Exhibit 99.1
REVOLVING LOAN AGREEMENT
BY AND BETWEEN
SCIENTIFIC LEARNING CORPORATION
(THE "BORROWER")
AND
FLEET NATIONAL BANK
(THE "BANK")
DATED AS OF
MARCH 9, 2001
TABLE OF CONTENTS
SECTION 1. DEFINITIONS:....................................................1
SECTION 2. REVOLVING CREDIT FACILITY.......................................5
SECTION 3. INTEREST; LATE FEE..............................................7
SECTION 4. CONVERSION OPTIONS..............................................7
SECTION 5. INABILITY TO DETERMINE LIBOR RATE...............................8
SECTION 6. INDEMNITY.......................................................8
SECTION 7. ILLEGALITY......................................................9
SECTION 8. ADDITIONAL COSTS, ETC...........................................10
SECTION 9. CHANGES IN CIRCUMSTANCES........................................11
SECTION 10. FEES AND PAYMENTS...............................................11
SECTION 11. REPRESENTATIONS AND WARRANTIES..................................12
SECTION 12. CONDITIONS PRECEDENT............................................13
SECTION 13. COVENANTS.......................................................14
SECTION 15. SETOFF..........................................................17
SECTION 16. MISCELLANEOUS...................................................17
SECTION 17. JURY WAIVER.....................................................18
SECTION 18. PREJUDGMENT REMEDY WAIVER.......................................19
SECTION 19. ASSIGNMENT; PARTICIPATION.......................................19
SECTION 20. CONFIDENTIALITY.................................................20
SECTION 21. USURY...........................................................21
REVOLVING LOAN AGREEMENT
This REVOLVING LOAN AGREEMENT (this "LOAN AGREEMENT") is made as of March
9, 2001, by and between SCIENTIFIC LEARNING CORPORATION, a Delaware corporation
(the "BORROWER"), having its principal place of business at 0000 Xxxxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx 00000 and, FLEET NATIONAL BANK (the
"BANK"), a national banking association with an office at 000 Xxxxxx Xxxxxx, Xxx
Xxxxx, Xxxxxxxxxxx 00000.
SECTION 1. DEFINITIONS: Certain capitalized terms are defined below:
AFFILIATE: Any Person that would be considered to be an affiliate of
Warburg Pincus under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission as in effect on the Closing Date, if Warburg Pincus were
issuing securities.
BASE RATE: The variable per annum rate of interest so designated from time
to time by the Bank as its prime rate. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate being charted to any
customer. Changes in the rate of interest resulting from changes in the Prime
Rate shall take place immediately without notice or demand of any kind.
BASE RATE LOANS: Loans bearing interest calculated by reference to the
Base Rate.
BUSINESS DAY: Any day on which banks in New Haven, Connecticut are open
for business generally.
CHARTER DOCUMENTS: With respect to any Person, the certificate or articles
of incorporation or organization and the by-laws of such Person, or other
constitutive documents of such entity.
CHASE LETTER OF CREDIT: That certain letter of credit issued on or before
the Closing Date by Chase Manhattan Bank USA, N.A. for the account of the
Guarantor and for the benefit of the Bank in the amount of $15,000,000.00 and in
form and substance satisfactory to the Bank.
CLOSING DATE: March 9, 2001.
COMMITMENT: The obligation of the Bank to make Loans to the Borrower up to
an aggregate outstanding principal amount not to exceed $15,000,000, as such
amount may be reduced from time to time or terminated pursuant hereto.
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CONSENT: In respect of any Person, any permit, license or exemption from,
approval, consent of, registration or filing with any local, state or federal
governmental or regulatory agency or authority, required under applicable law.
CONVERSION REQUEST: A notice given to the Bank by the Borrower after
Borrower's election to convert or to continue a Loan in accordance with SECTION
4 hereof.
COST OF FUNDS: The per annum rate of interest which Bank is required to
pay, or is offering to pay, for wholesale liabilities of like tenor, adjusted
for reserve requirements and such other requirements as may be imposed by
federal, state or local government and regulatory agencies, as determined by
Bank.
DEFAULT: An event or act which, with the giving of notice and/or the lapse
of time, would become an Event of Default.
DISTRIBUTION: The declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of the Borrower or any other
distribution on or in respect of any shares of any class of capital stock of the
Borrower, other than dividends and distributions 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.
DOLLARS or $: Dollars in lawful currency of the United States of America.
DRAWDOWN DATE: In respect of any Loan, the date on which such Loan is made
to the Borrower.
ENVIRONMENTAL LAWS: All laws pertaining to environmental matters,
including without limitation, the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act of 1986, the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, in each case
as amended, and all rules, regulations, judgments, decrees, orders and licenses
arising under all such laws.
ERISA: The Employee Retirement Income Security Act of 1974, as amended,
and all rules, regulations, judgments, decrees, and orders arising thereunder.
EVENT OF DEFAULT: Any of the events listed in SECTION 14 hereof.
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FINANCIALS: With respect to any Person for any period, the balance sheet
of such Person as at the end of such period, and the related statement of income
and expense and statement of cash flow of such Person for such period, each
setting forth in comparative form the figures for the previous comparable fiscal
period, all in reasonable detail and prepared in accordance with GAAP.
GAAP: Generally accepted accounting principles consistent with those
adopted by the Financial Accounting Standards Board and its predecessor
generally, as in effect from time to time.
GUARANTY: The Guaranty of even date herewith from the Guarantor to the
Bank, as amended from time to time.
GUARANTOR: WPV, Inc., a Delaware corporation, with its principal place of
business at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
INDEBTEDNESS: With respect to any Person, all obligations of such Person,
contingent and otherwise, that in accordance with GAAP should be classified as
liabilities, including without limitation (a) all debt obligations, (b) all
liabilities secured by Liens, (c) all guarantees and (d) all liabilities in
respect of bankers' acceptances or Letters of Credit.
INTEREST PERIOD: With respect to each Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a request for a
Loan (i) for any Base Rate Loan, the last day of the calendar quarter; (ii) for
any LIBOR Rate Loan, 1, 2 or 3 months; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such 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 SECTION
4, the Borrower shall be deemed to have requested a conversion of the
affected
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LIBOR Rate Loan to a Base Rate Loan 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 relating to any LIBOR Rate Loan that would
otherwise extend beyond the Maturity Date shall end on the Maturity Date.
LIENS: Any encumbrance, mortgage, pledge, hypothecation, charge,
restriction or other security interest of any kind securing any obligation of
any Person.
LIBOR BUSINESS DAY: Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in the London
interbank market.
LIBOR LENDING OFFICE: Initially, the office of the 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 the rate determined by the Bank 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.
LIBOR RATE LOANS: Loans bearing interest calculated by reference to the
LIBOR Rate.
LOANS: Any loan made or to be made to the Borrower pursuant to SECTION 2
hereof, including, without limitation, any Base Rate Loans or LIBOR Loans.
LOAN DOCUMENTS: This Loan Agreement, the Note, the Guaranty and any other
documents, instruments or agreements executed and/or delivered in connection
with this Loan Agreement, in each case as from time to time amended or
supplemented.
MATERIALLY ADVERSE EFFECT: Any materially adverse effect on the financial
condition or business operations of the Borrower or its Subsidiaries or material
impairment of the ability of the Borrower or any of its Subsidiaries to perform
its obligations hereunder or under any of the other Loan Documents, PROVIDED,
that under no circumstances shall operating losses of the Borrower and its
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Subsidiaries incurred in the ordinary course of business (and which have been
projected by the Borrower prior to the date hereof) constitute a Materially
Adverse Effect hereunder.
MATURITY DATE: October 11, 2002.
NOTE: See SECTION 2(a).
OBLIGATIONS: All indebtedness, obligations and liabilities of the Borrower
to the Bank, existing on the date of this Loan 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 Loan
Agreement or any other Loan Document or in respect of any of the Loans, the Note
or other instruments at any time evidencing any thereof.
PERSON: Any individual, corporation, partnership, limited liability
company, trust, unincorporated association, business, or other legal entity, any
government or any governmental agency or political subdivision thereof.
REQUIREMENT OF LAW: With respect to any Person, any law, treaty, rule,
regulation or determination of an arbitrator, court, or other governmental
authority, in each case applicable to or binding upon such Person or affecting
any of its property.
SUBSIDIARY: Any Person with respect to which the Borrower at any time owns
or controls, directly or indirectly, more than fifty percent (50%) of the
outstanding shares of stock or other equity securities or interests having
voting power, regardless of whether such right to vote depends upon the
occurrence of a contingency.
TYPE: As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.
WARBURG PINCUS: Warburg, Xxxxxx Ventures, L.P., a Delaware limited
partnership, a significant shareholder of the Borrower.
SECTION 2. REVOLVING CREDIT FACILITY.
(a) Upon the terms and subject to the conditions of this Loan
Agreement, the Bank agrees to make Loans to the Borrower that the Borrower
may request from the date hereof until but not including the Maturity
Date; PROVIDED that the sum of the outstanding principal amount of all
Loans (after giving effect to all amounts requested) shall not exceed the
Commitment. Loans shall be in the minimum aggregate amount of $100,000 or
an integral multiple thereof. With respect to any Base Rate
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Loan, the Borrower shall notify the Bank in writing or telephonically not
later than 2:00 p.m. New Haven time on the proposed Drawdown Date of such
Base Rate Loan being requested, of the Drawdown Date (which must be a
Business Day) and the principal amount of such Base Rate Loan. With
respect to any LIBOR Rate Loan, the Borrower shall notify the Bank in
writing, no less than three (3) LIBOR Business Days prior to the proposed
Drawdown Date of such LIBOR Rate Loan being requested, of the Drawdown
Date (which must be a LIBOR Business Day), the principal amount of such
LIBOR Rate Loan and the Interest Period for such LIBOR Rate Loan. Subject
to the foregoing, so long as the Commitment is then in effect and the
conditions set forth in SECTION 12(a) through SECTION 12(e) hereof have
been met as of the Closing Date; and as set forth in Section 12(a) through
12(d) hereof have been met for each Drawdown Date thereafter, the Bank
shall advance the amount requested to the Borrower's bank account
designated by the Borrower to the Bank in immediately available funds not
later than the close of business on such Drawdown Date. The obligation of
the Borrower to repay to the Bank the principal of the Loans and interest
accrued thereon shall be evidenced by a promissory note, in the stated
principal amount of $15,000,000, executed and delivered by the Borrower
and payable to the order of the Bank, and in substantially the form
attached hereto as EXHIBIT A (the "NOTE").
(b) Subject to the terms of SECTION 6 hereof and the terms of any
written cash management agreements between the Bank and the Borrower, the
Borrower may elect to prepay the outstanding principal of all or any part
of any Loan, without premium or penalty, in a minimum amount of $100,000
or an integral multiple thereof, upon written notice to the Bank given by
2:00 p.m. New Haven time on the proposed date of such prepayment, of the
amount to be prepaid and the date of such prepayment. The Borrower shall
be entitled to reborrow before the Maturity Date such amounts, upon the
terms and subject to the conditions of this Loan Agreement.
(c) If at any time the outstanding principal amount of the Loans
shall exceed the Commitment, the Borrower shall, immediately upon the
Borrower's receipt of written notice of such excess, pay the amount of
such excess to the Bank for application to the Loans. The Borrower may
elect to reduce or terminate the Commitment by a minimum principal amount
of $100,000 or an integral multiple thereof, upon written notice to the
Bank given by 2:00 p.m. New Haven time on the proposed date of such
reduction or termination. The Borrower shall not be entitled to reinstate
all or any portion of the Commitment following such reduction or
termination.
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SECTION 3. INTEREST; LATE FEE.
(a) So long as no Event of Default is continuing, the Borrower shall
pay interest on the Loans outstanding as follows:
(i) 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 of the Base
Rate.
(ii) 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 of one
percent (1.00%) per annum above the LIBOR Rate determined for such
Interest Period.
(iii) Interest on Loans shall be payable in arrears on the
last day of the Interest Period with respect to such Loan. While an
Event of Default is continuing (whether or not the Bank has
accelerated payment), or after maturity or after judgment has been
rendered on this Loan Agreement and the other Loan Documents,
amounts payable with respect to any Loans shall bear interest
(compounded monthly and payable on demand in respect to overdue
amounts) at a rate which is four (4) percentage points per annum
greater than that which would otherwise be applicable.
(b) If the entire amount of any required principal and/or interest
is not paid in full within ten (10) days after the same is due, Borrower
shall pay to Bank a late fee equal to five percent (5%) of the required
payment.
SECTION 4. CONVERSION OPTIONS.
(a) The Borrower may elect from time to time to convert any
outstanding Loan to a Loan of another Type, PROVIDED that (i) with respect
to any such conversion of a LIBOR Rate Loan to a Base Rate Loan, the
Borrower shall give the Bank at least one (1) Business Day's prior written
notice of such election; (ii) with respect to any such conversion of a
Base Rate Loan to a LIBOR Rate Loan, the Borrower shall give the Bank at
least three (3) LIBOR Business Days' prior written notice of such
election; (iii) with respect to any such conversion of a Base Rate Loan to
a LIBOR Rate Loan, such conversion shall only be made on the last day of
the Interest Period with respect thereto; and (iv) no Loan may be
converted into a LIBOR Rate Loan when any Default or Event of Default has
occurred and is continuing. All or any part of outstanding Loans of any
Type may be converted into a Loan of another Type as provided herein,
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PROVIDED that any partial conversion shall be in an aggregate principal
amount of $100,000 or an integral multiple thereof. Each Conversion
Request relating to the conversion of a Loan to a LIBOR Rate Loan shall be
irrevocable by the Borrower.
(b) Any Loan of any Type may be continued as a 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
SECTION 4(a); 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 Bank active
upon the Borrower's account have actual knowledge.
(c) 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 $250,000 or an
integral multiple of $50,000 in excess thereof.
SECTION 5. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the Bank
shall determine 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 Bank
shall promptly give telephonic notice (promptly confirmed in writing) of such
determination (which shall be conclusive and binding on the Borrower) to the
Borrower. In such event (a) upon receipt of notice, the Borrower may revoke any
pending request for any Loan or Conversion Request with respect to LIBOR Rate
Loans, (b) if the Borrower does not revoke such request or Conversion Request,
the Bank shall make, convert or continue Loans, as proposed by the Borrower, in
the amount specified in the request or the Conversion Request submitted by the
Borrower, but such Loans shall be made, converted or continued as Base Rate
Loans instead of LIBOR Rate Loans, (c) each LIBOR Rate Loan will automatically,
on the last day of the then current Interest Period relating thereto, become a
Base Rate Loan, and (d) the obligations of the Bank to make LIBOR Rate Loans
shall be suspended until the Bank determines that the circumstances giving rise
to such suspension no longer exist, whereupon the Bank shall so notify the
Borrower.
SECTION 6. INDEMNITY. The Borrower agrees to indemnify Bank and to hold
Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that the 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
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any LIBOR Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by the 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 request for a Loan or a Conversion Request relating
thereto in accordance with SECTION 4 (other than as a result of the operation of
SECTION 5 or SECTION 7 hereof) or (c) the making of any conversion of any LIBOR
Rate 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 the Bank to lenders of funds obtained by it in order to maintain any
such Loans. In addition, if, at any time, (x) the interest rate on any Loan is
accruing at the LIBOR Rate, and (y) Bank in its sole discretion should determine
that current market conditions can accommodate a prepayment request, Borrower
shall have the right, at any time and from time to time, upon at least ten (10)
Business Days prior written notice to Bank, to prepay such LIBOR Rate Loans in
whole (but not in part), and Borrower shall pay to Bank a yield maintenance fee
in an amount computed as follows: the current rate for United States Treasury
securities (bills on a discounted basis shall be converted to a bond equivalent)
with a maturity date closest to the maturity date of the term chosen pursuant to
the Fixed Rate Election (as hereinafter defined) as to which the prepayment is
made, shall be subtracted from the Cost of Funds (as hereinafter defined)
component of the fixed rate in effect at the time of prepayment. If the result
is zero or a negative number, there shall be no yield maintenance fee. If the
result is a positive number, then the resulting percentage shall be multiplied
by the amount of the principal balance being prepaid. The resulting amount shall
be divided by 360 and multiplied by the number of days remaining in the term
chosen pursuant to the Fixed Rate Election as to which the prepayment is made.
Said amount shall be reduced to present value calculated using the
above-referenced United States Treasury securities rate and the number of days
remaining in the term chosen pursuant to the Fixed Rate Election as to which the
prepayment is made. The resulting amount shall be the yield maintenance fee due
to Bank upon prepayment of such LIBOR Rate Loan. Each reference in this
paragraph to "Fixed Rate Election" shall mean the election by Borrower pursuant
to SECTION 2 hereof to request a LIBOR Rate Loan. If by reason of an Event of
Default, Bank elects to declare the Loans to be immediately due and payable,
then any yield maintenance fee with respect to the loan shall become due and
payable in the same manner as though Borrower had exercised such right of
prepayment.
SECTION 7. 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 the Bank to make or maintain
LIBOR Rate Loans, the Bank shall forthwith give notice of such circumstances to
the Borrower and thereupon (a) the commitment of the Bank to make LIBOR Rate
Loans or convert Loans of another Type to LIBOR
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Rate Loans shall forthwith be suspended and (b) the Bank's 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 period as may be required by law. The Borrower
hereby agrees promptly to pay the Bank upon demand, any additional amounts
necessary to compensate the Bank for any costs incurred by the Bank in making
any conversion in accordance with this SECTION 7, including any interest or fees
payable by the Bank to lenders of funds obtained by it in order to make or
maintain its LIBOR Loans hereunder.
SECTION 8. ADDITIONAL COSTS, ETC. If after the Closing Date 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 the Bank by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:
(a) subject the Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Loan
Agreement, the other Loan Documents, the Commitment or the Loans (other
than taxes based upon or measured by the income or profits of the Bank),
or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to the Bank of the principal of or
the interest on any Loans or any other amounts payable to the Bank under
this Loan 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 Loan 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 the Bank, or
(d) impose on the Bank any other conditions or requirements with
respect to this Loan Agreement, the other Loan Documents, the Loans, the
Commitment, or any class of loans or commitments of which any of the Loans
or the Commitment forms a part,
and the result of any event described in clause (a), (b), (c) or (d) is
(i) to increase the cost to the Bank of making, funding,
issuing, renewing, extending or maintaining any of the Loans or
the Commitment, or
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(ii) to reduce the amount of principal, interest or other
amount payable to the Bank hereunder on account of the Commitment or
any of the Loans, or
(iii) to require the Bank to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by the Bank
from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by the Bank at
any time and from time to time and as often as the occasion therefor may arise,
pay to the Bank such additional amounts as will be sufficient to compensate the
Bank for such additional cost, reduction, payment or foregone interest or other
sum.
SECTION 9. CHANGES IN CIRCUMSTANCES. If after the Closing Date any change
in banking law or regulation or the administration thereof (whether or not
having the force of law) affects the amount of capital required or expected to
be maintained by the Bank or any entity controlling it, and such amount is
increased by reason of the Commitment or the Loans, the Bank may notify the
Borrower thereof. The Borrower and the Bank shall negotiate an adjustment
payable to the Bank to compensate for such increase. If no agreement is reached
within thirty (30) days, the Bank may increase the fees payable hereunder by the
amount determined by the Bank to be necessary to provide such compensation.
SECTION 10. FEES AND PAYMENTS.
(a) On or prior to the Closing Date, the Borrower shall pay to the
Bank a one-time fee in the amount of $75,000.
(b) The Borrower shall pay to the Bank a commitment fee calculated
at the rate of one-quarter of one percent (1/4%) per annum of the average
daily amount during each calendar quarter or portion thereof from the
Closing Date to the Maturity Date by which the Commitment exceeds the
aggregate amount outstanding under the 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 Closing Date, with a final
payment on the Maturity Date or any earlier date on which the Commitment
shall terminate.
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(c) All payments to be made by the Borrower hereunder or under any
of the other Loan Documents shall be made in U.S. dollars in immediately
available funds at the Bank's office at 000 Xxxxxx Xxxxxx, Xxx Xxxxx,
Xxxxxxxxxxx 00000 or such other place as Bank may from time to time
specify in writing, without set-off or counterclaim and without any
withholding or deduction whatsoever. The Bank shall be entitled (but shall
not be obligated) to charge any account of the Borrower with the Bank for
any sum due and payable by the Borrower to the Bank, hereunder or under
any of the other Loan Documents. If any payment hereunder is required to
be made on a day which is not a Business Day, it shall be paid on the
immediately preceding Business Day. All computations of interest or of the
closing or commitment fees payable hereunder shall be made by the Bank on
the basis of a 360-day year and the actual number of days elapsed. All
payments shall be applied first to the payment of all fees, expenses and
other amounts due to the Bank (excluding principal and interest), then to
accrued interest, and the balance on account of outstanding principal;
provided, however, that after a Default or Event of Default, payments will
be applied to the obligations of Borrower to Bank as Bank determines in
its sole discretion.
SECTION 11. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Bank on the date hereof, on the date of any request for any
Loan, and on each Drawdown Date that: (a) the Borrower and each of its
Subsidiaries is duly organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation and is duly qualified and in good
standing in every other jurisdiction where it is doing business, except where
the failure to so qualify does not have a Materially Adverse Effect on the
Borrower or any of its Subsidiaries, and the execution, delivery and performance
by the Borrower and its Subsidiaries of the Loan Documents to which each is a
party (i) are within their respective corporate authority, (ii) have been duly
authorized, (iii) do not conflict with or contravene their respective Charter
Documents; (b) upon execution and delivery thereof, each Loan Document shall
constitute the legal, valid and binding obligation of the Borrower and each
Subsidiary, enforceable in accordance with its terms except as enforceability is
limited by laws regarding bankruptcy or insolvency or generally the enforcement
of creditors' rights and by general principles of equity; (c) the Borrower and
each Subsidiary have good and marketable title to (or, to the best knowledge of
the Borrower after reasonable inquiry, valid licenses of) all of their
respective material properties, subject only to Liens permitted hereunder, and
possess (or to the best knowledge of the Borrower after reasonable inquiry, have
valid licenses for) all assets, including intellectual properties, franchises
and Consents, adequate for the conduct of their respective businesses as now
conducted, without any conflict with any rights of others; (d) the Borrower has
provided to the Bank its audited Financials as at December 31, 1999 and its
Financials as at December 31, 2000 (which have been prepared in accordance
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with GAAP but may not include all footnotes required by GAAP), and such
Financials are complete and correct, to the extent described herein, and fairly
present the position of the Borrower and its Subsidiaries as at such dates and
for such periods; (e) except as otherwise disclosed in writing to the Bank by
the Borrower, since December 31, 2000, there has been no materially adverse
change of any kind in the Borrower or any of its Subsidiaries which would have a
Materially Adverse Effect; (f) there are no legal or other proceedings or
investigations pending or threatened against the Borrower or any of its
Subsidiaries before any court, tribunal or regulatory authority which would, if
adversely determined, alone or together, have a Material Adverse Effect; (g) the
execution, delivery, performance of their respective obligations, and exercise
of their respective rights under the Loan Documents by the Borrower and each
Subsidiary to which each is a party, including borrowing under this Loan
Agreement (i) do not require any Consents; and (ii) are not and will not be in
conflict with or prohibited or prevented by (A) any Requirement of Law, or (B)
any Charter Document, corporate minute or resolution, instrument, agreement or
provision thereof, in each case binding on any of them or affecting any of their
respective property; (h) neither the Borrower nor any Subsidiary is in violation
of (i) any Charter Document, corporate minute or resolution, (ii) any instrument
or agreement, in each case binding on it or affecting its property, in a manner
which would have a Materially Adverse Effect, or (iii) any Requirement of Law in
a manner which would have a Materially Adverse Effect, including, without
limitation, all applicable federal and state tax laws, ERISA and Environmental
Laws; (i) other than SLC Subsidiary Corporation, the Borrower has no
Subsidiaries and is not a party to any partnership or joint venture, (k) each
fiscal year of the Borrower begins on January 1 of each calendar year and ends
on December 31 of each calendar year; and (l) both before and immediately after
giving effect to the transactions contemplated hereby, the Borrower and each of
its Subsidiaries is and will be solvent on a going concern basis (after taking
into account the value of all tangible and intangible assets, including without
limitation goodwill, patents, trademarks, copyrights and other intellectual
property), has assets (after taking into account the value of all tangible and
intangible assets, including, without limitation, goodwill, patents, trademarks,
copyrights and other intellectual property) having a fair value in excess of the
amount required to pay its probable liabilities on its existing debts as they
become absolute and matured, and has, and will have, access to adequate capital
(including the Commitment) (i) for the conduct of its business and (ii) to pay
its debts from time to time incurred in connection therewith as such debts
mature.
SECTION 12. CONDITIONS PRECEDENT. In addition to the making of the
foregoing representations and warranties and the delivery of the Loan Documents
and such other documents and the taking of such actions as the Bank may
reasonably require at or prior to the time of executing this Loan Agreement, the
obligation of the Bank to make any Loan to the Borrower hereunder is subject to
the satisfaction of the following further conditions precedent: (a) each of the
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representations and warranties of the Borrower and the Guarantor to the Bank
shall be true and correct in all material respects as of the time made or
claimed to have been made; (b) no Default or Event of Default shall be
continuing; (c) all proceedings in connection with the transactions contemplated
hereby shall be in form and substance reasonably satisfactory to the Bank, and
the Bank shall have received all information and documents as it may have
reasonably requested; (d) the Bank shall have received the Chase Letter of
Credit and the same shall not have been revoked, terminated or expired and (e)
on or prior to the Closing Date the respective counsels to each of the Borrower
and Guarantor shall have each provided an opinion letter to the Bank in form and
substance satisfactory to the Bank.
SECTION 13. COVENANTS. The Borrower agrees that as long as any Loan or the
Note is outstanding and until the termination of the Commitment and the payment
and satisfaction in full of the Loans and all of the other Obligations, the
Borrower will, and where applicable, will cause each of its Subsidiaries to
comply with its obligations as set forth throughout this Loan Agreement and to:
(a) furnish the Bank (i) as soon as available but in any event
within ninety (90) days after the close of each fiscal year, its audited
consolidated Financials for such fiscal year, accompanied by an unqualified
opinion of the Borrower's accountants and (ii) as soon as available but in any
event within forty-five (45) days after the end of each fiscal quarter, its
unaudited consolidated Financials for such quarter, certified by its chief
financial officer;
(b) keep true and accurate books of account in accordance with GAAP
and, upon reasonable prior notice and at reasonable intervals (unless a Default
or an Event of Default shall be continuing, whereupon such notice shall not be
required), to permit the Bank or its designated representatives (at the expense
of the Borrower if a Default or Event of Default has occurred and is continuing
and at the expense of the Bank at all other times), to inspect the Borrower's
premises, activities, books and records, to examine and be advised as to such or
other business records upon the request of the Bank and cause Borrower's
officers and employees to give full cooperation and assistance in connection
therewith;
(c) maintain its corporate existence, business and assets, to keep
its business and assets adequately insured, to maintain its chief executive
office in the United States, to continue to engage in substantially the same
lines of business or businesses related thereto, and to comply in all material
respects with all Requirements of Law, including ERISA and Environmental Laws;
(d) notify the Bank promptly in writing (i) of the occurrence of any
Default or Event of Default, (ii) of any noncompliance with ERISA or any
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Environmental Law or proceeding in respect thereof which could have a Materially
Adverse Effect, (iii) of any change of address or name of the Borrower or any of
its Subsidiaries, (iv) of any threatened or pending litigation or similar
proceeding affecting the Borrower or any of its Subsidiaries involving claims in
excess of $500,000 in the aggregate or any material change in any such
litigation or proceeding previously reported, or (v) of claims in excess of
$500,000 in the aggregate against any assets or properties of the Borrower or
any of its Subsidiaries encumbered in favor of the Bank;
(e) use the proceeds of the Loans for working capital purposes, and
not for the purchasing or carrying of "margin security" or "margin stock" within
the meaning of Regulations U and X of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Parts 221 and 224; and
(f) cooperate with the Bank, take such action, execute such
documents, and provide such information as the Bank may from time to time
reasonably request in order further to effect the transactions contemplated by
and the purposes of the Loan Documents.
SECTION 14. EVENTS OF DEFAULT; ACCELERATION. If any of the following
events ("EVENTS OF DEFAULT") shall occur: (a) the Borrower shall fail to pay
within five (5) days of when due and payable any principal of the Loans; (b) the
Borrower shall fail to pay within thirty (30) days of when due and payable any
interest on the Loans or any other sum due under any of the Loan Documents; (c)
the Guarantor shall fail to comply with any term, covenant or condition set
forth in its Guaranty; (d) the Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained in SECTIONS 13.1(a) and
13.1(d) through (f); (e) the Borrower or any of its Subsidiaries or the
Guarantor shall fail to perform any other term, covenant or agreement contained
in the Loan Documents within thirty (30) days after the Bank has given written
notice of such failure to the Borrower; (f) any representation or warranty of
the Borrower, any of its Subsidiaries or the Guarantor in the Loan Documents or
in any certificate or notice given in connection therewith shall have been false
or misleading in any material respect at the time made or deemed to have been
made; (g) the Borrower, any of its Subsidiaries or the Guarantor shall fail to
pay when due or within any applicable period of grace any Indebtedness owing to
the Bank or any affiliates of the Bank or any other Indebtedness for borrowed
money to any other third party in an aggregate principal amount greater than
$750,000; (h) any of the Loan Documents shall cease to be in full force and
effect, (i) the Borrower, any of its Subsidiaries or the Guarantor (i) shall
make an assignment for the benefit of creditors, (ii) shall be adjudicated
bankrupt or insolvent, (iii) shall seek the appointment of, or be the subject of
an order appointing, a trustee, liquidator or receiver as to all or part of its
assets, (iv) shall commence, approve or consent to, any case or proceeding under
any bankruptcy, reorganization or similar law and, in the case of an involuntary
case or
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proceeding, such case or proceeding is not dismissed within forty-five (45) days
following the commencement thereof, or (v) shall be the subject of an order for
relief in an involuntary case under federal bankruptcy law; (j) the Borrower,
any of its Subsidiaries or the Guarantor shall be unable to pay debts as they
mature; (k) there shall remain undischarged for more than thirty (30) days any
final judgment or execution action against the Borrower, any of its Subsidiaries
or the Guarantor that, together with other outstanding claims and execution
actions against the Borrower, such Subsidiary or the Guarantor, exceeds $750,000
in the aggregate; (l) Warburg Pincus shall at any time, legally or beneficially,
own less than one hundred percent (100%) of the capital stock of the Guarantor;
or (m) following the date hereof, any person or group of persons other than
Warburg Pincus or Affiliates thereof (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 40% or more of the outstanding shares of
stock of the Borrower; or, during any period of twelve consecutive calendar
months, individuals who on the first day of such period were either (i)
directors of the Borrower or (ii) the successors thereof duly appointed by a
majority of the directors who were directors at the beginning of such period,
shall cease to constitute a majority of the board of directors of the Borrower;
THEN, or at any time thereafter:
(1) In the case of any Event of Default under clause (i) or (j), the
Commitment shall automatically terminate, and the entire unpaid principal amount
of the Loans, all interest accrued and unpaid thereon, and all other amounts
payable hereunder and under the other Loan Documents shall automatically become
forthwith due and payable, without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived by the Borrower; and
(2) In the case of any Event of Default other than (i) and (j), the Bank
may, by written notice to the Borrower, terminate the Commitment and/or declare
the unpaid principal amount of the Loans, all interest accrued and unpaid
thereof, and all other amounts payable hereunder and under the other Loan
Documents to be forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by the
Borrower.
No remedy herein conferred upon the Bank is intended to be exclusive of
any other remedy and each and every remedy shall be cumulative and in addition
to every other remedy hereunder, now or hereafter existing at law or in equity
or otherwise.
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SECTION 15. SETOFF. Borrower hereby grants to Bank, a continuing lien,
security interest right of setoff as security for all liabilities and
obligations to Bank, whether now existing or hereafter arising, upon and against
all deposits, credits, collateral and property, now or hereafter in the
possession, custody, safekeeping or control of Bank or any entity under the
control of FleetBoston Financial Corporation and its successors and assigns or
in transit to any of them. At any time, without demand or notice (any such
notice being expressly waived by Borrower), Bank may setoff the same or any part
thereof and apply the same to any liability or obligation of Borrower even
though unmatured and regardless of the adequacy of any other collateral securing
the Loans. ANY AND ALL RIGHTS TO REQUIRE BANK TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING
ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
BORROWER, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAVIED.
SECTION 16. MISCELLANEOUS. The Borrower agrees to indemnify and hold
harmless the Bank against all claims and losses of every kind arising out of the
Loan Documents, including without limitation against those in respect of the
application of Environmental Laws to the Borrower and its Subsidiaries;
PROVIDED, however, Borrower shall not be obligated to indemnify the Bank from,
and hold it harmless against, any such claims or losses arising out of the gross
negligence or willful misconduct of the Bank. Borrower shall pay to the Bank
promptly on demand all reasonable expenses of Bank in connection with the
preparation, administration, default, collection, waiver or amendment of loan
terms, or in connection with Bank's exercise, preservation or enforcement of any
of its rights, remedies or options under this Loan Agreement or any of the other
Loan Documents, including, without limitation, reasonable fees of outside legal
counsel or the allocated costs of in-house legal counsel, accounting,
consulting, brokerage or other similar reasonable professional fees or expenses,
and any reasonable fees or expenses associated with travel or other costs
relating to any appraisals or examinations conducted in connection with the
Loans or any Collateral, and the amount of all such expenses shall, until paid,
bear interest at the rate applicable to principal hereunder (including any
default rate) and be an obligation secured by any Collateral. Any communication
to be made hereunder shall (i) be made in writing, but unless otherwise stated,
may be made by telex, facsimile transmission or letter, and (ii) be made or
delivered to the address of the party receiving notice which is identified with
its signature below (unless such party has by five (5) days' written notice
specified another address), and shall be deemed made or delivered, when
dispatched or transmitted (in the case of facsimiles), left at that address, or
five (5) days after being mailed, postage prepaid, to such address. This Loan
Agreement shall be binding upon and inure to the benefit of each party hereto
and its successors and assigns, but the Borrower may not assign its rights or
obligations hereunder. This Loan Agreement may not be amended or waived except
by a written
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instrument signed by the Borrower and the Bank, and any such amendment or waiver
shall be effective only for the specific purpose given. No failure or delay by
the Bank to exercise any right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege preclude
any other right, power or privilege. The provisions of this Loan Agreement are
severable and if any one provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, such invalidity or unenforceability
shall affect only such provision in such jurisdiction. This Loan Agreement,
together with all Exhibits and Schedules hereto, expresses the entire
understanding of the parties with respect to the transactions contemplated
hereby. This Loan Agreement and any amendment hereby may be executed in several
counterparts, each of which shall be an original, and all of which shall
constitute one agreement. In proving this Loan Agreement, it shall not be
necessary to produce more than one such counterpart executed by the party to be
charged. THIS LOAN AGREEMENT AND THE NOTE ARE CONTRACTS UNDER THE LAWS OF THE
STATE OF CONNECTICUT AND SHALL BE CONSTRUED IN ACCORDANCE THEREWITH AND GOVERNED
THEREBY. THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF ANY OF THE
LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF CONNECTICUT OR ANY
FEDERAL COURT SITTING THEREIN. Bank may at any time pledge or assign all or any
portion of its rights under the Loan Documents including any portion of the Note
to any of the twelve (12) Federal Reserve Banks organized under Section 4 of the
Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or assignment or
enforcement thereof shall release Bank from its obligations under any of the
loan documents. Upon receipt of an affidavit of an officer of Bank as to the
loss, theft, destruction or mutilation of the Note or any other security
document which is not of public record, and, in the case of any such loss,
theft, destruction or mutilation, upon cancellation of such Note or other
security document, Borrower will issue, in lieu thereof, a replacement note or
other security document in the same principal amount thereof and otherwise of
like tenor.
SECTION 17. JURY WAIVER. BORROWER AND BANK MUTUALLY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF
ANY CLAIM BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LOAN
AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION
HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING, WITHOUT LIMITATION, ANY
COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR ACTIONS OF BANK RELATING TO
THE ADMINISTRATION OF THE LOANS OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE
THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH
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A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAVIED. EXCEPT AS PROHIBITED BY LAW,
BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF BANK HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT BANK WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR BANK TO
ACCEPT THIS LOAN AGREEMENT AND MAKE THE LOANS.
SECTION 18. PREJUDGMENT REMEDY WAIVER. THE BORROWER ACKNOWLEDGES THAT THE
FINANCING EVIDENCED HEREBY IS A COMMERCIAL TRANSACTION WITHIN THE MEANING OF
CHAPTER 903a OF THE CONNECTICUT GENERAL STATUTES. THE BORROWER HEREBY WAIVES ITS
RIGHT TO NOTICE AND PRIOR COURT HEARING OR COURT ORDER UNDER CONNECTICUT GENERAL
STATUTES SECTIONS 52-278a ET. SEQ. AS AMENDED OR UNDER ANY OTHER STATE OR
FEDERAL LAW WITH RESPECT TO ANY AND ALL PREJUDGMENT REMEDIES THE BANK MAY EMPLOY
TO ENFORCE ITS RIGHTS AND REMEDIES HEREUNDER. MORE SPECIFICALLY, THE BORROWER
ACKNOWLEDGES THAT THE BANK'S ATTORNEY MAY, PURSUANT TO CONN. GEN. STAT.
SECTION 52-278F, ISSUE A WRIT FOR A PREJUDGMENT REMEDY WITHOUT SECURING A COURT
ORDER. THE BORROWER ACKNOWLEDGES AND RESERVES ITS RIGHT TO NOTICE AND A HEARING
SUBSEQUENT TO THE ISSUANCE OF A WRIT FOR PREJUDGMENT REMEDY AS AFORESAID AND THE
BANK ACKNOWLEDGES THE BORROWER'S RIGHT TO SAID HEARING SUBSEQUENT TO THE
ISSUANCE OF SAID WRIT. THE BORROWER FURTHER WAIVES ITS RIGHTS TO REQUEST THAT
BANK POST A BOND, WITH OR WITHOUT SURETY, TO PROTECT BORROWER AGAINST DAMAGES
THAT MAY BE CAUSED BY BANK.
SECTION 19. ASSIGNMENT; PARTICIPATION. Bank shall have the unrestricted
right at any time or from time to time, and without Borrower's or any
Guarantor's consent, to assign all or any portion of its rights and obligations
hereunder to one or more banks or other financial institutions (each, an
"Assignee"), and Borrower and each Guarantor agrees that it shall execute, or
cause to be executed, such documents, including without limitation, amendments
to this Agreement and to any other documents, instruments and agreements
executed in connection herewith as Bank shall deem necessary to effect the
foregoing. In addition, at the request of Bank and any such Assignee, Borrower
shall issue one or more new promissory notes, as applicable, to any such
Assignee and, if Bank has retained any of its rights and obligations hereunder
following such assignment, to Bank, which new promissory notes shall be issued
in
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replacement of, but not in discharge of, the liability evidenced by the
promissory note held by Bank prior to such assignment and shall reflect the
amount of the respective commitments and loans held by such Assignee and Bank
after giving effect to such assignment. Upon the execution and delivery of
appropriate assignment documentation, amendments and any other documentation
required by Bank in connection with such assignment, and the payment by Assignee
of the purchase price agreed to by Bank and such Assignee, such Assignee shall
be a party to this Agreement and shall have all of the rights and obligations of
Bank hereunder (and under any and all other guaranties, documents, instruments
and agreements executed in connection herewith) to the extent that such rights
and obligations have been assigned by Bank pursuant to the assignment
documentation between Bank and such Assignee, and Bank shall be released from
its obligations hereunder and thereunder to a corresponding extent. Borrower may
furnish any information concerning Borrower in its possession from time to time
to prospective Assignees, provided that Bank shall require any such prospective
Assignees to agree in writing to maintain the confidentiality of such
information. Bank shall also have the unrestricted right at any time and from
time to time, and without the consent of or notice to Borrower or any Guarantor,
to grant to one or more banks or other financial institutions (each, a
"Participant") participating interests in Bank's obligation to lend hereunder
and/or any or all of the Loans held by Bank hereunder. In the event of any such
grant by Bank of a participating interest to a Participant, whether or not upon
notice to Borrower, Bank shall remain responsible for the performance of its
obligations hereunder and Borrower shall continue to deal solely and directly
with Bank in connection with Bank's rights and obligations hereunder. Bank may
furnish any information concerning Borrower in its possession from time to time
to prospective Participants, provided that Bank shall require any such
prospective Participant to agree in writing to maintain the confidentiality of
such information.
SECTION 20. CONFIDENTIALITY. The Bank agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information identified as "confidential" or "secret" by the Borrower and
provided to it by the Borrower or any of its Subsidiaries under this Loan
Agreement or any of other Loan Document, and the Bank shall not use any such
information other than in connection with or in the administration or
enforcement of this Loan Agreement and the other Loan Documents, except to the
extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Bank, (ii) was or becomes available
on a non-confidential basis from a source other than the Borrower; PROVIDED,
that such source is not bound by a confidentiality agreement with the Borrower
known to the officers of the Bank handling the transaction contemplated hereby;
and PROVIDED, FURTHER, that the Bank may disclose such information (A) at the
request or pursuant to any requirement of any governmental authority or
regulator to which the Bank is subject or in connection with an examination of
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the Bank by any such authority or regulator, (B) pursuant to subpoena or other
court process, (C) when required to do so in accordance with the provisions of
any applicable law, (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Bank may be party, (E) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document, (F) to the Bank's independent auditors,
attorneys, accountants and other professional advisor, and (G) to any affiliate
of the Bank provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Bank hereunder.
SECTION 21. USURY. All agreements between Borrower and Guarantors and Bank
are hereby expressly limited so that in no contingency or event whatsoever,
whether by reason of acceleration of maturity of the indebtedness evidenced
hereby or otherwise, shall the amount paid or agreed to be paid to Bank for the
use or the forbearance of the indebtedness evidenced hereby exceed the maximum
permissible under applicable law. As used herein, the term "applicable law"
shall mean the law in effect as of the date hereof; provided, however, that in
the event there is a change in the law which results in a higher permissible
rate of interest, then this Loan Agreement shall be governed by such new law as
of its effective date. In this regard, it is expressly agreed that it is the
intent of Borrower and Bank in the execution, delivery and acceptance of this
Loan Agreement to contract in strict compliance with the laws of the State of
Connecticut from time to time in effect. If, under or from any circumstances
whatsoever, fulfillment of any provision hereof or of any of the Loan Documents
at the time of performance of such provision shall be due, shall involve
transcending the limit of such validity prescribed by applicable law, then the
obligation to be fulfilled shall automatically be reduced to the limits of such
validity, and if under or from circumstances whatsoever Bank should ever receive
as interest an amount which would exceed the highest lawful rate, such amount
which would be excessive interest shall be applied to the reduction of the
principal balance evidenced hereby and not to the payment of interest. This
provision shall control every other provision of all agreements between
Borrower, Guarantors and Bank.
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IN WITNESS WHEREOF, the undersigned have duly executed this Loan Agreement
as of the date first above written.
SCIENTIFIC LEARNING CORPORATION
By: /s/ Xxxx Xxxxxxx
---------------------------------
Xxxx Xxxxxxx
Its: Chief Financial Officer
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
President and Chief Executive Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
FLEET NATIONAL BANK
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Xxxxx Xxxxxxx
Its: Senior Vice President
000 Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxxx 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
