1
EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
dated as of January 7, 2000
among
XXXXXX AUTOMATION, INC.,
ABN AMRO BANK N.V. and the other lending institutions set forth on Schedule 1
attached hereto
and
ABN AMRO BANK N.V., as Agent
2
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION.........................................................1
1.1. Definitions..........................................................................1
1.2. Rules of Interpretation..............................................................18
2. THE REVOLVING CREDIT FACILITY...................................................................20
2.1. Commitment to Lend...................................................................20
2.2. Commitment Fee.......................................................................20
2.3. Reduction of Total Commitment........................................................20
2.4. The Revolving Credit Notes...........................................................21
2.5. Interest on Revolving Credit Loans...................................................21
2.6. Requests for Revolving Credit Loans..................................................21
2.6.1. General...................................................................21
2.7. Conversion Options...................................................................22
2.7.1. Conversion to Different Type of Revolving Credit Loan.....................22
2.7.2. Continuation of Type of Revolving Credit Loan.............................22
2.7.3. LIBOR Rate Loans..........................................................23
2.8. Funds for Revolving Credit Loan......................................................23
2.8.1. Funding Procedures........................................................23
2.8.2. Advances by Agent.........................................................23
2.9. Change in Borrowing Base.............................................................24
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.........................................................24
3.1. Maturity.............................................................................24
3.2. Mandatory Repayments of Revolving Credit Loans.......................................24
3.3. Optional Repayments of Revolving Credit Loans........................................25
4. LETTERS OF CREDIT...............................................................................25
4.1. Letter of Credit Commitments.........................................................25
4.1.1. Commitment to Issue Letters of Credit.....................................25
4.1.2. Letter of Credit Applications.............................................26
4.1.3. Terms of Letters of Credit................................................26
4.1.4. Reimbursement Obligations of Banks........................................26
4.1.5. Participations of Banks...................................................27
4.2. Reimbursement Obligation of the Borrower.............................................27
4.3. Letter of Credit Payments............................................................28
4.4. Obligations Absolute.................................................................28
4.5. Reliance by Issuer...................................................................29
4.6. Letter of Credit Fee.................................................................29
5. CERTAIN GENERAL PROVISIONS......................................................................29
5.1. Closing .............................................................................29
5.2. Other Fees...........................................................................30
5.3. Funds for Payments...................................................................30
5.3.1. Payments to Agent.........................................................30
5.3.2. No Offset, etc............................................................30
5.4. Computations.........................................................................30
5.5. Inability to Determine LIBOR Rate....................................................31
3
-ii-
5.6. Illegality...........................................................................31
5.7. Additional Costs, etc................................................................32
5.8. Capital Adequacy.....................................................................33
5.9. Certificate..........................................................................34
5.10. Indemnity............................................................................34
5.11. Interest After Default...............................................................34
5.11.1. Overdue Amounts..........................................................34
5.11.2. Amounts Not Overdue......................................................34
5.12. Replacement of Banks................................................................35
6. GUARANTIES......................................................................................35
6.1. Guaranties of Subsidiaries...........................................................35
7. REPRESENTATIONS AND WARRANTIES..................................................................36
7.1. Corporate Authority..................................................................36
7.1.1. Incorporation; Good Standing..............................................36
7.1.2. Authorization.............................................................36
7.1.3. Enforceability............................................................36
7.2. Governmental Approvals...............................................................36
7.3. Title to Properties; Leases..........................................................37
7.4. Financial Statements, Projections and Solvency.......................................37
7.4.1. Fiscal Year...............................................................37
7.4.2. Financial Statements......................................................37
7.4.3. Projections...............................................................37
7.4.4. Solvency..................................................................38
7.5. No Material Changes, etc.............................................................38
7.6. Franchises, Patents, Copyrights, etc.................................................38
7.7. Litigation...........................................................................38
7.8. No Materially Adverse Contracts, etc.................................................38
7.9. Compliance with Other Instruments, Laws, etc.........................................39
7.10. Tax Status...........................................................................39
7.11. No Event of Default..................................................................39
7.12. Holding Company and Investment Compa.ny Acts.........................................39
7.13. Absence of Financing Statements, etc.................................................40
7.14. Insurance............................................................................40
7.15. Certain Transactions.................................................................40
7.16. Employee Benefit Plans...............................................................40
7.16.1. In General...............................................................40
7.16.2. Terminability of Welfare Plans...........................................41
7.16.3. Guaranteed Pension Plans.................................................41
7.16.4. Multiemployer Plans......................................................41
7.17. Use of Proceeds.....................................................................42
7.17.1. General..................................................................42
7.17.2. Regulations U and X......................................................42
7.18. Environmental Compliance............................................................42
7.19. Subsidiaries, etc...................................................................44
7.20. Chief Executive Office..............................................................44
7.21. Year 2000 Problem...................................................................44
7.22. Disclosure..........................................................................44
7.23. Capitalization Documents............................................................45
8. AFFIRMATIVE COVENANTS OF THE BORROWER...........................................................45
4
-iii-
8.1. Punctual Payment.....................................................................45
8.2. Maintenance of Office................................................................45
8.3. Records and Accounts.................................................................45
8.4. Financial Statements, Certificates and Information...................................46
8.5. Notices..............................................................................47
8.5.1. Defaults..................................................................47
8.5.2. Environmental Events......................................................47
8.5.3. Notification of Claim against Assets......................................48
8.5.4. Notice of Litigation and Judgments........................................48
8.6. Corporate Existence; Maintenance of Properties.......................................48
8.7. Insurance............................................................................49
8.7.1. Insurance.................................................................49
8.8. Taxes................................................................................49
8.9. Inspection of Properties and Books, etc..............................................49
8.9.1. General...................................................................49
8.9.2. Borrowing Base Component Reports. .......................................49
8.9.3. Appraisals. .............................................................50
8.10. Compliance with Laws, Contracts, Licenses, and Permits..............................50
8.11. Employee Benefit Plans..............................................................50
8.12. Use of Proceeds.....................................................................51
8.13. Fair Labor Standards Act............................................................51
8.14. Guarantors..........................................................................51
8.15. Additional Subsidiaries.............................................................52
8.16. Further Assurances..................................................................52
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER......................................................52
9.1. Restrictions on Indebtedness.........................................................52
9.2. Restrictions on Liens................................................................53
9.3. Restrictions on Investments..........................................................55
9.4. Restricted Payments..................................................................56
9.5. Merger, Consolidation and Disposition of Assets......................................56
9.5.1. Mergers and Acquisitions..................................................56
9.5.2. Disposition of Assets.....................................................58
9.6. Sale and Leaseback...................................................................58
9.7. Compliance with Environmental Laws...................................................59
9.8. AutoSimulations Debt.................................................................59
9.9. Employee Benefit Plans...............................................................59
9.10. Business Activities..................................................................60
9.11. Fiscal Year..........................................................................60
9.12. Transactions with Affiliates.........................................................60
9.13. Modification of Charter..............................................................60
9.14. Upstream Limitations.................................................................60
9.15. Inconsistent Agreements..............................................................61
9.16. Negative Pledge......................................................................61
10. FINANCIAL COVENANTS OF THE BORROWER............................................................61
10.1. Leverage Ratio.......................................................................61
10.2. Debt Service Coverage Ratio..........................................................61
10.3. Quick Ratio..........................................................................61
10.4. Capital Expenditures.................................................................61
11. CLOSING CONDITIONS.............................................................................62
5
-iv-
11.1. Loan Documents.......................................................................62
11.1.1. Loan Documents...........................................................62
11.2. Certified Copies of Charter Documents...............................................62
11.3. Corporate Action....................................................................62
11.4. Incumbency Certificate..............................................................62
11.5. UCC Search Results..................................................................63
11.6. Certificates of Insurance...........................................................63
11.7. Borrowing Base Report...............................................................63
11.8. Accounts Receivable Aging Report....................................................63
11.9. Solvency Certificate................................................................63
11.10. Opinion of Counsel.................................................................63
11.11. Payment of Fees....................................................................63
12. CONDITIONS TO ALL BORROWINGS...................................................................64
12.1. Representations True; No Event of Default...........................................64
12.2. No Legal Impediment.................................................................64
12.3. Governmental Regulation.............................................................64
12.4. Proceedings and Documents...........................................................64
12.5. Borrowing Base Report...............................................................65
13. EVENTS OF DEFAULT; ACCELERATION; ETC...........................................................65
13.1. Events of Default and Acceleration..................................................65
13.2. Termination of Commitments..........................................................68
13.3. Remedies............................................................................68
14. SETOFF.........................................................................................69
15. THE AGENT......................................................................................70
15.1. Authorization.......................................................................70
15.2. Employees and Agents................................................................70
15.3. No Liability........................................................................71
15.4. No Representations..................................................................71
15.4.1. General..................................................................71
15.4.2. Closing Documentation, etc...............................................71
15.5. Payments............................................................................72
15.5.1. Payments to Agent........................................................72
15.5.2. Distribution by Agent....................................................72
15.5.3. Delinquent Banks.........................................................72
15.6. Holders of Revolving Credit Notes...................................................73
15.7. Indemnity...........................................................................73
15.8. Agent as Bank.......................................................................73
15.9. Resignation.........................................................................73
15.10. Notification of Defaults and Events of Default.....................................74
16. EXPENSES AND INDEMNIFICATION...................................................................74
16.1. Expenses............................................................................74
16.2. Indemnification.....................................................................75
16.3. Survival............................................................................75
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION..................................................75
17.1. Sharing of Information with Affiliates..............................................75
17.2. Confidentiality.....................................................................76
17.3. Prior Notification..................................................................76
17.4. Other...............................................................................77
18. SURVIVAL OF COVENANTS, ETC.....................................................................77
6
-v-
19. ASSIGNMENT AND PARTICIPATION...................................................................77
19.1. Conditions to Assignment by Banks...................................................77
19.2. Certain Representations and Warranties; Limitations; Covenants......................78
19.3. Register............................................................................79
19.4. New Revolving Credit Notes..........................................................79
19.5. Participations......................................................................80
19.6. Disclosure..........................................................................80
19.7. Assignee or Participant Affiliated with the Borrower................................81
19.8. Miscellaneous Assignment Provisions.................................................81
19.9. Assignment by Borrower..............................................................82
20. NOTICES, ETC...................................................................................82
21. GOVERNING LAW..................................................................................82
22. HEADINGS.......................................................................................83
23. COUNTERPARTS...................................................................................83
24. ENTIRE AGREEMENT, ETC..........................................................................83
25. WAIVER OF JURY TRIAL...........................................................................83
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.............................................................84
27. SEVERABILITY...................................................................................84
7
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of January 7, 2000, by and
among XXXXXX AUTOMATION, INC. (the "Borrower"), a Delaware corporation having
its principal place of business at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx
00000, ABN AMRO BANK N.V. and the other lending institutions listed on SCHEDULE
1 and ABN AMRO BANK N.V. as agent for itself and such other lending
institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
ABN AMRO. ABN AMRO Bank N.V., in its individual capacity.
ACCOUNTS RECEIVABLE. All rights of the Borrower or any of the
Guarantors to payment for goods sold, leased or otherwise marketed in the
ordinary course of business and all rights of the Borrower or any of the
Guarantors 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 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 accounting principles.
ACQUISITION CLOSING DATE. The first date on which the conditions set
forth in the AutoSimulations Merger Agreement have been satisfied and the
AutoSimulations Acquisition has occurred.
ADJUSTMENT DATE. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to ss.8.4(c).
AFFILIATE. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
AGENT'S HEAD OFFICE. The Agent's head office located at 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx, or at such other location as the Agent may
designate from time to time.
AGENT. ABN AMRO Bank N.V. acting as agent for the Banks.
8
-2-
AGENT'S SPECIAL COUNSEL. Xxxxxxx Xxxx LLP or such other counsel as may
be approved by the Agent.
APPLICABLE MARGIN. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Leverage Ratio as determined for the
period ending on the fiscal quarter ended immediately preceding the applicable
Rate Adjustment Period.
------------------------------------------------------------------------------------------------------------------
LIBOR
BASE RATE RATE COMMITMENT LETTER OF
LEVEL LEVERAGE RATIO LOANS LOANS FEE RATE CREDIT RATE
------------------------------------------------------------------------------------------------------------------
I Greater than 1.00:1.00 0.75% 2.25% 0.375% 2.25%
------------------------------------------------------------------------------------------------------------------
II Less than or equal to 1.00:1.00 but 0.50% 2.00% 0.350% 2.00%
greater than or equal to 0.50:1.00
------------------------------------------------------------------------------------------------------------------
III Less than 0.50:1.00 0.25% 1.75% 0.300% 1.75%
------------------------------------------------------------------------------------------------------------------
Notwithstanding the foregoing, (a) for Revolving Credit Loans
outstanding, Letter of Credit Rate and the Commitment Fee Rate payable during
the period commencing on the Closing Date through the date immediately preceding
the first Adjustment Date to occur after December 31, 1999, the Applicable
Margin shall be at Level I set forth above and (b) if the Borrower fails to
deliver any Compliance Certificate pursuant to ss.8.4(c) hereof then, for the
period commencing on the next Adjustment Date to occur subsequent to such
failure through the date immediately following the date on which such Compliance
Certificate is delivered, the Applicable Margin shall be the highest Applicable
Margin set forth above.
ASSIGNMENT AND ACCEPTANCE. See ss.19.1.
AUTOSIMULATIONS ACQUISITION The acquisition by the Borrower on the
Acquisition Closing Date of all of the outstanding capital stock of each of
AutoSimulations, Inc., a Utah corporation and Auto Soft Corporation, a Utah
corporation, pursuant to the AutoSimulations Merger Agreement.
AUTOSIMULATIONS MERGER AGREEMENT. That certain Agreement and Plan of
Merger dated on or prior to the Closing Date by and among (a) the Borrower; (b)
ASI Merger Corp., a wholly-owned Subsidiary of the Borrower; (c) ASC Merger
Corp., a wholly-owned Subsidiary of the Borrower; (d) AutoSimulations, Inc., a
Utah corporation; (e) Auto Soft Corporation, a Utah corporation; (f) Daifuku
America Corporation, an Illinois corporation and sole stockholder of each of
AutoSimulations, Inc. and Auto Soft Corporation; and (g) Daifuku Co., Ltd., a
Japanese corporation and the parent of Daifuku America Corporation, with such
agreement to contain substantially the same terms as to the scope and nature of
the assets and liabilities being purchased and the aggregate purchase price
(including the amount of the purchase price, the type of consideration
9
-3-
which constitutes the purchase price and the timing of any payments of any
portion of the purchase price) as previously disclosed to the Agent prior to the
Closing Date.
BALANCE SHEET DATE. September 30, 1999.
BANKS. ABN AMRO and the other lending institutions listed on SCHEDULE 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to ss.19.
BASE RATE. The higher of (a) the annual rate of interest announced from
time to time by ABN AMRO at its head office in Chicago, Illinois, as its "prime
commercial lending rate" or "prime rate" (or an analogous term) and (b) one-half
of one percent (1/2%) above the Federal Funds Effective Rate. For the purposes
of this definition, "Federal Funds Effective Rate" shall mean for any day, the
rate per annum equal to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Agent from three funds brokers of recognized standing selected by the Agent.
BASE RATE LOANS. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
BORROWER. As defined in the preamble hereto.
BORROWING BASE. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to ss.8.4(e), as adjusted pursuant
to the provisions below, which is equal to the sum of:
(a) 85% of Eligible Accounts Receivable for which
invoices have been issued and are payable; PLUS
(b) the Discretionary Amount.
The Agent may, in its discretion, from time to time, upon ten (10) days' prior
notice to the Borrower, reduce the lending formula with respect to Eligible
Accounts Receivable to the extent that the Agent reasonably and in good faith
determines that the results of any commercial finance examination or a review of
any Accounts Receivable aging report delivered to the Agent indicate a material
deterioration in the Borrower's or its Subsidiaries' Eligible Accounts
Receivable from the Closing Date or from the date of the most Accounts
Receivable aging report delivered to the Agent, such that a lower advance rate
for Eligible Receivables is warranted.
10
-4-
BORROWING BASE REPORT. A Borrowing Base Report signed by a designated
officer of the Borrower and in substantially the form of EXHIBIT A hereto.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts and Chicago, Illinois are open for the transaction of banking
business and, in the case of LIBOR Rate Loans, also a day which is a LIBOR
Business Day.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
CAPITAL EXPENDITURES. Amounts paid or Indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with (a) the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or (b) the lease of any
assets by the Borrower or any of its Subsidiaries as lessee under any Synthetic
Lease to the extent that such assets would have been Capital Assets had the
Synthetic Lease been treated for accounting purposes as a Capitalized Lease;
PROVIDED, HOWEVER, for purposes of this Credit Agreement, Capital Expenditures
shall not include any Capital Expenditures made in connection with any Permitted
Acquisition.
CAPITALIZATION DOCUMENTS. Collectively, the articles of incorporation
and by-laws of the Borrower and its Subsidiaries.
CAPITALIZED LEASES. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See ss.7.18(a).
CLOSING DATE. The first date on which the conditions set forth in ss.11
have been satisfied and any Revolving Credit Loans are to be made or any Letter
of Credit is to be issued hereunder.
CODE. The Internal Revenue Code of 1986.
COMMITMENT. With respect to each Bank, the amount set forth on SCHEDULE
1 hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may
11
-5-
be reduced from time to time; or if such commitment is terminated pursuant to
the provisions hereof, zero.
COMMITMENT FEE RATE. As referred to as such in the table contained in
the definition of "Applicable Margin".
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth on SCHEDULE 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
COMPLIANCE CERTIFICATE. See ss.8.4(c) hereof.
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
CONSOLIDATED CURRENT ASSETS. All assets of the Borrower and its
Subsidiaries on a consolidated basis that, in accordance with generally accepted
accounting principles, are properly classified as current assets, PROVIDED that
(a) notes and accounts receivable shall be included only if good and collectible
as determined by the Borrower in accordance with established practice
consistently applied and, with respect to such notes, only if payable on demand
or within one (1) year from the date as of which Consolidated Current Assets are
to be determined and if not directly or indirectly renewable or extendible at
the option of the debtors, by their terms, or by the terms of any instrument or
agreement relating thereto, beyond such year; and (b) inventory shall be
included only if and to the extent that the same shall consist of saleable
finished goods ready and available for shipment to purchasers thereof.
CONSOLIDATED CURRENT LIABILITIES. All liabilities and other
Indebtedness of the Borrower and its Subsidiaries outstanding hereunder and all
liabilities and other Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis maturing on demand or within one (1) year from the date as of
which Consolidated Current Liabilities are to be determined, and such other
liabilities as may properly be classified as current liabilities in accordance
with generally accepted accounting principles, PROVIDED, (a) for purposes of
calculating liabilities of the Borrower under the Revolving Credit Loans for any
fiscal quarter, the amount shall be the average outstanding amount of Revolving
Credit Loans for such fiscal quarter; and (b) for purposes of this definition,
Consolidated Current Liabilities shall not include accruals of the Borrower and
its Subsidiaries and shall not include the Indebtedness of the Borrower to
Daifuku America Corporation incurred in connection with the AutoSimulations
Acquisition so long as such Indebtedness is subordinated to the Obligations
pursuant to the Subordination Agreement.
CONSOLIDATED NET INCOME (OR DEFICIT). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
12
-6-
accepted accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income.
CONSOLIDATED OPERATING CASH FLOW. For any period, an amount equal to
(a) EBITDA of the Borrower and its Subsidiaries for the fiscal quarter ending on
such date, LESS (b) the sum of (i) income taxes recorded on the Borrower's
financial statements pursuant to generally accepted accounting principles during
such period, PLUS (ii) to the extent not already deducted in the determination
of EBITDA, Capital Expenditures made during such period.
CONSOLIDATED TOTAL DEBT SERVICE. For any fiscal period with respect to
the Borrower and its Subsidiaries, the sum of (a) Consolidated Total Interest
Expense for such period, plus (b) any and all mandatory or required payments of
principal in respect of Indebtedness of the Borrower and its Subsidiaries made
or required to be made in such period.
CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrower and its
Subsidiaries during such period on all Indebtedness of the Borrower and its
Subsidiaries 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, including payments consisting of interest in respect of any
Capitalized Lease, or any Synthetic Lease and including commitment fees, agency
fees, facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money.
CONTROLLED ENTITY. As to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote ten percent (10%) or more of the securities having ordinary voting power
for the election of directors of such Person or (b) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.
CONVERSION REQUEST. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in accordance
with ss.2.7.
CREDIT AGREEMENT. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
DEBT SERVICE COVERAGE RATIO. As at any date of determination, the ratio
of (a) Consolidated Operating Cash Flow of the Borrower and its Subsidiaries for
the fiscal quarter most recently ended to (b) Consolidated Total Debt Service of
the Borrower and its Subsidiaries for the fiscal quarter most recently ended,
PROVIDED, HOWEVER, when calculating the Debt Service Coverage Ratio for any
period in which a Permitted Acquisition has occurred, the calculation of Debt
Service Coverage Ratio shall be made on a Pro Forma Basis.
13
-7-
DEFAULT. See ss.13.1.
DELINQUENT BANK. See ss.15.5.3.
DERIVATIVE CONTRACT. As defined in paragraph (i) of the definition of
"Indebtedness".
DISCRETIONARY AMOUNT. As at any date of determination, an amount
determined by the Agent in its sole and absolute discretion which shall not
exceed $5,000,000 at any time and which amount shall not be more than $0.00 for
more than any period of ten (10) consecutive days.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated
as such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
DOMESTIC SUBSIDIARY. A Subsidiary which is not a Foreign Subsidiary.
DRAWDOWN DATE. The date on which any Revolving Credit Loan is made or
is to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with ss.2.7.
EBITDA. With respect to the Borrower and its Subsidiaries for any
fiscal period, an amount equal to Consolidated Net Income for such period, PLUS,
to the extent deducted in the calculation of Consolidated Net Income and without
duplication, (a) depreciation and amortization for such period, (b) the one time
nonrecurring charge to be taken in the Borrower's fourth fiscal quarter of 1999
or first fiscal quarter of 2000 in an aggregate amount of not more than
$11,400,000, (c) income tax expense for such period, and (d) Consolidated Total
Interest Expense for such period, all as determined in accordance with generally
accepted accounting principles.
ELIGIBLE ACCOUNTS RECEIVABLE. 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 Receivable) (a) that the Borrower reasonably and in good faith
determines to be collectible; (b) that are with account debtors or other
obligors that (i) are not Affiliates of the Borrower (provided, however, for
purposes of this
14
-8-
Credit Agreement, Unoptic AG shall not be considered an Affiliate of the
Borrower unless it would also be a Controlled Entity), (ii) purchased the goods
or services giving rise to the relevant Account Receivable in an arm's length
transaction, and (iii) are not insolvent or involved in any case or proceeding,
whether voluntary or involuntary, under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar
law of any jurisdiction; (c) that are in payment of obligations that have been
fully performed, do not consist of progress xxxxxxxx (which for purposes of this
Credit Agreement, does not include payment of obligations under a milestone or
similar contract if such milestone or other condition to payment has been fully
satisfied and for which invoices for such payment have been issued and are
payable or, if such invoices have not been issued, which are readily
identifiable on the books and records of the Borrower as an Account Receivable
for which an invoice could, as if the date of determination, be issued and
which, if so issued, be immediately due and payable) or xxxx and hold invoices
and, if subject to any dispute or any other similar claims that would reduce the
cash amount payable therefor, that portion of such Account Receivable subject to
such dispute or claim shall be excluded from being an Eligible Account
Receivable; (d) that are not subject to any pledge, restriction, security
interest or other lien or encumbrance other than Permitted Liens permitted by
ss.9.2(b) - (e) hereof; (e) that are not outstanding for more than one hundred
twenty (120) days past the date of the respective invoices therefor; (f) that
are not due from an account debtor or other obligor located in Minnesota unless
the Borrower (i) has received a certificate of authority to do business and is
in good standing in such state or (ii) has filed a notice of business activities
report with the appropriate office or agency of such state for the current year;
(g) that are not due from any single account debtor or other obligor if more
than thirty percent (30%) of the aggregate amount of all Accounts Receivable
owing from such account debtor or other obligor would otherwise not be Eligible
Accounts Receivable; (h) that are payable in Dollars or such other currencies as
is reasonably acceptable to the Agent; and (i) for which invoices have been
issued and are payable or, if invoices have not been issued, which are readily
identifiable on the books and records of the Borrower as an Account Receivable
and for which invoices could, as of the date of determination, be issued and
which would, if so issued, be immediately due and payable.
ELIGIBLE ASSIGNEE. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, PROVIDED that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if,
15
-9-
but only if, any Event of Default has occurred and is continuing, any other
bank, insurance company, commercial finance company or other financial
institution or other Person approved by the Agent, such approval not to be
unreasonably withheld.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
ENVIRONMENTAL LAWS. See ss.7.18(a).
EPA. See ss.7.18(b).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Borrower under ss.414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.
EUROCURRENCY RESERVE RATE. For any day with respect to a LIBOR Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
EVENT OF DEFAULT. See ss.13.1.
EXCLUDED DOMESTIC SUBSIDIARIES. Collectively, Smart Machines of
California, Inc. and Midas Software, Inc., so long as such Subsidiaries continue
to have no assets and continue to be inactive Subsidiaries.
FOREIGN SUBSIDIARY. Any Subsidiary which conducts substantially all of
its business in countries other than the United States of America and that is
organized under the laws of a jurisdiction other than the United States of
America and the States (or the District of Columbia) thereof.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in ss.10,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means
16
-10-
principles that are (i) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time, and (ii) consistently applied with past financial statements of
the Borrower adopting the same principles, provided that in each case referred
to in this definition of "generally accepted accounting principles" a certified
public accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles) as
to financial statements in which such principles have been properly applied. No
"Accounting Change" (as hereinafter defined) shall affect financial covenants,
pricing, standards or other terms in this Credit Agreement; PROVIDED that the
Borrower shall prepare footnotes to each Compliance Certificate and the
financial statements required to be delivered hereunder that show the material
differences between the financial statements delivered hereunder (which reflect
such Accounting Changes) and the basis for calculating financial covenant
compliance and the Leverage Ratio set forth in computing the Applicable Margin
(in each case without reflecting such Accounting Charges). Accounting Changes
shall mean (a) changes in accounting principles required by generally accepted
accounting principles and implemented by the Borrower; and (b) changes in
accounting principles recommended by the Borrower's certified public accountants
and implemented by the Borrower.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
GUARANTOR. Collectively, (a) each Domestic Subsidiary of the Borrower
existing on the Closing Date other than the Excluded Domestic Subsidiaries and
each other Domestic Subsidiary of the Borrower which is required to be or become
a guarantor from time to time pursuant to ss.8.14 hereof and (b) each Foreign
Subsidiary of the Borrower which has delivered to the Agent an election to
become a Guarantor, duly executed by such Foreign Subsidiary and the Borrower
and which election request shall have been approved in writing by the Agent,
which approval shall be the sole and absolute discretion of the Agent.
GUARANTY. Collectively, each Guaranty, dated or to be dated on or prior
to the Closing Date or such later date as is required by ss.8.14, made by each
Guarantor in favor of the Banks and the Agent pursuant to which each Guarantor
guaranties to the Banks and the Agent the payment and performance of the
Obligations and in form and substance satisfactory to the Banks and the Agent.
HAZARDOUS SUBSTANCES. See ss.7.18(b).
INDEBTEDNESS. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
17
-11-
(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(c) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person,
(d) every obligation of such Person issued or assumed as
the deferred purchase price of property or services (including
securities repurchase agreements but excluding trade accounts payable
or accrued liabilities arising in the ordinary course of business which
are not overdue or which are being contested in good faith),
(e) every obligation of such Person under any Capitalized
Lease,
(f) every obligation of such Person under any lease (a
"Synthetic Lease") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S.
income tax purposes,
(g) all sales by such Person of (i) accounts or general
intangibles for money due or to become due, (ii) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (iii) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of
such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(h) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights,
(i) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement (including, without limitation, caps, floors, collars
and similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices (a
"Derivative Contract"),
18
-12-
(j) every obligation in respect of Indebtedness of any
other entity (including any partnership in which such Person is a
general partner) to the extent that such Person is liable therefor as a
result of such Person's ownership interest in or other relationship
with such entity, except to the extent that the terms of such
Indebtedness provide that such Person is not liable therefor and such
terms are enforceable under applicable law,
(k) every obligation, contingent or otherwise, of such
Person guaranteeing, or having the economic effect of guarantying or
otherwise acting as surety for, any obligation of a type described in
any of clauses (a) through (j) (the "primary obligation") of another
Person (the "primary obligor"), in any manner, whether directly or
indirectly, and including, without limitation, any obligation of such
Person (i) to purchase or pay (or advance or supply funds for the
purchase of) any security for the payment of such primary obligation,
(ii) to purchase property, securities or services for the purpose of
assuring the payment of such primary obligation, or (iii) to maintain
working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor
to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (x) any Synthetic Lease shall be the
stipulated loss value, termination value or other equivalent amount, (y) any
Derivative Contracts shall be the aggregate amount of the net liability amount
of the termination or loss payment required to be paid by such Person on all
Derivative Contracts if such derivative contracts were, at the time of
determination, to be terminated by reason of any event of default or early
termination event thereunder, whether or not such event of default or early
termination event has in fact occurred and (z) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.
INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the last day of
the calendar month with respect to interest accrued during such calendar month,
including, without limitation, the calendar month which includes the Drawdown
Date of such Base Rate Loan; and (b) as to any LIBOR Rate Loan in respect of
which the Interest Period is (i) three (3) months or less, the last day of such
Interest Period and (ii) more than three (3) months, the date that is three
19
-13-
(3) months from the first day of such Interest Period and, in addition, the last
day of such Interest Period.
INTEREST PERIOD. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Revolving Credit
Loan and ending on the last day of one of the periods set forth below, as
selected by the Borrower in a Loan Request or as otherwise required by the terms
of this Credit Agreement (i) for any Base Rate Loan, the last day of the
calendar month; and (ii) for any LIBOR Rate Loan, 1, 2, 3, or 6 months; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Revolving Credit Loan and ending on the last
day of one of the periods set forth above, as selected by the Borrower in a
Conversion Request; PROVIDED that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(a) if any Interest Period with respect to a LIBOR Rate Loan
would otherwise end on a day that is not a LIBOR Business Day, that
Interest Period shall be extended to the next succeeding LIBOR Business
Day unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding LIBOR Business Day;
(b) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in
ss.2.7, the Borrower shall be deemed to have requested a conversion of
the affected LIBOR Rate Loan to a Base Rate Loan and the continuance of
all Base Rate Loans as Base Rate Loans on the last day of the then
current Interest Period with respect thereto;
(d) any Interest Period relating to any LIBOR Rate Loan that
begins on the last LIBOR Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last LIBOR
Business Day of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date shall end on the Revolving Credit
Loan Maturity Date.
INTERNATIONAL STANDBY PRACTICES. With respect to any standby Letter of
Credit, International Standby Practices (ISP98), International Chamber of
Commerce Publication No. 590, or any successor code of standby letter of credit
practices among banks adopted by the Agent in the ordinary course of its
business as a standby letter of credit issuer and in effect at the time of
issuance of such Letter of Credit.
20
-14-
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
LETTER OF CREDIT. See ss.4.1.1.
LETTER OF CREDIT APPLICATION. See ss.4.1.1.
LETTER OF CREDIT FEE. See ss.4.6.
LETTER OF CREDIT PARTICIPATION. See ss.4.1.4.
LEVERAGE RATIO. As of any date of determination, the ratio of (a) Total
Funded Indebtedness of the Borrower and its Subsidiaries outstanding on such
date to (b) the EBITDA of the Borrower and its Subsidiaries for the Reference
Period ended on such date, PROVIDED, HOWEVER, when calculating the Leverage
Ratio for any period in which a Permitted Acquisition has occurred, the
calculation of the Leverage Ratio shall be made on a Pro Forma Basis.
LIBOR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
LIBOR LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining LIBOR Rate Loans.
LIBOR RATE. For any Interest Period with respect to a LIBOR Rate Loan,
the rate of interest equal to (a) the rate determined by the Agent at which
Dollar deposits for such Interest Period are offered based on information
presented on Telerate Page 3750 as of 11:00 a.m. London time on the second LIBOR
Business Day prior to the first day of such Interest Period, divided by (b) a
number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
21
-15-
LIBOR RATE LOANS. Revolving Credit Loans bearing interest calculated by
reference to the LIBOR Rate.
LOAN DOCUMENTS. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters of Credit, the Syndication Side
Letter, the Subordination Agreement and the Guaranty.
LOAN REQUEST. See ss.2.6.
MAJORITY BANKS. As of any date, the Banks holding at least fifty one
percent (51%) of the outstanding principal amount of the Revolving Credit Notes
on such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitutes at least fifty one percent (51%) of the Total
Commitment.
MATERIAL ADVERSE EFFECT. A material adverse effect on (a) the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Borrower and the Guarantors, taken as a whole; (b) the rights
and remedies of the Agent or any Bank under any Loan Document or (c) the ability
of the Borrower or any Guarantor to perform their respective obligations under
the Loan Documents.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
the Borrower and its Subsidiaries to any of the Banks and the Agent,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Revolving Credit Loans made or Reimbursement Obligations
incurred or any of the Revolving Credit Notes, Letter of Credit Application,
Letter of Credit or other instruments at any time evidencing any thereof.
OUTSTANDING. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERMITTED ACQUISITION. See ss.9.5.1.
22
-16-
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by ss.9.2.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
PRO FORMA BASIS. Following a Permitted Acquisition, Total Funded
Indebtedness (or, in the case of Consolidated Total Interest Expense, all
Indebtedness) and EBITDA for the fiscal quarter in which such Permitted
Acquisition occurred and each of the three fiscal quarters immediately following
such Permitted Acquisition being calculated with reference to the audited
historical financial results of the Person so acquired (or, to the extent such
financial results are unaudited, such unaudited results shall have been prepared
in a manner which is acceptable to the Majority Banks) and the Borrower and its
Subsidiaries for the applicable Test Period after giving effect on a pro forma
basis to such Permitted Acquisition and assuming that such Permitted Acquisition
had been consummated at the beginning of such Test Period in the manner
described in (i), (ii) and (iii) below:
(i) all Indebtedness (whether under this Credit Agreement or
otherwise) and any other balance sheet adjustments incurred or made in
connection with the Permitted Acquisition shall be deemed to have been
incurred or made on the first day of the Test Period, and all
Indebtedness of the Person acquired or to be acquired in such Permitted
Acquisition which was or will have been repaid in connection with the
consummation of the Permitted Acquisition shall be deemed to have been
repaid concurrently with the incurrence of the Indebtedness incurred in
connection with the Permitted Acquisition;
(ii) all Indebtedness assumed to have been incurred pursuant
to the preceding clause (i) shall be deemed to have borne interest at
the sum of (a) the arithmetic mean of (x) the LIBOR Rate for LIBOR Rate
Loans having an Interest Period of one month in effect on the first day
of the Test Period and (y) the LIBOR Rate for LIBOR Rate Loans having
an Interest Period of one month in effect on the last day of the Test
Period PLUS (b) the Applicable Margin for LIBOR Rate Loans then in
effect (after giving effect to the Permitted Acquisition on a PRO FORMA
Basis); and
(iii) other reasonable cost savings, expenses and other income
statement or operating statement adjustments which are acceptable to
the Majority Banks and which are attributable to the change in
ownership and/or management resulting from such Permitted Acquisition
shall be deemed to have been realized on the first day of the Test
Period.
PURCHASE PRICE. As defined in ss.9.5.1 hereof.
RATE ADJUSTMENT PERIOD. See definition of "Applicable Margin".
23
-17-
RCRA. See ss.7.18(a).
REAL ESTATE. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
RECORD. The grid attached to a Revolving Credit Note, or the
continuation of such grid, or any other similar record, including computer
records, maintained by any Bank with respect to any Revolving Credit Loan
referred to in such Revolving Credit Note.
REFERENCE PERIOD. The period of (a) four (4) consecutive fiscal
quarters of the Borrower ending on the relevant date or (b) until four (4) full
fiscal quarters of the Borrower have elapsed after September 30, 1999, such
shorter period of one, two or three full fiscal quarters, elapsed since
September 30, 1999, with the relevant amount applicable to such shorter period
annualized for the period of four (4) consecutive fiscal quarters for which the
applicable covenant or test calculation is being performed by multiplying the
relevant amount by a fraction, whose numerator is four (4) and whose denominator
is such actual number of elapsed full fiscal quarters.
REGISTER. See ss.19.3.
REIMBURSEMENT OBLIGATION. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in ss.4.2.
RESTRICTED PAYMENT. In relation to the Borrower and its Subsidiaries,
any (a) Distribution or (b) payment or prepayment by the Borrower or any
Subsidiary to any shareholder of the Borrower or to any other Affiliate of the
Borrower, a Subsidiary or a shareholder of the Borrower.
REVOLVING CREDIT LOAN MATURITY DATE. January 7, 2002.
REVOLVING CREDIT LOANS. Revolving credit loans made or to be made by
the Banks to the Borrower pursuant to ss.2.
REVOLVING CREDIT NOTES. See ss.2.4.
XXXX. See ss.7.18(a).
SUBORDINATION AGREEMENT. The Subordination Agreement dated as of the
date hereof by and among the Borrower, the Agent and Daifuku American
Corporation and in form and substance acceptable to the Agent.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
24
-18-
SYNDICATION SIDE LETTER. That certain letter agreement, dated or to be
dated on or prior to the Closing Date, between the Borrower and the Agent, and
in form and substance satisfactory to the Agent.
SYNTHETIC LEASE. As such term is defined in paragraph (f) of the
definition of "Indebtedness".
TEST PERIOD. The period of all fiscal quarters (and any portion of a
fiscal quarter) being tested in any covenant calculation period prior to the
date of such Permitted Acquisition as set forth in the definition of "Pro Forma
Basis".
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time.
TOTAL FUNDED INDEBTEDNESS. All Indebtedness of the Borrower and its
Subsidiaries for borrowed money, purchase money Indebtedness and with respect to
Capitalized Leases and Synthetic Leases, determined on a consolidated basis in
accordance with generally accepted accounting principles, PROVIDED, for purposes
of calculating Indebtedness of the Borrower under the Revolving Credit Loans for
any fiscal quarter, the amount shall be the average outstanding amount of
Revolving Credit Loans for such fiscal quarter.
TYPE. As to any Revolving Credit Loan, its nature as a Base Rate Loan
or a LIBOR Rate Loan.
UNIFORM CUSTOMS. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, ss.4.2.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
25
-19-
(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word "from" means "from and including," the words "to" and "until" each
mean "to but excluding," and the word "through" means "to and
including."
(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the
terms thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Agent and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this
Credit Agreement and the other Loan Documents are not intended to be
construed against the Agent or any of the Banks merely on account of
the Agent's or any Bank's involvement in the preparation of such
documents.
26
-20-
2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Revolving Credit Loan Maturity Date
upon notice by the Borrower to the Agent given in accordance with ss.2.6, such
sums as are requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at any one time equal
to such Bank's Commitment MINUS such Bank's Commitment Percentage of the sum of
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations, PROVIDED
that the sum of the outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested) PLUS the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not at any time exceed the lesser of (a)
the Total Commitment and (b) the Borrowing Base. The Revolving Credit Loans
shall be made PRO RATA in accordance with each Bank's Commitment Percentage.
Each request for a Revolving Credit Loan hereunder shall constitute a
representation and warranty by the Borrower that the conditions set forth in
ss.11 and ss.12, in the case of the initial Revolving Credit Loans to be made on
the Closing Date, and ss.12, in the case of all other Revolving Credit Loans,
have been satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the applicable Commitment Fee Rate on the average
daily amount during each calendar quarter or portion thereof from the date
hereof to the Revolving Credit Loan Maturity Date by which the Total Commitment
MINUS the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations exceeds the outstanding amount of Revolving Credit Loans during such
calendar quarter. The commitment fee shall be payable quarterly in arrears on
the first day of each calendar quarter for the immediately preceding calendar
quarter commencing on the first such date following the date hereof, with a
final payment on the Revolving Credit Maturity Date or any earlier date on which
the Commitments shall terminate.
2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right
at any time and from time to time upon five (5) Business Days prior written
notice to the Agent to reduce by $1,000,000 or an integral multiple of $500,000
in excess thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced PRO RATA in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this ss.2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
27
-21-
2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of EXHIBIT B hereto (each a "Revolving Credit Note"), dated as of the Closing
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Revolving Credit Note Record reflecting the
making of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on such
Bank's Record shall be PRIMA FACIE evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Revolving Credit
Note to make payments of principal of or interest on any Revolving Credit Note
when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided
in ss.5.11,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the Base Rate PLUS the Applicable Margin.
(b) Each LIBOR Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the LIBOR Rate determined for such Interest Period PLUS the Applicable
Margin.
(c) The Borrower promises to pay interest on each Revolving
Credit Loan in arrears on each Interest Payment Date with respect
thereto.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS.
2.6.1. GENERAL. The Borrower shall give to the Agent written
notice in the form of EXHIBIT C hereto (or telephonic notice confirmed
in a writing in the form of EXHIBIT C hereto) of each Revolving Credit
Loan requested hereunder (a "Loan Request") no later than (a) 10:00
a.m. (Chicago time) on the proposed Drawdown Date of any Base Rate Loan
and (b) 10:00 a.m. (Chicago time) two (2) LIBOR Business Days prior to
the proposed Drawdown Date of any LIBOR Rate Loan. Each such notice
shall specify (i) the principal amount of the Revolving Credit Loan
requested, (ii) the proposed Drawdown Date of such Revolving Credit
Loan, (iii) the Interest Period for such Revolving Credit
28
-22-
Loan and (iv) the Type of such Revolving Credit Loan. Promptly upon
receipt of any such notice, the Agent shall notify each of the Banks
thereof. Each Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Revolving Credit
Loan requested from the Banks on the proposed Drawdown Date. Each Loan
Request for a Base Rate Loan shall be in a minimum aggregate amount of
$250,000 or an integral multiple thereof, and each Loan Request for a
LIBOR Rate Loan shall be in a minimum aggregate amount of $500,000 or
an integral multiple thereof.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.
The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type,
PROVIDED that (a) with respect to any such conversion of a LIBOR Rate
Loan to a Base Rate Loan, the Borrower shall give the Agent at least
two (2) Business Days prior written notice of such election; (b) with
respect to any such conversion of a Base Rate Loan to a LIBOR Rate
Loan, the Borrower shall give the Agent at least two (2) LIBOR Business
Days prior written notice of such election; (c) with respect to any
such conversion of a LIBOR Rate Loan into a Revolving Credit Loan of
another Type, such conversion shall only be made on the last day of the
Interest Period with respect thereto and (d) no Revolving Credit Loan
may be converted into a LIBOR Rate Loan when any Default or Event of
Default has occurred and is continuing. On the date on which such
conversion is being made each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Revolving
Credit Loans to its Domestic Lending Office or its LIBOR Lending
Office, as the case may be. All or any part of outstanding Revolving
Credit Loans of any Type may be converted into a Revolving Credit Loan
of another Type as provided herein, PROVIDED that any partial
conversion shall be in an aggregate principal amount of $500,000 or a
whole multiple thereof. Each Conversion Request relating to the
conversion of a Revolving Credit Loan to a LIBOR Rate Loan shall be
irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any
Revolving Credit Loan of any Type may be continued as a Revolving
Credit Loan of the same Type upon the expiration of an Interest Period
with respect thereto by compliance by the Borrower with the notice
provisions contained in ss.2.7.1; PROVIDED that no LIBOR Rate Loan may
be continued as such when any Default or Event of Default has occurred
and is continuing, but shall be automatically converted to a Base Rate
Loan on the last day of the first Interest Period relating thereto
ending during the continuance of any Default or Event of Default of
which officers of the Agent active upon the Borrower's account have
actual knowledge. In the event that the Borrower fails to provide any
such notice with respect to the continuation of any LIBOR Rate Loan as
such,
29
-23-
then such LIBOR Rate Loan shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating
thereto. The Agent shall notify the Banks promptly when any such
automatic conversion contemplated by this ss.2.7 is scheduled to occur.
2.7.3. LIBOR RATE LOANS. Any conversion to or from LIBOR Rate
Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of
all LIBOR Rate Loans having the same Interest Period shall not be less
than $500,000 or a whole multiple of $500,000 in excess thereof.
2.8. FUNDS FOR REVOLVING CREDIT LOAN.
2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Chicago
time) on the proposed Drawdown Date of any Revolving Credit Loans, each
of the Banks will make available to the Agent, at the Agent's Head
Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit
Loans. Upon receipt from each Bank of such amount, and upon receipt of
the documents required by ss.ss.11 and 12 and the satisfaction of the
other conditions set forth therein, to the extent applicable, the Agent
will make available to the Borrower the aggregate amount of such
Revolving Credit Loans made available to the Agent by the Banks. The
failure or refusal of any Bank to make available to the Agent at the
aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Revolving Credit Loans shall not
relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment
Percentage of any requested Revolving Credit Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to
the contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the amount
of such Bank's Commitment Percentage of the Revolving Credit Loans to
be made on such Drawdown Date, and the Agent may (but it shall not be
required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the
Agent such amount on a date after such Drawdown Date, such Bank shall
pay to the Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, TIMES
(b) the amount of such Bank's Commitment Percentage of such Revolving
Credit Loans, TIMES (c) a fraction, the numerator of which is the
number of days that elapse from and including such Drawdown Date to the
date on which the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans shall become immediately available to the Agent,
and the denominator of which is 365. A statement of the Agent
30
-24-
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 the amount of such Bank's Commitment
Percentage of such Revolving Credit Loans is not made available to the
Agent by such Bank within three (3) Business Days following such
Drawdown Date, the Agent agrees to provide the Borrower with notice of
such events (PROVIDED, the Agent shall not be liable for any failure to
so deliver such notice and the failure by the Agent to provide the
Borrower with any such notice shall in no manner alter the Borrower's
obligations under this ss.2.8.2) and the Agent shall be entitled to
recover such amount from the Borrower on demand, with interest thereon
at the rate per annum applicable to the Revolving Credit Loans made on
such Drawdown Date.
2.9. CHANGE IN BORROWING BASE. The Borrowing Base shall be determined
quarterly (or at such other interval as may be specified pursuant to ss.8.4(e))
by the Agent by reference to the Borrowing Base Report delivered to the Banks
and the Agent pursuant to ss.8.4(e). The Agent shall give to the Borrower
written notice of any change in the Borrowing Base determined by the Agent. In
the case of a reduction in the lending formula with respect to Eligible Accounts
Receivable, such notice shall be effective ten (10) days after its receipt by
the Borrower.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. MATURITY. The Borrower promises to pay on the Revolving Credit
Loan Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the
sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the lesser of (a) the
Total Commitment and (b) the Borrowing Base, then the Borrower shall immediately
pay the amount of such excess to the Agent for the respective accounts of the
Banks for application: first, to any Unpaid Reimbursement Obligations; second,
to the Revolving Credit Loans; and third, to provide to the Agent cash
collateral for Reimbursement Obligations as contemplated by ss.4.2(b) and (c).
Each payment of any Unpaid Reimbursement Obligations or prepayment of Revolving
Credit Loans shall be allocated among the Banks, in proportion, as nearly as
practicable, to each Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
31
-25-
premium, PROVIDED that any full or partial prepayment of the outstanding amount
of any LIBOR Rate Loans pursuant to this ss.3.3 may be made only on the last day
of the Interest Period relating thereto. The Borrower shall give the Agent, no
later than 10:00 a.m., Chicago time, at least one (1) Business Days prior
written notice of any proposed prepayment pursuant to this ss.3.3 of Base Rate
Loans, and two (2) LIBOR Business Days notice of any proposed prepayment
pursuant to this ss.3.3 of LIBOR Rate Loans, in each case specifying the
proposed date of prepayment of Revolving Credit Loans and the principal amount
to be prepaid. Each such partial prepayment of the Revolving Credit Loans shall
be in an aggregate amount of $500,000 or integral multiple of $250,000 in excess
thereof, shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of prepayment and shall be applied, in the absence
of instruction by the Borrower, first to the principal of Base Rate Loans and
then to the principal of LIBOR Rate Loans. Each partial prepayment shall be
allocated among the Banks, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior repayments not
exactly in proportion.
4. LETTERS OF CREDIT.
4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the
Borrower of a letter of credit application on the Agent's customary
form (a "Letter of Credit Application"), the Agent on behalf of the
Banks and in reliance upon the agreement of the Banks set forth in
ss.4.1.4 and upon the representations and warranties of the Borrower
contained herein, agrees, in its individual capacity, to issue, extend
and renew for the account of the Borrower one or more standby or
documentary letters of credit (individually, a "Letter of Credit"), in
such form as may be requested from time to time by the Borrower and
agreed to by the Agent; PROVIDED, HOWEVER, that after giving effect to
such request, the sum of (a) the Maximum Drawing Amount on all Letters
of Credit, (b) all Unpaid Reimbursement Obligations, and (c) the amount
of all Revolving Credit Loans outstanding shall not exceed the lesser
of (i) the Total Commitment and (ii) the Borrowing Base.
Notwithstanding the foregoing, except in connection with Letters of
Credit issued to support Indebtedness assumed or incurred in any
connection with any Permitted Acquisition, the Agent shall have no
obligation to issue any Letter of Credit to support or secure any
Indebtedness of the Borrower or any of its Subsidiaries to the extent
that such Indebtedness was incurred prior to the proposed issuance date
of such Letter of Credit, unless in any such case the Borrower
demonstrates to the satisfaction of the Agent that (x) such prior
incurred Indebtedness were then fully secured by a prior perfected and
unavoidable security interest in collateral provided by the Borrower or
such Subsidiary to the proposed beneficiary of such Letter of Credit or
(y) such prior incurred Indebtedness were then
32
-26-
secured or supported by a letter of credit issued for the account of
the Borrower or such Subsidiary and the reimbursement obligation with
respect to such letter of credit was fully secured by a prior perfected
and unavoidable security interest in collateral provided to the issuer
of such letter of credit by the Borrower or such Subsidiary.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, and (b) have an expiry date no later
than the date which is fourteen (14) days (or, if the Letter of Credit
is confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty-five (45) days) prior to the Revolving Credit
Loan Maturity Date. Each Letter of Credit so issued, extended or
renewed shall be subject to the Uniform Customs or, in the case of a
standby Letter of Credit, either the Uniform Customs or the
International Standby Practices.
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. 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, 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 Borrower pursuant to ss.4.2 (such
agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank).
4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under ss.4.2 in an
amount equal to such payment. Each Bank shall share in accordance with
its participating interest in any interest which accrues pursuant to
ss.4.2.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
33
-27-
(a) except as otherwise expressly provided in ss.4.2(b) and
(c), on each date that any draft presented under such Letter of Credit
is honored by the Agent, or the Agent otherwise makes a payment with
respect thereto, (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 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,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.13, an amount equal to the then
Maximum Drawing Amount on all Letters of Credit, which amount shall be
held by the Agent for the benefit of the Banks and the Agent as cash
collateral for all Reimbursement Obligations.
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 Borrower under this ss.4.2 at any time from the date such amounts become due
and payable (whether as stated in this ss.4.2, 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 ss.5.11 for overdue principal on the
Revolving Credit Loans.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Agent as
provided in ss.4.2 on or before the date that such draft is paid or other
payment is made by the Agent, the Agent may at any time thereafter notify the
Banks of the amount of any such Unpaid Reimbursement Obligation. No later than
3:00 p.m. (Chicago time) on the Business Day next following the receipt of such
notice, each Bank shall make available to the Agent, at the Agent's Head Office,
in immediately available funds, such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (a)
the average, computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, TIMES (b) the amount equal to
such Bank's Commitment Percentage of such Unpaid Reimbursement Obligation, TIMES
(c) a fraction, the numerator of which is the number of days that elapse from
and including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such
34
-28-
Bank's Commitment Percentage of such Unpaid Reimbursement obligation shall
become immediately available to the Agent, and the denominator of which is 360.
The responsibility of the Agent to the Borrower and the Banks shall be only to
determine that the documents (including each draft) delivered under each Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.
4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this ss.4
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under ss.4.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted by
the Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon the
Borrower and shall not result in any liability on the part of the Agent or any
Bank to the Borrower.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.4.4,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement unless it
shall first have received such advice or concurrence of the Majority Banks as it
reasonably deems appropriate or it shall first 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 Credit Agreement in accordance with a request of the Majority
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 Revolving Credit
Notes or of a Letter of Credit Participation.
35
-29-
4.6. LETTER OF CREDIT FEE. The Borrower shall pay a fee (in each case,
a "Letter of Credit Fee") to the Agent in respect of each Letter of Credit an
amount equal to the Letter of Credit Rate per annum of the face amount of such
standby Letter of Credit, which Letter of Credit Fee shall be for the accounts
of the Banks in accordance with their respective Commitment Percentages. Such
Letter of Credit Fee shall be due and payable quarterly in arrears. In respect
of each Letter of Credit, the Borrower shall also pay to the Agent for the
Agent's own account, at such other time or times as such charges are customarily
made by the Agent, the Agent's customary issuance, amendment, negotiation or
document examination and other administrative fees as in effect from time to
time.
5. CERTAIN GENERAL PROVISIONS.
5.1. CLOSING . The Borrower agrees to pay to the Agent for the PRO RATA
accounts of the Banks on the Closing Date a closing fee in the amount set forth
in the Syndication Side Letter.
5.2. OTHER FEES. The Borrower shall pay to the Agent those other fees,
if any, provided for in the Syndication Side Letter, such fees to be due and
payable at the times specified in such Syndication Side Letter.
5.3. FUNDS FOR PAYMENTS.
5.3.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan
Documents shall be made on the due date thereof to the Agent in
Dollars, for the respective accounts of the Banks and the Agent, at the
Agent's Head Office or at such other place that the Agent may from time
to time designate, in each case at or about 11:00 a.m. (Chicago,
Illinois, time or other local time at the place of payment) and in
immediately available funds.
5.3.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without
recoupment, setoff or counterclaim and free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions
of any nature now or hereafter imposed or levied by any jurisdiction or
any political subdivision thereof or taxing or other authority therein
unless the Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrower with
respect to any amount payable by it hereunder or under any of the other
Loan Documents, the Borrower will pay to the Agent, for the account of
the Banks or (as the case may be) the Agent, on the date on which such
amount is due and payable hereunder or under such other Loan Document,
such additional amount in Dollars as shall be necessary to enable the
Banks or the Agent to receive the same net amount which the
36
-30-
Banks or the Agent would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver
promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments
made by the Borrower hereunder or under such other Loan Document.
5.4. COMPUTATIONS. All computations of interest on the Base Rate Loans
and of commitment fees, Letter of Credit Fees or other fees shall, unless
otherwise expressly provided herein, be based on a 365-day year and paid for the
actual number of days elapsed, and all computations of interest on the LIBOR
Rate Loans shall be based on a 360-day year and paid for the actual number of
days elapsed. Except as otherwise provided in the definition of the term
"Interest Period" with respect to LIBOR Rate Loans, whenever a payment hereunder
or under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Revolving Credit Loans as reflected on the Records
from time to time shall be considered correct and binding on the Borrower unless
within five (5) Business Days after receipt of any notice by the Agent or any of
the Banks of such outstanding amount, the Agent or such Bank shall notify the
Borrower to the contrary.
5.5. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent
shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the LIBOR Rate that would
otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan
during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to LIBOR Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR Rate
Loan will automatically, on the last day of the then current Interest Period
relating thereto, become a Base Rate Loan, and (c) the obligations of the Banks
to make LIBOR Rate Loans shall be suspended until the Agent or the Majority
Banks determine that the circumstances giving rise to such suspension no longer
exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrower and the Banks.
5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
LIBOR Rate Loans, such Bank shall forthwith give notice of such circumstances to
the Borrower and the other Banks and thereupon (a) the commitment of such Bank
to make LIBOR Rate Loans or convert Revolving Credit Loans of another Type to
LIBOR Rate Loans shall forthwith be suspended and (b) such Bank's Revolving
Credit Loans then outstanding as LIBOR Rate Loans, if any, shall be converted
automatically to Base Rate Loans on the last day of each Interest Period
applicable to such LIBOR Rate Loans or within such earlier
37
-31-
period as may be required by law. The Borrower hereby agrees promptly to pay the
Agent for the account of such Bank, upon demand by such Bank, any additional
amounts necessary to compensate such Bank for any costs incurred by such Bank in
making any conversion in accordance with this ss.5.6, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its LIBOR Rate Loans hereunder.
5.7. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Bank's Commitment or the Revolving Credit Loans (other
than taxes based upon or measured by the income or profits of such Bank
or the Agent), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Revolving Credit Loans or any other
amounts payable to any Bank or the Agent under this Credit Agreement or
any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Revolving Credit Loans, such
Bank's Commitment, or any class of loans, letters of credit or
commitments of which any of the Revolving Credit Loans or such Bank's
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Revolving Credit Loans or such Bank's Commitment or any
Letter of Credit, or
38
-32-
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank
or the Agent hereunder on account of such Bank's Commitment,
any Letter of Credit or any of the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or Reimbursement Obligation
or other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from
the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum, PROVIDED that the Borrower shall not be liable to any
Bank or the Agent for costs incurred more than sixty (60) days prior to receipt
by the Borrower of such demand for payment from such Bank or, as the case may
be, the Agent, unless such costs were incurred prior to such sixty (60) day
period as a result of such present or future applicable law being retroactive to
a date which occurred prior to such sixty (60) day period.
5.8. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Revolving Credit Loans to a level below that which such Bank or
the Agent could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's or the Agent's then existing policies
with respect to capital adequacy and assuming full utilization of such entity's
capital) by any amount deemed by such Bank or (as the case may be) the Agent to
be material, then such Bank or the Agent may notify the Borrower of such fact.
To the extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate, the Borrower and such Bank shall thereafter attempt
to negotiate in good faith, within thirty (30) days of the day on which the
Borrower receives such notice, an adjustment payable hereunder that will
adequately compensate such Bank in light of these circumstances. If the Borrower
and such Bank are unable to agree to such adjustment within thirty (30) days of
the date on which the Borrower receives such notice, then commencing on the date
of such notice (but not earlier than the effective date of
39
-33-
any such increased capital requirement), the fees payable hereunder shall
increase by an amount that will, in such Bank's reasonable determination,
provide adequate compensation; PROVIDED that the Borrower shall not be liable to
any Bank or the Agent for costs incurred more than sixty (60) days prior to
receipt by the Borrower of the notice referred to in the immediately preceding
sentence from such Bank or the Agent, as the case may be. Each Bank shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
5.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to ss.ss.5.7 or 5.8 and a reasonably detailed explanation of
such amounts which are due, submitted by any Bank or the Agent to the Borrower,
shall be conclusive, absent manifest error, that such amounts are due and owing.
5.10. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any LIBOR Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its LIBOR Rate Loans, (b) default by the
Borrower in making a borrowing or conversion after the Borrower has given (or is
deemed to have given) a Loan Request or a Conversion Request relating thereto in
accordance with ss.2.6 or ss.2.7 or (c) the making of any payment of a LIBOR
Rate Loan or the making of any conversion of any such Revolving Credit Loan to a
Base Rate Loan on a day that is not the last day of the applicable Interest
Period with respect thereto, including interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain any such Revolving Credit
Loans.
5.11. INTEREST AFTER DEFAULT.
5.11.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Revolving Credit Loans and
all other overdue amounts payable hereunder or under any of the other
Loan Documents shall bear interest compounded monthly and payable on
demand at a rate per annum equal to two percent (2%) above the rate of
interest otherwise applicable to such Revolving Credit Loans pursuant
to ss.2.5 until such amount shall be paid in full (after as well as
before judgment).
5.11.2. AMOUNTS NOT OVERDUE. During the continuance of a
Default or an Event of Default the principal of the Revolving Credit
Loans not overdue shall, until such Default or Event of Default has
been cured or remedied or such Default or Event of Default has been
waived by the Majority Banks pursuant to ss.26, bear interest at a rate
per annum equal to two percent (2%) above the rate of interest
otherwise applicable to such Revolving Credit Loans pursuant to ss.2.5.
40
-34-
5.12. REPLACEMENT OF BANKS. Within thirty (30) days after (a) any Bank
had demanded compensation from the Borrower pursuant to ss.ss.5.7 or 5.8 hereof,
or (b) there shall have occurred a change in law with respect to any Bank as a
consequence of which it shall have become unlawful for such Bank to make a LIBOR
Rate Loan on any Drawdown Date, as described in ss.5.6 hereof (any such Bank
described in the foregoing clauses (a) or (b) is hereinafter referred to as an
"Affected Bank"), the Borrower may request that the other Banks (collectively,
the "Non-Affected Banks") acquire all, but not less than all, of the Affected
Bank's Commitment or may designate a replacement bank or banks, which must be an
Eligible Assignee and which also must be reasonably acceptable to the Agent, to
acquire and assume all or any portion of the outstanding Revolving Credit Loans
and Commitment of the Affected Bank (the "Replacement Bank"). If the Borrower so
requests the Non-Affected Banks to acquire all or a portion of the Affected
Bank's Commitment, the Non-Affected Banks may elect to acquire all or any
portion of the Affected Banks outstanding Revolving Credit Loans and to assume
all or any portion of the Affected Bank's Commitment. If the Non-Affected Banks
do not elect to acquire and assume all or any portion of the Affected Bank's
outstanding Revolving Credit Loans and Commitment, the Replacement Bank may
acquire and assume that portion of the outstanding Revolving Credit Loans and
Commitments of the Affected Bank not otherwise acquired or assumed by the
Non-Affected Banks. The provisions of ss.19 hereof shall apply to all
reallocations pursuant to this ss.5.12, and the Affected Bank and any
Non-Affected Banks and/or replacement banks which are to acquire the Revolving
Credit Loans and Commitment of the Affected Bank shall execute and deliver to
the Agent, in accordance with the provisions of ss.19 hereof, such Assignments
and Acceptances and other instruments, including, without limitation, the
Revolving Credit Notes, as are required pursuant to ss.19 hereof to give effect
to such reallocations. On the effective date of the applicable Assignment and
Acceptance, the Borrower shall pay to the Affected Bank all interest accrued on
its Revolving Credit Loans up to but excluding such date, along with any fees
payable to such Affected Bank hereunder up to but excluding such date.
6. GUARANTIES.
6.1. GUARANTIES OF SUBSIDIARIES. The Obligations shall be guaranteed
pursuant to the terms of the Guaranty.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as
follows:
7.1. CORPORATE AUTHORITY.
7.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and
the Guarantors (a) is a corporation duly organized, validly existing
and in good standing under the laws of its state or other jurisdiction
of incorporation, (b) has all requisite corporate power to own its
property
41
-35-
and conduct its business as now conducted and as presently
contemplated, and (c) is in good standing as a foreign corporation and
is duly authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so qualified
would not have a Material Adverse Effect.
7.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which the
Borrower or any Guarantor is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the
corporate authority of such Person, (b) have been duly authorized by
all necessary corporate proceedings, (c) do not conflict with or result
in any breach or contravention of any provision of law, statute, rule
or regulation to which the Borrower or any Guarantor is subject or any
judgment, order, writ, injunction, license or permit applicable to the
Borrower or any Guarantor and (d) do not conflict with any provision of
the corporate charter or bylaws of, or any agreement or other
instrument binding upon, the Borrower or any Guarantor.
7.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Borrower or
any Guarantor is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it 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.
7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any Guarantor of this Credit Agreement and the other Loan
Documents to which the Borrower or any Guarantor is or is to become a party and
the transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority other than
those already obtained.
7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 7.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
7.4. FINANCIAL STATEMENTS, PROJECTIONS AND SOLVENCY.
42
-36-
7.4.1. FISCAL YEAR. The Borrower and each Guarantor has a
fiscal year which is the twelve months ending on September 30 of each
calendar year.
7.4.2. FINANCIAL STATEMENTS. There has been furnished to each
of the Banks a consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date, and a consolidated statement
of income of the Borrower and its Subsidiaries for the fiscal year then
ended, certified by PricewaterhouseCoopers LLP. Such balance sheet and
statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present the financial
condition of the Borrower as at the close of business on the date
thereof and the results of operations for the fiscal year then ended.
There are no contingent liabilities of the Borrower or any of its
Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower, which were not disclosed in such balance
sheet and the notes related thereto and which could reasonably be
expected to have a Material Adverse Effect.
7.4.3. PROJECTIONS. The projections of the annual operating
budgets of the Borrower and its Subsidiaries on a consolidated basis,
balance sheets and cash flow statements for the 2000 to 2001 fiscal
years, copies of which have been delivered to each Bank, disclose all
assumptions made with respect to general economic, financial and market
conditions used in formulating such projections. To the knowledge of
the Borrower or any of its Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any material change
in any of such projections. The projections are based upon reasonable
estimates and assumptions, have been prepared on the basis of the
assumptions stated therein and reflect the reasonable estimates of the
Borrower and its Subsidiaries of the results of operations and other
information projected therein.
7.4.4. SOLVENCY. The Borrower and its Subsidiaries, on a
consolidated basis, both before and after giving effect to the
transactions contemplated by this Credit Agreement and the other Loan
Documents (a) are solvent; (b) have assets having a fair value in
excess of their liabilities; (c) have assets having a fair value in
excess of the amount required to pay their liabilities on existing
debts as such debts become due and payable, and (d) have, and expect to
continue to 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 with the operation of their business as such debts
mature.
7.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the consolidated statement of income for the fiscal year then ended,
43
-37-
other than changes in the ordinary course of business that have not had any
Material Adverse Effect. Since the Balance Sheet Date, the Borrower has not made
any Distributions.
7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and
each Guarantor possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, reasonably
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others.
7.7. LITIGATION. Except as set forth in SCHEDULE 7.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against the Borrower or any of its Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, could
reasonably be expected, either in any case or in the aggregate, to have a
Material Adverse Effect or which question the validity of this Credit Agreement
or any of the other Loan Documents, or any action taken or to be taken pursuant
hereto or thereto.
7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Except as set forth on
SCHEDULE 7.8 hereto, neither the Borrower nor any of its Subsidiaries is subject
to any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is expected in the future to have a
Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries is a
party to any contract or agreement that has or is expected, in the judgment of
the Borrower's officers, to have any Material Adverse Effect.
7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower
nor any Guarantor is in violation of any provision of its charter documents,
bylaws, or any agreement or instrument to which it may be subject or by which it
or any of its properties may be bound or any decree, order, judgment, statute,
license, rule or regulation, in any of the foregoing cases in a manner that
could result in the imposition of substantial penalties or have a Material
Adverse Effect.
7.10. TAX STATUS. Except as set forth on SCHEDULE 7.10 hereto, the
Borrower and its Subsidiaries (a) have made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them is subject, except for those filings which the
failure to so file could not reasonably be expected to have a Material Adverse
Effect and where the Borrower reasonably believes it has maintained adequate
reserves for the payment of any obligations thereunder, (b) have paid all taxes
and other governmental assessments and charges shown or determined to be due on
such returns, reports and declarations, except those being contested in good
faith and by appropriate proceedings, the non-payment of which could not
reasonably be expected to have a Material Adverse Effect and (c) have set aside
on their books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the
44
-38-
Borrower know of no basis for any such claim. The Borrowing Base Report most
recently delivered to the Agent sets forth the amount of reserves established by
the Borrower and each of its Domestic Subsidiaries to, in the reasonable
judgment of the Borrower, are adequate to cover the Borrower's or such Domestic
Subsidiary's sales or use tax obligations in each jurisdiction where the
Borrower or such Domestic Subsidiary is required to pay such taxes. Such
reserves are adequate for the payment of all of such obligations.
7.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
7.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.
7.14. INSURANCE. The Borrower and each of the Guarantors maintains with
financially sound and reputable insurers insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices and with the details of such coverage
being more fully described on SCHEDULE 7.14 hereto.
7.15. CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE 7.15 hereto
and except for arm's length transactions pursuant to which the Borrower or any
of its Subsidiaries makes payments in the ordinary course of business upon terms
no less favorable than the Borrower or such Subsidiary could obtain from third
parties, none of the officers, directors, or employees of the Borrower or any of
its Subsidiaries is presently a party to any transaction with the Borrower or
any of its Subsidiaries (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
7.16. EMPLOYEE BENEFIT PLANS.
45
-39-
7.16.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in compliance
in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions and the
bonding of fiduciaries and other persons handling plan funds as
required by ss.412 of ERISA. The Borrower has heretofore delivered to
the Agent the most recently completed annual report, Form 5500, with
all required attachments, and actuarial statement required to be
submitted under ss.103(d) of ERISA, with respect to each Guaranteed
Pension Plan.
7.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit
Plan, which is an employee welfare benefit plan within the meaning of
ss.3(1) or ss.3(2)(B) of ERISA, provides benefit coverage subsequent to
termination of employment, except as required by Title I, Part 6 of
ERISA or the applicable state insurance laws. The Borrower may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of
the Borrower without liability to any Person other than for claims
arising prior to termination.
7.16.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of ss.302(f) of ERISA, or otherwise, has been timely
made. No waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any Guaranteed
Pension Plan, and neither the Borrower nor any ERISA Affiliate is
obligated to or has posted security in connection with an amendment to
a Guaranteed Pension Plan pursuant to ss.307 of ERISA or ss.401(a)(29)
of the Code. No liability to the PBGC (other than required insurance
premiums, all of which have been paid) has been incurred by the
Borrower or any ERISA Affiliate with respect to any Guaranteed Pension
Plan and there has not been any ERISA Reportable Event (other than an
ERISA Reportable Event as to which the requirement of 30 days notice
has been waived), or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the
PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed
for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets
of any Guaranteed Pension Plan with assets in excess of benefit
liabilities.
7.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial
46
-40-
withdrawal from such Multiemployer Plan under ss.4201 of ERISA or as a
result of a sale of assets described in ss.4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and within
the meaning of ss.4241 or ss.4245 of ERISA or is at risk of entering
reorganization or becoming insolvent, or that any Multiemployer Plan
intends to terminate or has been terminated under ss.4041A of ERISA.
7.17. USE OF PROCEEDS.
7.17.1. GENERAL. The proceeds of the Revolving Credit Loans
shall be used for working capital and general corporate purposes
(including, without limitation, financing all or any portion of a
Permitted Acquisition). The Borrower will obtain Letters of Credit
solely for working capital and general corporate purposes (including,
without limitation, financing all or any portion of a Permitted
Acquisition).
7.17.2. REGULATIONS U AND X. No portion of any Revolving
Credit Loan is to be used, and no portion of any Letter of Credit is to
be obtained, for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations U and
X of the Board of Governors of the Federal Reserve System, 12 C.F.R.
Parts 221 and 224.
7.18. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such diligent
investigation, has determined that:
(a) none of the Borrower, its Domestic Subsidiaries or any
operator of the Real Estate or any operations thereon is in violation,
or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), the
Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which violation could
reasonably be expected to have a Material Adverse Effect;
(b) neither the Borrower nor any of its Domestic 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
00
-00-
Xxxxxxxx X; (ii) that any hazardous waste, as defined by 42 U.S.C.
ss.6903(5), any hazardous substances as defined by 42 U.S.C.
ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
ss.9601(33) and any toxic substances, 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 its Domestic 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, or legal
or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as set forth on SCHEDULE 7.18 attached hereto: (i)
to the Borrower's knowledge, no portion of the Real Estate has been
used for the handling, processing, storage or disposal of Hazardous
Substances except in accordance with applicable Environmental Laws;
and, to the Borrower's knowledge, no underground tank or other
underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any activities
conducted by the Borrower, its Subsidiaries or operators of its
properties, no Hazardous Substances have been generated or are being
used on the Real Estate except in accordance with applicable
Environmental Laws, except where such noncompliance could not
reasonably be expected to have a Material Adverse Effect; (iii) to the
Borrower's knowledge, there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which releases would
have a material adverse effect on the value of any of the Real Estate
or adjacent properties or the environment; (iv) to the Borrower's
knowledge, there have been no releases on, upon, from or into any real
property in the vicinity of any of the Real Estate which, through soil
or groundwater contamination, may have come to be located on, and which
would have a material adverse effect on the value of, the Real Estate;
and (v) in addition, any Hazardous Substances that have been generated
by or on behalf of the Borrower or its Subsidiaries on any of the Real
Estate have, to the Borrower's knowledge, been transported offsite only
by carriers having an identification number issued by the EPA, treated
or disposed of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the
Borrower's knowledge, operating in compliance with such permits and
applicable Environmental Laws; and
48
-42-
(d) None of the Borrower and its Domestic Subsidiaries or any
of the other Real Estate is subject to any applicable environmental law
requiring the performance of Hazardous Substances site assessments, or
the removal or remediation of Hazardous Substances, or the giving of
notice to any governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby, or as a
condition to the effectiveness of any other transactions contemplated
hereby.
7.19. SUBSIDIARIES, ETC. SCHEDULE 7.19(a) sets forth the Subsidiaries
of the Borrower. Except as set forth on SCHEDULE 7.19(b) hereto, neither the
Borrower nor any Subsidiary of the Borrower is engaged in any joint venture or
partnership with any other Person.
7.20. CHIEF EXECUTIVE OFFICE. The Borrower's chief executive office is
at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000, at which location its
books and records are kept. Each Guarantor's chief executive office is as set
forth in the Guaranty to which it is a party.
7.21. YEAR 2000 PROBLEM. The Borrower and its Subsidiaries have (a)
reviewed the areas within their businesses and operations which could be
adversely affected by failure to become "Year 2000 Compliant" (i.e. that
computer applications, imbedded microchips and other systems used by the
Borrower or any of its Subsidiaries or any of its material vendors, will be able
properly to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (b) developed a
detailed plan and timetable to become Year 2000 Compliant in a timely manner,
and (c) committed adequate resources to support the Year 2000 plan of the
Borrower and its Subsidiaries. Based upon such review, the Borrower reasonably
believes that the Borrower and its Subsidiaries will become "Year 2000
Compliant" in a timely manner except to the extent that failure to do so will
not have a Material Adverse Effect.
7.22. DISCLOSURE. None of this Credit Agreement or any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements herein or
therein not misleading. There is no fact known to the Borrower or any of its
Subsidiaries which materially adversely affects, or which is reasonably likely
in the future to have a Material Adverse Effect, exclusive of effects resulting
from changes in general economic conditions, legal standards or regulatory
conditions.
7.23. CAPITALIZATION DOCUMENTS. The Borrower and each Guarantor have
delivered to the Agent true and complete copies of all of the Capitalization
Documents and neither the Borrower nor any Guarantor has amended any such
documents in any material respects, except as may have been disclosed to and
consented to by the Agent.
49
-43-
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Revolving Credit Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the commitment fees, the
Agent's fee and all other amounts provided for in this Credit Agreement and the
other Loan Documents to which the Borrower or any Guarantor is a party, all in
accordance with the terms of this Credit Agreement and such other Loan
Documents.
8.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in Chelmsford, Massachusetts, or at such other place in the
United States of America as the Borrower shall designate upon written notice to
the Agent, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents to which the Borrower is a party may be given or
made.
8.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and 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, (b) maintain in the reasonable judgment of the
Borrower adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties and the
properties of its Subsidiaries, contingencies, and other reserves, and (c) at
all times engage PricewaterhouseCoopers LLP or other independent certified
public accountants reasonably satisfactory to the Agent as the independent
certified public accountants of the Borrower and its Subsidiaries and will not
permit more than thirty (30) days to elapse between the cessation of such firm's
(or any successor firm's) engagement as the independent certified public
accountants of the Borrower and its Subsidiaries and the appointment in such
capacity of a successor firm as shall be reasonably satisfactory to the Agent.
8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its Subsidiaries, each
as at the end of such year, and the related consolidated statement of
income and consolidated statement of cash flow and consolidating
statement of income and consolidating statement of cash flow for such
year, each
50
-44-
setting forth in comparative form the figures for the previous fiscal
year and all such consolidated and consolidating statements to be in
reasonable detail, prepared in accordance with generally accepted
accounting principles, and, solely with respect to such consolidated
statements, certified without qualification by PricewaterhouseCoopers
LLP or by other independent certified public accountants reasonably
satisfactory to the Agent, together with a written statement from such
accountants to the effect that they have read a copy of this Credit
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
forty-five (45) days after the end of each of the first three fiscal
quarters in each fiscal year of the Borrower, copies of the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries and the
unaudited consolidating balance sheet of the Borrower and its
Subsidiaries, each as at the end of such quarter, and the related
consolidated statement of income and consolidated statement of cash
flow and consolidating statement of income and consolidating statement
of cash flow for the portion of the Borrower's fiscal year then
elapsed, all in reasonable detail and prepared in accordance with
generally accepted accounting principles, together with a certification
by the principal financial or accounting officer of the Borrower that
the information contained in such financial statements fairly presents
the financial position of the Borrower and its Subsidiaries on the date
thereof (subject to year-end adjustments);
(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer of the
Borrower in substantially the form of EXHIBIT D hereto (the "Compliance
Certificate") and setting forth in reasonable detail computations
evidencing compliance with the covenants contained in ss.10 and (if
applicable) reconciliations to reflect changes in generally accepted
accounting principles since the Balance Sheet Date;
(d) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities
and Exchange Commission or sent to the stockholders of the Borrower;
(e) within forty-five (45) days after the end of each fiscal
quarter or at such earlier time as the Agent may reasonably request, a
Borrowing Base Report setting forth the Borrowing Base as at the end of
such fiscal quarter or other date so requested by the Agent;
51
-45-
(f) within forty-five (45) days after the end of each fiscal
quarter, an Accounts Receivable aging report;
(g) as soon as practicable, but in any event not later than
September 30 of each year, annual projections of the Borrower and its
Subsidiaries (such projections to include, without limitation, the
balance sheet, income statement and cash flow statement of the Borrower
and its Subsidiaries on a quarterly basis); and
(h) from time to time such other financial data and
information (including accountants, management letters) as the Agent
may reasonably request.
8.5. NOTICES.
8.5.1. DEFAULTS. The Borrower will promptly notify the Agent
and each of the Banks in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take any other
action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note,
evidence of indebtedness, indenture or other obligation in an amount in
excess of $500,000 to which or with respect to which the Borrower or
any of its Subsidiaries is a party or obligor, whether as principal,
guarantor, surety or otherwise, the Borrower shall forthwith give
written notice thereof to the Agent and each of the Banks, describing
the notice or action and the nature of the claimed default.
8.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give
notice to the Agent and each of the Banks (a) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports
in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal,
state or local environmental agency and (b) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental
liability, of any federal, state or local environmental agency or
board, that has the potential to have a Material Adverse Effect.
8.5.3. NOTIFICATION OF CLAIM AGAINST ASSETS. The Borrower
will, immediately upon becoming aware thereof, notify the Agent and
each of the Banks in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims), withholdings or
other defenses to which any of the Borrower's or any Guarantor's assets
are subject.
8.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will,
and will cause each of its Subsidiaries to, give notice to the Agent
and each of the Banks in writing within fifteen (15) Business Days of
becoming aware of any litigation or proceedings threatened in writing
or any pending litigation and proceedings affecting the Borrower or any
of
52
-46-
its Subsidiaries or to which the Borrower or any of its Subsidiaries is
or becomes a party involving an uninsured claim against the Borrower or
any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect and stating the nature and status of such
litigation or proceedings. The Borrower will, and will cause each of
its Subsidiaries to, give notice to the Agent and each of the Banks, in
writing, in form and detail reasonably satisfactory to the Agent,
within fifteen (15) Business Days of any judgment not covered by
insurance, final or otherwise, against the Borrower or any of its
Subsidiaries in an amount in excess of $500,000.
8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises and those of the
Guarantors and will not, and will not cause or permit any of the Guarantors to,
convert to a limited liability company. It (a) will cause all of its properties
and those of its Subsidiaries used or useful in the conduct of its business or
the business of its Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment, (b) will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Borrower may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and (c) will, and will cause each of its
Subsidiaries to, continue to engage primarily in the businesses now conducted by
them and in related businesses; PROVIDED that nothing in this ss.8.6 shall
prevent the Borrower from discontinuing the operation and maintenance of any of
its properties or any of those of its Subsidiaries if such discontinuance is, in
the judgment of the Borrower, desirable in the conduct of its or their business
and that do not in the aggregate have a Material Adverse Effect.
8.7. INSURANCE.
8.7.1. INSURANCE. The Borrower will, and will cause each of
its Subsidiaries to, maintain with financially sound and reputable
insurers insurance with respect to its properties and business against
such casualties and contingencies as shall be in accordance with the
general practices of businesses engaged in similar activities in
similar geographic areas and in amounts, containing such terms, in such
forms and for such periods as may be reasonable and prudent.
8.8. TAXES. The Borrower will, and will cause each of its Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; PROVIDED that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such
53
-47-
Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and PROVIDED FURTHER that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
8.9.1. GENERAL. The Borrower shall permit the Banks, through
the Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and
to discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Agent or
any Bank may reasonably request.
8.9.2. BORROWING BASE COMPONENT REPORTS. Upon the reasonable
request of the Agent, and upon reasonable advance notice, or without
any notice if an Event of Default shall have occurred and be
continuing, upon the request of the Agent, the Borrower will obtain and
deliver to the Agent, or, if the Agent so elects, will cooperate with
the Agent in the Agent's obtaining, a report of an independent
collateral auditor reasonably satisfactory to the Agent (which may be
affiliated with one of the Banks) with respect to the Accounts
Receivable included in the Borrowing Base, which report shall indicate
whether or not the information set forth in the Borrowing Base Report
most recently delivered is accurate and complete in all material
respects based upon a review by such auditors of the Accounts
Receivable (including verification with respect to the amount, aging,
identity and credit of the respective account debtors and the billing
practices of the Borrower or its applicable Subsidiary). All such
collateral value reports shall be conducted and made at the expense of
the Borrower.
8.9.3. APPRAISALS. Upon the reasonable request of the Agent,
and upon reasonable advance notice, or without any notice if an Event
of Default shall have occurred and be continuing, upon the request of
the Agent, the Borrower will obtain and deliver to the Agent appraisal
reports in form and substance and from appraisers reasonably
satisfactory to the Agent, stating the then current business value of
each of the Borrower and its Subsidiaries. All such appraisals shall be
conducted and made at the expense of the Borrower.
8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to, comply in all
material respects with (a) the applicable laws and regulations wherever its
business is conducted, including all Environmental Laws except where such
noncompliance could not reasonably be expected to have a Material Adverse
Effect, (b) the
54
-48-
provisions of its charter documents and by-laws, (c) all agreements and
instruments by which it or any of its properties may be bound except where such
noncompliance could not reasonably be expected to have a Material Adverse Effect
and (d) all applicable decrees, orders, and judgments except where such
noncompliance could not reasonably be expected to have a Material Adverse
Effect. If any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that the Borrower or any of its Subsidiaries may fulfill any
of its obligations hereunder or any of the other Loan Documents to which the
Borrower or such Subsidiary is a party, the Borrower will, or (as the case may
be) will cause such Subsidiary to, immediately take or cause to be taken all
reasonable steps within the power of the Borrower or such Subsidiary to obtain
such authorization, consent, approval, permit or license and furnish the Agent
and the Banks with evidence thereof.
8.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon
filing the same with the Department of Labor or Internal Revenue Service,
furnish to the Agent a copy of the most recent actuarial statement required to
be submitted under ss.103(d) of ERISA and Annual Report, Form 5500, with all
required attachments, in respect of each Guaranteed Pension Plan and (b)
promptly upon receipt or dispatch, furnish to the Agent any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan under ss.ss.302,
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.
8.12. USE OF PROCEEDS. The Borrower will use the proceeds of the
Revolving Credit Loans solely for working capital and general corporate purposes
(including, without limitation, financing all or any portion of a Permitted
Acquisition). The Borrower will obtain Letters of Credit solely for working
capital and general corporate purposes (including, without limitation, finance
all or any portion of a Permitted Acquisition).
8.13. FAIR LABOR STANDARDS ACT. The Borrower shall, and shall require
each Domestic Subsidiary to, at all times operate its business in compliance
with all material applicable provisions of the Fair Labor Standards Act of 1938,
as amended.
8.14. GUARANTORS. The Borrower will cause each Domestic Subsidiary
created, acquired, formed or otherwise existing on or after the Closing Date to
immediately become a Guarantor on the Closing Date (or within thirty (30) days
of having been acquired, formed or otherwise comes into existence) and shall
cause such Domestic Subsidiary to execute and deliver to the Agent for the
benefit of the Agent and the Banks a Guaranty, together with legal opinions in
substantially the same form as the legal opinions delivered pursuant to ss.11.10
hereof, to be delivered to the Agent and the Banks opining as to the
authorization, validity and enforceability of such Guaranty and as to the due
incorporation and legal existence of such Domestic Subsidiary. In addition, to
the extent any Foreign Subsidiary has elected to become a Guarantor hereunder
and the Agent has approved such election, the Borrower will cause
55
-49-
such Foreign Subsidiary to execute and deliver to the Agent for the benefit of
the Agent and the Banks a Guaranty in form and substance acceptable to the
Agent, together with legal opinions in form and substance acceptable to the
Agent opining as to the authorization, validity and enforceability of such
Guaranty, as to due incorporation and legal existence of such Foreign Subsidiary
and such other local law issues as the Agent reasonably determines are
necessary. The parties hereto hereby acknowledge and agree that a Domestic
Subsidiary shall be considered a "Guarantor" hereunder for purposes of ss.ss.7
and 8 hereof at the time each such Domestic Subsidiary is created, acquired,
formed or otherwise exists, but shall not be considered a "Guarantor" for
purposes of ss.9 until such Person executes and delivers the Guaranty required
by ss.8.14 together with the requisite legal opinions, and a Foreign Subsidiary
will only be considered a "Guarantor" under all provisions of the Credit
Agreement after it has executed and delivered the Guaranty and legal opinion
required by this ss.8.14.
8.15. ADDITIONAL SUBSIDIARIES. If, after the Closing Date, the Borrower
or any of its Subsidiaries creates or acquires, either directly or indirectly,
any Subsidiary, it will immediately notify the Agent of such creation or
acquisition, as the case may be, and provide the Agent with an updated SCHEDULE
7.19(a) hereof and take all other actions required by ss.8.14 and ss.9.5.1
hereof.
8.16. FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Credit Agreement and
the other Loan Documents.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligations to issue, extend or renew any Letters of
Credit:
9.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries 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 any
of the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
56
-50-
(c) Indebtedness of the Borrower or any Subsidiary assumed in
connection with the AutoSimulations Acquisitions and Auto Soft
Acquisitions, provided, (i) the aggregate amount of all such
Indebtedness assumed under this ss.9.1(c) does not exceed $5,000,000;
and (ii) such Indebtedness is on terms, and contains covenants,
conditions and defaults, which are acceptable to the Agent and the
Banks in all respects;
(d) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Borrower
or such Subsidiary (other than Indebtedness incurred or assumed in
connection with any Permitted Acquisition) or under any Capitalized
Lease, PROVIDED that the aggregate principal amount of such
Indebtedness of the Borrower and its Subsidiaries shall not exceed the
aggregate amount of $3,000,000 at any one time;
(e) unsecured Indebtedness of the Borrower incurred or assumed
in connection with any Permitted Acquisition, provided that the
aggregate principal amount of such Indebtedness shall not exceed the
aggregate amount which equals ten percent (10%) of the Total Commitment
as in effect at the time of such incurrence or assumption of such
Indebtedness;
(f) Indebtedness existing on the date hereof and listed and
described on SCHEDULE 9.1 hereto;
(g) Indebtedness of a Subsidiary of the Borrower to the
Borrower or a Guarantor so long as such Subsidiary is a Guarantor
hereunder;
(h) Indebtedness of the Borrower or any of its Subsidiaries
consisting of Derivative Contracts so long as such Derivative Contracts
are entered into in the ordinary course of business consistent with
past practices and not for speculative purposes;
(i) Indebtedness of Foreign Subsidiaries to the Borrower or
any Guarantor in an aggregate amount not to exceed $1,500,000
outstanding at any one time; and
(j) unsecured Indebtedness of the Borrower or any Subsidiary
not otherwise provided for in this ss.9.1, provided the aggregate
amount of such Indebtedness permitted by this ss.9.1(j) does not exceed
$3,000,000 outstanding at any one time.
9.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
any of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits
57
-51-
therefrom; (b) transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; (e) sell, assign, pledge or otherwise transfer any "receivables" as
defined in clause (g) of the definition of the term "Indebtedness," with or
without recourse; or (f) enter into or permit to exist any arrangement or
agreement, enforceable under applicable law, which directly or indirectly
prohibits the Borrower or any of its Subsidiaries from creating or incurring any
lien, encumbrance, mortgage, pledge, charge, restriction or other security
interest other than in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents and other than customary anti-assignment
provisions in leases and licensing agreements entered into by the Borrower or
such Subsidiary in the ordinary course of its business, PROVIDED that the
Borrower or any of its Subsidiaries may create or incur or suffer to be created
or incurred or to exist:
(a) liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue or liens which are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which
adequate reserves are being maintained in accordance with generally
accepted accounting principles so long as such liens are not being
foreclosed;
(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 on properties in respect of judgments or awards that
have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect of
which the Borrower or such Subsidiary shall at the time in good faith
be prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such appeal
or review;
(e) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties in existence less than
58
-52-
120 days from the date of creation thereof in respect of obligations
not overdue;
(f) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrower or a
Subsidiary of the Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the Borrower interferes
materially with the use of the property affected in the ordinary
conduct of the business of the Borrower and its Subsidiaries, which
defects do not individually or in the aggregate have a Material Adverse
Effect;
(g) liens existing on the date hereof and listed on SCHEDULE
9.2 hereto; and
(h) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by ss.9.1(d), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired.
9.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by Xxxxx'x Investors Service, Inc., and not less than "A 1" if
rated by Standard and Poor's Rating Group;
(d) Investments existing on the date hereof and listed on
SCHEDULE 9.3 hereto;
(e) Investments with respect to Indebtedness permitted by
ss.9.1(g) so long as such entities remain Subsidiaries of the Borrower
and remain a Guarantor;
59
-53-
(f) Investments consisting of the Guaranty or Investments by
the Borrower or any Guarantor in Subsidiaries of the Borrower which are
also Guarantors;
(g) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by ss.9.5.2;
(h) Investments consisting of Permitted Acquisitions;
(i) Investments consisting of Capital Expenditures which are
permitted by ss.10.4 hereof;
(j) Investments with respect to Indebtedness permitted by
ss.9.1(i);
(k) Investments by any Foreign Subsidiary in the Borrower or
any Guarantor; and
(l) Investments not otherwise permitted by this ss.9.3 so long
as the aggregate amount of all such Investments does not exceed
$2,000,000.
9.4. RESTRICTED PAYMENTS. Neither the Borrower nor any of its
Subsidiaries will make any Restricted Payments; PROVIDED, HOWEVER, (a) Xxxxxx
Automation Asia Ltd. shall be permitted to make Restricted Payments to its
shareholders pursuant to the terms of its joint venture agreement, PROVIDED, the
aggregate amount of such Restricted Payments being made shall not exceed in any
fiscal year, in the aggregate, the amount of investor earnings in such year
which is legally permitted to be distributed to shareholders; (b) the Borrower
shall be permitted to make Restricted Payments to the two employee shareholders
of Hanyon Technologies Co. Ltd. in the form of the repurchase by the Borrower of
the remaining 9.5% interests in Hanyon Technologies Co. Ltd. from such
shareholders so long as (i) such Restricted Payments are made by not later than
April 21, 2001 and (ii) the aggregate amount of such Restricted Payments does
not exceed an amount equal to the purchase price (excluding a gross up for
taxes) for the 90.5% of the interests of Hanyon Technologies Co. Ltd. (which
was, as of September 30, 1999, approximately $305,258), and which may be set off
by prior dividend payments to such shareholders and (c) so long as no Default or
Event of Default has occurred and is continuing or would exist as a result
thereof, (i) the Borrower and/or any Subsidiary shall be permitted to make any
Restricted Payment, other than a Distribution, as permitted by ss.9.12 hereof;
and (ii) any Subsidiary of the Borrower shall be permitted to make a Restricted
Payment to the Borrower.
9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
9.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any asset acquisition or
stock
60
-54-
acquisition (other than the acquisition of assets in the ordinary
course of business consistent with past practices) except (a) the
merger or consolidation of one or more of the Subsidiaries of the
Borrower with and into the Borrower; (b) the merger or consolidation of
two or more Subsidiaries of the Borrower, PROVIDED, HOWEVER, to the
extent any Subsidiary is a Guarantor, the survivor of such merger or
consolidation shall be a Guarantor; (c) the AutoSimulations
Acquisition; and (d) any merger or asset or stock acquisition by the
Borrower or any of its Subsidiaries of Persons in the same or similar
line of business as the Borrower, or such Person's line of business is
incidental to the Borrower's existing line of business (a "Permitted
Acquisition") where (1) the Borrower has provided the Agent with
written notice of such Permitted Acquisition, which notice shall
include a reasonably detailed description of such Permitted
Acquisition; (2) the business to be acquired would not subject the
Agent or the Banks to any additional regulatory or third party
approvals in connection with the exercise of its rights and remedies
under this Credit Agreement or any other Loan Document; (3) no
contingent liabilities will be incurred or assumed in connection with
such Permitted Acquisition which could reasonably be expected to have a
Material Adverse Effect, and any Indebtedness incurred or assumed in
connection with such Permitted Acquisition shall have been permitted to
be incurred or assumed pursuant to ss.9.1(e) hereof; (4) the Borrower
has provided the Agent with such other information as was reasonably
requested by the Agent; (5) after the consummation of the Permitted
Acquisition, to the extent such acquisition was a stock acquisition,
either (A) the Person so acquired is merged with and into the Borrower
or its Subsidiary, with the Borrower or such Subsidiary, as the case
may be, being the survivor of such merger or (B) to the extent such
Person is not merged with and into the Borrower or a Subsidiary, such
Person shall become a Guarantor hereunder to the extent such Person is
a Domestic Subsidiary; (6) to the extent the aggregate Purchase Price
(as hereinafter defined) for such Permitted Acquisition is greater than
$7,000,000, the Borrower has demonstrated to the satisfaction of the
Agent, based on a pro forma Compliance Certificate, compliance with
ss.10 hereof immediately prior to and immediately after giving effect
to such Permitted Acquisition; (7) the aggregate amount of the Purchase
Price for all Permitted Acquisitions (or series of related
acquisitions) which are payable in anything other than the capital
stock of the Borrower shall not exceed $10,000,000 in any fiscal year;
(8) the board of directors and the shareholders (if required by
applicable law), or the equivalent, of each of the Borrower and the
Person to be acquired has approved such merger, consolidation or
acquisition and such Permitted Acquisition is otherwise considered
"friendly"; and (9) the Borrower has delivered to the Agent a
certificate of the chief financial officer of the Borrower to the
effect that (A) the Borrower and its Subsidiaries, on a consolidated
and consolidating basis, will be solvent upon the consummation of the
Permitted Acquisition; (B) to the extent required by (6) above, the pro
forma Compliance Certificate fairly presents the financial condition of
the Borrower and its Subsidiaries as of the date thereof and after
giving
61
-55-
effect to such Permitted Acquisition; and (C) no Default or Event of
Default then exists or would result after giving effect to the
Permitted Acquisition. For purposes of this ss.10.5.1, the Purchase
Price shall be defined as the aggregate amount of consideration paid by
the Borrower to the seller on the Closing Date in any Permitted
Acquisition (including, without limitation, the aggregate amount of
Indebtedness incurred or assumed in connection therewith regardless of
the maturity date thereof). In addition, when valuing the capital stock
component of the Purchase Price, the value of the Borrower's capital
stock shall be valued in the manner consistent with the purchase
agreement pertaining to the Permitted Acquisition, and, to the extent
no such purchase agreement exists, or a valuation method is not
detailed therein, then the value shall equal the average of the fair
market value of the Borrower's capital stock for the ten (10) Business
Days immediately preceding the date on which such Permitted Acquisition
is consummated.
In the event any new Domestic Subsidiary is formed or acquired
as a result of or in connection with any acquisition, the Loan
Documents shall be amended and/or supplemented as necessary to make the
terms and conditions of the Loan Documents applicable to such Domestic
Subsidiary. Such Domestic Subsidiary shall, within thirty (30) days of
formation, creation or acquisition, become a Guarantor hereunder and
shall execute and deliver a Guaranty.
9.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will
not permit any of its Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than (a) the sale of inventory,
the licensing of intellectual property and the disposition of obsolete
assets, in each case in the ordinary course of business consistent with
past practices; and (b) the sale or disposition of other assets,
provided that, in each case, (i) no Default of Event of Default has
occurred and is continuing and none would exist after giving effect
thereto or as a result thereof; (ii) the aggregate net cash proceeds
from all such sales or dispositions does not exceed $11,500,000 in any
fiscal year; and (iii) the Purchase Price shall be no less than the
fair market value of the applicable asset at the time of the sale or
disposition.
9.6. SALE AND LEASEBACK. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrower or any Subsidiary of the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrower or any Subsidiary of the Borrower intends
to use for substantially the same purpose as the property being sold or
transferred; PROVIDED, HOWEVER, notwithstanding anything to the contrary
contained in this ss.9.6, the Borrower shall be permitted subject to compliance
with the terms and conditions of the Credit Agreement, to enter into a sale and
leaseback transaction with respect to certain of its equipment where (a) in
connection with such sale and leaseback transaction the Borrower simultaneously
enters into a Capitalized Lease arrangement with the purchaser
62
-56-
of such equipment; and (b) the Borrower had, at the time of the initial purchase
by the Borrower of the property, intended to enter into a Capitalized Lease
arrangement with respect to the property.
9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) use any of the Real Estate or
any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances other than in compliance with applicable laws, (b) cause or
permit to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (c) generate any
Hazardous Substances on any of the Real Estate other than in compliance with
applicable laws, (d) conduct any activity at any Real Estate or use any Real
Estate in any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threatened release of Hazardous Substances
on, upon or into the Real Estate or (e) otherwise conduct any activity at any
Real Estate or use any Real Estate in any manner that would violate any
Environmental Law or bring such Real Estate in violation of any Environmental
Law.
9.8. AUTOSIMULATIONS DEBT. The Borrower will not, and will not permit
any of its Subsidiaries to, amend, supplement or otherwise modify the terms of
any of the Indebtedness incurred pursuant to ss.9.1(c) or 9.1(e) if such
amendment or modification would have the effect of increasing the principal
amount of such Indebtedness or the rate of interest thereon, or making any
covenant, default or provision contained therein more onerous to the Borrower
than exists on the Closing Date. In addition, the Borrower will not amend,
supplement or otherwise modify the terms of the Subordination Agreement without
the prior written consent of the Agent.
9.9. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning
of ss.406 of ERISA or ss.4975 of the Code which could result in a
material liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of its Subsidiaries pursuant to ss.302(f)
or ss.4068 of ERISA; or
63
-57-
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code; or
(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of ss.4001 of ERISA) of
all Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities.
9.10. BUSINESS ACTIVITIES. The Borrower will not, and will not permit
any of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in related businesses.
9.11. FISCAL YEAR. The Borrower will not, and will not permit any of it
Subsidiaries to, change the date of the end of its fiscal year from that set
forth in ss.7.4.1 other than changing the date of any Subsidiary's fiscal year
end to correspond to the Borrower's fiscal year end date.
9.12. TRANSACTIONS WITH AFFILIATES. Except for the transactions set
forth in SCHEDULE 7.15, the Borrower will not, and will not permit any of its
Subsidiaries to, engage in any transaction with any Affiliate (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such Affiliate or, to the knowledge of the
Borrower, any corporation, partnership, trust or other entity in which any such
Affiliate has a substantial interest or is an officer, director, trustee or
partner, on terms more favorable to such Person than would have been obtainable
on an arm's-length basis in the ordinary course of business.
9.13. MODIFICATION OF CHARTER. Neither the Borrower nor any of its
Subsidiaries will consent to or agree to any amendment, supplement or other
modification to the Capitalization Documents without the prior written consent
of the Agent unless such amendment, supplement or modification is immaterial and
ministerial in nature and would not have any material adverse effect on the
Agent's or the Banks' rights under the Loan Documents or the Borrower's or any
of its Subsidiaries' obligations under the Loan Documents, including, without
limitation, an increase in the authorized capital stock of the Borrower or any
Subsidiary.
9.14. UPSTREAM LIMITATIONS. Neither the Borrower nor any of its
Subsidiaries will enter into, or permit any of its Subsidiaries to enter into,
any agreement, contract or arrangement (other than the Credit Agreement and the
other Loan Documents) restricting the ability of any Subsidiary to pay or make
dividends or distributions in cash or kind, to make loans, advances or other
payments of whatsoever nature or to make transfers or distributions of all or
any part of its assets to the Borrower or any Guarantor.
64
-58-
9.15. INCONSISTENT AGREEMENTS. Neither the Borrower nor any of its
Subsidiaries will enter into any agreement containing any provision which would
be violated or breached by the performance by the Borrower or such Subsidiary of
its obligations hereunder or under any of the Loan Documents.
9.16. NEGATIVE PLEDGE. Neither the Borrower nor any of its Subsidiaries
will enter into any agreement (excluding this Credit Agreement and the other
Loan Documents) prohibiting the creation or assumption of any lien upon its
properties, revenues or assets or those of any of its Subsidiaries, whether now
owned or hereafter acquired other than agreements with Persons prohibiting any
such lien on assets in which such Person has a security interest which is
permitted by ss.9.2.
10. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
10.1. LEVERAGE RATIO. The Borrower will not at any time permit the
Leverage Ratio to exceed 1.50:1.00 at any time:
10.2. DEBT SERVICE COVERAGE RATIO. The Borrower will not permit the
Debt Service Coverage Ratio as at the end of any fiscal quarter, commencing with
the fiscal quarter ending March 31, 2000, to be less than 3.00:1.00.
10.3. QUICK RATIO. The Borrower will not permit the ratio of
Consolidated Current Assets to Consolidated Current Liabilities to be less than
1.25:1.00 at any time.
10.4. CAPITAL EXPENDITURES. The Borrower will not make, or permit any
Subsidiary of the Borrower to make, Capital Expenditures in any fiscal year that
exceed, in the aggregate, $13,000,000 for such fiscal year.
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
and of the Agent to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent:
11.1. LOAN DOCUMENTS.
11.1.1. LOAN DOCUMENTS. Each of the Loan Documents shall have
been duly executed and delivered by the respective parties thereto,
shall be in full force and effect and shall be in form and substance
satisfactory to each of the Banks. Each Bank shall have received a
fully executed copy of each such document.
65
-59-
11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. The Agent shall have
received from the Borrower and each of the Guarantors a copy, certified by a
duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (a) its charter or other incorporation or formation documents
as in effect on such date of certification, and (b) its by-laws (or any such
comparable version of such articles in the case of a Foreign Subsidiary) as in
effect on such date.
11.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of the Guarantors
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Agent shall have been provided to the Agent.
11.4. INCUMBENCY CERTIFICATE. The Agent shall have received from the
Borrower and each the Guarantors an incumbency certificate (or similar
authorization document as is typical in the country of formation for a Foreign
Subsidiary), dated as of the Closing Date, signed by a duly authorized officer
of the Borrower or such Subsidiary, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of each of the Borrower of such Subsidiary, each of the Loan
Documents to which the Borrower or such Subsidiary is or is to become a party;
(b) in the case of the Borrower, to make Loan Requests and Conversion Requests
and to apply for Letters of Credit; and (c) to give notices and to take other
action on its behalf under the Loan Documents.
11.5. UCC SEARCH RESULTS. The Agent shall have received from each of
the Borrower and its Domestic Subsidiaries the results of UCC searches,
indicating no liens other than Permitted Liens and otherwise in form and
substance satisfactory to the Agent.
11.6. CERTIFICATES OF INSURANCE. The Agent shall have received a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms.
11.7. BORROWING BASE REPORT. The Agent shall have received from the
Borrower the initial Borrowing Base Report dated as of the Closing Date.
11.8. ACCOUNTS RECEIVABLE AGING REPORT. The Agent shall have received
from the Borrower the most recent Accounts Receivable aging report of the
Borrower and its Subsidiaries dated as of a date which shall be no more than
thirty (30) days prior to the Closing Date and the Borrower shall have notified
the Agent in writing on the Closing Date of any material deviation from the
Accounts Receivable values reflected in such Accounts Receivable aging report
and shall have provided the Agent with such supplementary documentation as the
Agent may reasonably request.
66
-60-
11.9. SOLVENCY CERTIFICATE. The Agent shall have received an officer's
certificate of the Borrower dated as of the Closing Date as to the solvency of
the Borrower and its Subsidiaries following the consummation of the transactions
contemplated herein and in form and substance satisfactory to the Banks.
11.10. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from:
(a) Brown, Rudnick, Freed & Gesmer, P.C., counsel to the
Borrower and its Subsidiaries;
(b) local counsel to Guarantors as applicable.
11.11. PAYMENT OF FEES. The Borrower shall have paid to the Banks or
the Agent, as appropriate, the closing fees pursuant to ss.5.1.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Revolving Credit Loan,
including the Revolving Credit Loan and the Term Loan, and of the Agent to
issue, extend or renew any Letter of Credit, in each case whether on or after
the Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Revolving Credit Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the extent that
such representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
12.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Revolving Credit
Loan or to participate in the issuance, extension or renewal of such Letter of
Credit or in the reasonable opinion of the Agent would make it illegal for the
Agent to issue, extend or renew such Letter of Credit.
12.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as
67
-61-
such Bank shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
12.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
12.5. BORROWING BASE REPORT. The Agent shall have received the most
recent Borrowing Base Report required to be delivered to the Agent in accordance
with ss.8.4(e) and, if requested by the Agent, a Borrowing Base Report dated
within [thirty (30)] days of the Drawdown Date of such Revolving Credit Loan or
of the date of issuance, extension or renewal of such Letter of Credit.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the
Revolving Credit Loans or any Reimbursement Obligation when the same
shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower shall fail to pay any interest on the
Revolving Credit Loans, the commitment fee, any Letter of Credit Fee or
other sums due hereunder or under any of the other Loan Documents, when
the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed
for payment;
(c) the Borrower shall fail to comply with any of its
covenants contained in ss.8.1, 8.4, 8.5.1, 8.6, 8.8, 8.9, 8.12, 8.14,
8.16, 9 or 10;
(d) the Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
ss.13.1) for thirty (30) days after written notice of such failure has
been given to the Borrower by the Agent;
(e) any representation or warranty of the Borrower or any of
its Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant
68
-62-
to or in connection with this Credit Agreement shall prove to have been
false in any material respect upon the date when made or deemed to have
been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to pay
at maturity, or within any applicable period of grace, any obligation
for borrowed money or credit received or in respect of any Capitalized
Leases, in an amount in excess of $1,000,000, or fail to observe or
perform any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing borrowed money
or credit received or in respect of any Capitalized Leases, in an
amount in excess of $1,000,000, for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder to accelerate
the maturity thereof, or any such holder or holders shall rescind or
shall have a right to rescind the purchase of any such obligations;
(g) the Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator or receiver of the Borrower or any of
its Subsidiaries or of any substantial part of the assets of the
Borrower or any of its Subsidiaries or shall commence any case or other
proceeding relating to the Borrower or any of its Subsidiaries under
any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall
be commenced against the Borrower or any of its Subsidiaries and the
Borrower or any of its Subsidiaries shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within sixty (60) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any
of its Subsidiaries bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is
entered in respect of the Borrower or any Subsidiary of the Borrower in
an involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
final judgment against the Borrower or any of its Subsidiaries that,
with other outstanding final judgments, undischarged, against the
Borrower or any of its Subsidiaries exceeds in the aggregate
$1,000,000;
69
-63-
(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in accordance with the
terms thereof or with the express prior written agreement, consent or
approval of the Banks, or any action at law, suit or in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of the Borrower or any of its
Subsidiaries party thereto or any of their respective stockholders, or
any court or any other governmental or regulatory authority or agency
of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more
of the Loan Documents is illegal, invalid or unenforceable in
accordance with the terms thereof;
(k) the Borrower or any ERISA Affiliate incurs any liability
to the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA
in an aggregate amount exceeding $1,000,000, or the Borrower or any
ERISA Affiliate is assessed withdrawal liability pursuant to Title IV
of ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding $1,000,000, or any of the following occurs with respect to a
Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to
make a required installment or other payment (within the meaning of
ss.302(f)(1) of ERISA), PROVIDed that the Agent determines in its
reasonable discretion that such event (A) could be expected to result
in liability of the Borrower or any of its Subsidiaries to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding
$1,000,000 and (B) could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC, for the appointment by the
appropriate United States District Court of a trustee to administer
such Guaranteed Pension Plan or for the imposition of a lien in favor
of such Guaranteed Pension Plan; or (ii) the appointment by a United
States District Court of a trustee to administer such Guaranteed
Pension Plan; or (iii) the institution by the PBGC of proceedings to
terminate such Guaranteed Pension Plan;
(l) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part
of its business and such order shall continue in effect for more than
thirty (30) days;
(m) there shall occur any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty,
which in any such case causes, for more than thirty (30) consecutive
days, the cessation or substantial curtailment of revenue producing
activities at any facility of the Borrower or any of its Subsidiaries
if such event or circumstance is not covered by business interruption
insurance and would have a Material Adverse Effect;
(n) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by
70
-64-
the Borrower or any of its Subsidiaries if such loss, suspension,
revocation or failure to renew would have a Material Adverse Effect;
(o) the Borrower or any of its Subsidiaries shall be indicted
for a state or federal crime, or any civil or criminal action shall
otherwise have been brought against the Borrower or any of its
Subsidiaries, a punishment for which in any such case could reasonably
be expected to have a Material Adverse Effect;
(p) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said
Act) of thirty percent (30%) or more of the outstanding shares of
common stock of the Borrower; or, during any period of twelve
consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period shall cease to constitute a
majority of the board of directors of the Borrower; or
(q) the Borrower shall at any time, legally or beneficially
own less than 100% of the shares of the capital stock of any Guarantor,
PROVIDED, HOWEVER, to the extent the Borrower owns less than 100% of
the capital stock of any Guarantor at the time such Subsidiary becomes
a Guarantor hereunder, then it shall only constitute an Event of
Default if the Borrower shall at any time, legally or beneficially own
a smaller percentage of the capital stock of such Subsidiary than the
Borrower owned on the date such Person became a Subsidiary of the
Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Revolving Credit Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; PROVIDED that in the
event of any Event of Default specified in ss.ss.13.1(g) or 13.1(h), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.
13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in ss.13.1(g) or ss.13.1(h) shall occur, any unused portion of
the credit hereunder shall forthwith terminate and each of the Banks shall be
relieved of all further obligations to make Revolving Credit Loans to the
Borrower and the Agent shall be relieved of all further obligations to issue,
extend or renew Letters of Credit. If any other Event of Default shall have
occurred and be continuing, the Agent may and, upon the request of the Majority
Banks, shall, by notice to the Borrower, terminate the unused portion of the
credit hereunder, and upon such notice being given such unused portion
71
-65-
of the credit hereunder shall terminate immediately and each of the Banks shall
be relieved of all further obligations to make Revolving Credit Loans and the
Agent shall be relieved of all further obligations to issue, extend or renew
Letters of Credit. No termination of the credit hereunder shall relieve the
Borrower or any of its Subsidiaries of any of the Obligations.
13.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to ss.13.1, each
Bank, if owed any amount with respect to the Revolving Credit Loans or the
Reimbursement Obligations, may, with the consent of the Majority Banks but not
otherwise, proceed to protect and enforce its rights by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Bank are
evidenced, including as permitted by applicable law the obtaining of the EX
PARTE appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Revolving Credit Note or purchaser of any
Letter of Credit Participation 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.
14. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower and any securities or other property of the Borrower
in the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Revolving Credit Notes held by such Bank 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 Revolving
Credit Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, and (b) if such Bank shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Revolving Credit Notes held by, or
constituting Reimbursement Obligations owed to, such Bank by proceedings against
the Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Revolving Credit Note or
Revolving Credit Notes held by, or Reimbursement Obligations owed to, such Bank
any amount in excess of its ratable portion of
72
-66-
the payments received by all of the Banks with respect to the Revolving Credit
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 Revolving Credit Notes held by it or Reimbursement obligations
owed it, its proportionate payment as contemplated by this Credit Agreement;
PROVIDED that if all or any part of such excess payment is thereafter recovered
from such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
15. THE AGENT.
15.1. AUTHORIZATION.
(a) The Agent is authorized to take such action on behalf of
each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto, PROVIDED that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent.
(b) The relationship between the Agent and each of the Banks
is that of an independent contractor. The use of the term "Agent" is
for convenience only and is used to describe, as a form of convention,
the independent contractual relationship between the Agent and each of
the Banks. Nothing contained in this Credit Agreement nor the other
Loan Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on
all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust
in collateral security intended to secure the payment or performance of
any of the Obligations, all for the benefit of the Banks and the Agent.
15.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
73
-67-
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
15.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
15.4. NO REPRESENTATIONS.
15.4.1. GENERAL. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Revolving Credit Notes, the Letters of Credit, any of the other Loan
Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Revolving Credit Notes, or for
the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect
to the Revolving Credit Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan
Documents or in any certificate or instrument hereafter furnished to it
by or on behalf of the Borrower or any of its Subsidiaries, or be bound
to ascertain or inquire as to the performance or observance of any of
the terms, conditions, covenants or agreements herein or in any
instrument at any time constituting, or intended to constitute,
collateral security for the Revolving Credit Notes or to inspect any of
the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Borrower or
any holder of any of the Revolving Credit Notes shall have been duly
authorized or is true, accurate and complete. The Agent has not made
nor does it now make any representations or warranties, express or
implied, nor does it assume any liability to the Banks, with respect to
the credit worthiness or financial conditions of the Borrower or any of
its Subsidiaries. Each Bank acknowledges that it has, independently and
without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own
credit analysis and decision to enter into this Credit Agreement.
15.4.2. CLOSING DOCUMENTATION, ETC. For purposes of
determining compliance with the conditions set forth in ss.11, each
Bank that has executed this Credit Agreement shall be deemed to have
consented to, approved or accepted, or to be satisfied with, each
74
-68-
document and matter either sent, or made available, by the Agent to
such Bank for consent, approval, acceptance or satisfaction, or
required thereunder to be to be consent to or approved by or acceptable
or satisfactory to such Bank, unless an officer of the Agent active
upon the Borrower's account shall have received notice from such Bank
prior to the Closing Date specifying such Bank's objection thereto and
such objection shall not have been withdrawn by notice to the Agent to
such effect on or prior to the Closing Date.
15.5. PAYMENTS.
15.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of
any Bank shall constitute a payment to such Bank. The Agent agrees
promptly to distribute to each Bank such Bank's PRO RATA share of
payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan
Documents.
15.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent
the distribution of any amount received by it in such capacity
hereunder, under the Revolving Credit Notes or under any of the other
Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay
over the same in such manner and to such Persons as shall be determined
by such court.
15.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (a) to make available to the Agent its
PRO RATA share of any Revolving Credit Loan or to purchase any Letter
of Credit Participation or (b) to comply with the provisions of ss.14
with respect to making dispositions and arrangements with the other
Banks, where such Bank's share of any payment received, whether by
setoff or otherwise, is in excess of its PRO RATA share of such
payments due and payable to all of the Banks, in each case as, when and
to the full extent required by the provisions of this Credit Agreement,
shall be deemed delinquent (a "Delinquent Bank") and shall be deemed a
Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding
Revolving Credit Loans, Unpaid Reimbursement Obligations, interest,
fees or otherwise, to the remaining nondelinquent Banks for application
to, and reduction of, their respective PRO RATA shares of all
outstanding Revolving Credit Loans
75
-69-
and Unpaid Reimbursement Obligations. The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the nondelinquent
Banks in proportion to their respective PRO RATA shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. A Delinquent Bank shall be deemed to have satisfied in
full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Revolving Credit Loans and Unpaid
Reimbursement Obligations of the nondelinquent Banks, the Banks'
respective PRO RATA shares of all outstanding Revolving Credit Loans
and Unpaid Reimbursement Obligations have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
15.6. HOLDERS OF REVOLVING CREDIT NOTES. The Agent may deem and treat
the payee of any Revolving Credit Note or the purchaser of any Letter of Credit
Participation as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
15.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower as required by ss.17), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Revolving Credit Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent's willful misconduct or gross negligence.
15.8. AGENT AS BANK. In its individual capacity, ABN AMRO shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Revolving Credit Loans made by it, and as the holder of
any of the Revolving Credit Notes and as the purchaser of any Letter of Credit
Participations, as it would have were it not also the Agent.
15.9. RESIGNATION. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the
76
-70-
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation, the provisions of
this Credit Agreement and the other Loan Documents shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Agent.
15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.15.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.
16. EXPENSES AND INDEMNIFICATION.
16.1. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, syndication, administration or interpretation of the Loan
Documents and other instruments mentioned herein, each closing hereunder, any
amendments, modifications, approvals, consents or waivers hereto or hereunder,
or the cancellation of any Loan Document upon payment in full in cash of all of
the Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation, (d) the fees, expenses and disbursements of the Agent or any
of its affiliates incurred by the Agent or such affiliate in connection with the
preparation, syndication, administration or interpretation of the Loan Documents
and other instruments mentioned herein, including all appraisal charges, (e) all
reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or the
Agent, and reasonable consulting, accounting, appraisal, investment banking and
similar professional fees and charges) incurred by any Bank or the Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or any of its Subsidiaries or the
administration thereof after the occurrence of a Default or Event of Default and
(ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Bank's or the Agent's relationship with the
Borrower or any of its Subsidiaries and (f) all reasonable fees, expenses and
disbursements of the Agent incurred in connection with UCC searches.
16.2. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent, its affiliates and the Banks from and against any and all
claims, actions and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and expenses of every nature
77
-71-
and character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(a) any actual or proposed use by the Borrower or any of its Subsidiaries of the
proceeds of any of the Revolving Credit Loans or Letters of Credit, (b) the
Borrower or any of its Subsidiaries entering into or performing this Credit
Agreement or any of the other Loan Documents or (c) with respect to the Borrower
and its Subsidiaries and their respective properties and assets, the violation
of any Environmental Law, the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release or threatened release of any Hazardous
Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefor, the Banks and the Agent and its
affiliates shall be entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of the
Borrower under this ss.16.2 are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment in satisfaction of
such obligations which is permissible under applicable law.
16.3. SURVIVAL. The covenants contained in this ss.16 shall survive
payment or satisfaction in full of all other Obligations.
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
17.1. SHARING OF INFORMATION WITH AFFILIATES. The Borrower acknowledges
that from time to time financial advisory, investment banking and other services
may be offered or provided to the Borrower or one or more of its Subsidiaries,
in connection with this Credit Agreement or otherwise, by an Affiliate of the
Agent or any Bank. The Borrower, for itself and each of its Subsidiaries, hereby
authorizes (a) such Affiliate to share with the Agent and each Bank any
information delivered to such Affiliate by the Borrower or any of its
Subsidiaries, and (b) the Agent and each Bank to share with such Affiliate any
information delivered to the Agent or such Bank by the Borrower or any of its
Subsidiaries pursuant to this Credit Agreement, or in connection with the
decision of such Bank to enter into this Credit Agreement; it being understood,
in each case, that any such Affiliate receiving such information shall be bound
by the confidentiality provisions of this Credit Agreement. Such authorization
shall survive the payment and satisfaction in full of all of Obligations.
17.2. CONFIDENTIALITY. Each of the Banks and the Agent agrees, on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower or any of
78
-72-
its Subsidiaries pursuant to this Credit Agreement that is identified by such
Person as being confidential at the time the same is delivered to the Banks or
the Agent, PROVIDED that nothing herein shall limit the disclosure of any such
information (a) after such information shall have become public other than
through a violation of this ss.17, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel for any of the Banks or the
Agent, (d) to bank examiners or any other regulatory authority having
jurisdiction over any Bank or the Agent, or to auditors or accountants, (e) to
the Agent, any Bank or any Affiliate of any Bank or the Agent, (f) in connection
with any litigation to which any one or more of the Banks, the Agent or
Affiliate of the Agent or any Bank is a party, or in connection with the
enforcement of rights or remedies hereunder or under any other Loan Document,
(g) to a Subsidiary or affiliate of such Bank as provided in ss.17.1 or (h) to
any assignee or participant (or prospective assignee or participant) so long as
such assignee or participant agrees to be bound by the provisions of ss.19.6.
Moreover, each of the Agent, the Banks and any Affiliate of the Agent or any
Bank is hereby expressly permitted by the Borrower to refer to any of the
Borrower and its Subsidiaries in connection with any advertising, promotion or
marketing undertaken by the Agent, such Bank or such Affiliate and, for such
purpose, the Agent, such Bank or such Affiliate may utilize any trade name,
trademark, logo or other distinctive symbol associated with the Borrower or any
of its Subsidiaries or any of their businesses.
17.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
law or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
17.4. OTHER. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Affiliate of the Agent
or any Bank by the Borrower or any of its Subsidiaries. The obligations of each
Bank under this ss.17 shall supersede and replace the obligations of such Bank
under any confidentiality letter in respect of this financing signed and
delivered by such Bank to the Borrower prior to the date hereof and shall be
binding upon any assignee of, or purchaser of any participation in, any interest
in any of the Revolving Credit Loans or Reimbursement Obligations from any Bank.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Revolving Credit Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of any of the
Revolving Credit Loans and the issuance, extension or renewal of any
79
-73-
Letters of Credit, as herein contemplated, and shall continue in full force and
effect so long as any Letter of Credit or any amount due under this Credit
Agreement or the Revolving Credit Notes or any of the other Loan Documents
remains outstanding or any Bank has any obligation to make any Revolving Credit
Loans or the Agent has any obligation to issue, extend or renew any Letter of
Credit, and for such further time as may be otherwise expressly specified in
this Credit Agreement. All statements contained in any certificate or other
paper delivered to any Bank or the Agent at any time by or on behalf of the
Borrower or any of its Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Borrower or such Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Revolving Credit Loans at the time owing to it, the Revolving Credit Notes
held by it and its participating interest in the risk relating to any Letters of
Credit); PROVIDED that (a) each of the Agent and, unless a Default or Event of
Default shall have occurred and be continuing, the Borrower shall have given its
prior written consent to such assignment, which consent will not be unreasonably
withheld, (b) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and obligations under this Credit
Agreement, (c) each assignment shall be in an amount that is a whole multiple of
$5,000,000.00 and (d) so long as no Default of Event of Default has occurred and
is continuing, ABN AMRO shall not assign any portion of its Commitment hereunder
for a period of six months from the Closing Date unless consented to in writing
by the Borrower and (e) the parties to such assignment shall execute and deliver
to the Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of EXHIBIT E hereto (an
"Assignment and Acceptance"), together with any Revolving Credit Notes subject
to such assignment. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five (5) Business Days after the
execution thereof, (i) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in ss.19.3, be released from its obligations under
this Credit Agreement.
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
80
-74-
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or
mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower and its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or
any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.7.4 and ss.8.4 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
81
-75-
(i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to
its PRO RATA share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
19.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $3,500.00.
19.4. NEW REVOLVING CREDIT NOTES. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give prompt notice
thereof to the Borrower and the Banks (other than the assigning Bank). Within
five (5) Business Days after receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Agent, in exchange for each
surrendered Revolving Credit Note, a new Revolving Credit Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Revolving Credit
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Revolving Credit Notes shall provide that
they are replacements for the surrendered Revolving Credit Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Revolving Credit Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
the assigned Revolving Credit Notes. Within five (5) days of issuance of any new
Revolving Credit Notes pursuant to this ss.19.4, and if requested by the holder
of any such Revolving Credit Note, the Borrower shall deliver an opinion of
counsel, addressed to the Banks and the Agent, in substantially the form of the
legal opinion delivered pursuant to ss.11.10 hereof relating to the due
authorization, execution and delivery of such new Revolving Credit Notes and the
legality, validity and binding effect thereof. The surrendered Revolving Credit
Notes shall be cancelled and returned to the Borrower.
19.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (a) each such participation shall be in an amount of not less than
$1,000,000.00, (b) any such sale or participation shall not affect the rights
and duties of the
82
-76-
selling Bank hereunder to the Borrower and (c) the only rights granted to the
participant pursuant to such participation arrangements with respect to waivers,
amendments or modifications of the Loan Documents shall be the rights to approve
waivers, amendments or modifications that would reduce the principal of or the
interest rate on any Revolving Credit Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
19.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
PROVIDED that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation. For purposes of this ss.19.6 an
assignee or participant or potential assignee or participant may include a
counterparty with whom such Bank has entered into or potentially might enter
into a Derivative Contract referenced to credit or other risks or events arising
under this Credit Agreement or any other Loan Document.
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to ss.13.1 or ss.13.2, and
the determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Revolving Credit Loans or Reimbursement
Obligations. If any Bank sells a participating interest in any of the Revolving
Credit Loans or Reimbursement Obligations to a participant, and such participant
is the Borrower or an Affiliate of the Borrower, then such transferor Bank shall
promptly notify the Agent of the sale of such participation. A transferor Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to ss.13.1 or ss.13.2 to the
extent that such participation is beneficially owned by the Borrower or any
Affiliate of the Borrower, and the determination of the Majority Banks shall for
all purposes of this Credit Agreement and the other Loan Documents be made
without regard to the interest of such transferor Bank in the Revolving Credit
Loans or Reimbursement Obligations to the extent of such participation.
83
-77-
19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to ss.16 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained in
this ss.19 to the contrary notwithstanding, any Bank may at any time pledge all
or any portion of its interest and rights under this Credit Agreement (including
all or any portion of its Revolving Credit Notes) to any of the twelve Federal
Reserve Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341,
PROVIDED that any foreclosure or similar action by such trustee or other
representative shall be subject to the other provisions of this ss.19. No such
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
19.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Revolving Credit Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrower, at 00 Xxxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000, Attention: Xxxxx Xxxxxxxx, Treasurer, or at such
other address for notice as the Borrower shall last have furnished in
writing to the Person giving the notice;
(b) if to the Agent, at Xxx Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, XXX, Attention: Xxxxx X. Xxxxxx, Group
Vice President, or such other address for notice as the Agent shall
last have furnished in writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on
SCHEDULE 1 hereto, or such other address for notice as such Bank shall
have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if
84
-78-
sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.20. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.26.
25. WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Credit
Agreement, the Revolving Credit Notes or any of the other Loan Documents, any
85
-79-
rights or obligations hereunder or thereunder or the performance of such rights
and obligations. Except as prohibited by law, the Borrower hereby waives any
right it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Borrower (a)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by the Banks may be given, and any term of this Credit Agreement,
the other Loan Documents or any other instrument related hereto or mentioned
herein may be amended, and the performance or observance by the Borrower or any
of its Subsidiaries of any terms of this Credit Agreement, the other Loan
Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the written consent of the Majority Banks. Notwithstanding the
foregoing, the rate of interest on the Revolving Credit Notes (other than
interest accruing pursuant to ss.5.11.2 following the effective date of any
waiver by the Majority Banks of thE Default or Event of Default relating
thereto) or the amount of the commitment fee or Letter of Credit Fees may not be
decreased without the written consent of each Bank affected thereby; the amount
of the Commitments may not be increased without the written consent of the
Borrower and of each Bank affected thereby; the Revolving Credit Loan Maturity
Date may not be postponed without the written consent of each Bank affected
thereby; this ss.26 anD the definition of Majority Banks may not be amended,
without the written consent of all of the Banks; and the amount of any Letter of
Credit Fees payable for the Agent's account and ss.15 may not be amended without
thE written consent of the Agent. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Agent or any Bank in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in
86
-80-
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.
87
-81-
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
XXXXXX AUTOMATION, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Senior Vice President
ABN AMRO BANK N.V., individually and as Agent
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Group Vice President
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
88
-82-
Schedule 1
Banks; Commitments
--------------------------------------------------------------------------------
BANK COMMITMENT AMOUNT COMMITMENT PERCENTAGE
--------------------------------------------------------------------------------
ABN AMRO Bank N.V.
000 Xxxxx XxXxxxx Xxxxxx $30,000,000 100%
Chicago, Illinois
LIBOR Lending Office: Same
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Total Commitment $30,000,000 100%
--------------------------------------------------------------------------------
