGENT.....................................................................................................54
SECTION 8.1. APPOINTMENT........................................................................................54
SECTION 8.2. POWERS; GENERAL IMMUNITY...........................................................................54
Section 8.2.1. Duties Specified............................................................................54
Section 8.2.2. No Responsibility For Certain Matters.......................................................54
Section 8.2.3. Exculpatory Provisions......................................................................54
Section 8.2.4. Agent Entitled to Act as Lender.............................................................55
SECTION 8.3. REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF CREDITWORTHINESS................55
SECTION 8.4. RIGHT TO INDEMNITY.................................................................................55
SECTION 8.5. PAYEE OF NOTE TREATED AS OWNER.....................................................................56
SECTION 8.6. RESIGNATION BY AGENT...............................................................................56
SECTION 8.6. SUCCESSOR AGENT....................................................................................56
ARTICLE 9. MISCELLANEOUS.............................................................................................57
SECTION 9.1. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.....................................................57
SECTION 9.2. RIGHTS AND REMEDIES CUMULATIVE.....................................................................57
SECTION 9.3. DELAY OR OMISSION NOT WAIVER.......................................................................58
SECTION 9.4. WAIVER OF STAY OR EXTENSION LAWS...................................................................58
SECTION 9.5. AMENDMENTS, ETC....................................................................................58
SECTION 9.6. ADDRESSES FOR NOTICES, ETC.........................................................................59
SECTION 9.7. COSTS, EXPENSES AND TAXES..........................................................................60
SECTION 9.8. PARTICIPATIONS.....................................................................................60
SECTION 9.9. BINDING EFFECT; ASSIGNMENT.........................................................................60
SECTION 9.10. ACTUAL KNOWLEDGE..................................................................................60
SECTION 9.11. SUBSTITUTIONS AND ASSIGNMENTS.....................................................................61
SECTION 9.12. PAYMENTS PRO RATA.................................................................................62
SECTION 9.13. INDEMNIFICATION...................................................................................63
iii
5
SECTION 9.14. GOVERNING LAW...................................................................................64
SECTION 9.15. SEVERABILITY OF PROVISIONS......................................................................64
SECTION 9.16. HEADINGS........................................................................................64
SECTION 9.17. COUNTERPARTS....................................................................................64
iv
6
SCHEDULE OF EXHIBITS
EXHIBIT 1.1 EQUITY INVESTMENTS, OWNERSHIP INTERESTS AND SUBSIDIARIES
EXHIBIT 1.2 RELATED TRANSACTION DOCUMENTS
EXHIBIT 1.4 FORM OF INTEREST RATE ELECTION
EXHIBIT 1.5 FORM OF REVOLVING CREDIT NOTE
EXHIBIT 1.6 FORM OF TERM NOTE
EXHIBIT 1.8 PERMITTED ENCUMBRANCES
EXHIBIT 1.9 PRO RATA SHARES, AGENT'S AND LENDERS' NOTICE ADDRESSES AND
WIRE TRANSFER INSTRUCTIONS
EXHIBIT 1.10 FORM OF REQUEST
EXHIBIT 2.1.0 BORROWING BASE CERTIFICATE
EXHIBIT 3.1.1.8 PERMITTED INDEBTEDNESS AND CAPITALIZED LEASES
EXHIBIT 3.1.1.10 FORM OF COMPLIANCE CERTIFICATE
EXHIBIT 4.1.1 FOREIGN QUALIFICATIONS
EXHIBIT 4.1.2 AUTHORIZATIONS
EXHIBIT 4.1.3 CONSENTS
EXHIBIT 4.1.6 LITIGATION
EXHIBIT 4.1.8 ADVERSE AGREEMENTS
EXHIBIT 4.1.9 TAXES
EXHIBIT 4.1.11 REAL PROPERTY
EXHIBIT 4.1.17 GOVERNMENTAL PERMITS
EXHIBIT 4.1.20 COPYRIGHTS
EXHIBIT 4.1.21 HAZARDOUS WASTE
EXHIBIT 4.1.22 MATERIAL CONTRACTS
EXHIBIT 4.1.23 INTELLECTUAL PROPERTY
EXHIBIT 5.2.2 GUARANTIES
EXHIBIT 5.2.13 TRANSACTIONS WITH AFFILIATES
EXHIBIT 9.11.1 FORM OF SUBSTITUTION AGREEMENT
v
7
RESTATED AND AMENDED
LOAN AGREEMENT
Xxxxxx, Xxxxxxxx & Associates, Inc., an Ohio corporation with a
principal place of business at CCAi Renaissance Centre, 0000 Xxxxxxxxxxx Xxxxx,
Xxxxxxxx Xxxxxxx, Xxxx 00000 (hereinafter the "Borrower"), Fleet National Bank,
a national banking association organized under the laws of the United States and
having an office at Xxx Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter
sometimes the "Agent") as Agent for itself (sometimes "Fleet") and each of the
other Lenders who now and/or hereafter become parties to this Agreement pursuant
to the terms of Section 9.11 hereof, and sometimes in its capacity as a Lender
("Lender"), and the Lenders hereby agree as follows:
RECITALS
WHEREAS, on or about April 7, 1998, the Borrower obtained from Fleet a
secured revolving credit/term loan commitment of up to $15,000,000 all on the
terms and conditions contained in that certain Loan Agreement by and between the
Borrower, Fleet and the Agent dated as of April 7, 1998 (the "Existing Credit
Agreement"); and
WHEREAS, the Borrower has requested that the Agent and the Lenders
amend and restate said credit facility by replacing same with a Revolving Credit
Loan Commitment in a maximum principal amount not to exceed $7,500,000 and a
Term Loan in the amount of $20,000,000 and the Agent and the Lenders are willing
to amend and restate the Existing Credit Agreement to permit certain
indebtedness outstanding thereunder to remain outstanding on the terms and
conditions set forth in this Amended and Restated Loan Agreement, to provide for
the Revolving Credit Loan Commitment and the Term Loan and to amend and restate
certain other provisions thereof.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Borrower, the Lenders and the
Agent agree that the Existing Credit Agreement is hereby amended and restated
and shall remain in effect as amended and restated hereby on the terms and
conditions contained herein, each of which are agreed to by the Borrower, the
Lenders and the Agent as follows:
ARTICLE 1.
DEFINITIONS AND ACCOUNTING AND OTHER TERMS
Section 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired Company" means Bureau Van Dijk Computer Services, Inc., a
Georgia corporation and a Subsidiary.
1
8
"Adjusted Libor Rate" means, with respect to any Libor Loan to be made
by the Lenders for the Interest Period applicable to such Libor Loan, the
interest rate per annum determined by the Agent (fixed throughout such Interest
Period (subject to adjustments for the Libor Rate Reserve Percentage)) and
rounded upwards, if necessary, to the next 1/16 of 1%) which is equal to the
quotient of (i) the rate of interest determined by the Agent to be the average
of the interest rates per annum at which Dollar deposits in immediately
available funds are offered to each Reference Lender by first-class banks in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the Business Day on which such Interest Period begins, in an
amount approximately equal to the principal amount of such Libor Loan, for a
period of time equal to such Interest Period and (ii) a number equal to the
number one minus the Libor Rate Reserve Percentage. The "Libor Rate Reserve
Percentage" applicable to any Interest Period means the average of the maximum
effective rates (expressed as a decimal) of the statutory reserve requirements
(without duplication, but including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to each Reference Lender during such
Interest Period under regulations of the Board of Governors of the Federal
Reserve System (or any successor), including without limitation Regulation D or
any other regulation dealing with maximum reserve requirements which are
applicable to each Reference Lender with respect to its "Eurocurrency
Liabilities", as that term may be defined from time to time by the Board of
Governors of the Federal Reserve System (or any successor) or are otherwise
imposed by the Board of Governors of the Federal Reserve System (or any
successor) and which in any other respect relate directly to the funding of
loans bearing interest at rates based on the interest rates at which Dollar
deposits in immediately available funds are offered to banks by first-class
banks in the London interbank market. If any Reference Lender fails to provide
its offered quotation to the Agent, the Adjusted Libor Rate shall be determined
on the basis of the offered quotation of the other Reference Lender. The
Adjusted Libor Rate shall be adjusted automatically on and as of the effective
date of any change in the Libor Rate Reserve Percentage.
"Adjusted Four Quarterly Basis" means (i) for the Borrower fiscal
quarter ending December 31, 1998, EBITDA, Interest Expense and Total Debt
Service, respectively shall be the sum of (a) the EBITDA, Interest Expense and
Total Debt Service, respectively, of the Borrower and any Subsidiaries for said
Borrower fiscal quarter and for the immediately preceding two Borrower fiscal
quarters times 1.33, plus, (b) the Acquired Company EBITDA, Interest Expense and
Total Debt Service, respectively, calculated in the same manner as the
Borrower's EBITDA, Interest Expense and Total Debt Service, respectively, set
forth above for the Acquired Company fiscal quarter ending December 31, 1998 and
the immediately preceding three Acquired Company fiscal quarters; (ii) for the
Borrower fiscal quarter ending March 31, 1999, EBITDA, Interest Expense and
Total Debt Service, respectively, shall be the sum of (c) the EBITDA, Interest
Expense and Total Debt Service, respectively, of the Borrower and any
Subsidiaries for said fiscal quarter and for the immediately preceding three
Borrower fiscal quarters plus (d) the Acquired Company's EBITDA, Interest
Expense and Total Debt Service, respectively, for the Acquired Company's fiscal
quarters ending June 30, September 30, and December 31, of 1998; (iii) for the
Borrower fiscal quarter ending June 30, 1999, EBITDA, Interest Expense and Total
Debt Service, respectively, shall be the sum of (e) the EBITDA, Interest Expense
and Total Debt Service, respectively, of the Borrower and any Subsidiaries for
said fiscal quarter and for the immediately preceding three Borrower fiscal
quarters plus (f) the Acquired Company's EBITDA, Interest Expense and Total Debt
Service, respectively, for the Acquired Company's fiscal
2
9
quarters ending September 30, 1998 and December 31, 1998; (iv) for the Borrower
fiscal quarter ending September 30, 1999, EBITDA, Interest Expense and Total
Debt Service, respectively, shall be the sum of (g) the EBITDA, Interest Expense
and Total Debt Service, respectively, of the Borrower and any Subsidiaries for
said fiscal quarter and for the immediately preceding three Borrower fiscal
quarters plus (h) the EBITDA, Interest Expense and Total Debt Service,
respectively, of the Acquired Company for the Acquired Company's fiscal quarter
ending December 31, 1998; and for the Borrower fiscal quarter ending December
31, 1999 and thereafter, EBITDA, Interest Expense and Total Debt Service,
respectively, shall be the EBITDA, Interest Expense and Total Debt Service,
respectively, of the Borrower and any Subsidiaries for the Borrower fiscal
quarter in question and the immediately preceding three Borrower fiscal
quarters.
"Advance" and "Advances" means the funding by any Lender of all or a
portion of the Loans in accordance with this Agreement.
"Affiliate" means singly and collectively, TA Associates and any Person
(other than a Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, the Borrower. For purposes of
this definition, a Person shall be deemed to be "controlled by" the Borrower if
the Borrower possesses, directly or indirectly, power either to (i) vote 10% or
more of the securities having ordinary voting power for the election of
directors of such Person or (ii) direct or cause the direction of the management
and policies of such Person whether by contract or otherwise, and the legal
representative, successor or assign of any such Person.
"Agent" means Fleet National Bank or any other Person which is at the
time in question serving as the agent under the terms of Article 8 hereof and
the other Financing Documents.
"Agreement" means this loan agreement, as the same may from time to
time be amended.
"A.M." means a time from and including 12 o'clock midnight to and
excluding 12 o'clock noon on any Business Day using Eastern Standard (Daylight
Savings) time.
"Applicable Margin" means, (i) for each Libor Loan, 3.25% per annum,
and (ii) for each Prime Rate Loan, 1.50% per annum; provided, however, that if,
at any time on or after the receipt by the Agent (a) of the Borrower's quarterly
financial statements for the Borrower's December 31, 1998 fiscal quarter (which
for purposes of this definition shall be adjusted to give effect to the Loans
and the closing of the Related Transactions as provided in Section 3.1.10) and
(b) the Borrower's quarterly financial statements for each subsequent Borrower
fiscal quarter provided to the Agent by the Borrower pursuant to Section 5.3.3
hereof, the ratio of total Indebtedness for Borrowed Money of the Borrower and
its Subsidiaries on a consolidated basis as of the last day of the most recently
ended Borrower fiscal quarter to EBITDA calculated on the Adjusted Four
Quarterly Basis is within the ratios set forth below and if and so long as no
Default or Event of Default exists, the applicable margin, shall, subject to the
last sentence of this definition, equal the rate set forth below opposite the
applicable ratio:
3
10
Ratio Prime Rate+ LIBOR Rate+
< 3.00:1.00 > 2.50:1.00 1.00% 2.75%
-
< 2.50:1.00 > 1.50:1.00 .50% 2.25%
-
< 1.50 .00% 1.50%
Any change in the Applicable Margin required pursuant to the foregoing
shall become effective on the first day of the calendar month commencing after
the month in which the Agent receives the Borrower's financial statement for the
Borrower's fiscal quarter or year-end, as the case may be, in question;
provided, however, that each of the above-referenced interest rates shall remain
in effect only so long as Borrower qualifies therefor and provided further,
however, that interest rate reductions shall become final only on the basis of
Borrower's annual audited financial statements and in the event that such annual
audited financial statements establish that the Borrower was not entitled to a
rate reduction which was previously granted, the Borrower shall, upon written
demand by the Agent repay to the Agent for the account of each Lender an amount
equal to the excess of interest at the rate which should have been charged based
on such annual audited financial statements and the rate actually charged on the
basis of Borrower's quarterly financial statement(s) (provided that in the event
of a dispute as to the appropriate fiscal quarter as to which any adjustment
should be allocated, the decision of the independent accountants of the Borrower
shall be made in accordance with GAAP and shall be binding upon the Agent, the
Lenders and the Borrower absent manifest error); and provided further, however,
that in the event that Borrower fails to provide any financial statement on a
timely basis in accordance with Section 5.3.3, any interest rate increase
payable as a result thereof shall be retroactively effective to the date on
which the financial statement in question should have been received by the Agent
in accordance with Section 5.3.3, and the Borrower shall pay any amount due as a
result thereof upon written demand from the Agent. The Agent shall endeavor to
provide the Borrower with written notice of any such rate increases.
"Authorized Representative" means such senior personnel of the Borrower
as shall be duly authorized and designated in writing by the Borrower to execute
documents, instruments and agreements on its behalf and to perform the functions
of Authorized Representative under any of the Financing Documents.
"Borrowed Money" means any obligation to repay funded Indebtedness, any
Indebtedness evidenced by notes, bonds, debentures, guaranties or similar
obligations including without limitation the Loans and any obligation to pay
money under a conditional sale or other title retention agreement, the net
aggregate rentals payable under any Capitalized Lease Obligation, any
reimbursement obligation for any letter of credit, any obligations in respect of
banker's and other acceptances or similar obligations and the maximum amount of
KLA Deferred Payments which could be owed by the Borrower at or after the date
of determination.
"Borrower" has the meaning assigned in the first paragraph of this
Agreement.
4
11
"Borrowing Base" means an amount equal to eighty percent (80%) of the
Net Outstanding Amount of Eligible Receivables.
"Budget" has the meaning assigned to such term in Section 5.3.7.
"Business Condition" means the financial condition, business, assets,
liabilities and operations of a Person.
"Business Day" means (i) for all purposes other than as covered by
clause (ii) below, any day on which banks in Boston, Massachusetts or New York,
New York are not authorized or required by applicable law to close; and (ii)
with respect to all notices and determinations in connection with, and payments
of principal and interest on, Libor Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in Dollar deposits in the London interbank market.
"Capital Expenditures" means all expenditures paid or incurred by the
Borrower or any Subsidiary in respect of (i) the acquisition, construction,
improvement or replacement of land, buildings, machinery, equipment, any other
fixed assets or leaseholds and (ii) to the extent related to and not included in
(i) above, materials, contract labor and direct labor, which expenditures have
been or should be, in accordance with GAAP, capitalized on the books of the
Borrower or such Subsidiary. Where a fixed asset is acquired by a lease which is
required to be capitalized pursuant to Statement of Financial Accounting
Standards number 13 or any successor thereto, the amount required to be
capitalized in accordance therewith shall be considered to be an expenditure in
the year such asset is first leased.
"Capitalized Lease Obligations" means all lease obligations which have
been or should be, in accordance with GAAP, capitalized on the books of the
lessee.
"Cash Equivalent Investments" means any Investment in (i) direct
obligations of the United States or any agency, authority or instrumentality
thereof, or obligations guaranteed by the United States or any agency, authority
or instrumentality thereof, whether or not supported by the full faith and
credit of, a right to borrow from or the ability to be purchased by the United
States; (ii) commercial paper rated in the highest grade by a nationally
recognized statistical rating agency or which, if not rated, is issued or
guaranteed by any issuer with outstanding long-term debt rated A or better by
any nationally recognized statistical rating agency; (iii) demand and time
deposits with, and certificates of deposit and bankers acceptances issued by,
any office of the Agent, any Lender or any other bank or trust company which is
organized under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000, the
outstanding long-term debt of which or of the holding company of which it is a
subsidiary is rated A or better by any nationally recognized statistical rating
agency; (iv) any short-term note which has a rating of MIG-2 or better by
Xxxxx'x Investors Service Inc. or a comparable rating from any other nationally
recognized statistical rating agency; (v) any municipal bond or other
governmental obligation (including without limitation any industrial revenue
bond or project note) which is rated A or better by any nationally recognized
statistical rating agency; (vi) any other obligation of any issuer, the
outstanding long-term debt of which is rated A or better by any nationally
recognized statistical
5
12
rating agency; (vii) any repurchase agreement with any financial institution
described in clause (iii) above, relating to any of the foregoing instruments
and fully collateralized by such instruments; (viii) shares of any open-end
diversified investment company that has its assets invested only in investments
of the types described in clause (i) through (vii) above at the time of purchase
and which maintains a constant net asset value per share; and (ix) shares of any
open-end diversified investment company registered under the Investment Company
Act of 1940, as amended, which maintains a constant net asset value per share in
accordance with regulations of the Securities & Exchange Commission, has
aggregate net assets of not less than $50,000,000 on the date of purchase and
either derives at least 95% of its gross income from interest on or gains from
the sale of investments of the type described in clauses (i) through (vii),
above or has at least 85% of the weighted average value of its assets invested
in investments of such types; provided that the purchase of any shares in any
particular investment company shall be limited to an aggregate amount owned at
any one time of $500,000. Each Cash Equivalent Investment shall have a maturity
of less than one year at the time of purchase; provided that the maturity of any
repurchase agreement shall be deemed to be the repurchase date and not the
maturity of the subject security and that the maturity of any variable or
floating rate note subject to prepayment at the option of the holder shall be
the period remaining (including any notice period remaining) before the holder
is entitled to prepayment.
"Change of Control" means, at any time:
(i) any "person" or "group" (each as used in Sections 13(d)(3) and
14(d)(2) of the Securities Exchange Act of 1934, as amended from time to time)
either (A) becomes the "beneficial owner" (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of voting capital stock of the Borrower
(or securities convertible into or exchangeable for such voting capital stock)
representing 30% or more of the combined voting power of all voting capital
stock of the Borrower (on a fully diluted basis) or (B) otherwise has the
ability, directly or indirectly, to elect a majority of the board of directors
of the Borrower; or
(ii) during any period of up to 24 consecutive months, commencing on
the Closing Date, individuals who at the beginning of such 24-month period were
directors of the Borrower shall cease for any reason (other than (A) the death,
disability or retirement of a director or (B) the death, disability or
retirement of an officer of the Borrower that is serving as a director at such
time so long as another officer of the Borrower replaces such Person as a
director) to constitute a majority of the board of directors of the Borrower.
"Closing Date" means the date on which all of the conditions precedent
set forth in Section 3.1 of this Agreement have been satisfied and the Term Loan
is funded in accordance with this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means the Lenders' several commitments to make or maintain
the Loans as set forth in Section 2.1 hereof in the maximum outstanding amount
of each Lender's Pro Rata Share of $27,500,000 less the reductions set forth in
Section 2.1 and less any reductions and prepayments or repayments of the Term
Loan as set forth in Section 2.6.
6
13
"Commonly Controlled Entity" means a Person, whether or not
incorporated, which is under common control with the Borrower within the meaning
of section 414(b) or (c) of the Code.
"Current Liabilities" means all liabilities of the Borrower and the
Subsidiaries which would, in accordance with GAAP on a consolidated basis, be
classified as current liabilities of corporations conducting a business the same
as or similar to that of the Borrower and any Subsidiaries, including without
limitation, all lease rental payments under Capitalized Lease Obligations and
fixed prepayments of, and sinking fund payments and reserves with respect to,
Indebtedness, in each case required to be made within one year from the date of
determination.
"Default" means an event or condition which with the giving of notice
or lapse of time or both would become an Event of Default.
"Discharged Rights and Obligations" shall have the meaning assigned to
such term in Section 9.11.4.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means, for any fiscal period, Net Income plus, to the extent
accounted for in Net Income: (i) Interest Expense, (ii) taxes, (iii)
depreciation, (iv) amortization, (v) other noncash charges, (vi) non-recurring
extraordinary costs incurred by the Borrower and any Subsidiaries prior to March
31, 1999 in connection with closing of the Loans and the Related Transactions
and (vii) accrued KLA Deferred Payments, for such period determined on an
accrual and consolidated basis in accordance with GAAP.
"Effective Prime" means the Prime Rate plus the Applicable Margin for
Prime Rate Loans.
"Eligible Receivables" means accounts receivable of the Borrower
evidencing Indebtedness of Persons located in the United States of America to
the Borrower for goods actually sold and delivered or services actually
performed in the ordinary course of business by the Borrower to or for such
Person, as to which goods or services no written notice has been received by
Borrower from such Person that alleges a breach by the Borrower of its
obligation to deliver such goods and/or services and which accounts receivable
have been outstanding for less than ninety (90) days since their respective
invoicing dates, but excluding, however, (i) accounts receivable owing by
officers, directors, shareholders or employees of Borrower, (ii) accounts
receivable with respect to which goods are placed on consignment, guaranteed
sale, "xxxx and hold" or other terms by reason of which the payment by the
account debtor may be conditional, (iii) accounts receivable owing by the United
States or any agency, department or instrumentality thereof unless such accounts
are freely assignable to the Agent under the United States Assignment of Claims
Act and the Borrower has separately assigned each such account to the Agent in
compliance with such Act, (iv) accounts receivable owing by any Subsidiary or
Affiliate of Borrower, (v) accounts receivable with respect to which Borrower or
any Subsidiary or Affiliate is liable to the account debtor for goods sold or
services provided to Borrower or any Subsidiary or Affiliate by such account
debtor to the extent of Borrower's or any Subsidiary's or
7
14
Affiliate's liability to such account debtor, (vi) any accounts receivable as to
which the account debtor has claimed in writing any setoff or any dispute as to
the amount owing by the account debtor to the extent of the amount in dispute,
(vii) any accounts receivable subject to any Lien other than pursuant to the
Security Documents, (viii) any accounts receivable owing by any Person which is
insolvent and/or the subject of any bankruptcy, receivership or other insolvency
proceeding, and (ix) any accounts receivable deemed by the Agent in the Agent's
sole discretion exercised in good faith difficult to collect or uncollectible.
"ERISA" means the Employee Retirement Income Security Act of 1974 as
amended from time to time.
"Events of Default" has the meaning assigned to that term in Section
6.1 of this Agreement.
"Excess Cash Flow" means, for any fiscal year of the Borrower, the sum
of EBITDA for each Borrower fiscal quarter in such fiscal year, minus the sum of
(i) an amount equal to the sum of payments included in Total Debt Service paid
during each fiscal quarter in such fiscal year, (ii) to the extent not included
in Total Debt Service, all Capital Expenditures permitted under Section 5.2.17
and paid during each Borrower fiscal quarter in such fiscal year, (iii) KLA
Deferred Payments paid during such fiscal year, (iv) taxes payable during each
Borrower fiscal quarter in such fiscal year and (v) non-recurring extraordinary
costs incurred by the Borrower and any Subsidiaries prior to March 31, 1999 in
connection with the closing of the Loans and the Related Transactions and (v)
plus decreases and minus increases in working capital for the fiscal period in
question.
"Exhibit" means, when followed by a letter, the exhibit attached to
this Agreement bearing that letter and by such reference fully incorporated in
this Agreement.
"Facility Fee" means, the fee payable by the Borrower in accordance
with Section 2.2.2 and accordance with the Fee Letter.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/16th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York, provided that (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next succeeding Business Day as so published, and (ii) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate quoted to the Agent on such
day on such transactions as determined by the Agent in its discretion exercised
in good faith.
"Fee Letter" means that certain side letter of even date with this
Agreement between the Borrower and the Agent regarding certain fees payable by
the Borrower.
"Financing Documents" means, collectively, this Agreement, each Note,
the Security Documents, the Fee Letter, the Post-Closing Letter, any Letter of
Credit, any Letter of Credit
8
15
Agreement, any agreement with any Lender providing any interest rate protection
arrangement and each other agreement, instrument or document now or hereafter
executed in connection herewith or therewith.
"Fixed Charge Coverage Ratio" means the ratio of (i) EBITDA calculated
on the Adjusted Four Quarterly Basis minus all Capital Expenditures permitted
under Section 5.2.17 and paid during each Borrower fiscal quarter during the
period in question, and taxes payable during each Borrower fiscal quarter during
the period in question to (ii) Total Debt Service calculated on the Adjusted
Four Quarterly Basis.
"GAAP" means generally accepted accounting principles in effect from
time to time in the United States of America.
"Hazardous Material" shall mean any substance or material defined or
designated as a hazardous or toxic waste, hazardous or toxic material, hazardous
or toxic substance, or other similar term, by any United States federal, state
or local environmental statute, regulation or ordinance.
"Indebtedness" means, without duplication for any Person, (i) all
indebtedness or other obligations of said Person for Borrowed Money or for the
deferred purchase price of property or services, including, without limitation,
all reimbursement obligations of said Person with respect to standby and/or
documentary letters of credit (ii) all indebtedness or other obligations of any
other Person ("Other Person") for Borrowed Money or for the deferred purchase
price of property or services, the payment or collection of which said Person
has guaranteed (except by reason of endorsement for deposit or collection in the
ordinary course of business) or in respect of which said Person is liable,
contingently or otherwise, including, without limitation, liable by way of
agreement to purchase or lease, to provide funds for payment, to supply funds to
purchase, sell or lease property or services primarily to assure a creditor of
such Other Person against loss or otherwise to invest in or make a loan to the
Other Person, or otherwise to assure a creditor of such Other Person against
loss, (iii) all indebtedness or other obligations of any Person for Borrowed
Money or for the deferred purchase price of property or services secured by (or
for which the holder of such indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in any property owned by said
Person, whether or not said Person has assumed or become liable for the payment
of such indebtedness or obligations, (iv) Capitalized Lease Obligations of said
Person and (v) obligations of such Person under contracts pursuant to which such
Person has agreed to purchase interest rate protection or swap interest rate
obligations.
"Ineligible Securities" means Securities which may not be underwritten
or dealt in by member banks of the Federal Reserve System under Section 16 of
the Banking Act of 1993 (12 U.S.C. ss.24, Seventh), as amended.
"Interest Adjustment Date" means (i) as to any Prime Rate Loan to be
converted to a Libor Loan the Business Day elected by the Borrower in its
applicable Interest Rate Election, but being not less than three (3) Business
Days after the receipt by the Agent before 12:00 o'clock P.M. on a Business Day
of an Interest Rate Election electing the Libor Rate as the interest rate on
9
16
such Loan; and (ii) as to any Libor Loan, the last Business Day of the Interest
Period pertaining to such Libor Loan.
"Interest Expense" means, with respect to any fiscal quarter, the
aggregate amount required to be accrued by the Borrower and any Subsidiaries and
by the Acquired Company when calculated on the Adjusted Four Quarterly Basis in
such fiscal quarter for interest, fees (excluding, however, the Facility Fee
being paid to the Agent on or after the Closing Date), charges and expenses,
however characterized, on its Indebtedness, including, without limitation, all
such interest, fees, charges and expenses required to be accrued with respect to
Indebtedness under the Financing Documents, all determined in accordance with
GAAP.
"Interest Period" means:
(a) With respect to each Libor Loan:
(i) initially, the period commencing on the date of such Libor
Loan and ending one, two, three, four or six months thereafter as the
Borrower may elect in the applicable Interest Rate Election and
subject to Section 2.9; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such Libor Loan
and ending one, two, three, four or six months thereafter as the
Borrower may elect in the applicable Interest Rate Election and
subject to Section 2.9;
provided that clauses (i) and (ii) of this definition are subject to
the following:
(A) any Interest Period (other than an Interest Period determined
pursuant to clause (C) below) which would otherwise end on a day which
is not a Business Day shall be extended to the next succeeding
Business Day unless such Business Day falls in another calendar month,
in which case such Interest Period shall end on the immediately
preceding Business Day;
(B) any Interest Period which 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, subject to clause (C) below, end on the last Business
Day of a calendar month; and
(C) for the Term Loan, no Interest Period shall end after the
Term Loan Repayment Date and for the Revolving Credit Loan, no
Interest Period shall end after the Revolving Credit Repayment Date;
and
(D) with respect to all Libor Loans, no more than six (6)
Interest Periods may be in effect at any time.
(b) With respect to each Prime Rate Loan, the period during which such
Loan is outstanding:
10
17
"Interest Rate Election" means the Borrower's irrevocable telecopied or
telephonic notice of election, which shall be promptly confirmed by a written
notice of election that Effective Prime or the Libor Rate shall apply to all or
any portion of the Loans, which shall, subject to this Agreement, be effective
on the next Interest Adjustment Date, such telecopied or telephonic notice and
written confirmation thereof to be in the form of Exhibit 1.4 and to be received
by the Agent prior to 12:00 o'clock P.M. on a Business Day and at least three
(3) Business Days prior to an Interest Adjustment Date in the case of a Libor
Loan, and by 12:00 p.m. on an Interest Adjustment Date in the case of a Prime
Rate Loan, each such Interest Rate Election, subject to the terms of this
Agreement to apply to the Advance or the Loan referred to in such Interest Rate
Election or to effect a change in the interest rate on the applicable portion of
the Loans then outstanding, as applicable, with respect to which such Interest
Rate Election was made, such change to occur on the Interest Adjustment Date
next succeeding receipt of such Interest Rate Election by the Agent. Any
Interest Rate Election received by the Agent after 12 o'clock P.M. on a Business
Day shall be deemed, for all purposes of this Agreement to have been received
prior to 12 o'clock P.M. on the next succeeding Business Day.
"Investment" means any investment in any Person whether by means of a
purchase of capital stock, notes, bonds, debentures or other evidences of
Indebtedness and/or by means of a capital or partnership contribution, loan,
deposit, advance or other means.
"KLA" means Xxxxxx-Xxxxx & Associates, Inc., a Kentucky corporation.
"KLA Deferred Payments" means the financial obligations of Borrower
under the Retention Incentive Bonus Plan Agreements between the Borrower and
certain former employees of KLA each dated as of April 3, 1998 and the Earnout
Agreement among the Borrower, KLA, Xxxxxxx Xxxxxx, Xxxx Xxxxx and Xxxxxx
Xxxxxxxx, dated as of April 3, 1998.
"Lender" means Fleet, or any financial institution which hereafter
becomes a party hereto pursuant to the terms of Section 9.11, each in their
individual capacity, and "Lenders" means Fleet and each of such financial
institutions.
"Letter of Credit" means an irrevocable stand-by or commercial letter
of credit issued by the Agent for the account of the Borrower pursuant to a
Letter of Credit Agreement subject to and in accordance with this Agreement.
"Letter of Credit Agreement" means an application and agreement for
stand-by or commercial letter of credit in such form as may at any time be
customarily required by the Agent for its issuance of stand-by or commercial
letters of credit.
"Libor Loan" means any portion of any Loan bearing interest at the
Libor Rate.
"Libor Rate" means, for any Interest Period, the Adjusted Libor Rate in
effect on the first day of such Interest Period (subject to adjustment as
provided in the definition of Adjusted Libor Rate) plus the Applicable Margin
for Libor Loans from time to time in effect.
11
18
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other) or other security agreement
or preferential arrangement of any kind or nature whatsoever (including without
limitation any conditional sale or other title retention agreement and any
Capitalized Lease Obligation) having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the
applicable Uniform Commercial Code or comparable law of any jurisdiction in
respect of any of the foregoing.
"Loans" and "Loan" means at any time the outstanding principal amount
of Indebtedness owed to the Lenders or to any Lender, as the context may require
pursuant to this Agreement.
"Majority Lenders" means Lenders holding an aggregate Pro Rata Share of
the outstanding principal balance of the Loans in an amount equal to or in
excess of 50.1% of the total outstanding principal balance of the Loans and if
there is no outstanding principal balance of the Loans, Lenders having at least
50.1% of the Commitment.
"Material Adverse Effect" means material adverse effect on (i) the
ability of the Borrower or any Subsidiary to fulfill their obligations under any
of the Financing Documents or (ii) the Business Condition of the Borrower or any
Subsidiary.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Income" means, for any fiscal period, the net after tax income
(loss) of the Borrower and any Subsidiaries for such period determined on an
accrual and consolidated basis in accordance with GAAP.
"Net Outstanding Amount of Eligible Receivables" means the net amount
of Eligible Receivables outstanding after eliminating from the aggregate amount
of outstanding Eligible Receivables all payments, adjustments and credits
applicable thereto.
"Note" means any promissory note of the Borrower payable to the order
of a Lender and substantially in the form of Exhibit 1.5 or Exhibit 1.6 and
evidencing all or a portion of the Loan and "Notes" means all of the Notes,
collectively.
"Obligations" mean any and all Indebtedness, obligations and
liabilities of Borrower and/or any Subsidiaries under any of the Financing
Documents to any one or more of the Lenders and/or the Agent of every kind and
description, absolute or contingent, due or to become due, whether for payment
or performance, now existing or hereafter arising, including, without
limitation, all Loans, interest, taxes, fees, charges, and expenses under the
Financing Documents and attorneys' fees chargeable to the Borrower and/or any
Subsidiaries or incurred by any of the Lenders and/or the Agent under any of the
Financing Documents.
"Officer's Certificate" means a certificate signed by an Authorized
Representative and delivered to the Agent on behalf of the Lenders.
12
19
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to subtitle A of Title IV of ERISA.
"P.M." means a time from and including 12 o'clock noon on any Business
Day to the end of such Business Day using Eastern Standard (Daylight Savings)
time.
"Permitted Acquisition" means any acquisition (whether in one
transaction or in a series of transactions) of all or any substantial portion of
the assets or ownership interests in another Person, or any merger,
consolidation or combination(whether in one transaction or in a series of
transactions) with another Person permitted pursuant to the terms of Section
5.2.3 hereof, including, without limitation, the acquisition of the Acquired
Company by the Borrower pursuant to the Related Transaction Documents.
"Permitted Encumbrances" means each Lien granted pursuant to any of the
Security Documents, those Liens, security interests and defects in title
permitted under Section 5.2.1 and those Liens listed on Exhibit 1.8 hereto.
"Person" means an individual, corporation, partnership, limited
liability company, joint venture, trust, or unincorporated organization, or a
government or any agency or political subdivision thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of
ERISA maintained for employees of the Borrower or any Commonly Controlled
Entity.
"Post-Closing Letter" means that certain letter agreement between the
Borrower and the Agent dated the Closing Date and listing certain post-closing
actions to be completed by the Borrower.
"Premises" has the meaning assigned to such term in Section 4.1.21.1.
"Prime Rate" means the higher of (i) the floating rate of interest per
annum designated from time to time by the Agent as being its "prime rate" of
interest, such interest rate to be adjusted on the effective date of any change
thereof by the Agent, it being understood that such rate of interest may not be
the lowest rate of interest from time to time charged by the Agent and (ii) the
Federal Funds Rate, such interest rate to be adjusted on the effective date of
any change thereof by the Federal Reserve Bank of New York.
"Prime Rate Loan(s)" means any portion of the Loans bearing interest at
Effective Prime.
"Prior Permitted Acquisition" means Borrower's acquisition of KLA.
"Projections" means the Borrower's written projections of Borrower's
three-year future performance on a consolidated basis delivered to the Agent
prior to the Closing.
"Pro Rata Share" means (i) with respect to the Commitment, each
Lender's percentage share of the Commitment as set forth immediately opposite
such Lender's name on Exhibit 1.9,
13
20
and (ii) with respect to the Loans, each Lender's percentage share of the
aggregate outstanding principal balance of the Loans and "Pro Rata Shares" means
such percentage shares of the Lenders.
"Qualified Initial Public Offering" means the Borrower and/or any
Subsidiary filing a Form S-1 or any other form of registration statement then
available for registration with the Securities and Exchange Commission or
otherwise conducting an initial public offering of any class of the Borrower's
or any Subsidiary's securities, which such offering generates $35,000,000 or
more in net proceeds and results in a price per share of $11.00 or more (subject
to adjustment for stock splits, stock dividends, recapitalizations and the
like).
"Quick Ratio" means the (i) the sum of (w) cash on hand or on deposit
in any bank or trust company which has not suspended business, (x) Cash
Equivalent Investments (without duplication with (w)), (y) Net Outstanding
Amount of Eligible Receivables and (z) the excess, if any, of the Revolving
Credit Loan Commitment over the sum of the outstanding principal balance of the
Revolving Credit Loans, the outstanding stated amounts of any Letters of Credit
and Letter of Credit Agreements and the amount of any unreimbursed drawings
thereunder to (ii) (a) Current Liabilities plus the maximum KLA Deferred
Payments which could be payable by the Borrower during the immediately
succeeding twelve-month period, but excluding any KLA Deferred Payments which
have been accrued in Borrower's Current Liabilities. Each item described in
clauses (i) and (ii) of this Section 5.1.11 shall be calculated as of the last
day of the Borrower fiscal quarter and include only the item(s) in question of
the Borrower and its Subsidiaries on a consolidated basis.
"Reference Lender(s)" means the Agent unless the Agent resigns said
responsibility, at which time and thereafter such term means one or two Lenders
selected by the Agent in its discretion from time to time as a reference lender
for purposes of determining the Adjusted Libor Rate.
"Related Transactions" means the acquisition by the Borrowers of the
issued and outstanding capital stock of the Acquired Company.
"Related Transaction Documents" means the documents listed on Exhibit
1.2.
"Reportable Event" shall have the meaning assigned to that term in
Section 4043 of ERISA for which the requirement of 30 days' notice to the PBGC
has not been waived by the PBGC.
"Request" means a written request for the Loans in the form of Exhibit
1.10, received by the Agent on behalf of the Lenders from the Borrower in
accordance with this Agreement, specifying the date on which the Borrower
desires such Loans and the disbursement instructions of the Borrower with
respect thereto.
"Revolving Credit Loan" means the revolving credit loans to be made by
the Lenders to the Borrower from time to time in the maximum outstanding
principal amount of the Revolving Credit Loan Commitment, all subject and
pursuant to Section 2.1.0.
14
21
"Revolving Credit Loan Commitment" means the Lenders' several
commitments to make Revolving Credit Loans to the Borrower in accordance with
Section 2.1.0 and this Agreement and in the maximum outstanding amount of each
Lender's Pro Rata Share of the lesser of (i) the Borrowing Base and (ii)
$7,500,000, as such amount may be reduced pursuant to Section 2.6.4.
"Revolving Credit Note" means each revolving credit note of the
Borrower, payable to the order of a Lender in the form of Exhibit 1.5 hereto
evidencing the Indebtedness of the Borrower to such Lender with respect to the
Revolving Credit Loan.
"Revolving Credit Repayment Date" means the earlier to occur of (i)
June 30, 2001 and (ii) such earlier date on which the Revolving Credit Loan
becomes due and payable pursuant to the terms hereof.
"Section" means, when followed by a number, the section or subsection
of this Agreement bearing that number.
"Section 20 Subsidiary" means a subsidiary of the bank holding company
controlling any Lender, which subsidiary has been granted authority by the
Federal Reserve Board to underwrite and deal in certain Ineligible Securities.
"Security Documents" means any and all documents, instruments and
agreements now or hereafter providing security for the Loans and any other
Indebtedness of the Borrower or any Subsidiary to any of the Lenders and/or the
Agent, including without limitation the following documents, instruments and
agreements between the Agent and the Borrower or any Subsidiary: any mortgages
on and collateral assignments of real property interests (fee, leasehold and
easement) of the Borrower and any Subsidiary granting Liens thereon; landlord
lien waivers and consents as may be reasonably requested by the Agent; security
agreements granting first Liens on all Borrower's and any Subsidiary's fixtures
and tangible and intangible personal property; collateral assignments of
Borrower's and any Subsidiary's contracts, licenses, permits, easements and
leases; collateral assignments of Borrower's and any Subsidiary's copyrights;
conditional assignments of Borrower's and any Subsidiary's trademarks and
patents; any guaranty by a Subsidiary; any pledge of the capital stock of any
Subsidiary; casualty and liability insurance policies providing coverage to the
Agent for the benefit of the Lenders; UCC-1 financing statements or similar
filings perfecting the above-referenced security interests, pledges and
assignments, all as executed, delivered to and accepted by the Agent on or prior
to the Closing Date or subsequent to the Closing Date as may be required by this
Agreement, as any of the foregoing may be amended in writing by the Agent and
any other party or parties thereto.
"Selling Lender" shall have the meaning assigned to such term in
Section 9.11.1.
"Single Employer Plan" means any Plan as defined in Section 4001(a)(15)
of ERISA.
"Stockholders" means, collectively, TA Associates, Xxxxxxxx X. and
Xxxxxxx X. Xxxxxxxx (and/or any trusts established for the benefit of Xxxxxxxx
X. and Xxxxxxx X. Xxxxxxxx), Xxxxxxx X. and Xxxxx X. Xxxxxx (and/or any trusts
established for the benefit of Xxxxxxx X. and Xxxxx X. Xxxxxx) and Xxxx X.
Xxxxxx.
15
22
"Subsidiary" means any corporation or entity other than the Borrower of
which more than 50% of the outstanding capital stock or voting interests or
rights having ordinary voting power to elect a majority of the board of
directors or other managers of such entity (irrespective of whether or not at
the time capital stock or voting interests or rights of any other class or
classes of such Person shall or might have voting power upon the occurrence of
any contingency) is at the time directly or indirectly owned by the Borrower or
by the Borrower and/or one or more Subsidiaries or the management of which
corporation or entity is under control of the Borrower and/or any other
Subsidiary, directly or indirectly through one or more Persons and any other
Person which, under GAAP, should at any time for financial reporting purposes be
consolidated or combined with the Borrower and/or any other Subsidiary.
"Substituted Lender" has the meaning set forth in Section 9.11 hereof.
"Substitution Agreement" has the meaning assigned to such term in
Section 9.11.1.
"TA Associates" means TA Venture Investors Limited Partnership,
TA/Advent VIII L.P., Advent Atlantic and Pacific III, L.P., McDonald Investments
Inc., McD Venture Capital Fund, L.P., GHK Investments, L.L.C. and any venture
capital or other fund or entity for which TA Associates, Inc., a Delaware
corporation and/or one or more general partners of TA Associates, Inc. directly
or indirectly through one or more intermediaries serves as general partner,
manager or in a like capacity.
"Term Loan" means the term loan in the aggregate principal amount of
$20,000,000 to be made or maintained by the Lenders pursuant to Section 2.1.1
hereof.
"Term Note" means a term note of the Borrower payable to the order of a
Lender in the form of Exhibit 1.6 hereto evidencing the Indebtedness of the
Borrower to such Lender with respect to the Term Loan.
"Term Loan Repayment Date" means the earlier to occur of (i) December
31, 2003 and (ii) such earlier date on which the Term Loan becomes due and
payable pursuant to the terms hereof.
"Total Debt Service" means, at any date of determination, the sum of
(i) Interest Expense, ii) scheduled and mandatory principal payments for the
fiscal period in question due on account of any Indebtedness of the Borrower,
but excluding any mandatory payments of principal required pursuant to Sections
2.6.1.2, 2.6.1.3, and 2.6.1.4 and (iii) KLA Deferred Payments accrued over the
fiscal period in question all calculated on the Adjusted Four Quarterly Basis.
"Unused Fees" has the meaning assigned to such term in Section 2.2.2.
Section 1.2. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, calculations of
amounts for the purposes of calculating any financial covenants or ratios
hereunder shall be made in accordance with GAAP applied on a basis consistent
with those used in the Borrower's financial statements referred to in Section
4.1.5 (other than departures therefrom not material in their impact), and all
financial data
16
23
submitted pursuant to this Agreement shall be prepared in accordance with GAAP
(except, in the case of unaudited financial statements, the absence of footnotes
and that such statements are subject to changes resulting from year-end
adjustments made in accordance with GAAP).
Section 1.3. Other Terms. References to "Articles", "Sections",
"subsections" and "Exhibits" shall be to Sections, subsections and Exhibits and
of this Agreement unless otherwise specifically provided. In this Agreement,
"hereof," "herein," "hereto," "hereunder" and the like mean and refer to this
Agreement as a whole and not merely to the specific section, paragraph or clause
in which the respective word appears; words importing any gender include the
other genders; references to "writing" include printing, typing, lithography and
other means of reproducing words in a tangible visible form; the words
"including," "includes" and "include" shall be deemed to be followed by the
words "without limitation"; references to agreements and other contractual
instruments shall be deemed to include subsequent amendments, assignments, and
other modifications thereto, but only to the extent such amendments, assignments
and other modifications are not prohibited by the terms of this Agreement or any
other Financing Document; references to Persons include their respective
permitted successors and assigns or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all references
to statutes and related regulations shall include any amendments of same and any
successor statutes and regulations.
ARTICLE 2.
AMOUNT AND TERMS OF THE LOANS
Section 2.1. The Loans.
Section 2.1.0. The Revolving Credit Loans. Each of the Lenders
severally agrees, subject to the terms and conditions of this Agreement, to make
Advances of Revolving Credit Loans to the Borrower from time to time after
receipt by the Agent from time to time before the Revolving Credit Repayment
Date of, and at the times provided for in, a Request and an Interest Rate
Election from the Borrower in accordance with this Agreement, during the period
commencing on the Closing Date and ending on the Business Day immediately
preceding the Revolving Credit Repayment Date, in an aggregate principal amount
at any one time outstanding not to exceed the lesser of (i) such Lender's Pro
Rata Share of the Revolving Credit Loan Commitment less (ii) in each case, such
Lender's Pro Rata Share of the aggregate outstanding stated amount of any
Letters of Credit or Letter of Credit Agreements and any unreimbursed amounts
drawn thereunder.
Promptly after receipt of a Request and Interest Rate Election, Agent
shall notify each Lender by telephone, telex or telecopy of the proposed
borrowing. Subject to the immediately preceding paragraph, each Lender agrees
that after its receipt of notification from Agent of Agent's receipt of a
Request and Interest Rate Election, such Lender shall send its Pro Rata Share
(or such portion thereof as may be necessary to provide Agent with such Pro Rata
Share in Dollars and in immediately available funds, without consideration or
use of any contra accounts of any Lender) of the requested Loan by wire transfer
to Agent so that Agent receives such Pro
17
24
Rata Share in Dollars and in immediately available funds not later than 12:00
P.M. (Boston, Massachusetts time) on the first day of the Interest Period for
any such requested Libor Loan and on the Business Day for such Advance set forth
in Borrower's Request for any such requested Prime Rate Loan, and Agent shall
advance funds to the Borrower by depositing such funds in Borrower's account
with the Agent upon Agent's receipt of such Pro Rata Shares in the amount of the
Pro Rata Shares of such Loan in Agent's possession. Unless Agent shall have been
notified by any Lender (which notice may be telephonic if confirmed promptly in
writing) prior to the first day of the Interest Period in respect of any Loan
which such Lender is obligated to make under this Agreement, that such Lender
does not intend to make available to Agent such Lender's Pro Rata Share of such
Loan on such date, Agent may assume that such Lender has made such amount
available to Agent on such date and Agent in its sole discretion may, but shall
not be obligated to, make available to the Borrower a corresponding amount on
such date. If such corresponding amount is not in fact made available to Agent
by such Lender, Agent shall be entitled to recover such corresponding amount
from such Lender promptly upon demand by Agent together with interest thereon,
for each day from such date until the date such amount is paid to Agent, at the
Federal Funds Rate for three (3) Business Days and thereafter at the interest
rate on the Loan in question. If such Lender does not pay such corresponding
amount forthwith upon Agent's demand therefor, Agent shall promptly notify the
Borrower and the Borrower shall promptly pay such corresponding amount to Agent.
Nothing contained in this Section shall be deemed to relieve any Lender from its
obligation to fulfill its obligations hereunder or to prejudice any rights which
the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
Throughout the term of the Revolving Credit Loans, $2,500,000 of the
Revolving Credit Loan Commitment and principal amount of the Revolving Credit
Loans may, in the Agent's discretion, be made available to the Borrower prior to
the Revolving Credit Repayment Date by issuance of Letters of Credit having an
expiration date prior to the earlier to occur of (a) the first anniversary date
of the date of issuance of any such Letter of Credit or (b) three (3) Business
Days prior to the Revolving Credit Repayment Date, reasonably promptly after
submission by the Borrower to the Agent of a Letter of Credit Agreement, duly
completed and executed by the Borrower and otherwise in form and substance
satisfactory to the Agent. The Borrower shall pay upon demand by the Agent such
fees and costs as the Agent may from time to time establish for issuance,
transfer, amendment and negotiation of each Letter of Credit and shall pay to
the Agent for the Agent's account upon issuance of any Letter of Credit an
annual Letter of Credit fee in an amount equal to the product of (i) the stated
amount of each Letter of Credit multiplied by (ii) the Applicable Margin then in
effect with respect to any Revolving Credit Loan which is a Libor Loan. In the
event that the Borrower shall fail to reimburse the Agent under any Letter of
Credit or Letter of Credit Agreement, and any outstanding Indebtedness of the
Borrower relating thereto, the Agent shall promptly notify each Lender of the
unreimbursed amount together with accrued interest thereon, and each Lender
agrees to purchase, and it shall be deemed to have purchased, a participation in
such Letter of Credit or Letter of Credit Agreement and such indebtedness in an
amount equal to its Pro Rata Share of the unpaid amount together with unpaid
interest thereon. Upon one (1) Business Day's notice from the Agent, each Lender
shall deliver to the Agent an amount equal to its respective participation in
same day funds, at the place and on the date and by the time notified by the
Agent. The obligation of each Lender to deliver to the Agent an amount equal to
its respective participation pursuant to the foregoing sentence shall be
18
25
absolute and unconditional and such remittance shall be made notwithstanding the
occurrence or continuation of an Event of Default or the failure to satisfy any
condition set forth in Article III of this Agreement.
As soon as is practicable following the close of each month after the
Closing Date and in any event within fifteen (15) days thereafter, the Borrower
will submit to the Agent a borrowing base certificate in the form of Exhibit
2.1.0 or on such other form as the Agent may from time to time prescribe, which
certificate shall contain information adequate to identify accounts receivable
which the Borrower wishes to include in Eligible Receivables. During the
continuance of a Default or Event of Default, the Borrower shall also, if the
Lender so requests, accompany such information with assignments of accounts in
form and substance satisfactory to the Lender which assignments shall give the
Lender full power to collect, compromise or otherwise deal with the assigned
accounts as the sole owner thereof. Concurrently with each of such reports, and
immediately if material in amount, the Borrower shall notify the Lender of each
return or adjustment, rejection, repossession or loss, theft or damage of or to
merchandise represented by Eligible Receivables or any other collateral for any
Indebtedness of the Borrower to the Lender and of any credit, adjustment or
dispute arising in connection with the goods or services represented by Eligible
Receivables. All payments on Eligible Receivables and all adjustments and
credits with respect thereto, whether unilateral, negotiated or otherwise, shall
be immediately reflected in the Net Outstanding Amount of Eligible Receivables.
Section 2.1.1. Term Loans. Each of the Lenders severally agrees,
subject to the terms and conditions of this Agreement, to make a Term Loan to
the Borrower in the amount of its respective Pro Rata Share of $20,000,000.
Borrower shall pay on the last day of each calendar quarter ending on or in
between the dates set forth below the amount of the Term Loans set forth
immediately opposite such dates below:
Repayment Quarterly
Dates Payment Amount
--------- --------------
September 30, 1999 through June 30, 2000 $ 500,000
September 30, 2000 through June 30, 2001 750,000
September 30, 2001 and December 31, 2001 1,000,000
March 31, 2002 and June 30, 2002 1,250,000
September 30, 2002 through June 30, 2003 1,500,000
September 30, 2003 2,250,000
December 31, 2003 the greater of $2,250,000 and the
entire outstanding principal amount
of the Term Loan
Section 2.2. Interest and Fees on the Loans.
Section 2.2.1. Interest. Interest shall accrue and be paid
currently on the Loans at Effective Prime or the Libor Rate for each of the
Loans' Interest Periods in accordance with the Borrower's Interest Rate
Elections for the Loans subject to and in accordance with the terms and
conditions of this Agreement and the Note(s); provided that if a Default or an
Event of Default
19
26
exists and is continuing, no Interest Rate Election electing the Libor Rate
shall be effective and any Prime Rate Loan shall bear interest, payable on
demand, at Effective Prime plus, so long as an Event of Default exists and is
continuing, two percent (2.0%) and each Libor Loan shall bear interest, payable
on demand, at the Libor Rate plus two percent (2.0%); all of the foregoing being
applicable until such Default or Event of Default is cured or waived and an
Interest Rate Election electing the Libor Rate for such Loan or portion thereof
which is effective in accordance with this Agreement is submitted to the Agent;
and provided further that the Borrower shall submit Interest Rate Elections so
that on any date on which under Section 2.1.1 a regularly scheduled payment of
principal of the Term Loans is to be made, at least the amount of the Term Loans
to be so repaid is bearing interest at Effective Prime and/or such payment date
is an Interest Adjustment Date for outstanding Libor Loans in such amount of the
Term Loans. The Borrower shall pay such interest to the Agent for the pro rata
account of each Lender in arrears on the Loans (including without limitation
Libor Loans) outstanding from time to time after the Closing Date, such payments
to be made, with respect to Libor Loans with Interest Periods of three months or
less on each Interest Adjustment Date for such Loans, and with respect to Libor
Loans with Interest Periods of more than three months and with respect to Prime
Rate Loans, quarterly on the last Business Day of each calendar quarter of each
year commencing March 31, 1999. In the event no Interest Rate Election has been
made by the Borrower with respect to any Loan or Advance (or an Interest Rate
Election shall have expired without an effective substitute Interest Rate
Election), Effective Prime shall be the rate applicable to such Loan or Advance.
All provisions of each Note and any other agreements between the Borrower and
the Lenders are expressly subject to the condition that in no event, whether by
reason of acceleration of maturity of the Indebtedness evidenced by any Note or
otherwise, shall the amount paid or agreed to be paid to the Lenders which is
deemed interest under applicable law exceed the maximum permitted rate of
interest under applicable law (the "Maximum Permitted Rate"), which shall mean
the law in effect on the date of this Agreement, except that if there is a
change in such law which results in a higher Maximum Permitted Rate, then each
Note shall be governed by such amended law from and after its effective date. In
the event that fulfillment of any provision of any Note, or this Agreement or
any document, instrument or agreement providing security for any Note results in
the rate of interest charged under any Note being in excess of the Maximum
Permitted Rate, the obligation to be fulfilled shall automatically be reduced to
eliminate such excess. If, notwithstanding the foregoing, any Lender receives an
amount which under applicable law would cause the interest rate under any Note
to exceed the Maximum Permitted Rate, the portion thereof which would be
excessive shall automatically be deemed a prepayment of and be applied to the
unpaid principal balance of such Note to the extent of then outstanding Prime
Rate Loans and not a payment of interest and to the extent said excessive
portion exceeds the outstanding principal amount of Prime Rate Loans, said
excessive portion shall be repaid to the Borrower.
Section 2.2.2. Fees. On the Closing Date and thereafter if so
provided in the Fee Letter, the Borrower shall pay the Facility Fee to the Agent
for the account of Fleet. In addition, on the last Business Day of each March,
June, September and December commencing March 31, 1999 and continuing through
the Revolving Credit Repayment Date, the Borrower shall pay to the Agent for the
pro rata account of each Lender, a fee in an amount equal to .50% per annum of
the amount, if any, by which the average actual daily amount of the Revolving
Credit Loan Commitment for the quarterly period just ended (or in the case of
the first such payment, the
20
27
period from the Closing Date to the date such payment is due) exceeds the
average of the actual daily outstanding principal balances of the Revolving
Credit Loans plus (y) the average of the actual daily aggregate amount of the
outstanding stated amount of any Letter of Credit or Letter of Credit Agreement,
and any unreimbursed amounts thereunder; provided, however, that if at any time
after the receipt by the Agent of the quarterly financial statements for the
Borrower's December 31, 1998 fiscal quarter and each subsequent Borrower fiscal
quarter provided to the Agent by the Borrower pursuant to Section 5.3.3 hereof,
the ratio of (a) total Indebtedness for Borrowed Money of the Borrower and its
Subsidiaries on a consolidated basis as of the last day of the most recently
ended fiscal quarter of the Borrower to (b) EBITDA calculated on the Adjusted
Four Quarterly Basis, (i) is less than 2.5:1.0 and if and so long as no Event of
Default or Default exists and is continuing, the Borrower shall pay to the Agent
for the pro rata account of each Lender a fee in an amount equal to .35% per
annum of the amount, if any, by which the average actual daily amount of the
Revolving Credit Loan Commitment for the quarterly period just ended (or in the
case of the first such payment, the period from the Closing Date to the date
such payment is due) exceeds the sum of (x) the average of the actual daily
outstanding principal balance of the Revolving Credit Loans plus (y) the average
of the actual daily aggregate amount of the outstanding stated amount of any
Letter of Credit or Letter of Credit Agreement, and any unreimbursed amounts
thereunder (the "Unused Fees),
Section 2.2.3. Increased Costs - Capital. If, after the date
hereof, any Lender shall have reasonably determined that the adoption after the
date hereof of any applicable law, governmental rule, regulation or order
regarding capital adequacy of banks or bank holding companies, 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 such Lender or such
Lender's holding company with any policy, guideline, directive or request
regarding capital adequacy (whether or not having the force of law and whether
or not failure to comply therewith would be unlawful) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on the capital of such Lender or such Lender's holding company as
a consequence of the obligations hereunder of such Lender to a level below that
which such Lender could have achieved but for such adoption, change or
compliance (taking into consideration the policies of such Lender or such
Lender's holding company with respect to capital adequacy immediately before
such adoption, change or compliance and assuming that the capital of such Lender
or such Lender's holding company was fully utilized prior to such adoption,
change or compliance) by an amount reasonably deemed by such Lender to be
material, then such Lender shall notify the Agent and the Borrower thereof and
the Borrower shall pay to the Agent for the account of such Lender from time to
time as specified by such Lender such additional amounts as shall be sufficient
to compensate such Lender for such reduced return, each such payment to be made
by the Borrower within five (5) Business Days after each demand by such Lender;
provided that the liability of the Borrower to pay such costs shall only accrue
with respect to costs accruing from and after the 180th day prior to the date of
each such demand. A certificate in reasonable detail of one of the officers of
such Lender describing the event giving rise to such reduction and setting forth
the amount to be paid to such Lender hereunder and a computation of such amount
shall accompany any such demand and shall, in the absence of manifest error, be
conclusive. In determining such amount, such Lender shall act reasonably and
will use any reasonable averaging and attribution methods. If the Borrower
shall, as a result of the
21
28
requirements of this Section 2.2.3 above, be required to pay any Lender the
additional costs referred to above and the Borrower, in its sole discretion,
shall deem such additional amounts to be material, the Borrower shall have the
right to substitute another bank satisfactory to the Agent for such Lender which
has certified the additional costs to the Borrower, and the Agent shall use
reasonable efforts at no cost to the Agent to assist the Borrower to locate such
substitute bank. Any such substitution shall take place in accordance with
Section 9.11 and shall otherwise be on terms and conditions reasonably
satisfactory to the Agent, and until such time as such substitution shall be
consummated, the Borrower shall continue to pay such additional costs. Upon any
such substitution, the Borrower shall pay or cause to be paid to the Lender that
is being replaced, all principal, interest (to the date of such substitution)
and other amounts owing hereunder to such Lender and such Lender will be
released from liability hereunder.
Section 2.3. Notations. At the time of (i) the making of each Advance
evidenced by any Note, (ii) each change in the interest rate under any Note
effected as a result of an Interest Rate Election; and (iii) each payment or
prepayment of any Note, each Lender may enter upon its records an appropriate
notation evidencing (a) such Lender's Pro Rata Share of the Loans and (b) the
interest rate and Interest Adjustment Date applicable thereto or (c) such
payment or prepayment (voluntary or involuntary) of principal and (d) in the
case of payments or prepayments (voluntary or involuntary) of principal, the
portion of the applicable Loan which was paid or prepaid. No failure to make any
such notation shall affect the Borrower's unconditional obligations to repay the
Loans and all interest, fees and other sums due in connection with this
Agreement and/or any Note in full, nor shall any such failure, standing alone,
constitute grounds for disproving a payment of principal by the Borrower.
However, in the absence of manifest error, such notations and each Lender's
records containing such notations shall constitute presumptive evidence of the
facts stated therein, including, without limitation, the outstanding amount of
such Lender's Pro Rata Share of the Loans and all amounts due and owing to such
Lender at any time. Any such notations and such Lender's records containing such
notations may be introduced in evidence in any judicial or administrative
proceeding relating to this Agreement, the Loans or any Note.
Section 2.4. Computation of Interest. Interest due under this Agreement
and any Note shall be computed on the basis of a year of 360 days for the actual
number of days elapsed.
Section 2.5. Time of Payments and Prepayments in Immediately Available
Funds.
Section 2.5.1. Time. All payments and prepayments of
principal, fees, interest and any other amounts owed from time to time under
this Agreement and/or under each Note shall be made to the Agent for the pro
rata account of each Lender at the address referred to in Section 9.6 in Dollars
and in immediately available funds prior to 12:00 o'clock P.M. on the Business
Day that such payment is due, provided that the Borrower hereby authorizes and
instructs the Agent to charge against the Borrower's accounts with the Agent on
each date on which a payment is due hereunder and/or under any Note and on any
subsequent date if and to the extent any such payment is not made when due an
amount up to the principal, interest and fees due and payable to the Lenders,
the Agent or any Lender hereunder and/or under any Note and such charge shall be
deemed payment hereunder and under the Note(s) in question to the extent that
immediately available funds are then in such accounts. The Agent shall use
22
29
reasonable efforts in accordance with the Agent's customary procedures to give
subsequent notice of any such charge to the Borrower, but the failure to give
such notice shall not affect the validity of any such charge. To the extent that
immediately available funds are then in such accounts, the failure of the Agent
to charge any such account or the failure of the Agent to charge any such
account prior to 12 o'clock P.M. shall not be basis for an Event of Default
under Section 6.1.1 and any amount due on the Loans on such date shall be deemed
paid; provided that the Agent shall have the right to charge any such account on
any subsequent date for such unpaid payment and an Event of Default shall exist
if sufficient immediately available funds are not in such accounts on the date
the Agent so charges such account after the expiration of any applicable cure
period. In the event of any charge against the Borrower's accounts by the Agent
pursuant to the immediately preceding sentence, the Agent shall use reasonable
efforts to provide notice to the Borrower of such charge in accordance with the
Agent's customary procedures, but the failure to provide such notice shall not
in any way be a basis for any liability of the Agent nor shall such failure
adversely affect the validity and effectiveness of any such action by the Agent.
Any such payment or prepayment which is received by the Agent in Dollars and in
immediately available funds after 12 o'clock P.M. on a Business Day shall be
deemed received for all purposes of this Agreement on the next succeeding
Business Day unless the failure by Agent to receive such funds prior to 12
o'clock P.M. is due to Agent's failure to charge the account of Borrower prior
to 12 o'clock P.M., except that solely for the purpose of determining whether a
Default or Event of Default has occurred under Section 6.1.1, any such payment
or prepayment, if received by the Agent prior to the close of the Agent's
business on a Business Day, shall be deemed received on such Business Day. All
payments of principal, interest, fees and any other amounts which are owing to
any or all of the Lenders or the Agent hereunder and/or under any of the Notes
that are received by the Agent in immediately available Dollars prior to 12:00
o'clock P.M. on any Business Day shall, to the extent owing to the Lenders other
than the Agent, be sent by wire transfer by the Agent to any such other Lenders
(in each case, without deduction for any claim, defense or offset of any type)
before 3:00 o'clock P.M. on the same Business Day. Each such wire transfer shall
be addressed to each Lender in accordance with the wire instructions set forth
in Exhibit 1.9 hereto. The amount of each payment wired by the Agent to each
such Lender shall be such amount as shall be necessary to provide such Lender
with its Pro Rata Share of such payment (without consideration or use of any
contra accounts of any Lender), or with such other amount as may be owing to
such Lender in accordance with this Agreement (in each case, without deduction
for any claim, defense or offset of any type). Each such wire transfer shall be
sent by the Agent only after the Agent has received immediately available
Dollars from or on behalf of the Borrower and each such wire transfer shall
provide each Lender receiving same with immediately available Dollars on receipt
by such Lender. Any such payments of immediately available Dollars received by
the Agent after 12:00 o'clock P.M. and before 3:00 o'clock P.M. on any Business
Day shall be forwarded in the same manner by the Agent to such Lender(s) as soon
as practicable on said Business Day, and if any such payments of immediately
available Dollars are received by the Agent after 3:00 o'clock P.M. on a
Business Day, the Agent shall so forward same to such Lender(s) before 10:00
o'clock A.M. on the immediately succeeding Business Day.
Section 2.5.2. Setoff, etc. Regardless of the adequacy of any
collateral for any of the Obligations, upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized at any
time and from time to time, without notice to the Borrower
23
30
(any such notice being expressly waived by the Borrower), to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and any other Indebtedness at any time owing by such Lender to
or for the credit or the account of the Borrower against any and all of the
Obligations of the Borrower irrespective of whether or not such Lender shall
have made any demand under this Agreement or any Note and although such
obligations may be unmatured. Each such Lender agrees to promptly notify the
Borrower and the Agent after any such setoff and application; provided that the
failure to give such notice shall not affect the validity of such setoff and
application. Promptly following any notice of setoff received by the Agent from
a Lender pursuant to the foregoing, the Agent shall notify each other Lender
thereof. The rights of each Lender under this Section 2.5.2 are in addition to
all other rights and remedies (including, without limitation, other rights of
setoff) which such Lender may have and are subject to Section 9.12.
Section 2.5.3. Unconditional Obligations and No Deductions.
Section 2.5.3.1 The Borrower's obligation to make all payments provided
for in this Agreement and the other Financing Documents shall be unconditional.
Each such payment shall be made without deduction for any claim, defense or
offset of any type, including without limitation any withholdings and other
deductions on account of income or other taxes (except to the extent provided in
Section 2.5.3.2) and regardless of whether any claims, defenses or offsets of
any type exist.
Section 2.5.3.2. (a) Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Financing
Document shall be made free and clear of and without deduction for any and all
present or future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender and the Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or its
applicable lending office) or the Agent (as the case may be) is organized or any
political subdivision thereof, other than to the extent such income or franchise
tax is imposed solely as a result of the activities of the Agent or a Lender
pursuant to or in respect of this Agreement or any of the other Financing
Documents (all such non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable under this Agreement or any other Financing
Document to any Lender or the Agent,(i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 2.5.3.2) such Lender or
the Agent receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) the Borrower
shall furnish to the Agent, at its address referred to in Section 9.6 hereof,
the original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under this Agreement
or any other Financing Document or from the
24
31
execution or delivery of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section 2.5.3.2) paid by such Lender or the Agent (as the case may be) and
any liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) a properly completed Internal
Revenue Service Form 1001 or 4224, as appropriate, or any successor form
prescribed by the Internal Revenue Service, certifying that such Lender is
entitled to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding tax on payments of interest or
certifying that the income receivable pursuant to this Agreement is effectively
connected with the conduct of a trade or business in the United States, (ii) a
properly completed Internal Revenue Service Form W-8 or W-9, as appropriate, or
any successor form prescribed by the Internal Revenue Service, certifying that
such Lender is exempt from United States backup withholding, and (iii) any other
form or certificate required by any taxing authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying
that such Lender is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Financing Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Agent with the appropriate form pursuant to Section
2.5.3.2(d) hereof (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 2.5.3.2(a) or 2.5.3.2(b) hereof with respect to Taxes imposed by
the United States; provided, however, that should a Lender, which is otherwise
exempt from or subject to a reduced rate of withholding tax, become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Lender shall reasonably request and at such
Lender's cost to assist such Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 2.5.3.2, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its applicable
lending office so as to eliminate or reduce any such additional payment which
may thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender. Alternatively, in the event of such an
additional cost, the Borrower shall have the right to substitute another bank
satisfactory to the Agent, and the Agent and such Lender shall use reasonable
efforts at no cost to the Agent and such Lender to assist the Borrower to locate
and effect the substitution in favor of such substitute bank. Any such
substitution shall take place in accordance with Section 9.11 and shall
otherwise
25
32
be on terms and conditions reasonably satisfactory to the Agent, and until such
time as such substitution shall be consummated, the Borrower shall continue to
pay such additional costs. Upon any such substitution, the Borrower shall pay or
cause to be paid to the Lender that is being replaced, all principal, interest
(to the date of such substitution) and other amounts owing hereunder to such
Lender and such Lender will be released from liability hereunder.
(g) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent the original or a certified copy of a
receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.5.3.2 shall survive until the first anniversary of the Repayment
Date.
(i) If the Borrower makes any additional payment to any Lender pursuant
to this Section 2.5.3.2 in respect of any Taxes, and such Lender determines that
it has received (i) a refund of such Taxes, or (ii) a credit against, relief or
remission for, or a reduction in the amount of, any tax or other governmental
charge as a result of any deduction or credit for any Taxes with respect to
which it has received payments under this Section 2.5.3.2, such Lender shall, to
the extent that it can do so without prejudice to the retention of such refund,
credit, relief, remission or reduction, pay to the Borrower such amount as shall
be reasonably determined by such Lender to be solely attributable to the
deduction or withholding of such Taxes. If such Lender later determines that it
was not entitled to such refund, credit, relief, remission or reduction to the
full extent of any payment made pursuant to the first sentence of this Section
2.5.3.2(i), the Borrower shall upon demand of such Lender promptly repay the
amount of such overpayment. Nothing in this Section 2.5.3.2(i) shall be
construed as requiring such Lender to conduct its business or to arrange or
alter in any respect its tax or financial affairs so that it is entitled to
receive such a refund, credit or reduction or as allowing any Person to inspect
any records, including tax returns, of such Lender.
Section 2.6. Prepayment and Certain Payments.
Section 2.6.1. Mandatory Payments.
Section 2.6.1.1. In addition to each other principal
payment required hereunder, the outstanding principal balances of the Term Loans
shall be repaid on the Term Loan Repayment Date and the outstanding principal
balances of the Revolving Credit Loans shall be repaid on the Revolving Credit
Repayment Date.
Section 2.6.1.2. On or before the 90th day after the
end of each fiscal year of the Borrower commencing with the fiscal year ending
December 31, 1999, the Borrower shall prepay to the Agent for the accounts of
the Lenders in accordance with their Pro Rata Shares an amount of the
outstanding principal balances of the Term Loans equal to (i) 50% of the amount,
if any, of Excess Cash Flow for such fiscal year less (ii) voluntary prepayments
of the Term Loan made during such fiscal year. Such prepayments shall be in
addition to any and all other mandatory and voluntary prepayments required or
permitted hereunder and shall be applied to the principal installments of the
Term Loans in the inverse order of their maturities.
26
33
Section 2.6.1.3. In the event that the Borrower or
any Subsidiary is entitled to receive, collectively, proceeds from any casualty
insurance policies maintained by any of them on account of any interest of the
Borrower and/or any Subsidiary in any property, which proceeds are in an
aggregate amount in excess of $100,000 during the term of this Agreement, such
proceeds shall be received by the Agent and, to the extent that such proceeds
result from a casualty to property of the Borrower and/or any Subsidiary, so
long as no Default or Event of Default exists and is continuing and the Borrower
elects to repair, replace or restore such property, such proceeds shall be
released to the Borrower subject to reasonable procedures and conditions
established by the Agent to the extent necessary to so repair, replace or
restore such property within 3 months (or as soon as reasonably practicable if
such restoration, replacement or repair is not susceptible to being completed
within 3 months) from the date of receipt of such proceeds by the Agent and to
the extent such proceeds are not so used or do not result from such a casualty,]
the Borrower shall make a prepayment of the Term Loans for the accounts of the
Lenders in accordance with their Pro Rata Shares upon written notice from the
Agent. All such payments shall be applied to the principal installments of the
Term Loans in the inverse order of their maturities.
Section 2.6.1.4. In the event that the Borrower
and/or any Subsidiary sells, assigns or otherwise transfers title to any asset
other than in the ordinary course of its business, the Borrower and/or such
Subsidiary shall remit 100% of the net cash proceeds of such sale, assignment or
other transfer to the Agent for the accounts of the Lenders in accordance with
their Pro Rata Shares to be applied to the principal installments of the Term
Loans in the inverse order of their maturities within 10 Business Days of the
date of Borrower's or any Subsidiary's receipt of such net cash proceeds;
provided, however, that Borrower may sell any of its equipment which is
obsolete, worn-out or no longer used or useful in Borrower's business and
Borrower may use the proceeds of such sale to purchase other equipment which is
useful or necessary in the operation of Borrower's business.
Section 2.6.1.5. [Intentionally omitted.]
Section 2.6.1.6. If at any time the aggregate
principal amount of the Revolving Credit Loans shall exceed the Revolving Credit
Loan Commitment, the Borrower shall immediately pay to the Agent in immediately
available Dollars the amount of such excess.
Section 2.6.2. Voluntary Prepayments. All or any portion of
the unpaid principal balance of the Loans (other than portions of any Loans
constituting Libor Loans) may be prepaid at any time, without premium or
penalty, by giving the Agent at least 3 days' prior written notice of such
prepayment and by a payment to the Agent for the accounts of the Lenders in
accordance with their Pro Rata Shares of such prepayment in immediately
available Dollars by the Borrower; provided that each such partial payment or
prepayment of principal of the Loans shall be in a principal amount of at least
$100,000 or an integral multiple of $50,000 in excess thereof and provided
further that each such prepayment of the Term Loans shall be applied to the
principal installments of the Term Loans in the inverse order of their
maturities.
Section 2.6.3. Prepayment of Libor Loans. Notwithstanding
anything to the contrary contained in any Note or in any other agreement
executed in connection herewith or
27
34
therewith, the Borrower shall be permitted to prepay any portion of the Loans
constituting Libor Loans only in accordance with Section 2.9 hereof.
Section 2.6.4. Permanent Reduction of Commitment. At the
Borrower's option the Commitment and the Revolving Credit Loan Commitment may be
permanently and irrevocably reduced in whole or in part by an amount of at least
$100,000 and to the extent in excess thereof in integral multiples of $50,000 at
any time; provided that (i) the Borrower gives the Agent written notice of the
exercise of such option at least three (3) Business Days prior to the effective
date thereof, (ii) the aggregate outstanding balance of the Loans, if any, does
not exceed the Commitment and the aggregate outstanding balance of the Revolving
Credit Loans, plus the aggregate outstanding amount of any Letters of Credit or
Letter of Credit Agreement and any unreimbursed drawn amounts thereunder, if
any, does not exceed the Revolving Credit Loan Commitment, both as so reduced in
any such case on the effective date of such reduction and (iii) the Borrower is
not, and after giving effect to such reduction, would not be in violation of
Section 2.6.3. Any such reduction shall concurrently reduce the Dollar amount of
each Lender's Pro Rata Share of the Commitment and the Revolving Credit Loan
Commitment.
Section 2.7. Payment on Non-Business Days. Whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day other than a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
payment of fees, if any, and interest under this Agreement and under such Note.
Section 2.8. Use of Proceeds. (a) The Borrower shall use the proceeds
of the Term Loans to complete the Related Transactions and to pay costs incurred
by the Borrower in connection with the closing of the Loans, including without
limitation, the Facility Fee and costs incurred in connection with the Related
Transactions and shall use the proceeds of the Revolving Credit Loans for
Borrower's working capital needs and for Investments permitted by Section
5.2.12. The Borrower shall obtain any Letters of Credit solely for working
capital and general corporate purposes.
(b) No portion of the proceeds of any Loans is to be
used, and no portion of any Letter of Credit is to be obtained, for the purpose
of (a) knowingly purchasing, or providing credit support for the purchase of,
Ineligible Securities from a Section 20 Subsidiary during any period in which
such Section 20 Subsidiary makes a market in such Ineligible Securities, (b)
knowingly purchasing, or providing credit support for the purchase of, during
the underwriting or placement period, any Ineligible Securities being
underwritten or privately placed by a Section 20 Subsidiary, or (c) making, or
providing credit support for the making of, payments of principal or interest on
Ineligible Securities underwritten or privately placed by a Section 20
Subsidiary and issued by or for the benefit of the Borrower or any Subsidiary or
other Affiliate of the Borrower.
Section 2.9. Special Libor Loan Provisions. The Libor Loans shall be
subject to and governed by the following terms and conditions:
28
35
Section 2.9.1. Requests. Each Request accompanied by an
Interest Rate Election selecting the Libor Rate must be received by the Agent in
accordance with the definition of Interest Rate Election.
Section 2.9.2. Libor Loans Unavailable. Notwithstanding any
other provision of this Agreement, if, prior to or on the date on which all or
any portion of the Loans is to be made as or converted into a Libor Loan, any of
the Lenders (or the Agent with respect to (ii) below) shall reasonably determine
(which determination shall be conclusive and binding on the Borrower), that
(i) Dollar deposits in the relevant amounts and for the
relevant Interest Period are not offered to such Lender in the London
interbank market,
(ii) by reason of circumstances affecting the London interbank
market, adequate and reasonable means do not exist for ascertaining the
Adjusted Libor Rate, or
(iii) the Adjusted Libor Rate shall no longer represent the
effective cost to such Lender for Dollar deposits in the London
interbank market for reasons other than the fact, standing alone, that
the Adjusted Libor Rate is based on an averaging of rates determined by
the Agent and that such Lender's rate may exceed such average,
such Lender may elect not to accept any Interest Rate Election electing a Libor
Loan and such Lender shall notify the Agent by telephone or telex thereof,
stating the reasons therefor, not later than the close of business on the second
Business Day prior to the date on which such Libor Loan is to be made. The Agent
shall promptly give notice of such determination and the reason therefor to the
Borrower, and all or such portion of the Loans, as the case may be, which are
subject to any of Section 2.9.2 (i), (ii) through (iii) as a result of such
Lender's determination shall be made as or converted into, as the case may be,
Prime Rate Loans and such Lender shall have no further obligation to make Libor
Loans, until further written notice to the contrary is given by the Agent to the
Borrower. If such circumstances subsequently change so that such Lender shall no
longer be so affected, such Lender's obligation to make or maintain its Pro Rata
Share of all or any portion of the Loans as Libor Loans shall be reinstated when
such Lender obtains actual knowledge of such change of circumstances and
promptly after obtaining such actual knowledge such Lender shall forward written
notice thereof to the Agent. After receipt of such notice, the Agent shall
promptly forward written notice thereof to the Borrower. Upon or after receipt
by the Borrower of such written notice, the Borrower may submit an Interest Rate
Election in accordance with this Agreement electing an Interest Period ending no
later than the Interest Adjustment Date for the then current Interest Period for
the other Lenders' Pro Rata Shares of Libor Loans and electing the Libor Rate
for such Lenders' or Lender's Pro Rata Share(s) of the Loans as to which such
Lender's or Lenders' obligation(s) to make or maintain its or their Pro Rata
Share(s) of the Loans as Libor Loans was suspended and such Pro Rata Share(s)
shall be converted to Libor Loans in accordance with this Agreement. During any
period throughout which any of the Lenders has or have no obligation to make or
maintain its or their Pro Rata Share(s) of the Loans as Libor Loans, no Interest
Rate Elections electing the Libor Rate shall be effective with regard to the
Loans to the extent of the Pro Rata Share(s) of such Lender(s), but shall be
effective as to the other Lenders.
29
36
Section 2.9.3. Libor Lending Unlawful. In the event that any
change in applicable laws or regulations (including the introduction of any new
applicable law or regulation) or in the interpretation thereof (whether or not
having the force of law) by any governmental or other regulatory authority
charged with the administration thereof, shall make it unlawful for any of the
Lenders to make or continue to maintain its Pro Rata Share of all or any portion
of the Loans as Libor Loans, each such Lender shall promptly notify the Agent by
telephone or telex thereof, and of the reasons therefor, and the obligation of
such Lender to make or maintain its Pro Rata Share of the Loans or such portion
thereof as Libor Loans shall, upon the happening of such event, terminate and
the Agent shall, by telephonic notice to the Borrower, declare that such
obligation has so terminated with respect to such Lender, and such Pro Rata
Share of the Loans or any portion thereof to the extent then maintained as Libor
Loans, shall, on the last day on which such Lender can lawfully continue to
maintain such Pro Rata Share of the Loans or any portion thereof as Libor Loans,
automatically convert into Prime Rate Loans without additional cost to the
Borrower. If circumstances subsequently change so that such Lender shall no
longer be so affected, such Lender's obligation to make or maintain its Pro Rata
Share of all or any portion of the Loans as Libor Loans shall be reinstated when
such Lender obtains actual knowledge of such change of circumstances, and
promptly after obtaining such actual knowledge such Lender shall forward written
notice thereof to the Agent. After receipt of such notice, the Agent shall
promptly forward written notice thereof the Borrower. Upon or after receipt by
the Borrower of such written notice, the Borrower may submit an Interest Rate
Election in accordance with this Agreement electing an Interest Period ending no
later than the Interest Adjustment Date for the then current Interest Period for
the other Lenders' Pro Rata Shares of Libor Loans and electing the Libor Rate
for such Lenders' or Lender's Pro Rata Share(s) of the Loans as to which such
Lender's or Lenders' obligation(s) to make or maintain its or their Pro Rata
Share(s) of the Loans as Libor Loans was suspended and such Pro Rata Share(s)
shall be converted to Libor Loans in accordance with this Agreement. During any
period throughout which any of the Lenders has or have no obligation to make or
maintain its or their Pro Rata Share(s) of the Loans as Libor Loans, no Interest
Rate Elections electing the Libor Rate shall be effective with regard to the
Loans to the extent of the Pro Rata Share(s) of such Lender(s), but shall be
effective as to the other Lenders.
Section 2.9.4. Additional Costs on Libor Loans. The Borrower
further agrees to pay to the Agent for the account of the applicable Lender or
Lenders such amounts as will compensate any of the Lenders for any increase in
the cost to such Lender of making or maintaining (or of its obligation to make
or maintain) all or any portion of its Pro Rata Share of the Loans as Libor
Loans and for any reduction in the amount of any sum receivable by such Lender
under this Agreement in respect of making or maintaining all or any portion of
such Lender's Pro Rata Share of the Loans as Libor Loans, in either case, from
time to time by reason of:
(i) any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, such Lender, under or pursuant to any law, treaty, rule,
regulation (including, without limitation, any Regulations of the Board
of Governors of the Federal Reserve System) or requirement in effect on
or after the date hereof, any interpretation thereof by any
governmental authority charged with administration thereof or by any
central bank or other fiscal or monetary authority or other authority,
or any
30
37
requirement imposed by any central bank or such other authority whether
or not having the force of law; or
(ii) any change in (including the introduction of any new)
applicable law, treaty, rule, regulation or requirement or in the
interpretation thereof by any official authority, or the imposition of
any requirement of any central bank, whether or not having the force of
law, which shall subject such Lender to any tax (other than taxes on
net income imposed on such Lender), levy, impost, charge, fee, duty,
deduction or withholding of any kind whatsoever or change the taxation
of such Lender with respect to making or maintaining all or any portion
of its Pro Rata Share of the Loans as Libor Loans and the interest
thereon (other than any change which affects, and to the extent that it
affects, the taxation of net income of such Lender); provided, that
with respect to any withholding the foregoing shall not apply to any
withholding tax described in sections 1441, 1442 or 3406 of the Code,
or any succeeding provision of any legislation that amends, supplements
or replaces any such section, or to any tax, levy, impost, duty,
charge, fee, deduction or withholding that results from any
noncompliance by a Lender with any federal, state or foreign law or
from any failure by a Lender to file or furnish any report, return,
statement or form the filing or furnishing of which would not have an
adverse effect on such Lender and would eliminate such tax, impost,
duty, deduction or withholding;
In any such event, such Lender shall promptly notify the Agent thereof, and of
the reasons therefor, and the Agent shall promptly notify the Borrower thereof
in writing stating the reasons provided to the Agent by such Lender therefor and
the additional amounts required to fully compensate such Lender for such
increased or new cost or reduced amount as reasonably determined by such Lender.
Such additional amounts shall be payable on each date on which interest is to be
paid hereunder or, if there is no outstanding principal amount under any of the
Notes, within 10 Business Days after the Borrower's receipt of said notice. Such
Lender's certificate as to any such increased or new cost or reduced amount
(including calculations, in reasonable detail, showing how such Lender computed
such cost or reduction) shall be submitted by the Agent to the Borrower and
shall, in the absence of manifest error, be conclusive. In determining any such
amount, the Lender(s) may use any reasonable averaging and attribution methods.
Notwithstanding anything to the contrary set forth above, the Borrower shall not
be obligated to pay any amounts pursuant to this Section 2.9.4 as a result of
any requirement or change referenced above with respect to any period prior to
the one hundred and eightieth (180th) day prior to the date on which the
Borrower is first notified thereof (other than any amounts which relate to any
such requirement or change which is adopted with retroactive effect in which
case the Borrower shall be obligated to pay all such amounts accrued from the
date as of which such requirement or change is retroactively effective) unless
the failure to give such notice within such one hundred and eighty (180) day
period resulted from reasonable circumstances beyond such Lender's reasonable
control.
Section 2.9.5. Libor Funding Losses. In the event that any
payment or prepayment of a Libor Loan is received on a date other than the last
day of an Interest Period, such payment or prepayment shall be held by the Agent
in a separate account and be pledged to the Agent as collateral for the
obligations of the Borrower arising in connection with this Agreement, the Notes
and the other Financing Documents until the end of the then current
31
38
Interest Period, at which time the Agent shall apply such payment or prepayment,
for the accounts of the Lenders in accordance with their Pro Rata Shares, to the
outstanding Libor Loans. Notwithstanding the foregoing, in the event any of the
Lenders shall incur any loss or expense (including, without limitation, any loss
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain all or any portion of
the Loans as Libor Loans) as a result of:
(i) payment or prepayment by the Borrower of all or any
portion of any Libor Loan on a date other than the Interest Adjustment
Date for such Libor Loan, for any reason; provided, however that this
clause shall not be deemed to grant the Borrower any right to convert a
Libor Loan to a Prime Rate Loan prior to the end of any Interest Period
or to imply such right;
(ii) conversion of all or any portion of any Libor Loan on a
day other than the last day of an Interest Period applicable to such
Loan to a Prime Rate Loan for any reason including, without limitation,
acceleration of the Loans upon or after an Event of Default, any
Interest Rate Election or any other cause whether voluntary or
involuntary and whether or not referred to or described in this
Agreement, other than any such conversion resulting solely from
application of Sections 2.9.2 or 2.9.3 by any Lender; or
(iii) any failure by the Borrower to borrow the Loans as Libor
Loans on the date specified in any Interest Rate Election selecting the
Libor Rate, other than any such failure resulting solely from
application of Sections 2.9.2 or 2.9.3 by any Lender;
such Lender shall promptly notify the Agent thereof, and of the reasons
therefor. Upon the request of the Agent, the Borrower shall pay directly to the
Agent for the account of such Lender such amount as will (in the reasonable
determination of such Lender, which shall be conclusive in the absence of
manifest error) reimburse such Lender for such loss or expense. Each Lender
shall furnish to the Borrower, upon written request from the Borrower received
by the Agent, a written statement setting forth the computation of any such
amounts payable to such Lender under this Section 2.9.5.
Section 2.9.6. Banking Practices. Each Lender agrees that upon
the occurrence of any of the events described in Sections 2.2.3 and/or 2.9.2,
2.9.4 or 2.9.5, such Lender will exercise all reasonable efforts to take such
reasonable actions at no expense to such Lender (other than reasonable expenses
which are covered by the Borrower's advance deposit of funds with such Lender
for such purpose, or if such Lender agrees, which the Borrower has agreed to pay
or reimburse to such Lender in full upon demand), in accordance with such
Lender's usual banking practices in such situations and subject to any statutory
or regulatory requirements applicable to such Lender, as such Lender may take
without the consent or participation of any other Person to, in the case of an
event described in Sections 2.2.3 and/or 2.9.4 or 2.9.5, mitigate the cost of
such events to the Borrower and, in the case of an event described in Sections
2.9.2(i), (ii) or (iii), to seek Dollar deposits in any other interbank Libor
market in which such Lender regularly participates and in which the applicable
determination(s) described in Sections 2.9.2(i), (ii) or (iii), as the case may
be, does not apply.
32
39
Section 2.9.7. Borrower's Options on Unavailability or
Increased Cost of Libor Loans. In the event of any conversion of all or any
portion of any Lender's Pro Rata Share of any Libor Loans to a Prime Rate Loan
for reasons beyond the Borrower's control or in the event that any Lender's Pro
Rata Share of all or any portion of the Libor Loans becomes subject, under
Sections 2.9.4 or 2.9.5, to additional costs, the Borrower shall have the
option, subject to the other terms and conditions of this Agreement, to convert
such Lender's Pro Rata Share to a Prime Rate Loan by making Interest Rate
Elections for Interest Periods which (i) end on the Interest Adjustment Date for
such Libor Loan or (ii) end on Business Days occurring prior to such Interest
Adjustment Date, in which case, at the end of the last of such Interest Periods
any such Libor Rate Loan shall automatically convert to a Prime Rate Loan and
the Borrower shall have no further right to make an Interest Rate Election with
respect to such Prime Rate Loan other than an Interest Rate Election which is
effective on the Interest Adjustment Date for such Libor Loan. The Borrower's
options set forth in this Section 2.9.7 may be exercised, if and only if the
Borrower pays, concurrently with delivery to the Agent of each such Interest
Rate Election and thereafter in accordance with Sections 2.9.4, 2.9.5 and 2.9.6
all amounts provided for therein to the Agent in accordance with this Agreement.
If the Borrower shall, as a result of the requirements of
Section 2.9.4 above, be required to pay any Lender the additional costs referred
to therein, but not be required to pay such additional costs to the other Lender
or Lenders and the Borrower, in its sole discretion, shall deem such additional
amounts to be material or in the event that Libor Loans from a Lender are
unavailable to the Borrower as a result solely of the provisions of Sections
2.9.2, 2.9.3 or 2.9.4, but are available from the other Lender or Lenders, the
Borrower shall have the right to substitute another bank satisfactory to the
Agent for such Lender which is entitled to such additional costs or which is
relieved from making Libor Loans and the Agent shall use reasonable efforts
(with all reasonable costs of such efforts by the Agent to be borne by the
Borrower) to assist the Borrower to locate such substitute bank. Any such
substitution shall take place in accordance with Section 9.11 and otherwise be
on terms and conditions reasonably satisfactory to the Agent, and until such
time as such substitution shall be consummated, the Borrower shall continue to
pay such additional costs and comply with the above-referenced Sections. Upon
any such substitution, the Borrower shall pay or cause to be paid to the Lender
that is being replaced, all principal, interest (to the date of such
substitution) and other amounts owing hereunder to such Lender and such Lender
will be released from liability hereunder.
Section 2.9.8. Assumptions Concerning Funding of Libor Loans.
The calculation of all amounts payable to the Lenders under this Section 2.9
shall be made as though each Lender actually funded its relevant Libor Loans
through the purchase of a deposit in the London interbank market bearing
interest at the Libor Rate in an amount equal to that Libor Loan and having a
maturity comparable to the relevant Interest Period and through the transfer of
such deposit from an offshore office of such Lender to a domestic office of such
Lender in the United States of America; provided, however, that each Lender may
fund each of its Libor Loans in any manner it sees fit and the foregoing
assumption shall be utilized solely for the calculation of amounts payable under
this Section 2.9.
Section 2.10. Interest Rate Protection. On or before January 31, 1999,
the Borrower shall enter into an interest rate protection arrangement covering
not less than $10,000,000 of the
33
40
then outstanding Term Loans. Such interest rate protection arrangement may
consist of any one or a combination of the following: (i) the purchase of an
interest rate swap arrangement from a financial institution reasonably
acceptable to the Majority Lenders covering such Loans effectively converting
the Borrower's interest payment obligations with respect to such portion of the
Term Loans to a fixed rate per annum reasonably acceptable to the Majority
Lenders for a term expiring not earlier than two years from the effective date
of such arrangement or (ii) the purchase of an interest rate cap from a
financial institution reasonably acceptable to the Majority Lenders covering
such Loans at a cap rate per annum reasonably acceptable to the Majority Lenders
for a term expiring not earlier than two years from the effective date of such
arrangement. The other terms and conditions of any such interest rate swap or
interest rate cap shall be reasonably satisfactory to the Majority Lenders.
ARTICLE 3.
CONDITIONS OF LENDING
Section 3.1. Conditions Precedent to the Commitment and to all Loans.
Section 3.1.1. The Commitment and Initial Loans. The
Commitment and the obligation of the Lenders to make the initial Advances of the
Loans and/or to issue any Letter of Credit or Letter of Credit Agreement are
subject to performance by the Borrower of all of its obligations under this
Agreement and to the satisfaction of the conditions precedent that all legal
matters incident to the transactions contemplated hereby or incidental to the
Loans shall be reasonably satisfactory to counsel for the Agent and that the
Lenders shall have received on or before the Closing Date all of the following,
each dated the Closing Date or another date acceptable to the Lenders and each
to be in form and substance reasonably satisfactory to the Agent or if any of
the following is not a deliverable, the satisfaction of such condition in form
and substance reasonably satisfactory to the Agent:
Section 3.1.1.1. The Financing Documents, including,
without limitation, those hereinafter set forth and the Borrower's and any
Subsidiary's certificate of incorporation or other organizational documents,
by-laws and each agreement or instrument relating thereto.
Section 3.1.1.2. Certificate of the secretary, clerk
or similar officer of the Borrower and each Subsidiary certifying as to the
resolutions of the shareholders or board of directors of the Borrower and each
Subsidiary authorizing and approving each of the Financing Documents to which
the Borrower and each Subsidiary is a party and other matters contemplated
hereby and certifying as to the names and signatures of the Authorized
Representative(s) of the Borrower and each Subsidiary authorized to sign each
Financing Document to be executed and delivered by or on behalf of the Borrower
and each Subsidiary. The Agent and the Lenders may conclusively rely on each
such certificate until the Agent shall receive a further certificate canceling
or amending the prior certificate and submitting the signatures of the
Authorized Representative(s) named in such further certificate.
34
41
Section 3.1.1.3. Favorable opinions of Xxxxx, Day,
Xxxxxx & Xxxxx, counsel for the Borrower, in form and substance reasonably
satisfactory to the Agent.
Section 3.1.1.4. An Officer's Certificate stating
that:
Section 3.1.1.4.1. The representations and
warranties contained in Section 4.1 and/or contained in any of the other
Financing Documents are correct on and as of the Closing Date as though made on
and as of such date; and
Section 3.1.1.4.2. No Default or Event of
Default has occurred and is continuing, or would result from the making of the
Loans.
Section 3.1.1.5. Certificates of good standing or
legal existence of the secretaries of state (or equivalent officials) of the
states (or jurisdictions) of organization and qualification of and covering the
Borrower and any Subsidiaries dated reasonably near the Closing Date.
Section 3.1.1.6. Evidence that (i) the ownership
interests in the Borrower are as set forth in Exhibit 1.1, and (ii) that except
for receipt and application of certain proceeds of the Loans, the Related
Transactions have been completed in accordance with the Related Transaction
Documents without any waiver or amendment of any term or condition contained
therein without the prior written approval of the Lenders, and in compliance
with any applicable laws and necessary governmental authority approvals.
Section 3.1.1.7. A Request and an Interest Rate
Election.
Section 3.1.1.8. All documents, instruments and
agreements necessary to terminate, cancel and discharge the documents,
instruments and agreements evidencing or securing any and all existing
Indebtedness of the Borrower and any Subsidiary and Liens securing such
Indebtedness other than those listed in Exhibit 3.1.1.8.
Section 3.1.1.9. Payment to the Agent and the Lenders
of the fees specified in this Agreement or in the Fee Letter as being payable on
the Closing Date and all reasonable out-of-pocket costs and expenses incurred by
the Agent and Fleet in connection with the transactions contemplated hereby,
including, but not limited to, reasonable outside legal expenses and any
accounting fees, auditing fees, appraisal fees, and other fees associated with
any independent analyses of the Borrower and any Subsidiary and evidence that
all other reasonable fees and costs payable by the Borrower in connection with
the transactions contemplated by the Financing Documents and completed on the
Closing Date have been paid in full.
Section 3.1.1.10. An Officer's Certificate in the
form of Exhibit 3.1.1.10, duly completed and reflecting, inter alia, compliance
by the Borrower as of the opening of business on the first Business Day after
the Closing Date but based on the Borrower's financial information as of the
last day of the Borrower's most recent fiscal quarter, adjusted to give effect
35
42
to the Loans made on the Closing Date and completion of the Related Transactions
to be completed on or prior to the Closing Date, with the financial covenants
provided for herein.
Section 3.1.1.11. Such other information about the
Borrower, any Subsidiaries and/or their Business Condition as the Lenders may
reasonably request.
Section 3.1.1.12. True copies of, and/or true copies
of any revisions to, the financial statements, the Projections, the pro forma
Closing Date financial statements giving effect to the Loans and completion of
the Related Transactions to be completed on or prior to the Closing Date, and
other information provided pursuant to Section 4.1.5 and certification by the
Borrower of the Projections.
Section 3.1.1.13. Certificates of fire, business
interruption, liability and extended coverage insurance policies, each such
policy to name the Agent as mortgagee and loss payee and, on all liability
policies, as additional insured.
Section 3.1.1.14. True descriptions of any pending or
threatened litigation against or by Borrower or any Subsidiary.
Section 3.1.1.15. Evidence that all necessary
material third party consents to the Related Transactions and the Loans have
been obtained and remain in effect without the imposition of any terms or
condition not reasonably acceptable to the Lenders and all required filings with
any governmental authority have been duly completed.
Section 3.1.1.16. The financial statements described
in Section 4.1.5 together with the Borrower's pro forma Closing Date balance
sheet. Such financial statements shall be accompanied by an Officer's
Certificate of the chief financial officer of the Borrower to the effect that
(i) the representations of the Borrower set forth in Section 4.1.14 are accurate
as of the Closing Date and (ii) that no Material Adverse Effect has occurred
since the date of the Borrower's most recent audited financial statements
delivered to the Lenders except as set forth or reflected in the financial
statements described in Section 4.1.5 or otherwise disclosed in writing and
acceptable to the Agent.
Section 3.1.1.17. True copies of all documents,
instruments and agreements relating to the Borrower's capital structure and the
Related Transaction Documents.
Section 3.1.1.18. The fact that the representations
and warranties of the Borrower contained in Article 4, infra, and in each of the
other Financing Documents are true and correct in all material respects on and
as of the Closing Date except as altered hereafter by actions not prohibited
hereunder. The Borrower's delivery of each Note and Letter of Credit Agreement
to the Lenders and of each Request to the Agent shall be deemed to be a
representation and warranty by the Borrower as of the date thereof to such
effect.
Section 3.1.1.19. That there has been no enactment of
any law or regulation by any governmental authority which would make it (i)
unlawful, (ii) prevent, (iii)
36
43
restrain or (iv) impose conditions which the Lenders determine to be adverse, in
any respect as to the foregoing, to the making of the Loans and/or the
completion of the Related Transactions.
Section 3.1.1.20. The Security Documents, after the
completion of any required filings or recordations, will grant to the Agent
perfected, first priority security interests or mortgages, as the case may be,
with respect to the collateral identified therein and the Agent shall received
the favorable opinions of counsel referred to in Section 3.1.1.3 above with
respect to such perfection. The Agent shall also have received such searches,
landlord consents, access agreements and/or title insurance commitments as
reasonably requested by the Agent, all in form and substance reasonably
satisfactory to the Agent and/or its counsel. Without limiting the generality of
the foregoing, the Agent shall be reasonably satisfied with the terms and
conditions of all real property leases in which the Borrower and any Subsidiary
has a leasehold interest, including the terms of such leaseholds and the
assumability of the lessee's obligations thereunder upon the transfer of or
foreclosure upon of the Borrower's or any Subsidiary's leasehold interest.
Section 3.1.1.21. No Material Adverse Effect has
occurred and there shall exist no action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
governmental or regulatory agency or authority that could reasonably be expected
to result in a Material Adverse Effect.
Section 3.1.1.22. All information and materials
supplied to the Agent prior to the date hereof shall be true and correct in all
material aspects; and no additional information shall have come to the attention
of the Agent or the Lenders that is inconsistent in any material respect with
the information and materials supplied to the Agent prior to the date hereof or
that could reasonably be expected to have a Material Adverse Effect.
Section 3.1.2. The Commitment and the Loans. The Commitment
and the obligation of each Lender to make or maintain its Pro Rata Share of any
Advance or Loan and/or to issue any Letter of Credit or Letter of Credit
Agreement are subject to performance by the Borrower of all its obligations
under this Agreement and to the satisfaction of the following further conditions
precedent:
(a) The fact that, immediately prior to and upon the making of
each Loan, no Event of Default or Default shall have occurred and be continuing;
(b) The fact that the representations and warranties of the
Borrower contained in Article 4, infra and in each of the other Financing
Documents, are true and correct in all material respects on and as of the date
of each Advance or Loan except as altered hereafter by actions consented to or
not prohibited hereunder. The Borrower's delivery of the Notes to the Lenders
and of each Request to the Agent shall be deemed to be a representation and
warranty by the Borrower as of the date of such Advance or Loan as to the facts
specified in Sections 3.1.2(a) and (b);
(c) Receipt by Agent on or prior to the Business Day specified
in the definition of Interest Rate Election of a written Request stating the
amount requested for the
37
44
Loan or Advance in question and an Interest Rate Election for such Loan or
Advance, all signed by a duly authorized officer of the Borrower on behalf of
the Borrower;
(d) That there exists no law or regulation by any governmental
authority having jurisdiction over the Agent or any of the Lenders which would
make it unlawful in any respect for such Lender to make its Pro Rata Share of
the Loan or Advance, including, without limitation, Regulations U, T and X of
the Board of Governors of the Federal Reserve System; and
(e) No Material Adverse Effect has occurred.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Borrower. The
Borrower represents and warrants to the Agent and the Lenders that, after giving
effect to the Loans and the application of the proceeds thereof (which
representations and warranties shall survive the making of the Loans) as
follows:
Section 4.1.1. Organization and Existence. The Borrower and
any Subsidiary is a corporation or limited liability company, duly organized,
validly existing and in good standing under the laws of the state (or applicable
jurisdiction) of its incorporation or organization and is duly qualified to do
business in all jurisdictions in which such qualification is required, all as
noted on Exhibit 4.1.1, except where failure to so qualify would not have a
Material Adverse Effect, and has all requisite power and authority to conduct
its business, to own its properties and to execute and deliver, and to perform
all of its obligations under the Financing Documents.
Section 4.1.2. Authorization and Absence of Defaults. Except
as described on Exhibit 4.1.2, the execution, delivery to the Agent and/or the
Lenders and performance by the Borrower and any Subsidiary of the Financing
Documents and Related Transaction Documents have been duly authorized by all
requisite corporate action and do not and will not (i) require any consent or
approval of the shareholders or board of directors of the Borrower or any
Subsidiary which has not been obtained, (ii) violate any provision of any law,
rule, regulation (including, without limitation, Regulations U and X of the
board of governors of the federal reserve system), order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Borrower and/or any Subsidiary and/or the articles of
organization or by-laws, as applicable, of the Borrower and/or any Subsidiary,
(iii) result in a material breach of or constitute a material default under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which the Borrower and/or any Subsidiary is or are a party or
parties or by which it or they or its or their properties may be bound or
affected; or (iv) result in, or require, the creation or imposition of any Lien
on any of the Borrower's and/or any Subsidiary's respective properties or
revenues other than Liens granted to the Agent by any of the Financing Documents
securing the Obligations. The Borrower and any Subsidiary are in compliance with
any such applicable law, rule, regulation, order, writ, judgment, injunction,
38
45
decree, determination or award or any such indenture, other agreement, lease or
instrument, except where the failure to be in compliance does not have a
Material Adverse Effect.
Section 4.1.3. Acquisition of Consents. Except as noted on
Exhibit 4.1.3, no authorization, consent, approval, license, exemption of or
filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, other than those
which have been obtained, is or will be necessary to the valid execution and
delivery to the Agent and/or the Lenders or performance by the Borrower or any
Subsidiary of any Financing Documents and each of the foregoing which has been
obtained is in full force and effect.
Section 4.1.4. Validity and Enforceability. Each of the
Financing Documents when delivered hereunder will constitute the legal, valid
and binding obligations of each of the Borrower and any Subsidiary which is or
are a party thereto enforceable against the Borrower, and any Subsidiary which
is or are a party thereto in accordance with their respective terms except as
the enforceability thereof may be limited by the effect of general principles of
equity and bankruptcy and similar laws affecting the rights and remedies of
creditors generally.
Section 4.1.5. Financial Information. The following
information with respect to the Borrower has heretofore been furnished to the
Agent:
Section 4.1.5.1. Audited annual financial statements of the
Borrower for the periods ended December 31, 1996 and December 31, 1997 ; and
Section 4.1.5.2. Interim, consolidated balance sheets of the
Borrower and any Subsidiaries as of the end of the most recent fiscal quarter
prior to the Closing for which such statements are available and the related
statements of income and cash flows and shareholders' equity, such balance
sheets and statements to be prepared and certified by an Authorized
Representative in an Officer's Certificate as having been prepared in accordance
with GAAP except for footnotes and year-end adjustments, and to be in form
reasonably satisfactory to the Agent;
Section 4.1.5.3. The Projections.
Section 4.1.5.4. The pro forma financial statements
of the Borrower as of the Closing Date provided pursuant to Section 3.1.1.12.
Section 4.1.5.5. The (a) unaudited balance sheets of
Acquired Company as of December 31, 1996 and 1997 and the related statements of
operations and cash flows for the years then ended and (b) the reviewed balance
sheet of the Acquired Company as of September 30, 1998 and the related
statements of operations and cash flows for the nine-month period then ended.
Each of the financial statements referred to above in
Section 4.1.5.1 and 4.1.5.2 was prepared in accordance with GAAP (subject, in
the case of interim statements, to the absence of footnotes and normal year-end
adjustments) applied on a consistent basis, except as
39
46
stated therein. To the best of the Borrower's knowledge, each of the financial
statements referred to above in Sections 4.1.5.1, 4.1.5.2 and 4.1.5.4 fairly
presents the financial condition or pro forma financial condition, as the case
may be, of the Person being reported on at such dates and is complete and
correct in all material respects and no Material Adverse Effect has occurred
since the date thereof. The Projections were prepared by the Borrower in good
faith.
Section 4.1.6. No Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower and/or any Subsidiary or any of their properties before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which if determined adversely to the
Borrower and/or any Subsidiary would draw into question the legal existence of
the Borrower and/or any such Subsidiary and/or the validity, authorization
and/or enforceability of any of the Financing Documents and/or any provision
thereof and/or could have a Material Adverse Effect except those matters, if
any, described on Exhibit 4.1.6 none of which, in Borrower's good faith opinion,
will (i) have such Material Adverse Effect or (ii) draw into question (a) the
legal existence of the Borrower and/or any such Subsidiary or (b) the validity,
authorization and/or enforceability of any of the Financing Documents and/or any
provision thereof.
Section 4.1.7. Regulation U. The Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying
"margin stock" within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System (12 CFR Part 221), does not own and has no present
intention of acquiring any such margin stock or a "margin security" within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR, Part 207). None of the proceeds of the Loans will be used directly or
indirectly by the Borrower for the purpose of purchasing or carrying, or for the
purpose of reducing or retiring any Indebtedness which was originally incurred
to purchase or carry, any such margin security or margin stock or for any other
purpose which might constitute the transaction contemplated hereby a "purpose
credit" within the meaning of said Regulation U, or cause this Agreement to
violate any other regulation of the Board of Governors of the Federal Reserve
System or the Securities and Exchange Act of 1934, as amended, or any rules or
regulations promulgated under either said statute.
Section 4.1.8. Absence of Adverse Agreements. Neither the
Borrower nor any Subsidiary is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
corporate or partnership restriction which would have a Material Adverse Effect.
Section 4.1.9. Taxes. The Borrower and each Subsidiary has
filed all tax returns (federal, state and local) required to be filed and paid
all taxes shown thereon to be due, including interest and penalties, except for
those taxes, if any, which are being contested in good faith and by appropriate
proceedings, and for which proper reserve or other provision has been made in
accordance with GAAP and except where any failure to file or pay would not have
a Material Adverse Effect on the Borrower or any Subsidiary and except as
described in Exhibit 4.1.9.
Section 4.1.10. ERISA. Borrower and any Commonly Controlled
Entity do not maintain or contribute to any Plan which is not in substantial
compliance with ERISA, or any
40
47
Single Employer Plan which has incurred any accumulated funding deficiency
within the meaning of sections 412 and 418 of the Code or which has applied for
or obtained a waiver from the Internal Revenue Service of any minimum funding
requirement under section 412 of the Code. Borrower and any Commonly Controlled
Entity have not incurred any liability to the PBGC in connection with any Plan
covering any employees of Borrower or any Commonly Controlled Entity in amount
exceeding Fifty Thousand Dollars ($50,000) in the aggregate or ceased operations
at any facility or withdrawn from any Plan in a manner which could subject any
of them to liability under sections 4062(e), 4063 or 4064 of ERISA in amount
exceeding Fifty Thousand Dollars ($50,000) in the aggregate, and know of no
facts or circumstance which might give rise to any liability of Borrower or any
Commonly Controlled Entity to the PBGC under Title IV of ERISA in amount
exceeding Fifty Thousand Dollars ($50,000) in the aggregate. Borrower and any
Commonly Controlled Entity have not incurred any withdrawal liability in amount
exceeding Fifty Thousand Dollars ($50,000) in the aggregate (including but not
limited to any contingent or secondary withdrawal liability) within the meaning
of sections 4201 and 4202 of ERISA, to any Multiemployer Plan, and no event has
occurred, and there exists no condition or set of circumstances known to the
Borrower, which presents a risk of the occurrence of any withdrawal from or the
partition, termination, reorganization or insolvency of any Multiemployer Plan
which could result in any liability to a Multiemployer Plan in amount exceeding
Fifty Thousand Dollars ($50,000) in the aggregate.
Except for payments for which the minimum funding requirement
has been waived under section 412 of the Code, full payment has been made of all
amounts which Borrower and any Commonly Controlled Entity are required to have
paid as contributions to any Plan under applicable law or under any plan or any
agreement relating to any Plan to which Borrower or any Commonly Controlled
Entity is a party. Borrower and each Commonly Controlled Entity have made
adequate provision for reserves to meet contributions that have not been made
because they are not yet due under the terms of any Plan or related agreements.
Neither Borrower nor any Commonly Controlled Entity has any
knowledge, nor do any of them have any reason to believe, that any Reportable
Event which could result in a liability or liabilities of Fifty Thousand Dollars
($50,000) or more in the aggregate has occurred with respect to any Plan.
Section 4.1.11. Ownership of Properties.
Section 4.1.11.1. Except for Permitted Encumbrances,
Borrower and any Subsidiary has good title to all of its properties and assets
free and clear of all restrictions and Liens of any kind other than those which
could not have a Material Adverse Effect or a material adverse effect on the
validity, authorization and/or enforceability of the Financing Documents and/or
any provision thereof.
Section 4.1.11.2. Exhibit 4.1.11 accurately and
completely lists the location of all real property owned or leased by Borrower
or any Subsidiary. Borrower and each Subsidiary enjoys quiet possession under
all material leases of real property to which it is a party as a lessee, and all
of such leases are valid, subsisting and, to Borrower's knowledge, in full force
and effect.
41
48
Section 4.1.11.3. To Borrower's knowledge, except as
specified in Exhibit 4.1.11, none of the real property occupied by Borrower or
any Subsidiary is located within any federal, state or municipal flood plain
zone.
Section 4.1.11.4. Except as set forth in Exhibit
4.1.11, all of the material properties used in the conduct of the Borrower's and
each Subsidiary's business (i) are in good repair, working order and condition
(reasonable wear and tear excepted) and reasonably suitable for use in the
operation of Borrower's, and each Subsidiary's business; and (ii) to Borrower's
knowledge are currently operated and maintained, in all material respects, in
accordance with the requirements of applicable governmental authorities.
Section 4.1.12. Accuracy of Representations and Warranties.
None of Borrower's representations or warranties set forth in this Agreement or
in any document or certificate furnished pursuant to this Agreement or in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary to make
any statement of fact contained herein or therein, in light of the circumstances
under which it was made, not misleading; except that unless provided otherwise
any such document or certificate which is dated speaks as of the date stated and
not the present.
Section 4.1.13. No Investment Company. Neither the Borrower
nor any Subsidiary is an "investment company" or a company "controlled" by an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended, which is required to register thereunder.
Section 4.1.14. Solvency, etc. After giving effect to the
consummation of each Loan outstanding and to be made under this Agreement as of
the time this representation and warranty is given, the Borrower (a) will be
able to pay its debts as they become due, (b) will have funds and capital
sufficient to carry on its business and all businesses in which it is about to
engage, and (c) will own property in the aggregate having a value both at fair
valuation and at fair saleable value in the ordinary course of the Borrower's
business greater than the amount required to pay its Indebtedness, including for
this purpose unliquidated and disputed claims. The Borrower will not be rendered
insolvent by the execution and delivery of this Agreement and the consummation
of any transactions contemplated herein.
Section 4.1.15. Approvals. Except as set forth in Exhibit
4.1.3, all approvals required from all Persons including without limitation all
governmental authorities with respect to the Financing Documents have been
obtained.
Section 4.1.16. Ownership Interests. The schedule of ownership
interests in the Borrower and any Subsidiaries set forth in Exhibit 1.1 is true,
accurate and complete and the Investments to be made for all ownership interests
disclosed therein have in fact been fully paid in immediately available Dollars
after giving effect to the closing of the Related Transactions.
Section 4.1.17. Licenses, Registrations, Compliance with Laws,
etc. Exhibit 4.1.17 accurately and completely describes all permits,
governmental licenses, registrations and approvals, material to carrying out of
Borrower's and each of the Subsidiaries'
42
49
businesses as presently conducted and as required by law or the rules and
regulations of any federal, foreign governmental, state, county or local
association, corporation or governmental agency, body, instrumentality or
commission having jurisdiction over the Borrower or any of the Subsidiaries,
including but not limited to the United States Environmental Protection Agency,
the United States Department of Labor, the United States Occupational Safety and
Health Administration, the United States Equal Employment Opportunity
Commission, the Federal Trade Commission and the United States Department of
Justice and analogous and related state and foreign agencies. All existing
authorizations, licenses and permits are in full force and effect, are duly
issued in the name of, or validly assigned to the Borrower or a Subsidiary and
the Borrower or a Subsidiary has full power and authority to operate thereunder.
There is no material violation or material failure of compliance or, to
Borrower's knowledge, allegation of such violation or failure of compliance on
the part of the Borrower or any Subsidiary with any of the foregoing permits,
licenses, registrations, approvals, rules or regulations and there is no action,
proceeding or investigation pending or to the knowledge of the Borrower
threatened nor has the Borrower or any Subsidiary received any notice of such
which might result in the termination or suspension of any such permit, license,
registration or approval which in any case could have a Material Adverse Effect.
Section 4.1.18. Principal Place of Business; Books and
Records. The Borrower's chief executive offices are located at Borrower's
addresses set forth in Section 9.6. All of the Borrower's books and records are
kept at one or more of its addresses set forth in Section 9.6.
Section 4.1.19. Subsidiaries. The Borrower has only the
Subsidiaries identified on Exhibit 1.1.
Section 4.1.20. Copyright. Except as set forth in Exhibit
4.1.20 the Borrower has not violated any of the provisions of the Copyright
Revision Act of 1976, 17 U.S.C. 101, et seq. The Borrower has filed all
registration statements, notices and statements of account and all necessary
supplements and adjustment schedules thereto with the United States Copyright
Office and has made all payments to the United States Copyright Office that are
required. Exhibit 4.1.20 accurately and completely sets forth all copyrights
held by the Borrower or any of the Subsidiaries and contains exceptions to the
representations contained in this Section 4.1.20. No inquiries regarding any
such filings have been received by the Copyright Office. The Borrower has not
allocated revenues in any manner inconsistent with the rules and regulations of
the Copyright Office.
Section 4.1.21. Environmental Compliance. Neither the Borrower
nor, to the knowledge of the Borrower, any other Person:
Section 4.1.21.1. has ever caused, permitted, or
suffered to exist any Hazardous Material to be spilled, placed, held, located or
disposed of on, under, or about, any of the facilities owned, leased or used by
the Borrower (the "Premises"), or from the Premises into the atmosphere, any
body of water, any wetlands, or on any other real property, nor to Borrower's
knowledge does any Hazardous Material exist on, under or about the Premises
other than as disclosed on Exhibit 4.1.21, or in respect of Hazardous Material
used or disposed of in compliance with law;
43
50
Section 4.1.21.2. has any knowledge that any of the
Premises has ever been used (whether by the Borrower or, to the knowledge of the
Borrower, by any other Person) as a treatment, storage or disposal (whether
permanent or temporary) site for any Hazardous Waste as defined in 42 U.S.C.A.
6901, et seq. (the Resource Recovery and Conservation Act); and
Section 4.1.21.3. has any knowledge of any notice of
violation, Lien or other notice issued by any governmental agency with respect
to the environmental condition of the Premises or any other property occupied by
the Borrower, or any other property which was included in the property
description of the Premises or such other real property within the preceding
three years except as disclosed to the Agent.
Section 4.1.22. Material Agreements, etc. Exhibit 4.1.22
attached hereto accurately and completely lists all material agreements to which
the Borrower or any of the Subsidiaries are a party including without limitation
all software licenses, and all material construction, engineering, consulting,
employment, management, operating and related agreements, if any, which are
presently in effect. All of the material agreements to which Borrower or any
Subsidiary is a party, are legally valid, binding, and, to Borrower's knowledge,
in full force and effect and neither the Borrower, any of the Subsidiaries nor,
to Borrower's knowledge, any other parties thereto are in material default
thereunder.
Section 4.1.23. Patents, Trademarks and Other Property Rights.
Exhibit 4.1.23 attached hereto contains a complete and accurate schedule of all
registered trademarks, registered copyrights and patents of the Borrower and/or
any of the Subsidiaries, and pending applications therefor, and all other
intellectual property in which the Borrower and/or any of the Subsidiaries has
any rights other than "off-the shelf" software which is generally available to
the general public at retail. Except as set forth in Exhibit 4.1.23, the
Borrower and any Subsidiaries own, possess, or have licenses to use all the
patents, trademarks, service marks, trade names, copyrights and non-governmental
licenses, and all rights with respect to the foregoing, necessary for the
conduct of their respective businesses as now conducted, without, to the
Borrower's knowledge any conflict with the rights of others with respect
thereto.
Section 4.1.24. Related Transaction Documents. The Borrower
has, prior to the date hereof, delivered to the Lenders true copies of the
Related Transaction Documents, and each and every amendment or modification
thereto and, except for receipt and application of certain proceeds of the
Loans, the Related Transactions have been completed in accordance with the
Related Transaction Documents, without any waiver or amendment of any term or
condition contained therein without the prior written approval of the Lenders,
and in compliance with any applicable laws and necessary governmental authority
approvals.
Section 4.1.25. Material Adverse Effect. No Material Adverse
Effect has occurred and there exists no action, suit, investigation, litigation
or proceeding pending or threatened in any court or before any arbitrator or
governmental or regulatory agency or authority that could reasonably be expected
to result in a Material Adverse Effect.
44
51
Section 4.1.26. Year 2000. On the basis of comprehensive
review and assessment undertaken by the Borrower of the Borrowers' and its
Subsidiaries' computer applications and an assessment by the Borrower of its and
its Subsidiaries' material suppliers, vendors and customers, the Borrower
reasonably believes that the "Year 2000 Problem" (that is, the risk that
computer applications used by any person may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999) will not result in a Material Adverse Effect.
ARTICLE 5.
COVENANTS OF THE BORROWER
Section 5.1. Affirmative Covenants of the Borrower Other than Reporting
Requirements. From the date hereof and thereafter for so long as there is
Indebtedness of the Borrower to any Lender and/or the Agent under any of the
Financing Documents or any part of the Commitment is in effect, the Borrower
will, with respect to itself and, unless noted otherwise below, with respect to
each of its Subsidiaries, ensure that each Subsidiary will, unless the Majority
Lenders shall otherwise consent in writing:
Section 5.1.1. Payment of Taxes, etc. Pay and discharge all
taxes and assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, prior to the date
on which penalties attach thereto, and all lawful claims for the same which, if
unpaid, might become a Lien upon any of its properties, provided that (unless
and until foreclosure, restraint, sale or any similar proceeding is pending and
is not stayed, discharged or bonded within 30 days after commencement) the
Borrower shall not be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings and for
which proper reserve or other provision has been made in accordance with GAAP,
unless failure to pay could not result in a Material Adverse Effect.
Section 5.1.2. Maintenance of Insurance. Maintain on the
collateral under any of the Security Documents insurance against loss by fire,
hazards included within the term "extended coverage", and such other hazards,
casualties and contingencies as the Agent may from time to time require, in an
amount equal to one hundred percent (100%) of the replacement cost of the
collateral under any of the Security Documents and business interruption
insurance in an amount reasonably acceptable to the Agent. All policies of such
insurance and all renewals thereof shall be in form and substance acceptable to
Agent, shall be made payable in case of loss to the Agent as loss payee and
mortgagee and shall contain an endorsement requiring thirty (30) days prior
written notice to the Agent prior to cancellation or change in the coverage,
scope or amount of any such policies. Borrower shall also keep in full force and
effect a policy of public liability insurance against claims of bodily injury,
death or property damage occurring in any building in which the limits of
liability shall not be less than One Million Dollars ($1,000,000) per person and
One Million Dollars ($1,000,000) per accident, together with an excess liability
policy in the amount of Two Million Dollars ($2,000,000) which shall be in
addition to the limits above set forth. Borrower shall increase the limits of
such liability insurance to such higher
45
52
amounts as the Agent may from time to time reasonably require. Certificates of
all such insurance shall be delivered to the Agent concurrently with the
execution and delivery of this Agreement, and thereafter all renewal or
replacement certificates shall be delivered to the Agent not less than thirty
(30) days prior to the expiration date of the policy to be renewed or replaced,
accompanied by evidence satisfactory to the Agent that all premiums payable with
respect to such policies have been paid by Borrower. Borrower shall have the
right of free choice in the selection of the agent or the insurer through or by
which the insurance required hereunder is to be placed; provided, however, said
insurer has at all times a general policyholders' rating of A or A+ in Best's
latest rating guide. Furthermore, the Agent shall have the right and is hereby
constituted and appointed the true and lawful attorney irrevocable of Borrower,
in the name and stead of Borrower, but in the uncontrolled discretion of said
attorney, (i) to adjust, xxx for, compromise and collect any amounts due under
such insurance policies in the event of loss and (ii) to give releases for any
and all amounts received in settlement of losses under such policies; and the
same shall, subject to Section 2.6.1.3 of this Agreement, at the option of the
Agent, be applied, after first deducting the costs of collection, on account of
any Indebtedness the payment of which is secured by any of the Financing
Documents, whether or not then due, or, notwithstanding the claims of any
subsequent lienor, be used or paid over to Borrower in accordance with
reasonable procedures established by the Agent for use in repairing or replacing
any damaged or destroyed collateral under any of the Security Documents.
Section 5.1.3. Preservation of Existence, etc. Preserve and
maintain in full force and effect its legal existence, and all material rights,
franchises and privileges in the jurisdiction of its organization, preserve and
maintain all material licenses, governmental approvals, trademarks, patents,
trade secrets, copyrights and trade names owned or possessed by it and which are
necessary or, in the reasonable business judgment of the Borrower, desirable in
view of its business and operations or the ownership of its properties and
qualify or remain qualified as a foreign corporation in each jurisdiction in
which such qualification is necessary or, in its reasonable business judgment,
desirable in view of its business and operations and ownership of its properties
except where the failure to so qualify will not have a Material Adverse Effect;
provided that Borrower may liquidate or dissolve Consulting Professionals
Limited.
Section 5.1.4. Compliance with Laws, etc. Comply with the
requirements of all present and future applicable laws, rules, regulations and
orders of any governmental authority having jurisdiction over it and/or its
business including, without limitation, regulations of the United States
Copyright Office and the Copyright Royalty Tribunal, except where the failure to
comply would not have a Material Adverse Effect.
Section 5.1.5. Visitation Rights. Permit, during normal
business hours and upon the giving of reasonable notice, the Agent, the Lenders
and any agents or representatives thereof, to examine and make copies of (at
Borrower's cost and expense) and abstracts from the records and books of account
of, and visit the properties of the Borrower and any Subsidiary to discuss the
affairs, finances and accounts of the Borrower or any Subsidiary with any of
their partners, officers or management level employees and/or any independent
certified public accountant of the Borrower and/or any Subsidiary.
46
53
Section 5.1.6. Keeping of Records and Books of Account. Keep
adequate records and books of account, in which complete entries will be made in
accordance with GAAP and with applicable requirements of any governmental
authority having jurisdiction over the Borrower and/or any Subsidiary in
question, reflecting all financial transactions.
Section 5.1.7. Maintenance of Properties, etc. Maintain and
preserve all of its properties necessary or useful in the proper conduct of its
business, in good working order and condition, ordinary wear and tear excepted,
and in accordance with each of the Security Documents.
Section 5.1.8. Post-Closing Items. Complete in a timely
fashion all actions required in the Post-Closing Letter.
Section 5.1.9. Other Documents, etc. Except as otherwise
required by this Agreement, pay, perform and fulfill all of its obligations and
covenants under each material document, instrument or agreement to which it is a
party including, without limitation, the Related Transaction Documents; provided
that so long as the Borrower or any Subsidiary is contesting any claimed default
by it or them under any of the foregoing by proper proceedings conducted in good
faith and for which any proper reserve or other provision in accordance with and
to the extent required by GAAP has been made, such default shall not be deemed a
violation of this covenant.
Section 5.1.10. Minimum Interest Coverage Ratio. Maintain a
ratio of EBITDA to Interest Expense of not less than 4.0:1.0, such ratio to be
calculated at each Borrower fiscal quarter end on the Adjusted Four Quarterly
Basis.
Section 5.1.11. Minimum Fixed Charge Coverage Ratio. Maintain
a Fixed Charge Coverage Ratio of not less than 1.25:1.00, such ratio to be
calculated at each Borrower fiscal quarter end on the Adjusted Four Quarterly
Basis.
Section 5.1.12. Maximum Ratio of Total Indebtedness for
Borrowed Money to EBITDA. Maintain at the end of each fiscal quarter of the
Borrower in each period set forth below a ratio of (i) total Indebtedness for
Borrowed Money of the Borrower and its Subsidiaries on a consolidated basis as
of the last day of such fiscal quarter to (ii) EBITDA calculated on the Adjusted
Four Quarterly Basis of not greater than the ratio set forth below opposite such
period:
Borrower Fiscal Quarter(s) Ending Ratio
--------------------------------- -----
December 31, 1998 3.50:1.00
March 31, 1999 3.25:1.00
June 30, 1999 3.00:1.00
September 30, 1999 2.75:1.00
December 31, 1999 2.25:1.00
Thereafter 2.00:1.00
47
54
Section 5.1.12 (A). Minimum Quick Ratio. Maintain at the end
of Borrower's fiscal quarters ending December 31, 1998 and March 31, 1999, a
Quick Ratio of not less than 1.15:1.00 and at the end of each Borrower fiscal
quarter thereafter, a Quick Ratio of not less than 1.05:1.00.
Section 5.1.13. Officer's Certificates and Requests. Provide
each Officer's Certificate required under this Agreement and each Request so
that the statements contained therein are accurate and complete in all material
respects.
Section 5.1.14. Depository. Use the Agent as a principal
depository of Borrower's funds.
Section 5.1.15. Chief Executive Officer. Maintain Xxxxxxxx X.
Xxxxxxxx as Chief Executive Officer of the Borrower and Xxxxxxx X. Xxxxxx as
President as the Persons with principal executive, operating and management
responsibility for the Borrower's business or obtain a replacement of comparable
experience and training in the Borrower's industry reasonably satisfactory to
the Majority Lenders within 120 days of his ceasing to act in such capacity.
Section 5.1.16. Notice of Purchase of Real Estate and Leases.
Promptly notify the Agent in the event that the Borrower shall purchase any real
estate or enter into any lease of real estate or of equipment material to the
operation of the Borrower's business, supply the Agent with a copy of the
related purchase agreement or of such lease, as the case may be, and if
requested by the Agent, execute and deliver, or cause to be executed and
delivered, to the Agent for the benefit of the Lenders a deed of trust,
mortgage, assignment or other document, together with landlord consents, in the
case of leased property, reasonably satisfactory in form and substance to the
Agent, granting a valid first Lien (subject to any Liens permitted under Section
5.2.1 hereof) on such real property or leasehold as security for the Financing
Documents, all subject to the limitations of Section 5.2.17.
Section 5.1.17. Additional Assurances. From time to time
hereafter, execute and deliver or cause to be executed and delivered, such
additional instruments, certificates and documents, and take all such actions,
as the Agent shall reasonably request for the purpose of implementing or
effectuating the provisions of the Financing Documents, and upon the exercise by
the Agent of any power, right, privilege or remedy pursuant to the Financing
Documents which requires any consent, approval, registration, qualification or
authorization of any governmental authority or instrumentality, exercise and
deliver all applications, certifications, instruments and other documents and
papers that the Agent may be so required to obtain.
Section 5.1.18. Appraisals. Permit the Agent and its agents,
at any time and in the sole discretion of the Agent or at the request of the
Majority Lenders, to conduct appraisals of the Borrower's business, the cost of
which shall be borne by the Borrower.
Section 5.1.19. Environmental Compliance. Comply strictly and
in all material respects with the requirements of all federal, state, and local
environmental laws; notify the Lenders promptly in the event of any spill of
Hazardous Material materially affecting the
48
55
Premises occupied by the Borrower from time to time; forward to the Lenders
promptly any written notices relating to such matters received from any
governmental agency; and pay promptly when due any uncontested fine or
assessment against the Premises.
Section 5.1.20. Remediation. Immediately contain and remove
any Hazardous Material found on the Premises in compliance with applicable laws
and at the Borrower's expense, subject however, to the right of the Agent, at
the Agent's option but at the Borrower's expense, to have an environmental
engineer or other representative review the work being done.
Section 5.1.21. Site Assessments. Promptly upon the request of
the Agent, based upon the Agent's reasonable belief that a material Hazardous
Waste or other environmental problem exists with respect to any Premises,
provide the Agent with a Phase I environmental site assessment report and, if
Agent finds a reasonable basis for further assessment in such Phase I
assessment, a Phase II environmental site assessment report, or an update of any
existing report, all in scope, form and content and performed by such company as
may be reasonably satisfactory to the Agent.
Section 5.1.22. Indemnity. Indemnify, defend, and hold the
Agent and the Lenders harmless from and against any claim, cost, damage
(including without limitation consequential damages), expense (including without
limitation reasonable attorneys' fees and expenses), loss, liability, or
judgment now or hereafter arising as a result of any claim for environmental
cleanup costs, any resulting damage to the environment and any other
environmental claims against the Borrower, any Subsidiary, the Lenders and/or
the Agent arising out of the transactions contemplated by this Agreement, or any
of the Premises. The provisions of this Section shall continue in effect and
shall survive (among other events), until the applicable statute of limitations
has expired, any termination of this Agreement, foreclosure, a deed in lieu
transaction, payment and satisfaction of the Obligations of Borrower, and
release of any collateral for the Loans.
Section 5.1.23. Trademarks, Copyrights, etc. Concurrently with
the acquisition of any trademark, tradename, copyright, patent or service xxxx
collaterally assign and grant a first priority perfected Lien thereon to the
Agent pursuant to documents in form and substance reasonably satisfactory to the
Agent.
Section 5.2. Negative Covenants of the Borrower. From the date hereof
and thereafter for so long as there is Indebtedness of the Borrower to any
Lender and/or the Agent under any of the Financing Documents or any part of the
Commitment is in effect, the Borrower will not, with respect to itself and,
unless noted otherwise below, with respect to each of the Subsidiaries, will
ensure that each such Subsidiary will not, without the prior written consent of
the Majority Lenders:
Section 5.2.1. Liens, etc. Create, incur, assume or suffer to
exist any Lien of any nature, upon or with respect to any of its properties, now
owned or hereafter acquired, or assign as collateral or otherwise convey as
collateral, any right to receive income, except that the foregoing restrictions
shall not apply to any Liens:
49
56
Section 5.2.1.1. For taxes, assessments or
governmental charges or levies on property if the same shall not at the time be
delinquent or thereafter can be paid without penalty or interest, or (if
foreclosure, distraint, sale or other similar proceedings shall not have been
commenced or if commenced not stayed, bonded or discharged within 30 days after
commencement) are being contested in good faith and by appropriate proceedings
diligently conducted and for which proper reserve or other provision has been
made in accordance with and to the extent required by GAAP;
Section 5.2.1.2. Imposed by law, such as landlords',
carriers', warehousemen's and mechanics' liens, bankers' set off rights and
other similar Liens arising in the ordinary course of business for sums not yet
due or being contested in good faith and by appropriate proceedings diligently
conducted and for which proper reserve or other provision has been made in
accordance with and to the extent required by GAAP;
Section 5.2.1.3. Arising in the ordinary course of
business out of pledges or deposits under worker's compensation laws,
unemployment insurance, old age pensions, or other social security or retirement
benefits, or similar legislation;
Section 5.2.1.4. Arising from or upon any judgment or
award, provided that such judgment or award is being contested in good faith by
proper appeal proceedings and only so long as execution thereon shall be stayed;
Section 5.2.1.5. Those set forth on Exhibit 1.8;
Section 5.2.1.6. Those now or hereafter granted
pursuant to the Security Documents or otherwise now or hereafter granted to the
Agent for the benefit of the Lenders as collateral for the Loans and/or
Borrower's other Obligations arising in connection with or under any of the
Financing Documents;
Section 5.2.1.7. Deposits to secure the performance
of bids, trade contracts (other than for Borrowed Money), leases, statutory
obligations, surety bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of the Borrower's or any Subsidiary's
business;
Section 5.2.1.8. Easements, rights of way,
restrictions and other similar encumbrances incurred in the ordinary course of
business which, in the aggregate, are not substantial in amount, and which do
not in any case materially detract from the value of the property subject
thereto or materially interfere with the ordinary conduct of business by any
Borrower or any Subsidiary;
Section 5.2.1.9. Liens securing Indebtedness
permitted to exist under Section 5.2.8.3; provided that the Lien securing any
such Indebtedness is limited to the item of property purchased or leased in each
case;
50
57
Section 5.2.1.10. UCC-1 financing statements filed
solely for notice or precautionary purposes by lessors under operating leases
which do not secure Indebtedness and which are limited to the items of equipment
leased pursuant to the lease in question; and
Section 5.2.2. Assumptions, Guaranties, etc. of Indebtedness
of Other Persons. Assume, guarantee, endorse or otherwise become directly or
contingently liable in connection with any obligation or Indebtedness of any
other Person, except:
Section 5.2.2.1. Guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business;
Section 5.2.2.2. Assumptions, guaranties,
endorsements and contingent liabilities within the definition of Indebtedness
and permitted by Section 5.2.8; and
Section 5.2.2.3. Those set forth on Exhibit 5.2.2.
Section 5.2.3. Acquisitions, Dissolution, etc. Acquire, in one
or a series of transactions, all or any substantial portion of the assets or
ownership interests in another Person, or dissolve, liquidate, wind up, merge or
consolidate or combine with another Person or sell, assign, lease or otherwise
dispose of (whether in one transaction or in a series of transactions) any
material assets, whether now owned or hereafter acquired, or any of the
Borrower's or any Subsidiary's interests in real property other than assets
which are replaced within 30 days of any asset sale, assignment, lease or
disposition with assets of like kind, usefulness and value; provided, however,
that the Borrower shall be permitted to acquire all or any portion of the assets
or ownership interests in another Person (by merger, consolidation or otherwise
so long as the Borrower survives) having aggregate (for all such acquisitions
from and after the Closing Date, but excluding however the acquisition of the
Acquired Company) consideration not to exceed $15,000,000, of which not more
than $2,500,000 of such consideration shall be in the form of cash. At the time
of any such Permitted Acquisition the Borrower shall provide or grant or cause
to be provided or granted to the Agent a first priority perfected Lien on the
assets or ownership interests acquired, including without limitation the assets
owned by any Subsidiary, to the extent that the Agent does not already have such
a Lien. Prior to the consummation of any such Permitted Acquisition, Borrower
shall submit to the Agent a pro-forma Compliance Certificate on a consolidated
basis (including the to-be-acquired assets and any assumed liabilities or if
ownership interests are acquired, the to-be-acquired Person if such Person is to
be a Subsidiary and if not, the to-be-acquired ownership interests, all measured
as set forth below in this Section 5.2.3), which such pro-forma Compliance
Certificate shall indicate that no Default or Event of Default exists or would
exist following consummation of the Permitted Acquisition and that the Borrower
would be, in compliance with (on a consolidated basis including the
to-be-acquired assets and any assumed liabilities or if ownership interests are
acquired, the to-be-acquired Person if such Person is to be a Subsidiary and if
not, the to-be-acquired ownership interests), Sections 5.1.10, 5.1.11, 5.1.12
and 5.1.12.(A) following consummation of the Permitted Acquisition, including
the to-be-acquired assets, Person or ownership interests and the operating
results thereof on the same basis and for the same periods as the Borrower is
measured for each such covenant, respectively.
51
58
Section 5.2.4. Change in Nature of Business. Make any material
change in the nature of its business.
Section 5.2.5. Ownership. Cause or permit the occurrence of
any Change of Control.
Section 5.2.6. Sale and Leaseback. Enter into any sale and
leaseback arrangement with any lender or investor, or enter into any leases
except in the normal course of business at reasonable rents comparable to those
paid for similar leasehold interests in the area.
Section 5.2.7. Sale of Accounts, etc. Sell, assign, discount
or dispose in any way of any accounts receivable, promissory notes or trade
acceptances held by the Borrower or any Subsidiary, with or without recourse,
except in the ordinary course of the Borrower's or any Subsidiary's business.
Section 5.2.8. Indebtedness. Incur, create, become or be
liable directly or indirectly in any manner with respect to or permit to exist
any Indebtedness except:
Section 5.2.8.1. Indebtedness under the Financing
Documents;
Section 5.2.8.2. Indebtedness with respect to trade
payable obligations and other normal accruals and customer deposits in the
ordinary course of business not yet due and payable in accordance with customary
trade terms or with respect to which the Borrower or any Subsidiary is
contesting in good faith the amount or validity thereof by appropriate
proceedings and then only to the extent such person has set aside on its books
adequate reserves therefor in accordance with and to the extent required by
GAAP;
Section 5.2.8.3. Indebtedness with respect to
Capitalized Lease Obligations and purchase money Indebtedness with respect to
real or personal property in an aggregate amount outstanding at any time not to
exceed $1,000,000; provided that the amount of any purchase money Indebtedness
does not exceed 90% of the lesser of the cost or fair market value of the asset
purchased with the proceeds of such Indebtedness;
Section 5.2.8.4. Unsecured Indebtedness in an
aggregate amount outstanding at any time not to exceed $250,000;
Section 5.2.8.5. Indebtedness listed on Exhibit
3.1.1.8;
Section 5.2.8.6. Indebtedness owing by the Borrower
to any Subsidiary or by any Subsidiary to the Borrower or any other Subsidiary;
provided, however, that any Indebtedness owing by the Borrower or any Subsidiary
to an Affiliate shall be subordinated to the Obligations on terms and conditions
satisfactory to the Required Lenders.
Section 5.2.8.7. Indebtedness permitted by Section
5.2.2.
52
59
Section 5.2.8.8. Indebtedness outstanding as a
refinancing of Indebtedness permitted under another clause of this Section 5.2.8
other than Sections 5.2.8.2 or 5.2.8.8; provided that such Indebtedness as
refinanced continues to qualify as permitted Indebtedness under the clause of
this Section 5.2.8 under which the refinanced Indebtedness was permitted under
this Section 5.2.8.
Section 5.2.9. Other Agreements. Amend any of the terms or
conditions of any of the Related Transaction Documents in a manner materially
adverse to the Agent or any of the Lenders, its certificate of incorporation,
bylaws (or comparable applicable charter or governance document), the
Subordination Agreement, any other subordination agreement or any indenture,
agreement, document, note or other instrument evidencing, securing or relating
to any other Indebtedness permitted under Section 5.2.8.
Section 5.2.10. [Intentionally omitted.]
Section 5.2.11. Dividends, Payments and Distributions. Declare
or pay any dividends, management fees or like fees or make any other
distribution of cash or property or both to any of the Stockholders other than
compensation for services rendered to the Borrower and/or any Subsidiary or use
any of its assets for payment, purchase, conversion, redemption, retention,
acquisition or retirement of any beneficial interest in the Borrower or set
aside or reserve assets for sinking or like funds for any of the foregoing
purposes, make any other distribution by reduction of capital or otherwise in
respect of any beneficial interest in the Borrower or permit any Subsidiary
which is not a wholly-owned Subsidiary so to do.
Section 5.2.12. Investments in or to Other Persons. Make or
commit to make any Investment in or to any other Person (including, without
limitation, any Subsidiary) other than (i) advances to employees for business
expenses not to exceed $25,000 in the aggregate outstanding for any one employee
and not to exceed $500,000 in the aggregate outstanding at any one time to all
such employees, (ii) other employee loans not to exceed $100,000 in the
aggregate outstanding at any one time to all such employees, (iii) Cash
Equivalent Investments, (iv) Investments in accounts, contract rights and
chattel paper (as defined in the Uniform Commercial Code) and notes receivable,
arising or acquired in the ordinary course of business, (v) Investments
constituting Permitted Acquisitions and (vi) Investments described on Exhibit
5.2.2.
Section 5.2.13. Transactions with Affiliates. Except as
contemplated by the Related Transaction Documents, engage in any transaction or
enter into any agreement with an Affiliate, or in the case of Affiliates or
Subsidiaries, with the Borrower or another Affiliate or Subsidiary, except in
the ordinary course of business, as permitted by any other provision of this
Agreement and then only on an arm's length basis except as set forth on Exhibit
5.2.13.
Section 5.2.14. Change of Fiscal Year. Change its accounting
policies, reporting practices or its fiscal year from those in effect on the
Closing Date.
Section 5.2.15. Subordination of Claims. Subordinate any
present or future claim against or obligation of another Person, except as
ordered in a bankruptcy or similar creditors' remedy proceeding of such other
Person.
53
60
Section 5.2.16. Compliance with ERISA. With respect to
Borrower and any Commonly Controlled Entity (a) withdraw from or cease to have
an obligation to contribute to, any Multiemployer Plan, (b) engage in any
"prohibited transaction" (as defined in Section 4975 of the Code) involving any
Plan, (c) except for any deficiency caused by a waiver of the minimum funding
requirement under sections 412 and/or 418 of the Code, as described above, incur
or suffer to exist any material "accumulated funding deficiency" (as defined in
section 302 of ERISA and section 412 of the Code) of the Borrower or any
Commonly Controlled Entity, whether or not waived, involving any Single Employer
Plan, (d) incur or suffer to exist any Reportable Event or the appointment of a
trustee or institution of proceedings for appointment of a trustee for any
Single Employer Plan if, in the case of a Reportable Event, such event continues
unremedied for ten (10) days after notice of such Reportable Event pursuant to
sections 4043(a), (c) or (d) of ERISA is given, if in the reasonable opinion of
the Majority Lenders any of the foregoing is likely to result in a material
liability of the Borrower or any Commonly Controlled Entity, (e) permit the
assets held under any Plan to be insufficient to protect all accrued benefits,
(f) allow or suffer to exist any event or condition, which presents a material
risk of incurring a material liability of the Borrower or any Commonly
Controlled Entity to PBGC by reason of termination of any such Plan or (g) cause
or permit any Plan maintained by Borrower and/or any Commonly Controlled Entity
to be out of compliance with ERISA.] [For purposes of this Section 5.2.16
"material liability" shall be deemed to mean any liability of Fifty Thousand
Dollars ($50,000) or more in the aggregate.
Section 5.2.17. Capital Expenditures. Incur Capital
Expenditures in excess of $1,750,000, in any Borrower fiscal year.
Subject to the foregoing, the Borrower shall make its Capital
Expenditures substantially in accordance with and for the purposes outlined in
the Budget for the Borrower fiscal year in question.
Section 5.2.18. Hazardous Waste. Become involved, or permit,
to the extent reasonably possible after the exercise by the Borrower of
reasonable due diligence and preventive efforts, any tenant of its real property
to become involved, in any operations at such real property generating, storing,
disposing, or handling Hazardous Material or any other activity that could lead
to the imposition on the Borrower or the Agent or any Lender, or any such real
property of any material liability or Lien under any environmental laws.
Section 5.2.19. Other Restrictions on Liens or Dividends.
Enter into any agreement or otherwise agree to or grant any restriction
substantially similar to the provisions of Section 5.2.1 hereof or which would
otherwise have the effect of prohibiting, restricting, impeding or interfering
with the creation subsequent to the Closing Date of additional Liens to secure
the Obligations.
Section 5.2.20. Limitation on Creation of Subsidiaries, etc..
Establish, create or acquire any Subsidiary or become the general partner in any
general partnership.
Section 5.3. Reporting Requirements. From the date hereof and
thereafter for so long as the Borrower is indebted to any Lender and/or the
Agent under any of the Financing Documents,
54
61
the Borrower will, unless the Majority Lenders shall otherwise consent in
writing, furnish or cause to be furnished to the Agent for distribution to the
Lenders:
Section 5.3.1. As soon as possible and in any event upon
acquiring knowledge of an Event of Default or Default, continuing on the date of
such statement, the written statement of an Authorized Representative setting
forth details of such Event of Default or Default and the actions which the
Borrower has taken and proposes to take with respect thereto;
Section 5.3.2. As soon as practicable after the end of each
Borrower fiscal year and in any event within 90 days after the end of each such
fiscal year, consolidated and consolidating balance sheets of the Borrower and
any Subsidiaries as at the end of such year, and the related statements of
income and cash flows or shareholders' equity of the Borrower and any
Subsidiaries setting forth in each case the corresponding figures for the
preceding fiscal year, such statements to be certified by a firm of independent
certified public accountants selected by Borrower and reasonably acceptable to
the Majority Lenders, to be accompanied by a true copy of said auditors'
management letter, if one was provided to the Borrower, and to contain a
statement to the effect that such accountants have examined Sections 5.1.10
through 5.1.13 and 5.2.17 and that no Default or Event of Default exists on
account of Borrower's failure to have been in compliance therewith on the date
of such statement;
Section 5.3.3. As soon as is practicable after the end of each
fiscal quarter of each Borrower fiscal year and in any event within 45 days
thereafter, consolidated balance sheets of the Borrower and any Subsidiaries as
of the end of such period and the related statements of income and cash flows
and shareholders' equity of the Borrower and any Subsidiaries, subject to
changes resulting from year-end adjustments, together, subject to Section 5.3.7,
with a comparison to the Budget for the applicable period, such balance sheets
and statements to be prepared and certified by an Authorized Representative in
an Officer's Certificate as having been prepared in accordance with GAAP except
for footnotes and year-end adjustments, and to be in form reasonably
satisfactory to the Agent;
Section 5.3.4. Simultaneously with the furnishing of each of
the year-end consolidated and consolidating financial statements of the Borrower
and any Subsidiaries to be delivered pursuant to Section 5.3.2 and each of the
consolidated quarterly statements of the Borrower and the Subsidiaries to be
delivered pursuant to Section 5.3.3 an Officer's Certificate of an Authorized
Representative which shall contain a statement in the form of Exhibit 3.1.1.10
to the effect that no Event of Default or Default has occurred, without having
been waived in writing, or if there shall have been an Event of Default not
previously waived in writing pursuant to the provisions hereof, or a Default,
such Officer's Certificate shall disclose the nature thereof and the actions the
Borrower has taken and prepare to take with respect thereto. Each such Officer's
Certificate shall also contain a calculation of and certify to the accuracy of
the amounts required to be calculated in the financial covenants of the Borrower
contained in this Agreement and described in Exhibit 3.1.1.10;
Section 5.3.5. Promptly after the commencement thereof, notice
of all material actions, suits and proceedings before any court or governmental
department, commission, board,
55
62
bureau, agency or instrumentality, domestic or foreign, affecting the Borrower
and/or any Subsidiary;
Section 5.3.6. The borrowing base certificates required
pursuant to Section 2.1 hereof;
Section 5.3.7. On or before January 31 of each fiscal year of
the Borrower, an updated proposed budget, prepared on a quarterly basis, and
updated financial projections for the Borrower and any Subsidiaries on a
consolidated basis (together, the "Budget") for such fiscal year, setting forth
in detail reasonably satisfactory to the Agent the projected results of
operations of the Borrower and any Subsidiaries on a consolidated quarterly
basis, detailed Capital Expenditures plan and stating underlying assumptions and
accompanied by a written statement of an Authorized Representative certifying as
to the approval of such Budget by Borrower's board of directors.
Section 5.3.8. Such other information respecting the Business
Condition of the Borrower or any Subsidiaries as the Agent or any Lender may
from time to time reasonably request;
Section 5.3.9. Written notice of the fact and of the details
of any sale or transfer of any ownership interest in the Borrower or any
Subsidiary given promptly after the Borrower acquires knowledge thereof;
provided, however, that this clause shall not be deemed to constitute or imply
any consent to any such sale or transfer;
Section 5.3.10. Prompt written notice of loss of any key
personnel or any Material Adverse Effect and an explanation thereof and of the
actions the Borrower and/or such Subsidiary propose to take with respect
thereto; and
Section 5.3.11. Written notice of the following events, as
soon as possible and in any event within 15 days after the Borrower knows or has
reason to know thereof: (i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan, or (ii) the institution of
proceedings or the taking or expected taking of any other action by PBGC or the
Borrower or any Commonly Controlled Entity to terminate, withdraw or partially
withdraw from any Plan and, with respect to any Multiemployer Plan, the
Reorganization (as defined in Section 4241 of ERISA) or Insolvency (as defined
in Section 4245 of ERISA) of such Multiemployer Plan and in addition to such
notice, deliver to the Agent whichever of the following may be applicable: (a)
an Officer's Certificate setting forth details as to such Reportable Event and
the action that the Borrower or Commonly Controlled Entity proposes to take with
respect thereto, together with a copy of any notice of such Reportable Event
that may be required to be filed with PBGC, or b) any notice delivered by PBGC
evidencing its intent to institute such proceedings or any notice to PBGC that
such Plan is to be terminated, as the case may be.
ARTICLE 6.
56
63
EVENTS OF DEFAULT
Section 6.1. Events of Default. The Borrower shall be in default under
each of the Financing Documents, upon the occurrence of any one or more of the
following events ("Events of Default"):
Section 6.1.1. If the Borrower shall fail to make due and
punctual payment of any principal, fees, interest and/or other amounts payable
under this Agreement as provided in any Note and/or in this Agreement when the
same is due and payable except that it shall not be an Event of Default if any
interest, fees and/or other amounts (excluding principal) is paid within 5 days
after it is due and payable, whether at the due date thereof or at a date fixed
for prepayment or if the Borrower shall fail to make any such payment of fees,
interest, principal and/or any other amount under this Agreement and/or under
any Note on the date when such payment becomes due and payable by acceleration;
Section 6.1.2. If the Borrower or any Subsidiary shall make an
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall admit in writing its inability to pay its
debts as they become due or shall file a voluntary petition in bankruptcy, or
shall file any petition or answer seeking any reorganization, arrangement,
composition, adjustment, liquidation, dissolution or similar relief under the
present or any future federal bankruptcy laws or other applicable federal, state
or other statute, law or regulation, or shall seek or consent to or acquiesce in
the appointment of any trustee, receiver or liquidator of it or of all or any
substantial part of its properties, or if partnership or corporate action shall
be taken for the purpose of effecting any of the foregoing; or
Section 6.1.3. To the extent not described in Section 6.1.2,
(i) if the Borrower or any Subsidiary shall be the subject of a bankruptcy
proceeding, or (ii) if any proceeding against any of them seeking any
reorganization, arrangement, composition, adjustment, liquidation, dissolution,
or similar relief under the present or any future federal bankruptcy law or
other applicable federal, foreign, state or other statute, law or regulation
shall be commenced, or (iii) if any trustee, receiver or liquidator of any of
them or of all or any substantial part of any or all of their properties shall
be appointed without their consent or acquiescence; provided that in any of the
cases described above in this Section 6.1.3, such proceeding or appointment
shall not be an Event of Default if the Borrower or the Subsidiary in question
shall cause such proceeding or appointment to be discharged, vacated, dismissed
or stayed within sixty (60) days after commencement thereof; or
Section 6.1.4. If final judgment or judgments aggregating more
than $500,000 shall be rendered against the Borrower or any Subsidiary and shall
remain undischarged, unstayed or unpaid for an aggregate of thirty (30) days
(whether or not consecutive) after entry thereof; or
Section 6.1.5. If the Borrower or any Subsidiary shall default
(after giving effect to any applicable grace period) in the due and punctual
payment of the principal of or interest on any Indebtedness exceeding in the
aggregate $500,000 (other than the Loans), or if any default shall have occurred
and be continuing after any applicable grace period under any mortgage, note
57
64
or other agreement evidencing, securing or providing for the creation of such
Indebtedness, which results in the acceleration of such Indebtedness or which
permits, or with the giving of notice would permit, any holder or holders of any
such Indebtedness to accelerate the stated maturity thereof; or
Section 6.1.6. If there shall be a default in the performance
of the Borrower's obligations under Section 5.1.3 (insofar as such Section
requires the preservation of the corporate existence of the Borrower or any
Subsidiary), any of Sections 5.1.2, 5.1.10 through 5.1.13 or Section 5.2 of this
Agreement or under any covenant, representation or warranty contained in any of
the Security Documents for which no cure period is provided in such Security
Document; or
Section 6.1.7. If there shall be any Default in the
performance of any covenant or condition contained in this Agreement or in any
of the other Financing Documents to be observed or performed pursuant to the
terms hereof or any Financing Document, as the case may be, or to the extent
such Default would have a Material Adverse Effect, by the Borrower under any of
the Related Transaction Documents, other than a covenant or condition referred
to in any other subsection of this Section 6.1 and such Default shall continue
unremedied or unwaived, (i) in the case of any covenant or condition contained
in Section 5.3, for fifteen (15) Business Days, or (ii) in the case of any other
covenant or condition for which no other grace period is provided, for thirty
(30) days, or (iii) in the case of any other covenant or condition for which
another grace period is provided, for such grace period, or (iv) if any of the
representations and warranties made or deemed made by the Borrower to the Agent
and/or any Lender pursuant to any of the Financing Documents proves to have been
false or misleading in any material respect when made and such falseness or
misleading representation or warranty would be reasonably likely to have a
material adverse effect on the Agent or any Lender or their rights and remedies
or a Material Adverse Effect; or
Section 6.1.8. If there shall be any attachment of any
deposits or other property of the Borrower and/or any Subsidiary in the
possession of any Lender or any attachment of any other property of the Borrower
and/or any Subsidiary in an amount exceeding $100,000 which shall not be
discharged, vacated or stayed within thirty (30) days of the date of such
attachment; or
Section 6.1.9. Any certification of the financial statements,
furnished to the Agent pursuant to Section 5.3.2, shall contain any
qualification; provided, however, that such qualifications will not be deemed an
Event of Default if in each case (i) such certification shall state that the
examination of the financial statements covered thereby was conducted in
accordance with generally accepted auditing standards, including but not limited
to all such tests of the accounting records as are considered necessary in the
circumstances by the independent certified public accountants preparing such
statements, (ii) such financial statements were prepared in accordance with GAAP
and (iii) such qualification does not involve the "going concern" status of the
entity being reported upon.
ARTICLE 7.
58
65
REMEDIES OF LENDERS
Upon the occurrence and during the continuance of any one or more of
the Events of Default, the Agent, at the request of the Majority Lenders, shall,
by written notice to the Borrower, declare the obligation of the Lenders to make
or maintain the Loans to be terminated, whereupon the same and the Commitment
shall forthwith terminate, and the Agent, at the request of the Majority
Lenders, shall, by notice to the Borrower, declare the entire unpaid principal
amount of each Note and all fees and interest accrued and unpaid thereon and/or
under this Agreement, and/or any of the other Financing Documents and any and
all other Indebtedness under this Agreement, each Note and/or any of the other
Financing Documents to the Agent and/or any of the Lenders and/or to any holder
of all or any portion of each Note to be forthwith due and payable, whereupon
each Note, and all such accrued fees and interest and other such Indebtedness
shall become and be forthwith due and payable, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by the Borrower; provided, however, that upon the occurrence of an Event of
Default under Sections 6.1.2 or 6.1.3, all of the unpaid principal amount of
each Note, all fees and interest accrued and unpaid thereon and/or under this
Agreement and/or under any of the other Financing Documents and any and all
other such Indebtedness of the Borrower to any of the Lenders and/or to any such
holder shall thereupon be due and payable in full without any need for the Agent
and/or any Lender to make any such declaration or take any action and the
Lenders' obligations to make the Loans shall simultaneously terminate. The Agent
shall, in accordance with the votes of the Majority Lenders, exercise all
remedies on behalf of and for the account of each Lender and on behalf of its
respective Pro Rata Share of the Loans, its Note and Indebtedness of the
Borrower owing to it or any of the foregoing, including, without limitation, all
remedies available under or as a result of this Agreement, the Notes or any of
the other Financing Documents or any other document, instrument or agreement now
or hereafter securing any Note without any such exercise being deemed to modify
in any way the fact that each Lender shall be deemed a separate creditor of the
Borrower to the extent of its Note and Pro Rata Share of the Loans and any other
amounts payable to such Lender under this Agreement and/or any of the other
Financing Documents and the Agent shall be deemed a separate creditor of the
Borrower to the extent of any amounts owed by the Borrower to the Agent.
ARTICLE 8.
AGENT
Section 8.1. Appointment. The Agent is hereby appointed as
administrative and collateral agent, hereunder and each Lender hereby authorizes
the Agent to act under the Financing Documents as its Agent hereunder and
thereunder, respectively. The Agent agrees to act as such upon the express
conditions contained in this Article 8. The provisions of this Article 8 are
solely for the benefit of the Agent, and, except as expressly provided in
Section 8.6, neither the Borrower nor any third party shall have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Financing Documents to
which the Agent is a party, the Agent shall act solely as Agent of the Lenders
and does not assume nor shall the Agent be deemed to have assumed any obligation
59
66
towards or relationship of agency or trust with or for the Borrower, any of the
Stockholders, any Affiliate or any Subsidiary.
Section 8.2. Powers; General Immunity.
Section 8.2.1. Duties Specified. Each Lender irrevocably
authorizes the Agent to take such action on such Lender's behalf, including,
without limitation, to execute and deliver the Financing Documents to which the
Agent is a party and to exercise such powers hereunder and under the Financing
Documents and other instruments and agreements referred to herein as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto. The Agent shall have only
those duties and responsibilities which are expressly specified in this
Agreement or in any of the Financing Documents and may perform such duties by or
through its agents or employees. The duties of the Agent shall be mechanical and
administrative in nature; and the Agent shall not have by reason of this
Agreement or any of the Financing Documents a fiduciary relationship in respect
of any Lender; and nothing in this Agreement or any of the Security Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
the Agent any obligations in respect of this Agreement or any of the Financing
Documents or the other instruments and agreements referred to herein except as
expressly set forth herein or therein.
Section 8.2.2. No Responsibility For Certain Matters. The
Agent shall not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of any of
the Financing Documents or any other document, instrument or agreement now or
hereafter executed in connection herewith or therewith, or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith by or on behalf of the Borrower, any of the Affiliates, and/or any
Subsidiary to the Agent or any Lender, or be required to ascertain or inquire as
to the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or of the existence or possible existence of any Default
or Event of Default.
Section 8.2.3. Exculpatory Provisions. Neither the Agent nor
any of its officers, directors, employees or agents shall be liable to any
Lender for any action taken or omitted hereunder or under any of the Financing
Documents, or in connection herewith or therewith unless caused by its or their
gross negligence or willful misconduct. If the Agent shall request instructions
from Lenders with respect to any action (including the failure to take an
action) in connection with any of the Financing Documents, the Agent shall be
entitled to refrain from taking such action unless and until the Agent, shall
have received instructions from the Majority Lenders (or all of the Lenders if
the action requires their consent). Without prejudice to the generality of the
foregoing, (i) the Agent shall be entitled to rely, and shall be fully protected
in relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and shall be entitled to rely and shall be protected in relying on
opinions and judgments of attorneys (who may be attorneys for the Borrower, any
of the Affiliates, and/or any Subsidiary), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right of
action
60
67
whatsoever against the Agent as a result of the Agent acting or (where so
instructed) refraining from acting under any of the Financing Documents or the
other instruments and agreements referred to herein in accordance with the
instructions of the Majority Lenders (or all of the Lenders if the action
requires their consent). The Agent shall be entitled to refrain from exercising
any power, discretion or authority vested in it under any of the Financing
Documents or the other instruments and agreements referred to herein unless and
until it has obtained the instructions of the Majority Lenders (or all of the
Lenders if the action requires their consent).
Section 8.2.4. Agent Entitled to Act as Lender. The agency
hereby created shall in no way impair or affect any of the rights and powers of,
or impose any duties or obligations upon, Fleet in its individual capacity as a
Lender hereunder. With respect to its participation in the Loans and the
Commitment, Fleet shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or "Lenders" or any
similar term shall, unless the context clearly otherwise indicates, include
Fleet in its individual capacity. The Agent and its affiliates may accept
deposits from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower, any of the Stockholders,
or any Affiliate or Subsidiary as if it were not performing the duties specified
herein, and may accept fees and other consideration from the Borrower and/or any
of such other Persons for services in connection with this Agreement and
otherwise without having to account for the same to Lenders.
Section 8.3. Representations and Warranties; No Responsibility for
Appraisal of Creditworthiness. Each Lender represents and warrants that it has
made its own independent investigation of the financial condition and affairs of
the Borrower, the Stockholders and any Subsidiaries of any of them in connection
with the making of the Loans hereunder and has made and shall continue to make
its own appraisal of the creditworthiness of the Borrower, the Stockholders and
the Subsidiaries. The Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto whether coming into its possession before the
making of any Loan or any time or times thereafter (except for information
received by the Agent under Section 5.3 hereof which the Agent will promptly
forward to the Lenders), and the Agent shall further not have any responsibility
with respect to the accuracy of or the completeness of the information provided
to any of the Lenders.
Section 8.4. Right to Indemnity. Each Lender severally agrees to
indemnify the Agent proportionately to its Pro Rata Share of the Loans, to the
extent the Agent shall not have been reimbursed by or on behalf of the Borrower,
for and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including, without
limitation, counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder or in any way relating to or arising
out of this Agreement and/or any of the other Financing Documents; provided that
no Lender shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful misconduct.
If any indemnity furnished to the Agent for any purpose shall, in the opinion of
the Agent, be
61
68
insufficient or become impaired, the Agent may call for additional indemnity and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished.
Section 8.5. Payee of Note Treated as Owner. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have been
filed with the Agent. Any request, authority or consent of any person or entity
who, at the time of making such request or giving such authority or consent, is
the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of that Note or of any Note or Notes issued in exchange
for such Note.
Section 8.6. Resignation by Agent.
Section 8.6.1. The Agent may resign from the performance of
all its functions and duties under the Financing Documents at any time by giving
30 days' prior written notice to the Borrower and each of the Lenders. Such
resignation shall take effect upon the acceptance by a successor Agent, of
appointment pursuant to Sections 8.6.2 and 8.6.3 below or as otherwise provided
below.
Section 8.6.2. Upon any such notice of resignation, the
Majority Lenders shall appoint a successor Agent, who shall be a Lender and, so
long as no Default or Event of Default exists and is continuing, who shall be
reasonably satisfactory to the Borrower and in any event shall be an
incorporated bank or trust company with a combined surplus and undivided capital
of at least Five Hundred Million Dollars ($500,000,000).
Section 8.6.3. If a successor Agent shall not have been so
appointed within said 30 day period, the resigning Agent, with the consent of
the Borrower, which shall not be unreasonably withheld or delayed, shall then
appoint a successor Agent, who shall be a Lender and who shall serve as the
Agent, until such time, if any, as the Majority Lenders, and so long as no
Default or Event of Default exists and is continuing, with the consent of the
Borrower, which shall not be unreasonably withheld or delayed, appoint a
successor Agent as provided above.
Section 8.6.4. If no successor Agent has been appointed
pursuant to Sections 8.6.2 or 8.6.3 by the 40th day after the date such notice
of resignation was given by the resigning Agent, the resigning Agent's
resignation shall become effective and the Majority Lenders shall thereafter
perform all the duties of the resigning Agent under the Financing Documents
including without limitation directing the Borrower on how to submit Requests
and Interest Rate Elections and otherwise on administration of the Agent's
duties under the Financing Documents and the Borrower shall comply therewith so
long as such directions do not have a Material Adverse Effect on the Borrower or
any Subsidiary until such time, if any, as the Majority Lenders, and so long as
no Default or Event of Default exists and is continuing, with the consent of the
Borrower, which shall not be unreasonably withheld or delayed, appoint a
successor Agent, as provided above.
Section 8.7. Successor Agent. Upon the acceptance of any appointment as
the Agent hereunder by a successor Agent, that successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent and the retiring
62
69
Agent, shall be discharged from its duties and obligations as the Agent under
the Financing Documents. After any retiring Agent's resignation hereunder as the
Agent the provisions of this Article 8 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Agent under the
Financing Documents.
ARTICLE 9.
MISCELLANEOUS
Section 9.1. Consent to Jurisdiction and Service of Process.
Section 9.1.1. Except to the extent prohibited by applicable
law, the Borrower irrevocably:
Section 9.1.1.1. agrees that any suit, action, or
other legal proceeding arising out of any of the Financing Documents or any of
the Loans may be brought in the courts of record of the Commonwealth of
Massachusetts or any other state(s) in which any of the Borrower's or any
Subsidiary's assets are located or the courts of the United States located in
the Commonwealth of Massachusetts or any other state(s) in which any of the
Borrower's or any Subsidiary's assets are located;
Section 9.1.1.2. consents to the jurisdiction of each
such court in any such suit, action or proceeding; and
Section 9.1.1.3. waives any objection which it may
have to the laying of venue of such suit, action or proceeding in any of such
courts.
For such time as any of the Indebtedness of the Borrower to any Lender
and/or the Agent shall be unpaid in whole or in part and/or the Commitment is in
effect, the Borrower irrevocably designates the registered agent or agent for
service of process of the Borrower as reflected in the records of the Secretary
of State of the State of Ohio as its registered agent, and, in the absence
thereof, the Secretary of State of the State of Ohio as its agent to accept and
acknowledge on its behalf service of any and all process in any such suit,
action or proceeding brought in any such court and agrees and consents that any
such service of process upon such agent and written notice of such service to
the Borrower by registered or certified mail shall be taken and held to be valid
personal service upon the Borrower regardless of where the Borrower shall then
be doing business and that any such service of process shall be of the same
force and validity as if service were made upon it according to the laws
governing the validity and requirements of such service in each such state and
waives any claim of lack of personal service or other error by reason of any
such service. Any notice, process, pleadings or other papers served upon the
aforesaid designated agent shall, within three (3) Business Days after such
service, be sent by the method provided therefor under Section 9.6 to the
Borrower at its address set forth in this Agreement. EACH OF THE PARTIES HERETO
HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF ANY DISPUTE BETWEEN THE
BORROWER AND THE AGENT
63
70
AND/OR THE LENDERS WITH RESPECT TO THE FINANCING DOCUMENTS AND/OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREBY.
Section 9.2. Rights and Remedies Cumulative. No right or remedy
conferred upon or reserved to the Agent and/or the Lenders in any of the
Financing Documents is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given under any of the Financing
Documents or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy under any of the Financing
Documents, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 9.3. Delay or Omission not Waiver. No delay in exercising or
failure to exercise by the Agent and/or the Lenders of any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by any of the Financing
Documents or by law to the Agent and/or any of the Lenders may be exercised from
time to time, and as often as may be deemed expedient, by the Agent and/or any
of the Lenders.
Section 9.4. Waiver of Stay or Extension Laws. The Borrower covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, which may affect the covenants or the performance of any of
the Financing Documents; and the Borrower (to the extent that it may lawfully do
so) hereby expressly waives all benefit and advantage of any such law and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Agent and/or any of the Lenders, but will suffer and
permit the execution of every such power as though no such law had been enacted,
except to the extent the Agent or any Lender is guilty of willful misconduct or
gross negligence.
Section 9.5. Amendments, etc. No amendment, modification, termination,
or waiver of any provision of any of the Financing Documents nor consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be in a written notice given to the Borrower by the Agent and
consented to in writing by the Majority Lenders (or by the Agent acting alone if
any specific provision of this Agreement provides that the Agent, acting alone,
may grant such amendment, modification, termination, waiver or departure) and
the Agent shall give any such notice if the Majority Lenders so consent or
direct the Agent to do so; provided, however, that any such amendment,
modification, termination, waiver or consent shall require a written notice
given to the Borrower by the Agent and consented to in writing by all of the
Lenders if the effect thereof is to (i) change any of the provisions affecting
the interest rate on the Loans, (ii) extend or modify the Commitment, (iii)
discharge or release the Borrower from its obligation to repay all principal due
under the Loans or release any collateral or guaranty for the Loans, (iv) change
any Lender's Pro Rata Share of the Commitment or the Loans, (v) modify this
Section 9.5, (vi) change the definition of Majority Lenders, (vii) extend any
scheduled due date for payment of principal, interest or fees or (viii) permit
the Borrower to assign any of its rights under or interest in this Agreement,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. Any amendment or modification
64
71
of this Agreement must be signed by the Borrower, the Agent and at least all of
the Lenders consenting thereto who shall then hold the Pro Rata Shares of the
Loans required for such amendment or modification under this Section 9.5 and the
Agent shall sign any such amendment if such Lenders so consent or direct the
Agent to do so provided that any Lender dissenting therefrom shall be given an
opportunity to sign any such amendment or modification. Any amendment of any of
the Security Documents must be signed by each of the parties thereto. No notice
to or demand on the Borrower and no consent, waiver or departure from the terms
of this Agreement granted by the Agent and/or the Lenders in any case shall
entitle the Borrower to any other or further notice or demand in similar or
other circumstances.
Section 9.6. Addresses for Notices, etc. All notices, requests, demands
and other communications provided for hereunder (other than those which, under
the terms of this Agreement, may be given by telephone, which shall be effective
when received verbally) shall be in writing (including telecopied communication)
and mailed (provided that in the case of items referred to in the next-to-last
sentence of Section 9.1 and the items set forth below as requiring a copy to
legal counsel for the Borrower, the Agent or a Lender, such items shall be
mailed by overnight courier for delivery the next Business Day), telecopied or
delivered to the applicable party at the addresses indicated below:
If to the Borrower:
CCAi Renaissance Centre
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
With a copy to (if given pursuant to any of Sections 5.3.1, 5.3.5,
5.3.9, 5.3.10 and 5.3.11):
Xxxxx, Day, Xxxxxx & Xxxxx
Xxxxx Xxxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxx Xxxxx
Telecopy: (000) 000-0000
If to Fleet National Bank as the Agent and/or a Lender:
Fleet National Bank
Mailstop: MA OF D07A
Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx Xxxxx, Vice President
Telecopy: (000) 000-0000
With a copy to (if given pursuant to any of Sections 5.3.1, 5.3.5,
5.3.9, 5.3.10 and 5.3.11)
65
72
Xxxxxxxx, Xxxxx & Xxxxxx
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx III
Telecopy: (000) 000-0000
If to any other Lender, to the address set forth on Exhibit 1.9.
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to the delivery with the
terms of this Section. All such notices, requests, demands and other
communications shall be effective when received. Requests, certificates, other
items provided pursuant to Section 5.3 and other routine mailings or notices
need not be accompanied by a copy to legal counsel for the Lenders or the
Borrower.
Section 9.7. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand the reasonable fees and out-of-pocket expenses of Messrs. Xxxxxxxx, Xxxxx
& Xxxxxx, counsel for the Agent and of any local counsel retained by the Agent
in connection with the preparation, execution, delivery, syndication and
administration of the Financing Documents and the Loans. The Borrower agrees to
pay on demand all reasonable costs and expenses (including without limitation
reasonable attorneys' fees) incurred by the Agent and/or any Lender, upon or
after the occurrence and during the continuance of any Default or Event of
Default, if any, in connection with the enforcement of any of the Financing
Documents and any amendments, waivers or consents with respect thereto. In
addition, the Borrower shall pay on demand any and all stamp and other taxes and
fees payable or determined to be payable in connection with the execution and
delivery of the Financing Documents, and agrees to save the Lenders and the
Agent harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes or fees, except
those resulting from the Lenders' or Agent's gross negligence or willful
misconduct.
Section 9.8. Participations. Subject to compliance with the proviso in
the first sentence of Section 9.11, any Lender may sell participations in all or
part of the Loans made by it and/or its Pro Rata Share of the Commitment or any
other interest herein to a financial institution having at least $500,000,000 of
assets, in which event the participant shall not have any rights under any of
the Financing Documents (the participant's rights against such Lender in respect
of that participation to be those set forth in the Agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder or thereunder shall be determined as if such Lender had
not sold such participation. Such Lender may furnish any information concerning
the Borrower and any Subsidiary in the possession of such Lender from time to
time to participants (including prospective participants); provided that such
Lender and any participant comply with the proviso in Section 9.11.7 as if any
such participant was a Substituted Lender.
Section 9.9. Binding Effect; Assignment. This Agreement shall be
binding upon and inure to the benefit of the Borrower, the Agent and the Lenders
and their respective successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Agent and the Lenders. This Agreement
66
73
and all covenants, representations and warranties made herein and/or in any of
the other Financing Documents shall survive the making of the Loans, the
execution and delivery of the Financing Documents and shall continue in effect
so long as any amounts payable under or in connection with any of the Financing
Documents or any other Indebtedness of the Borrower to the Agent and/or any
Lender remains unpaid or the Commitment remains outstanding; provided, however,
that Sections 2.2.3 and 9.7 shall, except to the extent agreed to in a pay-off
letter by the Agent and the Lenders in their complete discretion, survive and
remain in full force and effect for 90 days following repayment in full of all
amounts payable under or in connection with all of the Financing Documents and
any other such Indebtedness.
Section 9.10. Actual Knowledge. For purposes of this Agreement, neither
the Agent nor any Lender shall be deemed to have actual knowledge of any fact or
state of facts unless the senior loan officer or any other officer responsible
for the Borrower's account established pursuant to this Agreement at the Agent
or such Lender, shall, in fact, have actual knowledge of such fact or state of
facts or unless written notice of such fact shall have been received by the
Agent or such Lender in accordance with Section 9.6.
Section 9.11. Substitutions and Assignments. Upon the request of any
Lender, the Agent and such Lender may assign all or any portion of its Pro Rata
Share of the Commitment and the Loans to a Federal Reserve Bank or an affiliate
of such Lender and may, subject to the terms and conditions hereinafter set
forth, take the actions set forth below to substitute one or more financial
institutions having at least $500,000,000 in assets (a "Substituted Lender") as
a Lender or Lenders hereunder having an amount of the Loans as specified in the
relevant Substitution Agreement executed in connection therewith; provided that
no Lender, Selling Lender or Substituted Lender shall have a Pro Rata Share of
the Commitment and the Loans in the aggregate of less than 10% and Fleet and/or
its affiliates shall retain for their own account at least 25% of the
Commitment.
Section 9.11.1. In connection with any such substitution the
Substituted Lender and the Agent shall enter into a Substitution Agreement in
the form of Exhibit 9.11.1 hereto (a "Substitution Agreement") pursuant to which
such Substituted Lender shall be substituted for the Lender requesting the
substitution in question (any such Lender being hereinafter referred to as a
"Selling Lender") to the extent of the reduction in the Selling Lender's portion
of the Loans specified therein. In addition, such Substituted Lender shall
assume such of the obligations of each Selling Lender under the Financing
Documents as may be specified in such Substitution Agreement and this Agreement
shall be amended by execution and delivery of each Substitution Agreement to
include such Substituted Lender as a Lender for all purposes under the Financing
Documents and to substitute for the then existing Exhibit 1.9 to this Agreement
a new Exhibit 1.9 in the form of Schedule A to such Substitution Agreement
setting forth the portion of the Loans belonging to each Lender following
execution thereof. The Agent, [and] each Selling Lender [and the Borrower] shall
countersign and accept delivery of each Substitution Agreement.
Section 9.11.2. Without prejudice to any other provision of
this Agreement, each Substituted Lender shall, by its execution of a
Substitution Agreement, agree that neither the Agent nor any Lender is any way
responsible for or makes any representation or warranty as to: (a) the accuracy
and/or completeness of any information supplied to such Substituted Lender in
67
74
connection therewith, (b) the financial condition, creditworthiness, affairs,
status or nature of the Borrower, any of the Affiliates and/or any of the
Subsidiaries or the observance by the Borrower, or any other party of any of its
obligations under this Agreement or any of the other Financing Documents or (c)
the legality, validity, effectiveness, adequacy or enforceability of any of the
Financing Documents.
Section 9.11.3. The Agent shall be entitled to rely on any
Substitution Agreement delivered to it pursuant to this Section 9.11 which is
complete and regular on its face as to its contents and appears to be signed on
behalf of the Substituted Lender which is a party thereto, and the Agent shall
have no liability or responsibility to any party as a consequence of relying
thereon and acting in accordance with and countersigning any such Substitution
Agreement. The effective date of each Substitution Agreement shall be the date
specified as such therein and each Lender prior to such effective date shall,
for all purposes hereunder, be deemed to have and possess all of their
respective rights and obligations hereunder up to 12:00 o'clock Noon on the
effective date thereof.
Section 9.11.4. Upon delivery to the Agent of any Substitution
Agreement pursuant to and in accordance with this Section 9.11 and acceptance
thereof by the Agent (which delivery shall be evidenced and accepted exclusively
and conclusively by the Agent's countersignature thereon pursuant to the terms
hereof without which such Substitution Agreement shall be ineffective): (i)
except as provided hereunder and in Section 9.11.5, the respective rights of
each Selling Lender and the Borrower against each other under the Financing
Documents with respect to the portion of the Loans being assigned or delegated
shall be terminated and each Selling Lender and the Borrower shall each be
released from all further obligations to the other hereunder with respect
thereto (all such rights and obligations to be so terminated or released being
referred to in this Section 9.11 as "Discharged Rights and Obligations"); and
(ii) the Borrower and the Substituted Lender shall each acquire rights against
each other and assume obligations towards each other which differ from the
Discharged Rights and Obligations only in so far as the Borrower and the
Substituted Lender have assumed and/or acquired the same in place of the Selling
Lender in question; and (iii) the Agent, the Substituted Lender and the other
Lenders shall acquire the same rights and assume the same obligations between
themselves as they would have acquired and assumed had such Substituted Lender
been an original party to this Agreement as a Lender possessing the Discharged
Rights and Obligations acquired and/or assumed by it in consequence of the
delivery of such Substitution Agreement to the Agent.
Section 9.11.5. Discharged Rights and Obligations shall not
include, and there shall be no termination or release pursuant to this Section
9.11 of (i) any rights or obligations arising pursuant to any of the Financing
Documents in respect of the period or in respect of payments hereunder made
during the period prior to the effective date of the relevant Substitution
Agreement or, (ii) any rights or obligations relating to the payment of any
amount which has fallen due and not been paid hereunder prior to such effective
date or rights or obligations for the payment of interest, damages or other
amounts becoming due hereunder as a result of such nonpayment.
68
75
Section 9.11.6. With respect to any substitution of a
Substituted Lender taking place after the Closing Date, the Borrower shall issue
to such Substituted Lender and to such Selling Lender, new Notes reflecting the
inclusion of such Substituted Lender as a Lender and the reduction in the
respective Loans of such Selling Lender, such new Notes to be issued against
receipt by the Borrower of the existing Notes of such Lender. The Selling Lender
or the Substituted Lender shall pay to the Agent for its own account an
assignment fee in the amount of $3,000 for each assignment hereunder, which
shall be payable at or before the effective date of the assignment.
Section 9.11.7. Each Lender may furnish to any financial
institution having at least $500,000,000 in assets which such Lender proposes to
make a Substituted Lender or to a Substituted Lender any information concerning
such Lender, the Borrower, Stockholders and any Subsidiary in the possession of
that Lender from time to time; provided that any Lender providing any
confidential information about the Borrower, any of the Stockholders and/or any
Subsidiary to any such financial institution shall first obtain such financial
institution's agreement to keep confidential any such confidential information.
Section 9.12. Payments Pro Rata. The Agent agrees that promptly after
its receipt of each payment from or on behalf of the Borrower in respect of any
obligations of the Borrower hereunder it shall distribute such payment to the
Lenders pro rata based upon their respective Pro Rata Shares, if any, of the
obligations with respect to which such payment was received. Each of the Lenders
agrees that, if it should receive any amount hereunder (whether by voluntary
payment, by realization upon security, by the exercise of the right of setoff
under Section 2.5.2 or otherwise or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Financing Documents, or
otherwise), which is applicable to the payment of the Obligations of a sum which
with respect to the related sum or sums received by other Lenders is in a
greater proportion than the total amount of such Obligation then owed and due to
such Lender bears to the total amount of such Obligation then owed and due to
all of the Lenders immediately prior to such receipt, except for any amounts
received pursuant to Section 2.2.3, then such Lender receiving such excess
payment shall purchase for cash without recourse or warranty from the other
Lenders an interest in the Obligations of the Borrower to such Lenders in such
amount as shall result in a proportional participation by all the Lenders in
such amount; provided further, however, that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
Section 9.13. Indemnification. The Borrower irrevocably agrees to and
does hereby indemnify and hold harmless Agent and each of the Lenders, their
agents or employees and each Person, if any, who controls any of the Agent and
the Lenders within the meaning of Section 15 of the Securities Act of 1933, as
amended, and each and all and any of them (the "Indemnified Parties"), against
any and all losses, claims, actions, causes of action, damages or liabilities
(including any amount paid in settlement of any action, commenced or threatened
and any amount described in Section 8.4) (collectively, the "Damages"), joint or
several, to which they, or any of them, may become subject under statutory law
or at common law, and to reimburse the Indemnified Parties for any legal or
other out-of-pocket expenses reasonably incurred by it or them in connection
with investigating, preparing for or defending against any of the Indemnified
69
76
Parties, insofar as such losses, claims, damages, liabilities or actions arise
out of or are related to any act or omission of the Borrower and/or any
Subsidiary with respect to any of (i) the Related Transactions, (ii) any of the
Financing Documents, (iii) any of Loans, (iv) any use made or proposed to be
made with the proceeds of the Loans, (v) any acquisition or proposed acquisition
or any other similar business combination or proposed business combination by
the Borrower and/or any of its Subsidiaries and/or its Affiliates (whether by
acquisition or exchange of capital stock or other securities or by acquisition
of all or substantially all of the assets of any Person), (vi) any offering of
securities by the Borrower and/or any Subsidiary after the date hereof and/or in
connection with the Securities and Exchange Act of 1933 and/or (vii) any failure
to comply with any applicable federal, state or foreign governmental law, rule,
regulation, order or decree, including without limitation, any Damages which
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact with respect to matters relative to any of the foregoing
contained in any document distributed in connection therewith, or the omission
or alleged omission to state in any of the foregoing a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, but excluding any Damages to the extent arising
from or due to, as determined in a final nonappealable judgment by a court of
competent jurisdiction, the gross negligence or willful misconduct of any of the
Indemnified Parties; provided, however, that notwithstanding the foregoing, no
Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort of otherwise) to the Borrower, any Affiliates or any
Subsidiaries or to their respective security holders or creditors except for
direct (as opposed to consequential damages) determined in a final nonappealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or proceeding to which the indemnity described in this
paragraph applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, any
Affiliates or any Subsidiary or to their respective security holders or
creditors or an Indemnified Party or an Indemnified Party is otherwise a party
thereto and whether or not the Related Transaction and the transactions
contemplated by the Financing Documents are consummated.
Promptly upon receipt of notice of the commencement of any action, or
information as to any threatened action against any of the Indemnified Parties
in respect of which indemnity or reimbursement may be sought from the Borrower
on account of the agreement contained in this Section 9.13, notice shall be
given to the Borrower in writing of the commencement or threatening thereof,
together with a copy of all papers served, but the omission so to notify the
Borrower of any such action shall not release the Borrower from any liability
which it may have to such Indemnified Parties unless, and only to the extent
that, such omission materially prejudiced Borrower's ability to defend against
such action.
In case any such action shall be brought against any of the Indemnified
Parties, the Borrower shall be entitled to participate in (and, to the extent
that it shall wish, to select counsel and to direct) the defense thereof at its
own expense. Any of the Indemnified Parties shall have the right to employ its
or their own counsel in any case, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless the employment of such
counsel shall have been authorized in writing by the Borrower in connection with
the defense of such action or the Borrower shall not have employed counsel to
have charge of the defense of such
70
77
action or such Indemnified Party shall have received an opinion from an
independent counsel that there may be defenses available to it which are
different from or additional to those available to the Borrower (in which case
the Borrower shall not have the right to direct the defense of such action on
behalf of such Indemnified Party), in any of which events the same shall be
borne by the Borrower. If any Indemnified Party settles any claim or action with
respect to which the Borrower has agreed to indemnify such Indemnified Party
pursuant to the terms hereof, the Borrower shall have no liability pursuant to
this Section 9.13 to such Indemnified Party with respect to such claim or action
unless the Borrower shall have consented in writing to the terms of such
settlement.
The provisions of Section 9.13 shall be effective only to the fullest
extent permitted by law. The provisions of this Section 9.13 shall continue in
effect and shall survive (among other events), until the applicable statute of
limitations has expired, any termination of this Agreement, foreclosure, a deed
in lieu transaction, payment and satisfaction of the Obligations of Borrower,
and release of any collateral for the Loans.
Section 9.14. Governing Law. This Agreement and each Note shall be
governed by, and construed in accordance with, the laws of The Commonwealth of
Massachusetts without regard to such state's conflict of laws rules.
Section 9.15. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 9.16. Headings. Article and Section headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 9.17. Counterparts. This Agreement may be executed and
delivered in any number of counterparts each of which shall be deemed an
original, and this Agreement shall be effective when at least one counterpart
hereof has been executed by each of the parties hereto.
71
78
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument by their respective officers thereunto duly
authorized, as of January 12, 1999.
In the presence of: XXXXXX, XXXXXXXX & ASSOCIATES, INC.
----------------------------- By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
In the presence of: FLEET NATIONAL BANK as Agent for the
Lenders and as a Lender
----------------------------- By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
STATE OF
-------------------------
COUNTY OF
-------------------------
In _________________, in said County and State, on the _______ day of
______________, 199_, before me personally appeared the within-named
_____________, the _______________ of Xxxxxx, Xxxxxxxx & Associates, Inc., me
known and known by me to be the party executing the foregoing instrument and
he/she has acknowledged said instrument by him executed to be his/her free act
and deed and the free act and deed of said Xxxxxx, Xxxxxxxx & Associates, Inc.
----------------------------------------
Notary Public:
Print Name:
My Commission Expires:
72
