SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of August 25, 1997
among
TRC COMPANIES, INC.,
CERTAIN SUBSIDIARIES LISTED ON SCHEDULE I
and
BANKBOSTON, N.A.
and those other lending institutions which may become a party hereto
and
BANKBOSTON, N.A., as Agent
TABLE OF CONTENTS
Section 1. DEFINITIONS AND RULES OF INTERPRETATION. ..................... 1
Section 2. THE LOANS. ................................................... 10
Section 2.1. Commitment to Lend. ................................... 10
Section 2.2. Letters of Credit. ..................................... 10
Section 2.3. Commitment Fee. ....................................... 11
Section 2.4. Reduction of Commitment. .............................. 11
Section 2.5. Notes. ................................................. 12
Section 2.6. Interest on Loans. .................................... 12
Section 2.7. Interest on Overdue Amounts. ......................... 14
Section 2.8. Requests for Loans and Letters of Credit. ............. 14
Section 2.9. Funds for Loans. ...................................... 15
Section 2.10. Termination of Credit. ................................ 15
Section 2.11. Optional Prepayment. .................................. 16
Section 2.12. Mandatory Prepayment. ................................. 16
Section 2.13. Mandatory Payment on Maturity. ........................ 17
Section 3. PAYMENTS AND COMPUTATIONS;
JOINT AND SEVERAL LIABILITY; SECURITY. ......................... 17
Section 3.1. Payments. ............................................. 17
Section 3.2. Computations. ......................................... 17
Section 3.3. Interest Limitation. .................................. 17
Section 3.4. Additional Costs, Etc. ................................ 18
Section 3.5. Capital Adequacy. ..................................... 19
Section 3.6. Concerning Joint and Several Liability of the
Borrowers. ............................................ 19
Section 3.7. New Borrowers. ........................................ 21
Section 3.8. Amendment Fee. ........................................ 21
Section 3.9. Security. ............................................. 22
Section 4. REPRESENTATIONS AND WARRANTIES. ............................. 22
Section 4.1. Corporate Authority. ................................... 22
Section 4.2. Governmental Approvals. ............................... 23
Section 4.3. Title to Property; Leases. ............................. 23
Section 4.4. Financial Statements; Solvency. ........................ 23
Section 4.5. No Material Changes, Etc.. ........................... 23
Section 4.6. Franchises, Patents, Copyrights, Etc. .................. 23
Section 4.7. Litigation. ........................................... 24
Section 4.8. No Materially Adverse Contracts, Etc. ................. 24
Section 4.9. Compliance With Other Instruments, Laws, Etc. .......... 24
Section 4.10. Tax Status. ........................................... 24
Section 4.11. No Event of Default. .................................. 25
Section 4.12. Holding Company and Investment Company Acts. .......... 25
Section 4.13. Absence of Financing Statements, Etc. ................. 25
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Section 4.14. Perfection of Security Interest. ...................... 25
Section 4.15. Certain Transactions. ................................. 25
Section 4.16. ERISA Compliance. ..................................... 26
Section 4.17. Use of Proceeds. ....................................... 26
Section 4.18. Environmental Compliance. ............................. 26
Section 5. AFFIRMATIVE COVENANTS OF THE BORROWERS. ...................... 28
Section 5.1. Records and Accounts. .................................. 28
Section 5.2. Financial Statements, Certificates and Information. .... 28
Section 5.3. Corporate Existence and Conduct of Business. ........... 29
Section 5.4. Maintenance of Properties. ............................. 30
Section 5.5. Insurance. ............................................ 30
Section 5.6. Taxes. ................................................ 30
Section 5.7. Inspection of Properties, Books, and Contracts. ....... 31
Section 5.8. Compliance with Laws, Contracts, Licenses and
Permits. ............................................. 31
Section 5.9. Pension Plans. ........................................ 31
Section 5.10. Further Assurances. .................................. 32
Section 5.11. Notice of Potential Claims or Litigation. .............. 32
Section 5.12. Notices. ............................................... 32
Section 5.13. New Borrowers. ......................................... 32
Section 6. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. ................ 32
Section 6.1. Restrictions on Indebtedness. ......................... 32
Section 6.2. Restrictions on Liens. ................................ 33
Section 6.3. Restrictions on Investments. .......................... 34
Section 6.4. Merger, Consolidation, and Acquisitions. ............... 36
Section 6.5. Sale and Leaseback. ................................... 36
Section 6.6. Sales of Assets. ...................................... 36
Section 6.7. Collateral Value Ratio. ............................... 37
Section 6.8. Interest Coverage. .................................... 37
Section 6.9. Subordinated Debt. .................................... 37
Section 7. CONDITIONS OF FIRST LOANS. .................................. 37
Section 7.1. Representations and Warranties. ....................... 37
Section 7.2. Performance; No Default. .............................. 37
Section 7.3. No Adverse Change. .................................... 37
Section 7.4. Corporate Action; Corporate Documents. ................ 38
Section 7.5. Loan Documents. ....................................... 38
Section 7.6. UCC Searches; Perfection of Liens. .................... 38
Section 7.7. Opinion of Borrower's Counsel. ........................ 38
Section 7.8. No Legal Impediment. .................................. 38
Section 7.9. Governmental Regulation. .............................. 38
Section 7.10. Accountant's Report. .................................. 38
Section 7.11. Payment of Fees. ...................................... 39
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Section 7.12. Proceedings and Documents. ............................ 39
Section 8. CONDITIONS OF SUBSEQUENT LOANS. .............................. 39
Section 8.1. Representations True; No Event of Default. ............. 39
Section 8.2. Performance; No Event of Default. ...................... 39
Section 9. EVENTS OF DEFAULT; ACCELERATION. ............................ 40
Section 10. DISTRIBUTION OF COLLATERAL PROCEEDS. ...................... 42
Section 11. SETOFF. ................................................... 42
Section 12. EXPENSES. .................................................. 43
Section 13. THE AGENT. .................................................. 44
Section 13.1. Appointment of Agent, Powers and Immunities. .......... 44
Section 13.2. Actions By Agent. .................................... 44
Section 13.3. Indemnification. ..................................... 44
Section 13.4. Reimbursement. ........................................ 45
Section 13.5. Documents. ........................................... 45
Section 13.6. Non-Reliance on Agent and Other Banks. ................ 45
Section 13.7. Resignation of Agent. ................................ 46
Section 13.8. Action by the Banks, Consents, Amendments,
Waivers, Etc. ........................................ 46
Section 13.9. Duties in the Case of Enforcement ..................... 47
Section 14. INDEMNIFICATION. ........................................... 47
Section 15. SURVIVAL OF COVENANTS, ETC. ................................. 48
Section 16. SYNDICATION AND PARTICIPATION. ............................. 48
Section 17. PARTIES IN INTEREST. ....................................... 48
Section 18. NOTICES, ETC. .............................................. 49
Section 19. MISCELLANEOUS. ............................................. 49
Section 20. ENTIRE AGREEMENT, ETC. ..................................... 49
Section 21. GOVERNING LAW. ............................................. 50
Section 22. CONSENTS, AMENDMENTS, WAIVERS, ETC. ........................ 50
50
Section 23. NO RESTRICTIONS WITH RESPECT TO MARGIN STOCK. ............... 50
Section 24. TRANSITIONAL ARRANGEMENTS. .................................. 51
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Section 24.1. Prior Credit Agreement Superseded. .................... 51
Section 24.2. Return and Cancellation of Notes. .................... 51
Section 24.3. Interest and Fees under Prior Credit Agreement. ....... 51
Section 24.4. Waiver of Defaults and Events of Default. ............ 51
EXHIBITS AND SCHEDULES
Exhibit A Form of Note
Schedule 1 - Borrowers
Schedule 3.7 - Currently Inactive Subsidiaries
Schedule 4.7 - Exceptions to Litigation Representation
Schedule 4.18 - Environmental Compliance Exceptions
Schedule 6.1 - Existing Indebtedness
Schedule 6.3(i) - Existing Investments
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
the 25th day of August, 1997 among TRC Companies, Inc., a Delaware
corporation ("TRC"), the Subsidiaries listed on SCHEDULE 1 hereto (TRC and
such Subsidiaries herein collectively referred to as the "Borrowers"), each
of which Borrowers, unless otherwise listed on SCHEDULE 1, has its principal
place of business at 0 Xxxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000,
BANKBOSTON, N.A. (f/k/a The First National Bank of Boston) ("BKB"), a
national banking association having its principal place of business at 000
Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, and such banks or financial
institutions which may become a party hereto pursuant to Section 15 hereof
(herein referred to individually as a "Bank" and, collectively, as the
"Banks"), and BKB, as agent for the Banks (the "Agent").
WHEREAS, the Borrowers and BKB are parties to the original Revolving
Credit Agreement dated as of September 22, 1989 (the "Original Closing
Date"), and amended as of September 6, 1990, June 10, 1992, June 28, 1993,
August 5, 1993, March 21, 1994, and October 31, 1994 (as so amended, the
"Original Credit Agreement);
WHEREAS, the Original Credit Agreement was amended and restated pursuant
to the Amended and Restated Revolving Credit and Term Loan Agreement dated as
of March 15, 1995 (the "Prior Closing Date"), and amended as of August 30,
1995 (as so amended, the "Prior Credit Agreement");
WHEREAS, the Borrowers and BKB wish to reduce the Total Commitment
Amount, restructure the revolving credit facility and make certain other
changes and amendments to the Prior Credit Agreement;
NOW THEREFORE, in consideration of the foregoing, the Borrowers and BKB,
individually and as Agent, agree that the Original Credit Agreement is hereby
amended and restated in its entirety as set forth herein.
Section 1. DEFINITIONS. (a) The following terms shall have the
meanings set forth in this Section 1 or elsewhere in the provisions of this
Agreement referred to below:
ACCOUNTS RECEIVABLE. All rights of the Borrowers to payment for goods
sold, leased or otherwise marketed in the ordinary course of business and all
rights of the Borrowers to payment for services rendered in the ordinary
course of business and all sums of money or other proceeds due thereon
pursuant to transactions with account debtors, except for that
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portion of the sum of money or other proceeds due thereon that relate to
sales, use or property taxes in conjunction with such transactions, recorded
on books of account in accordance with Generally Accepted Account Principles.
AGENT. BKB acting as agent for the Banks.
AGENT'S HEAD OFFICE. The Agent's head office is located at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent
may designate from time to time.
AGREEMENT. This Second Amended and Restated Revolving Credit Agreement,
including the Exhibits and Schedules hereto, as amended from time to time.
AMENDMENT DATE. See Section 7.
APPLICABLE RATE. With respect to Base Rate Loans, the Applicable Rate
shall be equal to the Base Rate as in effect from time to time. With respect
to Eurodollar Loans, the Applicable Rate shall be equal to the Eurodollar
Rate for the relevant Interest Period PLUS two percent (2%).
BALANCE SHEET DATE. June 30, 1997.
BANK(S). See Preamble.
BASE RATE. A rate per annum (rounded upward, if necessary, to the next
higher 1/100 of 1%) equal to the greater of: (a) the annual rate of interest
announced from time to time by the Agent at its head office in Boston,
Massachusetts, as its "Base Rate," or (b) the Federal Funds Effective Rate
plus one percent (1%). If for any reason the Agent shall have determined
(which determination shall be conclusive absent manifest error) that it is
unable to ascertain the Federal Funds Effective Rate for any reason,
including, without limitation, the inability or failure of the Agent to
obtain sufficient bids or publications in accordance with the terms thereof,
the rate announced by the Agent at its head office as its "Base Rate" shall
be the Base Rate until the circumstances giving rise to such inability no
longer exist.
BASE RATE LOANS. All or any portion of any Loans hereunder, the interest
rate on which is calculated by reference to the Base Rate.
BORROWERS. TRC and each Person listed on SCHEDULE 1 hereto as such
schedule may be amended from time to time.
BUSINESS DAY. Any day on which commercial banking institutions in
Boston, Massachusetts are open for the transaction of banking business, and,
if the applicable Business Day relates to a Eurodollar Loan, a day on
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which dealings are carried on in the Eurodollar interbank market and dollar
settlements of such dealings may be effected in New York City.
COLLATERAL. All of the property, rights and interest of the Borrowers
that are or are intended to be subject to the security interests and
mortgages created by the Security Documents.
COLLATERAL VALUE RATIO. See Section 6.7.
COMMITMENT. With respect to each Bank, the amount determined by
multiplying such Bank's Commitment Percentage by the aggregate amount of the
Banks' Total Commitment Amount to make Loans to the Borrowers, as the same
may be reduced from time to time; or if such commitment is terminated
pursuant to the terms hereof, zero.
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth beside its name below (subject to adjustment pursuant to Section 2.1
hereof or upon any assignments pursuant to Section 16 hereof):
Initial Commitment
Bank Percentage
---- ----------
BKB 100%
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrowers,
consolidated in accordance with Generally Accepted Accounting Principles,
after eliminating all intercompany items.
CONSOLIDATED EBITDA. For any period, the consolidated net income (or
deficit) of the Borrowers, determined in accordance with Generally Accepted
Accounting Principles, plus to the extent deducted in computing consolidated
net income (or deficit) for such period (a) interest expense, (b) income
taxes and (c) depreciation and amortization.
CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrowers during
such period on all Indebtedness of the Borrowers outstanding during all or
any part of such period, whether such interest was or is required to be
reflected as an item of expense or capitalized.
DEFAULT. See Section 9.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of any Borrower in an
amount in excess of an amount equal to the net income of such Borrower in any
fiscal year, other than dividends payable solely in shares of common stock of
a Borrower; or the purchase, redemption, or other retirement of any shares of
any class of capital stock of any Borrower, directly or indirectly
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through a Subsidiary or otherwise; the return of capital by any Borrower to
its shareholders as such; any other distribution on or in respect of any
shares of any class of capital stock of any Borrower.
DRAWDOWN DATE. The date on which any Loan is made or is to be made or on
which any Letter of Credit is issued or to be issued.
ELIGIBLE RECEIVABLES. The aggregate of the unpaid portions of Accounts
Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to
such Accounts Receivables) that are not outstanding for more than one hundred
twenty (120) days past the earlier to occur of (i) the date of the respective
invoices therefor and (ii) with respect to services, the end of the calendar
month following the provision thereof.
ENVIRONMENTAL LAWS. Any judgment, decree, order, law, license, rule or
regulation pertaining to environmental matters, including those arising under
the Resource Conservation and Recovery Act, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986, the Federal Water Pollution
Control Act, the Federal Clean Water Act, the Federal Clean Air Act, the
Toxic Substances Control Act or any United States, state or local or any
other statute, regulation, ordinance, order or decree relating to health,
safety or the environment.
ENVIRONMENTAL SERVICES CONTRACTS. All contracts or agreements of any
Borrower or any of their Subsidiaries to provide consultation, work or
services with respect to matters related to any Environmental Laws.
ERISA. The Employee Retirement Income Security Act of 1974, as amended
from time to time.
EURODOLLAR LOANS. In relation to any Interest Period, any portions of
the principal amount of the Loans on which a Borrower has elected pursuant to
Section 2.6(b) hereof to pay interest based on the Eurodollar Rate.
EURODOLLAR OFFERED RATE. The rate per annum at which deposits of dollars
are offered to the Agent by prime banks in whatever Eurodollar interbank
market may be selected by the Agent in its sole discretion, acting in good
faith, at or about 10:00 a.m. local time in such interbank market, two
Business Days prior to the commencement of an Interest Period for a period
equal to such Interest Period in an amount substantially equal to the
principal amount requested to be loaned at or converted to a rate based on
the Eurodollar Offered Rate.
EURODOLLAR RATE. With respect to any Interest Period, the rate per
annum, rounded upwards to the nearest 1/16 of 1%, determined by the Agent two
Business Days prior to the commencement of such Interest Period, in
accordance with the following formula:
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Eurodollar Rate = Eurodollar Offered Rate
-----------------------
1 - Reserve Rate
EVENT OF DEFAULT. See Section 9.
FEDERAL FUNDS EFFECTIVE RATE. For any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average
of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers as published for
such day by the Federal Reserve Bank of New York, or for any day on which
such rate is not so published for such day by the Federal Reserve Bank of New
York, the average of the quotations for such day for such transactions
received by the Agent from three federal funds brokers of recognized standing
selected by the Agent.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (i) When used in general,
Generally Accepted Accounting Principles means principles which are (1)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors or successors, in effect for
the fiscal year ended on the Balance Sheet Date and (2) such that a certified
public accountant would, insofar as the use of accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in Generally Accepted Accounting Principles)
as to financial statements in which such principles have been properly
applied; and (ii) when used with reference to the Borrowers and/or any of
their Subsidiaries such principles shall include (to the extent consistent
with such principles) the accounting practice of the Borrowers reflected in
their financial statements for the year ended on the Balance Sheet Date.
GUARANTEED PENSION PLAN. Any pension plan maintained by any Borrower or
any of their Subsidiaries, or to which any Borrower or any of their
Subsidiaries contributes, which is required to pay plan termination insurance
premiums to the Pension Benefit Guaranty Corporation.
HAZARDOUS SUBSTANCES. See Section 4.17(b).
INDEBTEDNESS. All obligations, contingent and otherwise, which in
accordance with Generally Accepted Accounting Principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should
be made by footnotes thereto, including, without limitation, in any event and
whether or not so classified: (i) all debt and similar monetary obligations,
whether direct or indirect; (ii) all liabilities secured by any mortgage,
pledge, security interest, lien, charge, or other encumbrance existing on
property owned or acquired subject thereto, whether or not the liability
secured thereby shall have been assumed; and (iii) all guarantees,
endorsements and other contingent obligations whether direct or indirect in
respect of Indebtedness of others, including any
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obligation to supply funds to or in any manner to invest in, directly or
indirectly, the debtor, to purchase Indebtedness, or to assure the owner of
Indebtedness against loss, through an agreement to purchase goods, supplies,
or services for the purpose of enabling the debtor to make payment of the
Indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer of any letters of credit, excluding obligations under
leases classified as operating leases under Generally Accepted Accounting
Principles.
INTERCREDITOR AGREEMENT. The Amended and Restated Intercreditor
Agreement dated as of the date hereof, by and among the Parent, R&M, the
shareholders of R&M, and the Agent.
INTEREST PERIOD. With respect to each Eurodollar Loan:
(a) initially, the period commencing on the date of a conversion from a
Base Rate Loan into a Eurodollar Loan or the making of a Eurodollar Loan, and
ending one (1), two (2), three (3), or six (6) months thereafter, as the case
may be, as the Borrowers may select; and
(b) thereafter, each subsequent Interest Period shall begin on the last
day of the preceding Interest Period, and end one (1), two (2), three (3), or
six (6) months thereafter, as the case may be, as the Borrowers may select;
(c) PROVIDED that any Interest Period which would otherwise end on a day
which is not a Business Day shall be deemed to end on the next preceding
Business Day.
INVESTMENTS. All cash expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock, all or
substantially all of the assets of, or Indebtedness of, or for loans,
advances, capital contributions or transfers of property to, or in respect of
any guaranties (or other commitments as described under Indebtedness), or
obligations of, any Person. In determining the aggregate amount of
Investments outstanding at any particular time, (I) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (II)
there shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is
paid, (III) there shall be deducted in respect of each such Investment any
amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution);
(IV) there shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends, interest or
otherwise, except that accrued interest included as provided in the foregoing
clause (III) may be deducted when paid; and (V) there shall not be deducted
from the aggregate amount of Investments any decrease in the value thereof.
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LETTERS OF CREDIT. Letters of credit issued or to be issued by the Agent
under Section 2.2 hereof for the account of any Borrower.
LETTER OF CREDIT AGREEMENTS. Letter of Credit Agreements in such form as
may be agreed upon by any Borrower and the Agent from time to time which are
entered into pursuant to Section 2.2 hereof, as such Letter of Credit
Agreements are amended, varied or supplemented from time to time.
LETTER OF CREDIT FEE. See Section 2.2(e).
LIENS. Any encumbrance, mortgage, pledge, hypothecation, charge,
restriction or other security interest of any kind securing any obligation of
any Person.
LOAN DOCUMENTS. Collectively, this Agreement, the Revolving Credit
Notes, the Security Documents, the Intercreditor Agreement and the Letter of
Credit Agreements.
LOAN REQUEST. The Notice any Borrower must give the Agent, pursuant to
Section 2.8, for each Loan or Letter of Credit requested hereunder.
LOANS. The revolving credit loans made or to be made to the Borrowers as
contemplated by Section 2 hereof.
MAJORITY BANKS. As of any date, (a) if there are no more than two Banks
on such date, all Banks and (b) if there are more than two Banks on such
date, the Banks holding at least sixty-six and two-thirds percent (66 2/3%)
of the outstanding principal amount of the Loans on such date; and if no such
principal is outstanding, the Banks whose aggregate Commitments constitute at
least sixty-six and two-thirds percent (66 2/3%) of the Total Commitment
Amount.
MATURITY DATE. June 30, 1998.
MAXIMUM DRAWING AMOUNT. With respect to any Letter of Credit, the
maximum amount from time to time which the beneficiary may draw under such
Letter of Credit, as may be reduced from time to time pursuant to the Letter
of Credit.
MIE. Monitoring Instruments for the Environment, Inc., a Massachusetts
corporation.
NET CASH PROCEEDS. With respect to any sale of any assets of any of the
Borrowers, the gross consideration received by any of the Borrowers (in cash)
from such sale, net of the commissions, direct sales costs, normal closing
adjustments, income taxes attributable to such sale and professional fees and
expenses incurred directly in connection therewith to the extent the
foregoing are actually paid in connection with such sale.
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NOTES. (a) The amended and restated promissory note of the Borrowers in
favor of BKB evidencing the Loans dated as of the date hereof and (b) the
promissory note(s) of the Borrowers in favor of any Bank which becomes a
party hereto pursuant to Section 16 hereof, in substantially the form of
EXHIBIT A hereto.
NOTICE. Fulfillment of any of the conditions set forth in Section 18.
OBLIGATIONS. All indebtedness, obligations and liabilities of the
Borrowers, individually or collectively, to the Banks and the Agent
individually or collectively, existing on the date of this Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Agreement or a Letter of Credit Agreement or in respect
of Loans made and the Notes or other instruments at any time evidencing any
thereof.
ORIGINAL CLOSING DATE. See Preamble.
ORIGINAL CREDIT AGREEMENT. See Preamble.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
PRIOR CLOSING DATE. See Preamble.
PRIOR CREDIT AGREEMENT. See Preamble.
REIMBURSEMENT OBLIGATION. The Borrowers' obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in Section 2.2(d).
RESERVE RATE. The rate in effect from time to time, expressed as a
percentage, at which the Banks would be required to maintain reserves under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor or similar regulation relating to such reserve requirements)
against "Eurocurrency Liabilities" (as such term is used in Regulation D) if
such liabilities were outstanding.
R&M. (R&M Corporation (f/k/a Environmental Solutions, Inc.), a
California corporation.
R&M NOTE. Promissory note of the Parent dated as of July 1, 1997 in
favor of R&M having an outstanding principal amount, as of the date hereof,
of not more than $7,000,000.
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SECURITY AGREEMENT. The Security Agreement, dated as of the date hereof
among the Borrowers and the Agent and in form and substance satisfactory to
the Banks and the Agent.
SECURITY DOCUMENTS. The Security Agreement and all other instruments and
documents, including, without limitation, Uniform Commercial Code financing
statements, required to be executed or delivered pursuant to the Security
Agreement.
SUBORDINATED DEBT. Indebtedness owing to R&M pursuant to the terms of
the R&M Note and obligations in respect of Section 2.4 of the Asset Purchase
Agreement dated as of March 21, 1994 by and among TRC, R&M (then known as
Environmental Solutions, Inc.) and the shareholders of R&M.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority of the
outstanding capital stock or other interest entitled to vote generally.
TOTAL COMMITMENT AMOUNT. As of any date, the amount set forth opposite
such date in the table set forth below, as the same may be reduced pursuant
to Section 2.4 or Section 6.1(f) hereof:
Period Total Commitment Amount
------ -----------------------
August 25, 1997 through September 30, 1997 $7,000,000
October 1, 1997 through December 31, 1997 $6,000,000
January 1, 1997 through March 31, 1998 $5,000,000
April 1, 1998 through Maturity Date $4,000,000
TRC. See Preamble.
UNPAID REIMBURSEMENT OBLIGATIONS. Any Reimbursement Obligation for which
the Borrowers do not reimburse the Agent and the Banks on the date specified
in, and in accordance with, Section 2.2(d).
(b) All terms of an accounting character not specifically defined herein
shall have the meanings assigned thereto by Generally Accepted Accounting
Principles. All terms not specifically defined herein which are defined in
the Uniform Commercial Code as in effect in the Commonwealth of Massachusetts
shall have the same meanings herein as therein. Each reference herein to a
particular Person (including, without limitation, the Banks) shall include a
reference to such Person's successors and permitted assigns. The words
"herein", "hereof", "hereunder" and words of like import shall refer to this
Agreement as a whole and not to any particular Section or subdivision of this
Agreement.
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Section 2. THE LOANS.
Section 2.1. COMMITMENT TO LEND. Subject to the terms and conditions
set forth in this Agreement, each of the Banks severally agrees to lend to
the Borrowers and the Borrowers may borrow and reborrow from time to time
between the Amendment Date and the Maturity Date upon notice to the Agent
given in accordance with Section 2.8 hereof, such sums as requested by the
Borrowers up to a maximum aggregate principal amount outstanding (after
giving effect to all amounts requested) at any one time equal to the Total
Commitment Amount minus the sum of (i) the aggregate Maximum Drawing Amount
of all Letters of Credit issued pursuant to Section 2.2 hereof and (ii) all
Unpaid Reimbursement Obligations. Each request for Loans hereunder shall
constitute a representation by the Borrowers that the conditions set forth in
Sections 7 and 8 hereof have been satisfied on the date of such request.
Section 2.2. LETTERS OF CREDIT.
(a) Subject to the terms and conditions set forth in this Agreement,
upon written request from the Borrowers, the Agent, on behalf of the Banks
and on reliance upon the representations and warranties of the Borrowers
contained herein, agrees to issue stand-by letters of credit, in such form as
the Borrowers and the Agent may agree upon from time to time, for the account
of the Borrowers from time to time prior to the Maturity Date, PROVIDED,
HOWEVER, that (a) the sum of (i) all Unpaid Reimbursement Obligations and
(ii) the aggregate Maximum Drawing Amount of all Letters of Credit, shall not
at any time exceed $1,000,000 and (b) the sum of (i) all Unpaid Reimbursement
Obligations, (ii) the aggregate Maximum Drawing Amount of all Letters of
Credit and (iii) the amount of all Loans outstanding shall not at any time
exceed the Total Commitment Amount. No Letter of Credit shall have an
expiration date later than the earlier of (i) one year after the date of
issuance of the Letter of Credit or (ii) 30 days prior to the Maturity Date.
(b) Each Bank severally agrees that it shall be absolutely liable,
without regard to the occurrence of any Default or Event of Default or any
other condition precedent whatsoever, to the extent of such Bank's Commitment
Percentage thereof, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent that such
amount is not reimbursed by the Borrowers pursuant to this Section 2.2(d)
(such agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank). Each Bank agrees that its obligation to
reimburse the Agent pursuant to this Section 2.2(b) shall not be affected in
any way by any circumstance other than the gross negligence or willful
misconduct of the Agent.
(c) Each such payment made by a Bank shall be treated as the purchase by
such Bank of a participating interest in the Borrowers' Reimbursement
Obligation under Section 2.2(d) in an amount equal to such
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payment. Each Bank shall share in accordance with its participating interest
in any interest which accrues pursuant to Section 2.2(d).
(d) In order to induce the Agent to issue, extend and renew each Letter
of Credit, the Borrowers hereby agree that on each date that any draft
presented under any Letter of Credit is honored by the Agent or the Agent
otherwise makes payment with respect thereto, the Borrowers will reimburse
the Agent, with respect to each Letter of Credit issued, extended or renewed
by the Agent hereunder (i) the amount paid by the Agent under or with respect
to such Letter of Credit, and (ii) the amount of any taxes, fees, charges or
other reasonable out-of-pocket costs and expenses whatsoever incurred by the
Agent or any Bank in connection with any payment made by the Agent or any
Bank under, or with respect to, such Letter of Credit (at the Borrowers'
option, any such Reimbursement Obligation may be satisfied by conversion of
such Reimbursement Obligation to the Base Rate Loan hereunder, PROVIDED THAT
the conditions set forth in Section 8 hereof have been satisfied).
(e) The Borrowers shall pay a Letter of Credit Fee to the Agent equal to
(i) one percent (1%) per annum of the Maximum Drawing Amount of all
performance standby Letters of Credit, and (ii) two percent (2%) per annum of
the Maximum Drawing Amount of all Letters of Credit that support financial
obligations, payable in advance on the date of issuance of the applicable
letter of credit (but in no case less than $350.00). One-eighth of one
percent (1/8%) of the Letter of Credit Fee shall be retained by the Agent,
and the balance shall be shared by the Banks pro-rata in accordance with
their Commitment Percentages.
Each such payment shall be made to the Agent at the Agent's Head Office
in immediately available funds. Interest on any and all amounts remaining
unpaid by the Borrowers under this Section 2.2 at any time from the date such
amounts become due and payable (whether as stated in this Section 2.2, by
acceleration or otherwise) until payment in full (whether before or after
judgment) shall be payable to the Agent on demand at the rate specified in
Section 2.7 for overdue amounts.
Section 2.3. COMMITMENT FEE. The Borrowers agree to pay to the Banks a
commitment fee at the rate of one-half of one percent (1/2%) per annum on the
unused portion of the Total Commitment Amount during each calendar month or
portion thereof from the Amendment Date until the Maturity Date (or to the
date of termination in full of the Commitments, if earlier).
Section 2.4. REDUCTION OF COMMITMENT. Any Borrower shall have the right
at any time and from time to time upon five (5) Business Days' written notice
to the Agent to reduce by $1,000,000 or an integral multiple thereof or
terminate entirely the amount of the unborrowed portion of the Total
Commitment Amount, if any, which exceeds the aggregate Maximum Drawing Amount
of all Letters of Credit issued pursuant to Section 2.2 hereof, whereupon the
Commitment of the Banks shall be reduced PRO RATA in
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accordance with their respective Commitment Percentages by the amount
specified in such notice or terminated, as the case may be. The Agent will
notify the Banks promptly after receiving any notice of the Borrowers
pursuant to this Section 2.4. No reduction or termination of the Total
Commitment Amount once made may be revoked; the portion of the Total
Commitment Amount reduced or terminated may not be reinstated; and amounts in
respect of such reduced or terminated portion may not be reborrowed.
Section 2.5. NOTES. The Loans shall be evidenced by the Notes. One
Note shall be payable to the order of each Bank in a principal amount equal
to such Bank's Commitment or, if less, the outstanding amount of all Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrowers irrevocably authorize each Bank to make or cause to be made, in
connection with a Drawdown Date of any Loan or at the time of receipt of any
payment of principal on such Bank's Note, an appropriate notation on such
Bank's records reflecting the making of the Loan or the receipt of such
payment (as the case may be). The outstanding amount of the Loans set forth
on such Bank's record shall be PRIMA FACIE evidence of the principal amount
thereof owing and unpaid to such Bank, but the failure to record, or any
error in so recording, any such amount shall not limit or otherwise affect
the obligations of the Borrowers hereunder or under the Notes to make
payments of principal of or interest on any Note when due.
Section 2.6. INTEREST ON LOANS.
(a) As of the Amendment Date, the outstanding principal amount of the
Loans shall bear interest at the Applicable Rate. Interest shall be payable
(x) monthly in arrears on the last Business Day of each calendar month for
the immediately preceding month, on all Base Rate Loans, (y) on the last day
of the applicable Interest Period for Eurodollar Loans having an interest
period of three months or shorter, and if such Interest Period is longer than
three months, quarterly in arrears on the last business day for each calendar
quarter for the immediately preceding calendar quarter, and (z) on the
Maturity Date for all Loans.
(b) At the Borrowers' option, so long as no Default or Event of Default
has occurred and is then continuing, the Borrowers may (i) elect to convert
any Base Rate Loan or a portion thereof to a Eurodollar Loan, (ii) at the
time of any Loan Request, specify that such requested Loan shall be a
Eurodollar Loan, or (iii) upon expiration of the applicable Interest Period,
elect to maintain an existing Eurodollar Loan as such, PROVIDED that the
Borrowers give notice to the Agent pursuant to Section 2.6(c) hereof. Upon
determining any Eurodollar Rate, the Agent shall forthwith provide notice
thereof to the Borrowers, and each such notice to the Borrowers shall be
considered prima facie correct and binding, absent manifest error.
(c) Three (3) Business Days prior to the making of any Loan which will
be a Eurodollar Loan or the conversion of any Base Rate Loan to a
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Eurodollar Loan, or, in the case of an outstanding Eurodollar Loan, the
expiration date of the applicable Interest Period, the Borrowers shall give
written or telecopy notice received by the Agent not later than 2:00 p.m.
(Boston time) of its election pursuant to Section 2.6(b). Each such notice
delivered to the Agent shall specify the aggregate principal amount of the
Loans to be borrowed or maintained as or converted to Eurodollar Loans and
the requested duration of the Interest Period that will be applicable to such
Eurodollar Loans, and shall be irrevocable and binding upon the Borrowers.
If the Borrowers shall fail to give the Agent notice of their election
hereunder together with all of the other information required by this Section
2.6(c) with respect to any Loan, whether at the end of an Interest Period or
otherwise, such Loan shall be deemed a Base Rate Loan.
(d) Notwithstanding anything herein to the contrary, the Borrowers may
not specify an Interest Period that would extend beyond the Maturity Date
with respect to any Loans.
(e) All Eurodollar Loans shall be in a minimum amount of not less than
$1,000,000. In no event shall the Borrowers have more than five (5)
different maturities of Eurodollar Loans outstanding at any time. All
requests for Loans which will be Base Rate Loans shall be in a minimum amount
of $100,000 or a greater integral multiple thereof.
(f) The Borrowers agree to indemnify the Agent and the Banks and to hold
them harmless from and against any reasonable loss, cost or expense that the
Agent or any Bank may sustain or incur as a consequence of (a) default by the
Borrowers in payment of the principal amount of or any interest on any
Eurodollar Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by the Agent or any Bank to
lenders of funds obtained by it in order to maintain its Eurodollar Loans,
(b) default by the Borrowers in making a borrowing or conversion after the
Borrowers have given (or are deemed to have given) notice pursuant to Section
2.6(c), and (c) the making of any payment of a Eurodollar Loan or the making
of any conversion of any such Eurodollar Loan to a Base Rate Loan on a day
that is not the last day of the applicable Interest Period with respect
thereto. Such loss or reasonable expense shall include an amount equal to
the excess, if any, as reasonably determined by the Agent of (i) its cost of
obtaining the funds for the Loan being paid, prepaid, converted, or not
borrowed (based on the Eurodollar Rate) for the period from the date of such
payment, prepayment, conversion, or failure to borrow to the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for the Loan which would have commenced on the date of such
failure to borrow) over (ii) the amount of interest (as reasonably determined
by the Agent) that would be realized by the Agent or any Bank in reemploying
the funds so paid, prepaid, converted, or not borrowed for such period or
Interest Period, as the case may be.
(g) Notwithstanding any other provisions of this Agreement, if (a) the
introduction of, any change in, or any change in the interpretation of,
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any law or regulation applicable to the Agent or any Bank shall make it
unlawful, or any central bank or other governmental authority having
jurisdiction thereof shall assert that it is unlawful, for the Agent or any
Bank to perform its obligations in respect of any Eurodollar Loans, or (b) if
the Agent or any Bank shall reasonably determine with respect to Eurodollar
Loans that (i) by reason of circumstances affecting any Eurodollar interbank
market, adequate and reasonable methods do not exist for ascertaining the
Eurodollar Rate which would otherwise be applicable during any Interest
Period, or (ii) deposits of Dollars in the relevant amount for the relevant
Interest Period are not available to the Agent or such Bank in any Eurodollar
interbank market, or (iii) the Eurodollar Rate does not or will not
accurately reflect the cost to the Agent or such Bank for obtaining or
maintaining the applicable Eurodollar Loans during any Interest Period, then
the Agent shall promptly give telephonic or telecopy notice of such
determination to the Borrowers (which notice shall be conclusive and binding
upon the Borrowers absent manifest error). Upon such notification by the
Agent, the obligation of the Banks to make Loans which will become Eurodollar
Loans shall be suspended until the Agent and the affected Bank(s) determines
that such circumstances no longer exist, and the outstanding Eurodollar Loans
shall continue to bear interest at the Applicable Rate based on the
Eurodollar Rate until the end of the applicable Interest Period, and
thereafter shall be deemed converted to Base Rate Loans in equal principal
amounts.
Section 2.7. INTEREST ON OVERDUE AMOUNTS. Except as otherwise limited
by Section 3.3 hereof, overdue principal and interest on the Loans and all
other overdue amounts payable hereunder shall bear interest payable on demand
at a rate per annum equal to one percent (1%) above the Applicable Rate,
until such amount shall be paid in full (after as well as before judgment).
Section 2.8. REQUESTS FOR LOANS AND LETTERS OF CREDIT. The Borrowers
shall give to the Agent written notice (or telephonic notice confirmed in a
writing or a telecopy) of each Loan requested hereunder (a "Loan Request")
not later than 11:00 a.m. (a) on the proposed Drawdown Date of any Base Rate
Loan, or (b) two (2) Business Days prior to the requested date of issuance of
any Letter of Credit. Any Loan Request for a Eurodollar Rate Amount shall be
given within the time frame specified in Section 2.6(c). Each such notice
shall specify the principal amount of the Loan requested and shall reflect
the Maximum Drawing Amount of all Letters of Credit outstanding. Each Loan
Request shall be irrevocable and binding on the Borrowers, and shall obligate
the Borrowers to accept the Loan requested from the Agent on the proposed
Drawdown Date.
Section 2.9. FUNDS FOR LOANS.
(a) Not later than 2:00 p.m. (Boston time) on the proposed Drawdown Date
of any Loan, each of the Banks will make available to the Agent, at its Head
Office, in immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Loan.
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Upon receipt from each Bank of such amount, and if the Agent is in receipt of
the documents required by Sections 7 or 8, as the case may be, and the other
conditions set forth therein are satisfied, to the extent applicable, the
Agent will make available to the Borrower the aggregate amount of such Loan
made available to the Agent by the Banks. The failure or refusal of any Bank
to make available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested Loan
shall not relieve any other Bank from its several obligations hereunder to
make available to the Agent the amount of such other Bank's Commitment
Percentage of any requested Loan.
(b) The Agent may (unless notified to the contrary by any Bank by 12:00
noon (Boston time) on any Drawdown Date assume that each Bank has made
available to the Agent the amount of such Bank's Commitment Percentage with
respect to the Loan to be made on such Drawdown Date, and the Agent may (but
shall not be required to), in reliance upon such assumption, make available
to the Borrowers a corresponding amount. If any Bank makes such amount
available to the Agent on a date after such Drawdown Date, such Bank shall
pay the Agent on demand an amount equal to the product of (i) the average
computed for the period referred to in clause (iii) below, of the weighted
average annual interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period TIMES (ii) the amount equal
to such Bank's Commitment Percentage of such Loans, TIMES (iii) a fraction,
the numerator of which is the number of days that elapse from and including
such Drawdown Date to but not including the date on which the amount equal to
such Bank's Commitment Percentage of such Loans shall become immediately
available to the Agent or such Bank, as applicable, and the denominator of
which is 365. A statement of the Agent submitted to such Bank with respect
to any amounts owing under this paragraph shall be PRIMA FACIE evidence of
the amount due and owing to the Agent by such Bank. If such amount is not in
fact made available to the Agent by such Bank within three (3) Business Days
of such Drawdown Date, the Agent shall be entitled to debit the Borrowers'
accounts to recover such amount from the Borrowers, with interest thereon at
the rate per annum applicable to any Loans made on such Drawdown Date.
Section 2.10. TERMINATION OF CREDIT. If any Event of Default shall
occur, any unused portion of the Total Commitment Amount hereunder shall
forthwith terminate and the Banks shall be relieved of all obligations to
make Loans to, and the Agent shall be relieved of all obligations to issue
Letters of Credit for the account of, any of the Borrowers; or if on any
Drawdown Date the conditions precedent to the making of the Loans to be made
on such Drawdown Date or the issuance of any Letters of Credit to be issued
on such date are not satisfied (except as a consequence of a default on the
part of the Agent or any Bank), the Agent may by Notice to the Borrowers,
terminate the unused portion of the Total Commitment Amount hereunder, and
upon such Notice being given such unused portion of the Total Commitment
Amount hereunder shall terminate immediately and the Banks
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shall be relieved of all further obligations to make Loans to, and the Agent
shall be relieved of all further obligations to issue Letters of Credit for
the account of, the Borrowers hereunder. No termination of any portion of
the Total Commitment Amount hereunder shall relieve the Borrowers of any of
their existing Obligations to the Banks hereunder or elsewhere.
Section 2.11. OPTIONAL PREPAYMENT. Each Borrower shall have the right
to prepay Eurodollar Loans made to such Borrower hereunder as a whole or in
part, on the last day of the Interest Period relating thereto, without
premium or penalty. Each Borrower shall also have the right at any time to
prepay Base Rate Loans at any time, as a whole or in part, without premium or
penalty; PROVIDED that the Agent may require one (1) Business Days' Notice of
such prepayments and, PROVIDED, FURTHER that each partial prepayment shall be
in the aggregate principal amount of $100,000 or a multiple thereof. Subject
to the conditions of Section 2.1 hereof, amounts so prepaid may be
reborrowed. In addition, each Borrower may, upon three (3) Business Days'
Notice, prepay all, but not less than all, of the Eurodollar Loans subject to
a particular Interest Period on a date other than the last day of the
Interest Period relating thereto subject to the terms and conditions of
Section 2.6(f) hereof.
Section 2.12. MANDATORY PREPAYMENTS.
(a) If at any time (including, without limitation, after giving effect
to the mandatory reductions of the Total Commitment Amount pursuant to the
definition thereof) the sum of (i) the outstanding Loans and (ii) the
aggregate Maximum Drawing Amount of all Letters of Credit issued pursuant to
Section 2.2 shall exceed the Total Commitment Amount then in effect, the
Borrowers shall immediately make a payment to the Agent in the amount
required to eliminate any such excess, together with all amounts, if any, due
under Section 2.10 hereof.
(b) In the event that TRC sells or otherwise disposes of MIE then as
soon as practicable and in any event within ten (10) days after receipt by
TRC of the net proceeds of such sale, the Borrowers shall prepay the Loans in
an amount equal to the Net Cash Proceeds of such sale. At least two (2)
Business Days prior to the prepayment of the Loans pursuant to this Section
2.12(b), the Borrowers shall deliver to the Agent a statement certified by
the principal financial or accounting officer of TRC setting forth the gross
consideration for such sale and in reasonable detail a computation of the Net
Cash Proceeds from such sale and the deductions taken to arrive at such Net
Cash Proceeds. The Total Commitment Amount shall be permanently reduced by
the amount of such mandatory prepayment but in any event shall not be reduced
below $4,000,000.
(c) In the event any of the Borrowers are paid restitution by either
Xxxxxxx X. Xxxxx or Xxxxx X. Xxxxx or both arising from their alleged actions
with respect to the exercising of stock options of the Borrowers, the
Borrowers shall immediately upon receipt thereof, prepay the Loans in an
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amount equal to the proceeds thereof. The Total Commitment Amount shall be
permanently reduced by the amount of such mandatory prepayment but in any
event shall not be reduced below $4,000,000.
Section 2.13. MANDATORY PAYMENT ON MATURITY. The Borrowers jointly and
severally promise to pay on the Maturity Date, and there shall become
absolutely due and payable on the Maturity Date, all of the Loans outstanding
on such date, together with any and all accrued and unpaid interest thereon.
Section 3. PAYMENTS AND COMPUTATIONS; JOINT AND SEVERAL LIABILITY;
SECURITY.
Section 3.1. PAYMENTS. All payments of principal, interest, commitment
fees, letter of credit fees and any other amounts due hereunder shall be made
by the Borrowers to the Agent in immediately available funds at the Agent's
head office at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000. The Agent
shall be entitled to debit the Borrowers' account with the Agent in the
amount of each such payment when due in order to effect timely payment
thereof.
Section 3.2. COMPUTATIONS. All computations of interest on the Loans
and of commitment fees, and letter of credit fees shall be based on a 360-day
year and paid for the actual number of days elapsed. Whenever a payment
hereunder or under the Notes becomes due on a day which is not a Business
Day, the due date for such payment shall be extended to the next succeeding
Business Day, and interest shall accrue during such extension.
Section 3.3. INTEREST LIMITATION. Notwithstanding any other term of
this Agreement or the Notes or any other document referred to herein or
therein, the maximum amount of interest which may be charged to or collected
from any person liable hereunder or under any Note by any Bank shall be
absolutely limited to, and shall in no event exceed, the maximum amount of
interest which could lawfully be charged or collected under applicable law
(including, to the extent applicable, the provisions of Section 5197 of the
Revised Statutes of the United States of America, as amended, 12 U.S.C.
Section 85, as amended), so that the maximum of all amounts constituting
interest under applicable law, howsoever computed, shall never exceed as to
any person liable therefor such lawful maximum, and any term of this
Agreement, the Notes, the Letter of Credit Agreements or any other document
referred to herein or therein which could be construed as providing for
interest in excess of such lawful maximum shall be and hereby is made
expressly subject to and modified by the provisions of this paragraph.
Section 3.4. ADDITIONAL COSTS, ETC. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and
regulations thereunder and interpretations thereof by any competent court or
by any governmental or other regulatory body or official charged with the
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administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon
or otherwise issued to any Bank by any central bank or other fiscal, monetary
or other authority (whether or not having the force of law), shall:
(a) subject such Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the
other Loan Documents, such Bank's Commitment, the Loans or the Letters of
Credit (other than taxes based upon or measured by the income or profits of
such Bank), or
(b) materially change the basis of taxation (except for changes in taxes
on income or profits) of payments to such Bank of the principal or of the
interest on any Loans or any other amounts payable to such Bank under this
Agreement or the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Agreement) any special deposit,
reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by,
or deposits in or for the account of, or loans by, or commitments of, or
letters of credit issued by, an office of such Bank, or
(d) impose on such Bank any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Loans, the Bank's
Commitment, the Letters of Credit or any class of loans or commitments or
letters of credit of which any of the Loans, the Bank's Commitment or the
Letters of Credit forms a part, and the result of any of the foregoing is
(i) to increase the cost to such Bank of making, funding, issuing,
renewing, extending or maintaining the Loans, the Bank's Commitment, or the
Letters of Credit; or
(ii) to reduce the amount of principal, interest or other amount
payable to such Bank hereunder on account of the Bank's Commitment, the
Loans, drawings under the Letters of Credit, or
(iii) to require such Bank to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by the Bank from the Borrowers
hereunder,
then, and in each such case, the Borrowers will, upon demand made by such
Bank or the Agent at any time and from time to time and as often as the
occasion therefor may arise, pay to such Bank such additional amounts as will
be sufficient to compensate such Bank for such additional cost, reduction,
payment or foregone interest or other sum (after such Bank shall
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have allocated the same fairly and equitably among all customers of any class
generally affected thereby).
Section 3.5. CAPITAL ADEQUACY. If any present or future applicable law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) or the interpretation thereof by a court or
governmental authority with appropriate jurisdiction affects the amount of
capital required or expected to be maintained by any Bank or any corporation
controlling such Bank determines that the amount of capital required to be
maintained by it is increased by or based upon such Bank's commitment to
make, or maintenance of, Loans or Letters of Credit hereunder, then such Bank
may notify the Borrowers of such fact. To the extent that the costs of such
increased capital requirements are not reflected in the Base Rate, the
Borrowers and such Bank shall thereafter attempt to negotiate in good faith,
within thirty (30) days of the day on which the Borrowers receive such
notice, an adjustment payable hereunder that will adequately compensate such
Bank in light of these circumstances. If the Borrowers and such Bank are
unable to agree to such adjustment within thirty (30) days of the date on
which the Borrowers receive such notice, then commencing on the date of such
notice (but not earlier than the effective date of any such increased capital
requirement), the rate payable hereunder shall increase by an amount that
will, in such Bank's reasonable determination, provide adequate compensation,
such amount to be considered PRIMA FACIE correct and binding, absent manifest
error. Such Bank shall allocate such cost increases among its customers in
good faith and on an equitable basis.
Section 3.6. CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Agent and the Banks under this
Agreement, for the mutual benefit, directly and indirectly, of each of the
Borrowers and in consideration of the undertakings of each other Borrower to
accept joint and several liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect
to the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 3.6), it being the
intention of the parties hereto that all the Obligations shall be the joint
and several Obligations of each of the Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to
make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof,
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then in each such event the other Borrowers will make such payment with
respect to, or perform, such Obligation.
(d) The Obligations of each of the Borrowers under the provisions
of this Section 3.6 constitute full recourse Obligations of each of the
Borrowers enforceable against each such corporation to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstance whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each
of the Borrowers hereby waives notice of acceptance of its joint and several
liability, notice of any Loans made under this Agreement, notice of any
action at any time taken or omitted by the Agent or the Banks under or in
respect of any of the Obligations, and, generally, to the extent permitted by
applicable law, all demands, notices and other formalities of every kind in
connection with this Agreement. Except as otherwise expressly provided in
this Agreement, each of the Borrowers hereby assents to, and waives notice
of, any extension or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by the Agent or the Banks at any time or times in
respect of any default by any of the Borrowers in the performance or
satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by the Agent or the Banks in respect
of any of the Obligations, and the taking, addition, substitution or release,
in whole or in part, at any time or times, of any security for any of the
Obligations or the addition, substitution or release, in whole or in part, of
any of the Borrowers. Without limiting the generality of the foregoing, each
of the Borrowers assents to any other action or delay in acting or failure to
act on the part of the Agent or the Banks with respect to the failure by any
of the Borrowers to comply with any of its respective Obligations, including,
without limitation, any failure strictly or diligently to assert any right or
to pursue any remedy or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this Section 3.6, afford
grounds for terminating, discharging or relieving any of the Borrowers, in
whole or in part, from any of its Obligations under this Section 3.6, it
being the intention of each of the Borrowers that, so long as any of the
Obligations hereunder remain unsatisfied, the Obligations of such Borrowers
under this Section 3.6 shall not be discharged except by performance and then
only to the extent of such performance. The Obligations of each of the
Borrowers under this Section 3.6 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any of the Borrowers,
the Agent or the Banks. The joint and several liability of the Borrowers
hereunder shall continue in full force and effect notwithstanding any
absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any of the Borrowers, the
Agent or Banks.
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(f) The provisions of this Section 3.6 are made for the benefit of
the Agent and the Banks and their successors and assigns, and may be enforced
by it or them from time to time against any or all of the Borrowers as often
as occasion therefor may arise and without requirement on the part of the
Agent and the Banks first to xxxxxxxx any of their claims or to exercise any
of their rights against any other Borrower or to exhaust any remedies
available to them against any other Borrower or to resort to any other source
or means of obtaining payment of any of the Obligations hereunder or to elect
any other remedy. The provisions of this Section 3.6 shall remain in effect
until all of the Obligations shall have been paid in full or otherwise fully
satisfied. If at any time, any payment, or any part thereof, made in respect
of any of the Obligations, is rescinded or must otherwise be restored or
returned by the Agent and the Banks upon the insolvency, bankruptcy or
reorganization of any of the Borrowers, or otherwise, the provisions of this
Section 3.6 will forthwith be reinstated in effect, as though such payment
had not been made.
(g) Each Borrower hereby agrees that it will not enforce any of its
rights of contribution or subrogation against any other Borrower with respect
to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to the Agent or any Bank with respect to
any of the Obligations or any collateral security therefor until such time as
all Obligations have been paid in full or such other Borrower shall be
released of all Obligations by the Agent or such Bank. If, notwithstanding
the foregoing, any payment shall be made to any Borrower on account of such
subrogation or contribution rights at any time when the Obligations shall not
have been paid in full, each and every amount so paid will forthwith be paid
over to such Bank to be credited and applied to the Obligations.
Section 3.7. NEW BORROWERS. The Majority Banks may, in their sole
discretion, require that any newly-created Subsidiaries, any Subsidiaries
acquired pursuant to Section 6.4 hereof, or any Inactive Subsidiaries listed
on SCHEDULE 3.7 hereto, become Borrowers hereunder by signing Notes, entering
into an amendment to this Agreement with the other parties hereto providing
that such Subsidiary shall become a Borrower hereunder, and providing such
other documentation as the Majority Banks may reasonably request including,
without limitation, documentation with respect to conditions noted in Section
7 hereof. In such event, the parties hereto will amend SCHEDULE 1 hereto.
Section 3.8. AMENDMENT FEE. The Borrowers shall pay to the Agent on the
Amendment Date, an amendment fee in the amount of $35,000 (the "Amendment
Fee").
Section 3.9. SECURITY. The Obligations shall be secured by a perfected
first priority security interest (subject only to liens permitted under
Section 6.2 entitled to priority under applicable law) in each Borrower's
accounts receivables,
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whether now owned or hereafter acquired, pursuant to the terms of the
Security Documents to which such Borrower is a party.
Section 4. REPRESENTATIONS AND WARRANTIES. The Borrowers jointly and
severally represent and warrant to the Agent and the Banks that on and as of
the date of this Agreement:
Section 4.1. CORPORATE AUTHORITY.
(a) INCORPORATION; GOOD STANDING. Each of the Borrowers and their
Subsidiaries (i) is a corporation duly organized, validly existing and in
good standing under the laws of its respective state of incorporation, (ii)
has all requisite corporate power to own its property and conduct its
business as now conducted and as presently contemplated, and (iii) is in good
standing as a foreign corporation and is duly authorized to do business in
each jurisdiction in which its property or business as presently conducted or
contemplated makes such qualification necessary except where a failure to be
so qualified would not have a material adverse effect on the business, assets
or financial condition of such Borrower or Subsidiary.
(b) AUTHORIZATION. The execution, delivery and performance of the Loan
Documents and the transactions contemplated hereby and thereby (i) are within
the corporate authority of each of the Borrowers and their Subsidiaries, (ii)
have been duly authorized by all necessary corporate proceedings, (iii) do
not conflict with or result in any material breach or contravention of any
provision of law, statute, rule or regulation to which any of the Borrowers
or any of their Subsidiaries is subject or any judgment, order, writ,
injunction, license or permit applicable to any of the Borrowers or any of
their Subsidiaries so as to materially adversely affect the assets, business
or any activity of any of the Borrowers or any of their Subsidiaries, and
(iv) do not conflict with any provision of the corporate charter or bylaws of
any of the Borrowers or any of their Subsidiaries or any agreement or other
instrument binding upon any of the Borrowers or any of their Subsidiaries.
(c) ENFORCEABILITY. The execution, delivery and performance of the Loan
Documents will result in valid and legally binding obligations of each of the
Borrowers enforceable against each in accordance with the respective terms
and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to
or affecting generally the enforcement of creditors' rights and except to the
extent that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding
therefor may be brought.
Section 4.2. GOVERNMENTAL APPROVALS. The execution, delivery and
performance by the Borrowers of the Loan Documents and the transactions
contemplated hereby and thereby do not require any approval or consent of,
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or filing with, any governmental agency or authority other than those already
obtained.
Section 4.3. TITLE TO PROPERTIES; LEASES. The Borrowers and their
Subsidiaries own all of their respective assets reflected in the consolidated
balance sheet of the Borrowers and their Subsidiaries as at the Balance Sheet
Date or acquired since that date (except property and assets sold or
otherwise disposed of in the ordinary course of business since that date),
subject to no mortgages, capitalized leases, conditional sales agreements,
title retention agreements, liens or other encumbrances except those
permitted by Section 6.2 hereof.
Section 4.4. FINANCIAL STATEMENTS; SOLVENCY. (a) There has been
furnished to the Agent a consolidated balance sheet of the Borrowers and
their Subsidiaries dated the Balance Sheet Date, and a consolidated statement
of operations for the fiscal year then ended, certified by the Borrowers'
independent certified public accountants. Such balance sheet and statement
of operations have been prepared in accordance with Generally Accepted
Accounting Principles and fairly present the financial condition of the
Borrowers as at the close of business on the date thereof and the results of
operations for the period then ended. There are no contingent liabilities of
the Borrowers or any of their Subsidiaries as of such date involving material
amounts, known to the officers of any of the Borrowers not disclosed in said
balance sheet and the related notes thereto.
(b) The Borrowers (both before and after giving effect to the
transactions contemplated by this Agreement) are solvent, have assets having
a fair value in excess of the amount required to pay their probable
liabilities on their existing debts as they become absolute and matured, and
have, and will have, access to adequate capital for the conduct of their
business and the ability to pay their debts from time to time incurred in
connection therewith as such debts mature.
Section 4.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date,
there have occurred no material adverse changes in the financial condition or
business of the Borrowers and their Subsidiaries as shown on or reflected in
the consolidated balance sheet of the Borrowers and their Subsidiaries as at
the Balance Sheet Date, or the consolidated statement of operations for the
fiscal year then ended other than changes in the ordinary course of business
which have not had any material adverse effect either individually or in the
aggregate on the business or financial condition of the Borrowers or their
Subsidiaries. Since the Balance Sheet Date, there has not been any
Distribution by any of the Borrowers.
Section 4.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the
Borrowers and their Subsidiaries possesses all franchises, patents,
copyrights, trademarks, trade names, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of its business
substantially as now conducted without known conflict with any rights of
others.
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Section 4.7. LITIGATION. Except as set forth on SCHEDULE 4.7 hereto,
there are no actions, suits, proceedings or investigations of any kind pending
or threatened against any of the Borrowers or any of their Subsidiaries before
any court, tribunal or administrative agency or board which, if adversely
determined, might, either in any case or in the aggregate, materially adversely
affect the properties, assets, financial condition or business of the Borrowers
and their Subsidiaries, considered as a whole, or materially impair the right of
the Borrowers and their Subsidiaries, considered as a whole, to carry on
business substantially as now conducted, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheets of the Borrowers, or which
question the validity of any of the Loan Documents, or any action taken or to be
taken pursuant hereto or thereto.
Section 4.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of the Borrowers
nor any of their Subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation which in
the judgment of the Borrowers' officers has or is expected in the future to have
a materially adverse effect on the business, assets or financial condition of
the Borrowers and their Subsidiaries as a whole. None of the Borrowers nor any
of their Subsidiaries is a party to any contract or agreement which in the
judgment of the Borrowers' officers has or is expected to have any materially
adverse effect on the business of the Borrowers and their Subsidiaries as a
whole, except as otherwise reflected in adequate reserves.
Section 4.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of the
Borrowers nor any of their Subsidiaries is violating any provision of their
charter documents or bylaws or any agreement or instrument by which any of them
may be subject or by which any of them or any of their properties may be bound
or any decree, order, judgment, or any statute, license, rule or regulation, in
a manner which could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of any of the Borrowers or any of their Subsidiaries.
Section 4.10. TAX STATUS. The Borrowers and their Subsidiaries have made
or filed all federal and state income and all other tax returns, reports and
declarations required by any jurisdiction to which any of them are subject
(unless and only to the extent that such Borrower or such Subsidiary has set
aside on its books provisions reasonably adequate for the payment of all unpaid
and unreported taxes); and have paid all taxes and other governmental
assessments and charges that are material in amount, shown or determined to be
due on such returns, reports and declarations, except those being contested in
good faith; and have set aside on their books provisions reasonably adequate for
the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due
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by the taxing authority of any jurisdiction, and the officers of the Borrowers
and their Subsidiaries know of no basis for any such claim.
Section 4.11. NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing as of the date of this Agreement.
Section 4.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of the
Borrowers nor any of their Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor
are any of them a "registered investment company", or an "affiliated company" or
a "principal underwriter" of a "registered investment company", as such terms
are defined in the Investment Company Act of 1940, as amended.
Section 4.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except as
contemplated by Section 6.2 of this Agreement, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage or other document
filed or recorded with any filing records, registry, or other public office,
which purports to cover, affect or give notice of any present or possible future
lien on, or security interest in, any assets or property of any of the Borrowers
or any of their Subsidiaries or rights thereunder.
Section 4.14. PERFECTION OF SECURITY INTEREST. All filings, assignments,
pledges and deposits of documents or instruments required to be made by the
Borrowers hereunder have been made and all other actions have been taken to the
satisfaction of the Agent required to be taken by the Borrowers hereunder to
establish and perfect the Agent's security interest in the Collateral. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses. The Borrowers are the
owner of the Collateral free from any lien, security interest, encumbrance and
any other claim or demand, except for liens permitted under Section 6.2.
Section 4.15. CERTAIN TRANSACTIONS. Except as may be disclosed in the
Borrowers' proxy statements, none of the officers, directors, or employees of
the Borrowers nor their Subsidiaries is presently a party to any transaction
with any other Borrower or Subsidiary (other than for services as employees,
officers and directors), including, without limitation, any contract, agreement
or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of any of the Borrowers, any corporation, partnership, trust or other
entity in which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner.
Section 4.16. ERISA COMPLIANCE. To the best of the Borrowers' knowledge,
the Borrowers and their Subsidiaries have complied in all material respects
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with ERISA, including without limitation, the provisions thereof respecting
funding requirements for, and the termination of, plans and respecting
prohibited transactions thereunder, and the funding of any Guaranteed Pension
Plan of any of the Borrowers and their Subsidiaries complies with the minimum
funding standards of Section 412 of the Internal Revenue Code for 1954, as
amended.
Section 4.17. USE OF PROCEEDS. The proceeds of the Loans shall be used
for working capital and other general corporate purposes. No proceeds of the
Loans shall be used in any way that will violate Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System.
Section 4.18. ENVIRONMENTAL COMPLIANCE. The Borrowers have taken all
necessary steps to investigate the past and present condition and usage of their
and their Subsidiaries' properties and the operations conducted thereon and,
based upon such diligent investigation, have determined that,
(a) Except as set forth on SCHEDULE 4.18 attached hereto, none of the
Borrowers, their Subsidiaries or any operator of their properties is in
violation, or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 as amended ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986 ("XXXX"), the Federal Clean Water Act, the Federal Clean Air Act,
the Toxic Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the environment
(hereinafter "Environmental Laws"), which violation would have a material
adverse effect on the environment or the business, assets or financial condition
of the Borrowers on a consolidated basis.
(b) Except as set forth on SCHEDULE 4.18 attached hereto, neither the
Borrowers nor their Subsidiaries has received notice from any third party
including, without limitation: any federal, state or local governmental
authority, (i) that any one of them has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R.
Part 000 Xxxxxxxx X (1986); (ii) that any hazardous waste, as defined by 42
U.S.C. Section 6903(5), any hazardous substances as defined by 42 U.S.C. Section
9601(14), any pollutant or contaminant as defined by 42 U.S.C. Section 9601(33)
and any toxic substance, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws ("Hazardous Substances") which
any one of them has generated, transported or disposed of has been found at any
site at which a federal, state or local agency or other third party has
conducted or has ordered that any Borrower or any of their Subsidiaries conduct
a remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any claim,
action, cause of action, complaint,
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legal or administrative proceeding arising out of any third party's incurrence
of costs, expenses, losses or damages of any kind whatsoever in connection
with the release of Hazardous Substances.
(c) Except as set forth on SCHEDULE 4.18 attached hereto: (i) no portion
of any Borrower's or any of their Subsidiaries' properties has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on such
properties; (ii) in the course of any activities conducted by any of the
Borrowers, their Subsidiaries or operators of their properties, no Hazardous
Substances have been generated or are being used on such properties except in
accordance with applicable Environmental Laws; (iii) there have been no
unpermitted releases (i.e. any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) or threatened releases of Hazardous Substances on, upon,
into or from the properties of any of the Borrowers or any of their
Subsidiaries, which releases would have a material adverse effect on the value
of such properties or adjacent properties or the environment; (iv) to the best
of the Borrowers' knowledge, there have been no releases on, upon, from or into
any real property in the vicinity of the real properties of any of the Borrowers
or any of their Subsidiaries which, through soil or groundwater contamination,
may have come to be located on, and which would have a material adverse effect
on the value of, any properties of any of the Borrowers or any of their
Subsidiaries; and (v) in addition, any Hazardous Substances that have been
generated on the properties of the Borrowers or any of their Subsidiaries, have
been transported offsite only by carriers having an identification number issued
by the EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Borrowers'
knowledge, operating in compliance with such permits and applicable
Environmental Laws.
(d) Except as set forth on SCHEDULE 4.18 attached hereto, none of the
properties of the Borrowers or any of their Subsidiaries are or shall be subject
to any applicable environmental clean up responsibility law or environmental
restrictive transfer law or regulation, by virtue of the transactions set forth
herein and contemplated hereby.
(e) The Borrowers further represent that they have provided the Agent with
true and complete copies of all documents, reports, site assessments, data,
communication and other materials in any of their possession or to which they
have access, which contain information with respect to potential environmental
liabilities of the Borrowers or their Subsidiaries related to compliance with
Environmental Laws.
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Section 5. AFFIRMATIVE COVENANTS OF THE BORROWERS. The Borrowers
jointly and severally covenant and agree that, so long as any Loan or Note is
outstanding or the Banks have any obligation to make Loans or the Agent has any
obligation to issue Letters of Credit hereunder:
Section 5.1. RECORDS AND ACCOUNTS. Each of the Borrowers will keep, and
will cause each of its Subsidiaries to keep, true and accurate records and books
of account in which full, true and correct entries will be made in accordance
with Generally Accepted Accounting Principles and with the requirements of all
regulatory authorities and maintain adequate accounts and reserves for all taxes
(including income taxes), depreciation, depletion, obsolescence and amortization
of its properties and the properties of its Subsidiaries, all other
contingencies, and all other proper reserves.
Section 5.2. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrowers will deliver to the Banks:
(a) as soon as practicable, but, in any event not later than 90 days after
the end of each fiscal year of the Borrowers, the consolidated balance sheet of
the Borrowers as at the end of such year, statements of cash flows, and the
related consolidated statement of operations, each setting forth in comparative
form the figures for the previous fiscal year, all such consolidated statements
to be in reasonable detail, prepared in accordance with Generally Accepted
Accounting Principles, and certified without qualification by Price
Waterhouse LLP or by other independent nationally recognized certified public
accountants, together with a written statement from such accountants to the
effect that they have read a copy of this Agreement, and that, in making the
examination necessary to said certification, they have obtained no knowledge of
any Default or Event of Default, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they shall disclose
in such statement any such Default or Event of Default; provided, that such
accountants shall not be liable to the Banks for failure to obtain knowledge of
any Default or Event of Default;
(b) as soon as practicable, but in any event not later than 45 days after
the end of each fiscal quarter of each fiscal year of the Borrowers, copies of
the unaudited consolidated and consolidating balance sheet and statement of
operations of the Borrowers as at the end of such quarter, subject to year end
audit adjustments, and consolidated statement of cash flows, all in reasonable
detail and prepared in accordance with Generally Accepted Accounting Principles,
together with a certification by the principal financial or accounting officer
of the Borrowers that such financial statements have been prepared in accordance
with Generally Accepted Accounting Principles and fairly present the financial
condition of the Borrowers as at the close of business on the date thereof and
the results of operations for the period then ended;
-29-
(c) simultaneously with the delivery of the financial statements referred
to in (a) and (b) above, a statement certified by the principal financial or
accounting officer of the Borrowers that the Borrowers are in compliance with
the covenants contained in Sections 5 and 6 hereof as of the end of the
applicable period and setting forth in reasonable detail computations evidencing
such compliance;
(d) when requested by the Agent, within 20 days after the end of each
calendar month, copies of the unaudited consolidated balance sheet and income
statements of the Borrowers as at the end of such calendar month, and statement
of cash flows;
(e) within 20 days after the end of each calendar month, an accounts
receivable aging summary and a statement certified by the principal financial or
accounting officer of the Borrowers that the Borrowers are in compliance with
Section 6.7 as of the end of such month and setting forth in reasonable detail
computations evidencing such compliance;
(f) no later than July 31st of each fiscal year of the Borrowers, the
annual budgets of the Borrowers (including the projected consolidated and
consolidating balance sheets for the end of such fiscal year);
(g) contemporaneously with the filing or mailing thereof, copies of all
material of a financial nature filed with the Securities and Exchange Commission
or sent to the stockholders of the Borrowers; and
(h) from time to time such other financial data and information (including
accountants' management letters) as the Agent may reasonably request.
The Borrowers hereby authorize the Banks to disclose any information
obtained pursuant to this Agreement to all appropriate governmental regulatory
authorities where required by law; PROVIDED, HOWEVER, that the Banks shall, to
the extent allowable under law, notify the Borrowers at the time any such
disclosure is made; and PROVIDED FURTHER, this authorization shall not be deemed
to be a waiver of any rights to object to the disclosure by the Banks of any
such information which any Borrower has or may have under the federal Right to
Financial Privacy Act of 1978 or other applicable laws, as in effect from time
to time.
Section 5.3. CORPORATE EXISTENCE AND CONDUCT OF BUSINESS. Each Borrower
and its Subsidiaries will do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, corporate
rights and franchises; effect and maintain its foreign qualifications,
licensing, domestication or authorization except as terminated by its Board of
Directors in the exercise of its reasonable judgment; use its best efforts to
comply with all applicable laws; and shall not become obligated under any
contract or binding arrangement which, at the time it was entered into would
materially adversely impair the financial condition of the Borrowers,
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on a consolidated basis. Each Borrower will, and will cause each of its
Subsidiaries to, continue to engage primarily in the businesses now conducted
by them and in related businesses.
Section 5.4. MAINTENANCE OF PROPERTIES. Each Borrower will cause all of
its properties and those of its Subsidiaries used or useful in the conduct of
its business or the business of its Subsidiaries to be maintained and kept in
good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
such Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; PROVIDED,
HOWEVER, that nothing in this section or in Section 5.3 above shall prevent any
Borrower from discontinuing the operation and maintenance of any of its
properties or those of its Subsidiaries if such discontinuance is, in the
judgment of such Borrower, desirable in the conduct of its or their business and
which do not in the aggregate materially adversely affect the business of the
Borrowers and their Subsidiaries on a consolidated basis.
Section 5.5. INSURANCE. The Borrowers will maintain, and cause their
Subsidiaries to maintain, with financially sound and reputable insurance
companies, funds or underwriters insurance of the kinds, covering the risks and
in the relative proportionate amounts usually carried by reasonable and prudent
companies conducting businesses similar to that of the Borrowers, including, to
the extent it is commercially available, feasible, and reasonably priced
environmental impairment insurance.
Section 5.6. TAXES. Each Borrower will and will cause each of its
Subsidiaries to duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges (other than taxes, assessments and other governmental
charges imposed by foreign jurisdictions which in the aggregate are not material
to the business or assets of any Borrower on an individual basis or of the
Borrowers and their Subsidiaries on a consolidated basis) imposed upon it and
its real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies, which if unpaid might by law become a lien or charge upon any of its
property; PROVIDED, HOWEVER, that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if such Borrower or such
Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and PROVIDED, FURTHER, that such Borrower and such Subsidiary will pay
all such taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien which may have attached as
security therefor.
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Section 5.7. INSPECTION OF PROPERTIES, BOOKS, AND CONTRACTS. The
Borrowers shall permit the Agent or any of its designated representatives, to
visit and inspect any of the properties of the Borrowers or any of their
Subsidiaries, to examine the books of account of the Borrowers and their
Subsidiaries and contracts under which any of the Borrowers performs services
(and to make copies thereof and extracts therefrom), and to discuss the affairs,
finances and accounts of the Borrowers and their Subsidiaries with, and to be
advised as to the same by, their officers, all at such reasonable times and
intervals as the Agent may reasonably request.
Section 5.8. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES AND PERMITS. Each
Borrower will and will cause each of its Subsidiaries to comply with (i) the
provisions of its charter documents and by-laws and all agreements and
instruments by which it or any of its properties may be bound; and (ii) all
applicable laws and regulations (including Environmental Laws), decrees, orders
and judgments ("Applicable Laws") except where noncompliance with such
Applicable Laws would not have a material adverse effect in the aggregate on the
financial condition, properties or business of any Borrower or any Subsidiary.
If at any time while the Notes, Loans or Letters of Credit are outstanding or
the Banks or the Agent have any obligation to make Loans or the Agent has any
obligation to issue Letters of Credit hereunder, any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that any Borrower may
fulfill any of its obligations hereunder, such Borrower will immediately take or
cause to be taken all reasonable steps within the power of such Borrower to
obtain such authorization, consent, approval, permit or license and furnish the
Agent with evidence thereof.
Section 5.9. PENSION PLANS. Each Borrower and each Subsidiary shall:
(a) fund each pension plan as required by Section 412 of the Internal
Revenue Code of 1954, as amended (the "Code");
(b) furnish to the Agent a copy of any actuarial statement related to any
pension plan required to be submitted under Section 103(d) of ERISA, no later
than the date on which such statement is submitted to the Department of Labor or
the Internal Revenue Service;
(c) furnish to the Agent forthwith, a copy of (i) any notice of a pension
plan termination sent to the Pension Benefit Guaranty Corporation under Section
4041(a) of ERISA or (ii) any notice, report or demand sent or received by a
pension plan under Sections 4041, 4042, 4043, 4063, 4065, 4066 and 4068 of
ERISA; and
(d) furnish to the Agent a copy of any request for waiver from the funding
standards or extension of the amortization periods required by Section 412 of
the Code no later than the date on which the request is submitted to the
Department of Labor or the Internal Revenue Service, as the case may be.
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Section 5.10. FURTHER ASSURANCES. The Borrowers will cooperate with the
Banks and execute such further instruments and documents as the Agent or the
Banks shall reasonably request to carry out to the Banks' satisfaction the
transactions contemplated by this Agreement.
Section 5.11. NOTICE OF POTENTIAL CLAIMS OR LITIGATION. Each of the
Borrowers shall deliver to the Banks, within 30 days of receipt thereof, written
notice of any pending action, claim, complaint, or any other notice of dispute
or potential litigation (including without limitation any alleged violation of
any Environmental Law), wherein the potential liability is unspecified or in
excess of $1,000,000, together with a copy of each such notice received by any
Borrower or its Subsidiary.
Section 5.12. NOTICES. The Borrowers will promptly notify the Banks in
writing of (i) the change in status of any inactive Subsidiary listed on
SCHEDULE 3.7 hereto, or (ii) the occurrence of any Default or Event of Default.
If any Person shall give any notice or take any other action in respect of a
claimed default (whether or not constituting an Event of Default) under this
Agreement or any other note, evidence of indebtedness, indenture or other
obligation as to which any Borrower or any of their Subsidiaries is a party or
obligor, whether as principal or surety, the Borrowers shall forthwith give
written notice thereof to the Banks, describing the notice of action and the
nature of the claimed default.
Section 5.13. NEW BORROWERS. Any newly-created Subsidiaries shall become
Borrowers hereunder by signing Notes, entering into an amendment to this
Agreement with the other parties hereto providing that such Subsidiary shall
become a Borrower hereunder, entering into an amendment to the Security
Agreement to become a party thereto, and providing such other documentation as
the Banks or the Agent may reasonably request including, without limitation,
documentation with respect to conditions noted in Section 7 hereof. In such
event, the Agent is hereby authorized by the parties to amend Schedule 1 hereto
to include such Subsidiary as a Borrower hereunder.
Section 6. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. The Borrowers
agree that, so long as the Notes are outstanding, the Banks or the Agent have
any obligation to make Loans or the Agent has any obligation to issue Letters of
Credit hereunder:
Section 6.1. RESTRICTIONS ON INDEBTEDNESS. The Borrowers will not, and
will not permit any Subsidiary to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under this Agreement
or the other Loan Documents;
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(b) Existing Indebtedness as listed on SCHEDULE 6.1 hereto, on the terms
and conditions in effect as of the date hereof;
(c) Current liabilities of the Borrowers incurred in the ordinary course
of business not incurred through (i) the borrowing of money, or (ii) the
obtaining of credit except for credit on an open account basis customarily
extended and in fact extended in connection with normal purchases of goods and
services;
(d) Indebtedness in respect of taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies to the extent that payment
therefor shall not at the time be required to be made in accordance with the
provisions of Section 5.6 and Indebtedness secured by liens of carriers,
warehousemen, mechanics and materialmen permitted by Section 6.2;
(e) Indebtedness in respect of judgments or awards which have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which such Borrower shall at
the time in good faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained pending such
appeal or review and in respect of which the Borrowers have maintained adequate
reserves; and Indebtedness in respect of a final judgment against any Borrower
which is undischarged, unsatisfied and unstayed and which, with other
outstanding final judgments, undischarged against the Borrowers does not exceed
$1,000,000 in aggregate amount;
(f) Other Indebtedness, not to exceed $5,000,000 in the aggregate,
incurred after the date hereof (including existing Indebtedness of any
Subsidiaries of the Borrowers acquired after the date hereof), through the
borrowing of money or the obtaining of credit, incurred in connection with the
lease or acquisition of property or fixed assets useful or intended to be used
in carrying on the business of the Borrowers and their Subsidiaries, PROVIDED
THAT all such Indebtedness in excess of $1,000,000 ("Additional Indebtedness")
shall have a final maturity date after the Maturity Date, and PROVIDED FURTHER
that to the extent that scheduled principal payments of such Additional
Indebtedness are payable after the Maturity Date, the Total Commitment Amount,
as applicable, shall be reduced by the amount of such payments.
Section 6.2. RESTRICTIONS ON LIENS. No Borrower will, nor will any
Borrower permit any Subsidiary to, create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character (other than upon any margin stock, as defined in
Regulation U of the Board of Governors of the Federal Reserve System, owned by
any Borrower or any Subsidiary), whether now owned or hereafter acquired, or
upon the income or profits therefrom; or transfer any of such property or assets
or the income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation
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in priority to payment of its general creditors; or acquire, or agree or have
an option to acquire, any property or assets upon conditional sale or other
title retention or purchase money security agreement, device or arrangement;
or suffer to exist for a period of more than 30 days after the same shall have
been incurred any Indebtedness or claim or demand against it which if unpaid
might by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever over its general creditors; or sell, assign, pledge or
otherwise transfer any accounts, contract rights, general intangibles or
chattel paper, with or without recourse, EXCEPT:
(a) To the extent permitted under Section 6.1(f) hereof, Liens securing
the Indebtedness incurred in connection with the acquisition of property or
assets useful or intended to be used in carrying on the business of the
Borrowers or the acquiring Subsidiary, PROVIDED THAT such Liens shall encumber
only the property or assets so acquired and do not exceed the fair market value
thereof; and
(b) Liens to secure taxes, assessments and other government charges or
claims for labor, material or supplies in respect of obligations not overdue;
(c) Deposits or pledges made in connection with, or to secure payment of,
workmen's compensation, unemployment insurance, old age pensions or other social
security obligations;
(d) Liens in respect of judgments or awards, the Indebtedness with respect
to which is permitted by Section 6.1(e);
(e) Liens of carriers, warehousemen, mechanics and materialmen, and other
like liens, in existence less than 120 days from the date of creation thereof in
respect of obligations not overdue; and
(f) Encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under leases
to which any Borrower or any Subsidiary is a party, and other minor liens or
encumbrances none of which in the opinion of the respective Borrower or
Borrowers interferes materially with the use of the property affected in the
ordinary conduct of the business of such Borrower and its Subsidiaries, which
defects do not individually or in the aggregate have a material adverse effect
on the business of such Borrower individually or of the Borrowers and their
Subsidiaries on a consolidated basis.
Section 6.3. RESTRICTIONS ON INVESTMENTS. No Borrower will, nor will any
Borrower permit any Subsidiary to, make or permit to exist or to remain
outstanding any Investment except the following:
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(a) Marketable direct or guaranteed obligations of the United States of
America which mature within one year from the date of purchase by the Borrowers;
(b) Demand deposits, certificates of deposit, bankers' acceptances, time
deposits and variable rate demand obligations of United States banks having
total assets in excess of $1,000,000,000 United States Dollars;
(c) Securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof which at the time of purchase have been rated and
the ratings for which are less than "P-1" if rated by Xxxxx'x Investors
Services, Inc. and less than "A-1" if rated by Standard and Poor's Ratings
Group, PROVIDED THAT such investments shall not exceed $2,000,000;
(d) Debt securities of U.S. corporations or U.S. governmental entities
under which full payment of principal and interest is assured by a letter of
credit issued by United States banks having total assets in excess of
$1,000,000,000 United States Dollars and which at the time of purchase are rated
and the ratings for which are not less than "P-1" if rated by Xxxxx'x Investors
Services, Inc. and not less than "A-1" if rated by Standard and Poor's Ratings
Group;
(e) (i) Securities commonly known as "municipal securities" issued by a
municipality organized and existing under the laws of any state of the United
States of America which at the time of purchase have been rated and the ratings
for which are not less than "P-1" if rated by Xxxxx'x Investors Services, Inc.,
and not less than "A-1" if rated by Standard and Poor's Ratings Group, and (ii)
securities known as the Xxxx Nuveen & Co. MuniPreferred series of tax-exempt
mutual funds, all of which funds have a triple-A rating by Standard and Poor's
Ratings Group and Xxxxx'x Investor Services, Inc.;
(f) Trade payables, accrued payroll and vacation, and taxes payable, all
accrued in the ordinary course of business;
(g) Present and future Investments by the Borrowers in any Person which is
a Borrower listed on SCHEDULE 1 hereto;
(h) Other Investments in addition to the existing Investments listed on
SCHEDULE 6.3(i) hereto, PROVIDED that such other Investments shall not exceed
$5,000,000 (such amount determined on the basis of cost) at any one time
outstanding;
(i) Existing Investments listed on SCHEDULE 6.3(i) hereto;
(j) Short term money market investments in money market loans or portions
of such loans sold by the Agent; and
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(k) Investments in acquisitions permitted by Section 6.4.
Section 6.4. MERGER, CONSOLIDATION, AND ACQUISITIONS. No Borrower will
become a party to any merger, consolidation, or acquisition except (a) for the
merger or consolidation of a Borrower with another Borrower or (b) where (i)
such Borrower is the surviving corporation of a merger; (ii) such merger,
consolidation, or acquisition is of a company in the environmental consulting,
engineering or related field; (iii) the Banks have been provided with a
certificate demonstrating that the Borrowers are in current compliance with and,
giving effect to the proposed acquisition (including any borrowings made or to
be made in connection therewith), will continue to be in compliance with, all of
the covenants in this Section 6; (iv) all of the assets to be acquired shall be
owned by an existing or newly created Subsidiary of TRC which is a Borrower or,
in the case of a stock acquisition, the acquired company shall become or shall
be merged with a wholly-owned Subsidiary of TRC that is a Borrower; and (v) the
required majority of the Board of Directors of the target company incumbent at
the time such acquisition is proposed has acquiesced either voluntarily or by
order of a court of competent jurisdiction, or the transaction is otherwise
deemed in the reasonable judgment of the Banks to be a "friendly" acquisition,
and PROVIDED THAT both immediately before and after such merger, consolidation
or acquisition no Defaults or Events of Default shall have occurred or be
continuing.
Section 6.5. SALE AND LEASEBACK. None of the Borrowers will enter into
any arrangement, directly or indirectly, whereby any Borrower or any Subsidiary
shall sell or transfer any property owned by it in order then or thereafter to
lease such property or lease other property which any Borrower or any Subsidiary
intends to use for substantially the same purpose as the property being sold or
transferred.
Section 6.6. SALES OF ASSETS. None of the Borrowers will, and no Borrower
will permit any Subsidiary to, sell or otherwise dispose of any of their
respective assets consisting of securities (other than any margin stock, as
defined in Regulation U of the Board of Governors of the Federal Reserve System,
held by any Borrower or any Subsidiary), real property or personal property,
including without limitation all or any part of any of any Borrower's operating
divisions (excluding sales of assets in the ordinary course of the business),
without the prior written approval of the Banks, with the following exceptions:
(i) any Borrower may sell obsolete or worn-out property not used or useful in
its business, and (ii) subject to Section 2.12(b) hereof MIE may be sold at the
Borrowers' discretion, PROVIDED that, in such event, MIE's rights under this
Agreement and the Notes shall terminate. In connection with any sale of MIE
permitted hereunder, the Agent shall release its lien on the assets of MIE
constituting Collateral and shall, at the Borrowers' sole cost and expense,
deliver to the Borrowers such UCC-3 releases or other release documents as the
Borrowers may reasonably request to effect such release.
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Section 6.7. COLLATERAL VALUE RATIO. The Borrowers will not, at the end
of any month, permit the sum of (i) outstanding Loans plus (ii) the Maximum
Drawing Amount under all Letters of Credit, plus (iii) Unpaid Reimbursement
Obligations to be greater than seventy percent (70%) of Eligible Receivables for
which invoices have been issued and are payable (the "Collateral Value Ratio").
Section 6.8. INTEREST COVERAGE. The Borrowers will not permit the ratio
of Consolidated EBITDA MINUS capital expenditures to Consolidated Total Interest
Expense to be less than 3.5:1 for any fiscal quarter.
Section 6.9. SUBORDINATED DEBT. The Borrowers will not (a) amend,
supplement or otherwise modify the terms of any of the Subordinated Debt, (b)
make any payment of principal or other amounts owing with respect thereto (other
than as permitted under the Intercreditor Agreement), or (c) prepay any of the
Subordinated Debt.
Section 7. CONDITIONS OF FIRST LOANS.
The obligation of the Banks to make the first Loan hereunder (including,
without limitation, the obligation of the Banks to convert loans under the Prior
Credit Agreement to Loans hereunder and the obligation of the Agent to issue
Letters of Credit) and otherwise be bound by the terms of this Agreement shall
be subject to the satisfaction of each of the following conditions precedent
(the date such conditions precedent are satisfied being the "Amendment Date"):
Section 7.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Section 4 hereof and otherwise made by the Borrowers in
writing in connection with the transactions contemplated by this Agreement shall
have been correct as of the date on which made and shall also be correct at and
as of the date of the first Loan with the same effect as if made at and as of
such time, except to the extent that the facts upon which such representations
and warranties are based may in the ordinary course be changed by the
transactions permitted or contemplated hereby.
Section 7.2. PERFORMANCE; NO DEFAULT. The Borrowers shall have performed
and complied with all terms and conditions herein required to be performed or
complied with by them prior to or at the time of the first Loan, and at the time
of the first Loan, as certified by the chief financial officer of TRC, there
shall exist no Default or Event of Default or condition which would, with either
or both the giving of notice or the lapse of time, result in a Default or Event
of Default upon consummation of the first Loans.
Section 7.3. NO ADVERSE CHANGE. As of the date of the first Loan, no
material adverse change since the Balance Sheet Date shall have occurred since
the date hereof in the business or financial condition of the Borrowers in the
aggregate.
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Section 7.4. CORPORATE ACTION; CORPORATE DOCUMENTS. All corporate action
necessary for the valid execution, delivery and performance by each Borrower of
the Loan Documents shall have been duly and effectively taken, and evidence
thereof satisfactory to the Agent shall have been provided to the Agent. The
Borrowers shall have certified to the Agent that the charter and by-laws of each
Borrower delivered to the Agent in connection with the Prior Credit Agreement
have not been amended, modified or supplemented and are in full force and effect
or shall have provided the Agent certified copies of any amendments,
modifications or supplements thereto. Each Borrower shall have delivered to the
Agent a certificate of the Secretary of State of the state of incorporation of
such Borrower certifying as to such Borrower's legal existence and good
standing.
Section 7.5. LOAN DOCUMENTS. Each of the Loan Documents shall have been
duly and properly authorized, executed and delivered by the respective party or
parties thereto and shall be in full force and effect on and as of the Amendment
Date and executed original counterparts of each of the Loan Documents shall have
been furnished to the Agent.
Section 7.6. UCC SEARCHES; PERFECTION OF LIENS. The Agent shall have
received the results of UCC searches with respect to the Collateral, indicating
no Liens other than Liens permitted under Section 6.2 and otherwise in form and
substance satisfactory to the Agent. The Security Documents shall be effective
to create in favor of the Agent a legal, valid and enforceable first (except for
Liens permitted under Section 6.2 entitled to priority under applicable law)
security interest in and lien upon the Collateral. All filings, recordings,
deliveries of instruments necessary or desirable in the opinion of the Agent to
protect and preserve such security interests shall have been duly effected. The
Agent shall have received evidence thereof in form and substance satisfactory to
the Agent.
Section 7.7. OPINION OF BORROWER'S COUNSEL. The Bank shall have received
from Borrowers' counsel a favorable opinion addressed to the Agent, dated the
Amendment Date.
Section 7.8. NO LEGAL IMPEDIMENT. No change shall have occurred in any
law or regulations thereunder or interpretations thereof which in the reasonable
opinion of the Agent would make it illegal for the Agent to make Loans
hereunder.
Section 7.9. GOVERNMENTAL REGULATION. The Agent shall have received such
statements in substance and form reasonably satisfactory to the Agent as it
shall require for the purpose of compliance with any applicable regulations of
the Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.
Section 7.10. ACCOUNTANT'S REPORT. The Borrowers shall have delivered to
the Banks a copy of the Price Waterhouse LLP management letter for the 1997
fiscal year and the Banks shall have discussed with Price Waterhouse
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LLP, and be satisfied with, the Borrowers' systems and controls and the
adequacy of the Borrowers' accounts receivable reserve.
Section 7.11. PAYMENT OF FEES. The Borrowers shall have paid to the Agent
the Amendment Fee and shall have paid the Agent's out-of-pocket expenses,
including, without limitation, the legal fees and disbursements of the Agent's
counsel, Xxxxxxx Xxxx LLP, incurred under the Prior Credit Agreement and in
connection with this Agreement.
Section 7.12. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Agreement and all documents incident
thereto shall have been delivered to the Banks as of the date hereof in
substance and in form satisfactory to the Banks, and the Banks shall have
received all information and such counterpart originals or certified or other
copies of such documents as the Banks may reasonably request.
Section 8. CONDITIONS OF SUBSEQUENT LOANS.
The obligation of the Banks to make any Loan (including without limitation
the obligation of the Agent to issue any Letter of Credit) subsequent to the
first Loan is subject to the following conditions precedent:
Section 8.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of the Borrowers contained in this Agreement or
in any document or instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were made and shall also
be true at and as of the time of the making of the Loan with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Agreement and changes occurring
in the ordinary course of business which singly or in the aggregate are not
materially adverse, and to the extent that such representations and warranties
relate expressly to an earlier date) and no Default or Event of Default shall
have occurred and be continuing.
Section 8.2. PERFORMANCE; NO EVENT OF DEFAULT. The Borrowers shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by them prior to or at the time of the Loan, and at
the time of the Loan, there shall exist no Event of Default or condition which
would result in an Event of Default upon consummation of the Loan (including
without limitation any amounts to be drawn under a Letter of Credit).
Each request by any Borrower for a Loan (including without limitation each
request for issuance of a Letter of Credit) subsequent to the first Loan shall
constitute certification by such Borrower that the conditions specified in
Sections 8.1 and 8.2 will be duly satisfied on the date of such Loan or Letter
of Credit issuance.
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Section 9. EVENTS OF DEFAULT; ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice and/or lapse of time, "Defaults")
shall occur:
(a) if the Borrowers shall fail to pay any principal of the Loans when the
same shall become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(b) if the Borrowers shall fail to pay any interest, letter of credit fees
or commitment fees on the Loans within five (5) Business Days after the same
shall become due and payable whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(c) if the Borrowers shall fail to comply with their covenants contained
in Section 5 (excepting Sections 5.2, 5.4, and 5.9,) or Section 6 hereof;
(d) if the Borrowers shall fail to perform any term, covenant or agreement
herein contained (other than those specified in subsections (a), (b), and (c)
above) within 45 business days after written notice of such failure has been
given to such Borrower by the Agent;
(e) if any representation or warranty contained in this Agreement or in
any document or instrument delivered pursuant to or in connection with this
Agreement shall prove to have been false in any material respect upon the date
when made;
(f) if any Borrower or any Subsidiary shall fail to pay at maturity, or
within any applicable period of grace, any and all obligations for borrowed
money in an aggregate amount greater than $1,000,000 (excluding, however, any
agreement relating to any pledge of, or restriction on the pledge or disposition
of, margin stock, as defined in Regulation U of the Board of Governors of the
Federal Reserve System, owned by any Borrower), or fail to observe or perform
any material term, covenant or agreement contained in any agreement by which it
is bound, evidencing or securing borrowed money in an aggregate amount greater
than $1,000,000 for such period of time as would, or would have permitted
(assuming the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the maturity
thereof; or
(g) if any Borrower makes an assignment for the benefit of creditors, or
admits in writing its inability to pay or generally fails to pay its debts as
they mature or become due (excluding, however, any agreement relating to any
pledge of, or restriction on the pledge or disposition of, margin stock, as
defined in Regulation U of the Board of Governors of the Federal Reserve System,
owned by any Borrower), or petitions or applies for
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the appointment of a trustee or other custodian, liquidator or receiver of any
of the Borrowers or of any substantial part of the assets of any of the
Borrowers or their Subsidiaries or commences any case or other proceeding
relating to any of the Borrowers or their Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law of any jurisdiction, now or hereafter in effect, or
takes any action to authorize or in furtherance of any of the foregoing, or if
any such petition or application is filed or any such case or other proceeding
is commenced against any of the Borrowers or their Subsidiaries and any of the
Borrowers or their Subsidiaries indicates its approval thereof, consent
thereto or acquiescence therein;
(h) a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating any of the Borrowers or their
Subsidiaries bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of any
Borrower or any Subsidiary in an involuntary case under Federal bankruptcy laws
as now or hereafter constituted, and such decree or order remains in effect for
more than 30 days, whether or not consecutive; or
(i) if there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any final
judgment against any Borrower or any Subsidiary which, with other outstanding
final judgments, undischarged, against the Borrowers exceeds in the aggregate
$1,000,000 after taking into account any insurance coverage;
then, the Agent may, and at the request of the Majority Banks shall, by notice
in writing to the Borrowers declare all amounts owing with respect to this
Agreement and the Notes to be, and they shall thereupon forthwith mature and
become, immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby expressly waived by the
Borrowers; PROVIDED, that in the event of any Event of Default specified in
Sections 9(g) or 9(h) hereof, all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the Agent.
Upon demand by the Agent after the occurrence of any Event of Default, the
Borrowers shall immediately provide to the Agent cash in an amount equal to the
aggregate Maximum Drawing Amount of all Letters of Credit outstanding, to be
held by the Agent as collateral security for the Obligations. In case any one
or more of the Events of Default shall have occurred and be continuing, and
whether or not the Agent shall have accelerated the maturity of the Loans
pursuant to the foregoing, any Bank, if owed any amount with respect to the
Loans may proceed to protect and enforce its rights by suit in equity, action at
law and/or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Agreement or any instrument pursuant
to which the obligations of the Borrowers to such Bank hereunder are evidenced,
including as permitted by applicable law the obtaining of the EX
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PARTE appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon the
Agent or Banks or the holders of the Notes is intended to be exclusive of any
other remedy and each and every remedy shall be cumulative and shall be in
addition to every other remedy given hereunder or now or hereafter existing at
law or in equity or by statute or any other provision of law.
Section 10. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that,
following the occurrence or during the continuance of any Default or Event of
Default, the Agent or any Bank, as the case may be, receives any monies in
connection with the enforcement of any the Security Documents, or otherwise with
respect to the realization upon any of the Collateral, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all
or any of the rights, remedies, powers and privileges of the Agent under
this Agreement or any of the other Loan Documents or in respect of the
Collateral or in support of any provision of adequate indemnity to the
Agent against any taxes or liens which by law shall have, or may have,
priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference as
the Majority Banks may determine; PROVIDED, HOWEVER, that (i) distributions
shall be made with respect to each type of Obligation owing to the Banks,
such as interest, principal, fees and expenses, among the Banks PRO RATA,
and (ii) the Agent may in its discretion make proper allowance to take into
account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other provisions
for payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid pursuant
to Section 9-504(1)(c) of the Uniform Commercial Code of the Commonwealth
of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrowers or
to such other Persons as are entitled thereto.
Section 11. SETOFF. Regardless of the adequacy of any collateral, during
the continuance of an Event of Default, any deposits or other sums credited by
or due from any Bank to the Borrowers and any securities or other property of
the Borrowers in the possession of any Bank may be applied to
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or set off against the payment of obligations of the Borrowers hereunder and
under the Note and any and all other liabilities, direct, or indirect,
absolute or contingent, due or to become due, now existing or hereafter
arising, of the Borrowers to the Banks. Each of the Banks agrees with each
other Bank that (i) if an amount to be set off is to be applied to
Indebtedness of the Borrowers to such Bank, other than Indebtedness evidenced
by the Notes held by such Bank or constituting Reimbursement Obligations owed
to such Bank, such amount shall be applied ratably to such other Indebtedness
and to the Indebtedness evidenced by all such Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (ii) if such
Bank shall receive from any of the Borrowers, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of
the claim evidenced by the Notes held by, or constituting Reimbursement
Obligations owed to, such Bank by proceedings against such Borrower at law or
in equity or by proof thereof in bankruptcy, reorganization, liquidation,
receivership or similar proceedings, or otherwise, and shall retain and apply
to the payment of the Note or Notes held by, or Reimbursement Obligations owed
to, such Bank any amount in excess of its ratable portion of the payments
received by all of the Banks with respect to the Notes held by, and
Reimbursement Obligations owed to, all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, PRO TANTO assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Notes held
by it or Reimbursement Obligations owed it, its proportionate payment as
contemplated by this Agreement; PROVIDED that if all or any part of such
excess payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
Section 12. EXPENSES. Whether or not the transactions contemplated herein
shall be consummated, the Borrowers hereby promise to reimburse the Agent for
all reasonable out-of-pocket attorneys' fees and disbursements, incurred or
expended in connection with the preparation, syndication or interpretation of
this Agreement, the Notes, the Letter of Credit Agreements, or any amendment
hereof or thereof, or with the enforcement of any Obligations or the
satisfaction of any indebtedness of the Borrowers hereunder or thereunder, or in
connection with any litigation, proceeding or dispute hereunder in any way
related to the credit hereunder, including without limitation the so-called
"work-out" thereof after the occurrence of a Default or Event of Default. The
Borrowers will pay any taxes (including any interest and penalties in respect
thereof), other than the Banks' federal and state income taxes, payable on or
with respect to the transactions contemplated by this Agreement (the Borrowers
hereby agreeing to indemnify the Banks with respect thereto). The Borrowers
further promise to reimburse the Agent and the Banks for all such fees and
disbursements incurred or expended in connection with the enforcement of any
Obligations or the satisfaction of any indebtedness of the Borrowers
-44-
hereunder or thereunder, or in connection with any litigation, proceeding or
dispute in any way related to the credit hereunder.
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Section 13. THE AGENT.
Section 13.1. APPOINTMENT OF AGENT, POWERS AND IMMUNITIES. Each Bank
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Loan Documents. Each Bank irrevocably authorizes
the Agent to execute all other instruments relating thereto and to take such
action on behalf of each of the Banks and to exercise all such powers as are
expressly delegated to the Agent hereunder and in all related documents,
together with such other powers as are reasonably incidental thereto. It is
agreed that the duties, rights, privileges and immunities of the Agent, in its
capacity as issuer of Letters of Credit hereunder, shall be identical to its
duties, rights, privileges and immunities as Agent as provided in this Section
13. The Agent shall not have any duties or responsibilities or any fiduciary
relationship with any Bank except those expressly set forth in this Agreement.
Neither the Agent nor any of its affiliates shall be responsible to the Banks
for any recitals, statements, representations or warranties made by the
Borrowers or any other Person whether contained herein or otherwise or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, the other Loan Documents or any other document referred to or
provided for herein or therein or for any failure by the Borrowers any other
Person to perform its obligations hereunder or thereunder or in respect of the
Notes. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the Agent nor any
of its directors, officers, employees or agents shall be responsible for any
action taken or omitted to be taken by it or them hereunder or in connection
herewith, except for its or their own gross negligence or willful misconduct.
The Agent in its separate capacity as a Bank shall have the same rights and
powers hereunder as any other Bank.
Section 13.2. ACTIONS BY AGENT. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement as it reasonably
deems appropriate unless it shall first have received such advice or concurrence
of the Banks and shall be indemnified to its reasonable satisfaction by the
Banks against any and all liability and expense which may be incurred by it by
reason of taking or continuing to take any such action. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, under this
Agreement or any of the Loan Documents in accordance with a request of the
Banks, and such request and any action taken or failure to act pursuant thereto
shall be binding upon the Banks and all future holders of the Notes or any
Letter of Credit Participation.
Section 13.3. INDEMNIFICATION. Without limiting the obligations of the
Borrowers hereunder or under any other Loan Document, the Banks agree to
indemnify the Agent, ratably in accordance with their respective Commitment
Percentages, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements or any
kind or nature whatsoever which may at any time be
-46-
imposed on, incurred by or asserted against the Agent in any way relating to
or arising out of this Agreement or any other Loan Document or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or the enforcement of any of the terms hereof
or thereof or of any such other documents; PROVIDED, THAT no Bank shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent (or any agent thereof).
Section 13.4. REIMBURSEMENT. Without limiting the provisions of Section
13.3, the Banks and the Agent hereby agree that the Agent shall not be obliged
to make available to any Person any sum which the Agent is expecting to receive
for the account of that Person until the Agent has determined that it has
received that sum. The Agent may, however, disburse funds prior to determining
that the sums which the Agent expects to receive have been finally and
unconditionally paid to the Agent, if the Agent wishes to do so. If and to the
extent that the Agent does disburse funds and it later becomes apparent that the
Agent did not then receive a payment in an amount equal to the sum paid out,
then any Person to whom the Agent made the funds available shall, on demand from
the Agent, refund to the Agent the sum paid to that Person. If, in the opinion
of the Agent, the distribution of any amount received by it in such capacity
hereunder or under the Loan Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
Section 13.5. DOCUMENTS. The Agent will forward to each Bank, promptly
after the Agent's receipt thereof, a copy of each notice or other document
furnished to the Agent for such Bank hereunder; PROVIDED, HOWEVER, that,
notwithstanding the foregoing, the Agent may furnish to the Banks a monthly
summary with respect to Letters of Credit issued hereunder in lieu of copies of
the related Letter of Credit Applications.
Section 13.6. NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank represents
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of the financial condition and affairs of the Borrowers and
the decision to enter into this Agreement and the other Loan Documents and
agrees that it will, independently and without reliance upon the Agent or any
other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own appraisals and decisions in
taking or not taking action under this Agreement or any other Loan Document.
The Agent shall not be required to keep informed as to the performance or
observance by
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the Borrowers of this Agreement, the other Loan Documents or any
other document referred to or provided for herein or therein or by any other
Person of any other agreement or to make inquiry of, or to inspect the
properties or books of, any Person. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by the
Agent hereunder, the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning any person which may
come into the possession of the Agent or any of its affiliates. Each Bank shall
have access to all documents relating to the Agent's performance of its duties
hereunder at such Bank's request. Unless any Bank shall promptly object to any
action taken by the Agent hereunder (other than actions to which the provisions
of Section 13.8 are applicable and other than actions which constitute gross
negligence or willful misconduct by the Agent), such Bank shall conclusively be
presumed to have approved the same.
Section 13.7. RESIGNATION OF AGENT. The Agent may resign at any time by
giving 60 days prior written notice thereof to the Banks and the Borrowers.
Upon any such resignation, the Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Banks and
shall have accepted such appointment within 30 days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent, which shall be a financial institution having
a combined capital and surplus in excess of $150,000,000. Upon the acceptance
of any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's resignation, the provisions of this Agreement shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as Agent. Any new Agent appointed pursuant to this Section
13.7 shall immediately issue new Letters of Credit in place of Letters of Credit
previously issued by the Agent.
Section 13.8. ACTION BY THE BANKS, CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Section 13.8, any action to be
taken (including the giving of notice) may be taken or any consent or approval
required or permitted by the Agreement or any other Loan Document to be given by
the Banks may be given, and any term of this Agreement, any other Loan Document
or any other instrument, document or agreement related to this Agreement or the
other Loan Documents or mentioned therein may be amended and the performance or
observance by the Borrowers or any other person of any of the terms thereof and
any Default or Event of Default (as defined in any of the above-referenced
documents or instruments) may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Majority Banks; PROVIDED, HOWEVER, that no such consent or
amendment which affects the rights, duties or liabilities of the Agent shall be
effective without the written
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consent of the Agent. Notwithstanding the foregoing, no amendment, waiver or
consent shall do any of the following unless in writing and signed by ALL of
the Banks (a) increase the Total Commitment Amount (or subject the Banks to
any additional obligations), (b) reduce the principal of or interest on the
Notes (including, without limitation, interest on overdue amounts) or any fees
payable hereunder, (c) postpone any date fixed for any payment in respect of
principal or interest (including, without limitation, interest on overdue
amounts) on the Notes, or any fees payable hereunder; (d) change the
definition of "Majority Banks" or the number of Banks which shall be required
for the Banks or any of them to take any action under the Loan Documents; (e)
amend this Section 13.8; or (f) change the Commitment Percentage of any Bank,
except as permitted under Section 16 hereof.
Section 13.9 DUTIES IN THE CASE OF ENFORCEMENT. In case one of more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (i) so
requested by the Majority Banks and (ii) the Banks have provided to the Agent
such additional indemnities and assurances against expenses and liabilities as
the Agent may reasonably request, proceed to enforce the provisions of the
Security Documents authorizing the sale or other disposition of all or any part
of the Collateral and exercise all or any such other legal and equitable and
other rights or remedies as it may have in respect of such Collateral. The
Majority Banks may direct the Agent in writing as to the method and the extent
of any such sale or other disposition, the Banks hereby agreeing to indemnify
and hold the Agent, harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, PROVIDED that the
Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
Section 14. INDEMNIFICATION. The Borrowers agree to indemnify and hold
harmless the Banks, as well as the Banks' shareholders, directors, agents,
officers, subsidiaries and affiliates, from and against all damages, losses,
settlement payments, obligations, liabilities, claims, actions or causes of
action, whether statutorily created or under the common law, and reasonable
costs and expenses incurred, suffered, sustained or required to be paid by an
indemnified party by reason of or resulting from the transactions contemplated
hereby and to the extent not caused by the gross negligence or willful
misconduct of the Banks. In any investigation, proceeding or litigation, or the
preparation therefor, the Banks shall be entitled to select its own counsel and,
in addition to the foregoing indemnity, the Borrowers agree to pay promptly the
reasonable fees and expenses of such counsel. In the event of the commencement
of any such proceeding or litigation, the Borrowers shall be entitled to
participate in such proceeding or litigation with counsel of their choice at
their expense, PROVIDED that such counsel shall be reasonably satisfactory to
the Banks. The covenants of this Section 14 shall survive payment or
satisfaction of payment of amounts owing with respect to the Notes or any other
Loan Document.
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Section 15. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the other Loan Documents or in
any documents or other papers delivered by or on behalf of the Borrowers
pursuant hereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by it, and
shall survive the making by the Banks of the Loans and the issuance by the Agent
of the Letters of Credit, as herein contemplated, and shall continue in full
force and effect so long as any amount due under this Agreement, any Letter of
Credit Agreement or the Notes remains outstanding and unpaid or any Bank or the
Agent has any obligation to make any Loans or issue any Letters of Credit
hereunder. All statements contained in any certificate or other paper delivered
to the Banks or the Agent at any time by or on behalf of the Borrowers pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrowers hereunder.
Section 16. SYNDICATION AND PARTICIPATION. It is understood and agreed
that each Bank shall have the right to syndicate or participate at any time the
Commitment and interests in the risk relating to any of the Obligations, to
additional banks or other financial institutions so long as BKB will be the
Agent thereunder, and so long as the Borrowers and the Agent have consented to
such assignment (such consent not to be unreasonably withheld), PROVIDED THAT
such Bank shall retain, free of any such assignment, an amount of its Commitment
of not less than $5,000,000, and PROVIDED FURTHER that any Bank may syndicate or
participate to an affiliate of such Bank without obtaining consent. It is
further agreed that each bank or other financial institution which executes and
delivers to the Agent and the Borrowers hereunder a counterpart joinder in form
and substance satisfactory to the Agent and such bank or financial institution
(together with an assignment fee of $2,500 to the Agent) shall, on the date
specified in such counterpart joinder, become a party to this Agreement and the
other Loan Documents for all purposes of this Agreement and the other Loan
Documents, and its Commitment shall be as set forth in such counterpart joinder.
Upon the execution and delivery of such counterpart joinder, (a) the Borrowers
shall issue to the bank or other financial institution a Note in the amount of
such bank's or other financial institution's Commitment dated as of the date of
such assignment or such other date as may be specified by the Bank and otherwise
completed in substantially the form of EXHIBIT A; (b) Sections 2.1 and 2.2 shall
be deemed to be amended to reflect the Commitment and interest in the risk
related to the Obligations of such bank or other financial institution and the
Commitment of such Bank shall be reduced by a like amount; (c) the Agent shall
distribute to the Borrowers, the Banks and such bank or financial institution a
schedule reflecting such changes; and (d) this Agreement shall be appropriately
amended to reflect (i) the status of such bank or financial institution as a
party hereto and (ii) the status and rights of BKB as agent for itself and such
other bank or financial institution hereunder.
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Section 17. PARTIES IN INTEREST. All the terms of this Agreement and the
other Loan Documents shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto and
thereto; PROVIDED, that no Borrower shall assign or transfer its rights
hereunder without the prior written consent of the Banks.
Section 18. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the other Loan Documents shall be in writing and
shall be delivered in hand, mailed by United States first-class mail, postage
prepaid, or sent by telecopier and confirmed by letter, addressed as follows:
(a) if to the Borrowers, at 0 Xxxxxxxxx Xxxxxxxx, Xxxxxxx, Xxxxxxxxxxx
00000, Attention: Xxxxxx X. Xxxxxx, Xx., Vice President and Treasurer,
telecopy number 000-000-0000, or at such other address for notice as the
Borrowers, shall last have furnished in writing to the Person giving the notice;
or
(b) if to the Agent or BKB, at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, XXX, Attention: Xxxxxx X. Xxxxxxxx, Vice-President, telecopy number
000-000-0000, or such other address for notice as the Agent shall last have
furnished in writing to the Person giving the notice; or
(c) if to the Banks, at BankBoston, N.A., 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, XXX, Attention: Xxxxxx X. Xxxxxxxx, Vice-President,
telecopy number 000-000-0000, or such other address for notice as the Bank shall
last have furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (a) if delivered by hand, overnight mail or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile or
(b) if sent by registered or certified first-class mail, postage prepaid, five
(5) Business Days after the posting thereof.
Section 19. MISCELLANEOUS. The rights and remedies herein expressed are
cumulative and not exclusive of any other rights which the Banks or the Agent
would otherwise have. The captions in this Agreement are for convenience of
reference only and shall not define or limit the provisions hereof. This
Agreement and any amendment hereof may be executed in several counterparts and
by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, but all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought.
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Section 20. ENTIRE AGREEMENT, ETC. This Agreement, together with the
other Loan Documents and any other documents executed in connection herewith or
therewith, express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated orally or in writing, except as
provided in Section 22.
Section 21. GOVERNING LAW. THIS AGREEMENT AND EACH OF THE OTHER LOAN
DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND
SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF SAID COMMONWEALTH (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
LAW). THE BORROWERS CONSENT TO THE JURISDICTION OF ANY OF THE FEDERAL OR STATE
COURTS LOCATED IN THE COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT
TO ENFORCE THE RIGHTS OF THE BANKS UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS.
Section 22. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except as otherwise
expressly provided in this Agreement, any consent or approval required or
permitted by this Agreement to be given by the Banks may be given, and any term
of this Agreement or of any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrowers of any terms
of this Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Borrowers and the written consent of the Banks. No waiver shall extend
to or affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Agent or
the Banks in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon any Borrower shall entitle
such Borrower or any other Borrower to other or further notice or demand in
similar or other circumstances.
Section 23. NO RESTRICTIONS WITH RESPECT TO MARGIN STOCK. Notwithstanding
any other provisions of this Agreement or the Notes, and further implementing
the exceptions with respect to margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) from the restrictions on Liens
in Section 6.2, the restrictions on sale of assets in Section 6.6, and certain
defaults in Sections 9(f) and (g), (a) nothing in this Agreement or in the Notes
shall prevent any Borrower or any Subsidiary from selling, transferring,
pledging or otherwise disposing of any such margin stock, and (b) no Borrower's
or Subsidiary's right or ability to sell, transfer, pledge or otherwise dispose
of any such margin stock shall in any way be restricted while any Loan or Note
is outstanding, nor shall any such sale, transfer, pledge or other disposition
ever be the cause for acceleration of the maturity of the Notes, it being the
intention of the parties hereto that
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in no event or manner shall the Loans, the Notes or any obligations of any of
the Borrowers under this Agreement be secured, directly or indirectly, by any
such margin stock.
Section 24. TRANSITIONAL ARRANGEMENTS.
Section 24.1. PRIOR CREDIT AGREEMENT SUPERSEDED. This Agreement shall on
the Amendment Date supersede the Prior Credit Agreement in its entirety. On the
Amendment Date, the rights and obligations of the parties evidenced by the Prior
Credit Agreement shall be evidenced by this Agreement and the other Loan
Documents, the "Loans" as defined in the Prior Credit Agreement shall be
converted to Loans as defined herein and all outstanding letters of credit
issued by the Agent for the account of the Borrowers prior to the Amendment Date
shall, for purposes of this Agreement, be Letters of Credit.
Section 24.2. RETURN AND CANCELLATION OF NOTES. As soon as reasonably
practicable after the Closing Date, the Banks under the Prior Credit Agreement
will promptly return to the Borrowers, marked "Substituted" or "Cancelled", as
the case may be, any notes of the Borrowers held by the Banks pursuant to the
Prior Credit Agreement.
Section 24.3. INTEREST AND FEES UNDER PRIOR CREDIT AGREEMENT. All interest
and fees and expenses, if any, owing or accruing under or in respect of the
Prior Credit Agreement through the Amendment Date shall be calculated as of the
Amendment Date (pro rated in the case of any fractional periods), and shall be
paid on the Amendment Date. Commencing on the Amendment Date, the commitment
fees shall be payable by the Borrowers to the Agent for the account of the Banks
in accordance with Section 2.3.
Section 24.4. WAIVER OF DEFAULTS AND EVENTS OF DEFAULT. The Banks and the
Agent agree that upon the effectiveness of this Agreement, any Defaults or
Events of Defaults which may have existed under the Prior Credit Agreement shall
be deemed to be waived by the Banks and the Agent.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement under
seal as of the date first set forth above.
TRC COMPANIES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
------
Xxxxxx X. Xxxxxx, Xx.
Title: Vice President & Treasurer
-----------------------------
MONITORING INSTRUMENTS FOR THE ENVIRONMENT, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
------
Xxxxxx X. Xxxxxx, Xx.
Title: Treasurer
-----------------------------
TRC ENVIRONMENTAL
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
------
Xxxxxx X. Xxxxxx, Xx.
Title: Vice President & Treasurer
-----------------------------
TRC ENGINEERS, INC. (d/b/a/
Xxxxxxx Xxxxx Associates)
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
------
Xxxxxx X. Xxxxxx, Xx.
Title: Treasurer
-----------------------------
TRC INVESTMENT
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
------
Xxxxxx X. Xxxxxx, Xx.
Title: Treasurer
-----------------------------
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NORTH AMERICAN WEATHER CONSULTANTS
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
------
Xxxxxx X. Xxxxxx, Xx.
Title: Treasurer
-----------------------------
ENVIRONMENTAL SOLUTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
------
Xxxxxx X. Xxxxxx, Xx.
Title: Assistant Treasurer
-----------------------------
TRC MARIAH ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
------
Xxxxxx X. Xxxxxx, Xx.
Title: Assistant Treasurer
-----------------------------
TRC XXXXXX ASSOCIATES, INC.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
--------------------------------
------
Xxxxxx X. Xxxxxx, Xx.
Title: Treasurer
-----------------------------
BANKBOSTON, N.A., (f/k/a
The First National Bank of Boston),
as Agent and individually
By: /s/ Xxxxxx X. Xxxxxxxx.
--------------------------------
Xxxxxx X. Xxxxxxxx
Title: Vice President
-----------------------------
