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CREDIT AGREEMENT
DATED AS OF JUNE 19, 1995
AMONG
SYSTEM SOFTWARE ASSOCIATES, INC.,
CERTAIN OF ITS SUBSIDIARIES,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT,
BANK OF AMERICA ILLINOIS,
AS ISSUING BANK,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
ARRANGED BY
BA SECURITIES, INC.
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TABLE OF CONTENTS
Section Page
ARTICLE I DEFINITIONS........................................... 1
1.1 Certain Defined Terms...................................... 1
1.2 Other Interpretive Provisions.............................. 19
1.3 Accounting Principles...................................... 20
1.4 Currency Equivalents Generally............................. 20
ARTICLE II THE CREDITS........................................... 21
2.1 Amounts and Terms of Commitments........................... 21
2.2 Loan Accounts.............................................. 21
2.3 Procedure for Borrowing.................................... 21
2.4 Conversion and Continuation Elections...................... 23
2.5 Utilization of Commitments in Offshore Currencies.......... 24
2.6 Voluntary Termination or Reduction of Commitments.......... 26
2.7 Mandatory Optional Prepayments............................. 26
2.8 Currency Exchange Fluctuations............................. 27
2.9 Repayment.................................................. 27
2.10 Interest Rates............................................. 27
2.11 Fees....................................................... 29
(a) Arrangement, Agency Fees.............................. 29
(b) Commitment Fees....................................... 29
2.12 Computation of Fees and Interest........................... 30
2.13 Payments by the Borrower................................... 30
2.14 Payments by the Banks to the Agent......................... 31
2.15 Sharing of Payments, Etc. ................................. 32
ARTICLE III THE LETTERS OF CREDIT................................. 32
3.1 The Letter of Credit Subfacility........................... 32
3.2 Issuance, Amendment and Renewal of Letters of Credit....... 34
3.3 Risk Participations, Drawings and Reimbursements........... 36
3.4 Repayment of Participations................................ 38
3.5 Role of the Issuing Bank................................... 38
3.6 Obligations Absolute....................................... 39
3.7 Cash Collateral Pledge..................................... 40
3.8 Letter of Credit Fees...................................... 40
3.9 Uniform Customs and Practice............................... 41
ARTICLE IV. TAXES, YIELD PROTECTION AND ILLEGALITY................ 41
4.1 Taxes...................................................... 41
4.2 Illegality................................................. 42
4.3 Increased Costs and Reduction of Return.................... 43
4.4 Funding Losses............................................. 44
4.5 Inability to Determine Rates............................... 44
4.6 Certificates of Banks...................................... 45
4.7 Substitution of Banks...................................... 45
4.8 Survival................................................... 45
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Section Page
ARTICLE V CONDITIONS PRECEDENT.................................. 45
5.1 Conditions of Initial Loans................................ 45
(a) Credit Agreement...................................... 46
(b) Notes................................................. 46
(c) Guaranty.............................................. 46
(d) Resolutions; Incumbency............................... 46
(e) Organization Documents; Good Standing................. 46
(f) Legal Opinion......................................... 46
(g) Payment of Fees....................................... 46
(h) Certificate........................................... 47
(i) Other Documents....................................... 47
5.2 Conditions to All Borrowings and Letters of Credit......... 47
(a) Notice of Transaction................................. 47
(b) Continuation of Representations and Warranties........ 47
(c) No Existing Default................................... 47
5.3 Addition of Subsidiary Borrowers........................... 47
(a) Supplemental Signature Page........................... 48
(b) Note.................................................. 48
(c) Reaffirmation of Guaranty............................. 48
(e) Organization Documents; Good Standing................. 48
(f) Legal Opinion......................................... 49
ARTICLE VI REPRESENTATIONS AND WARRANTIES........................ 49
6.1 Corporate Existence and Power.............................. 49
6.2 Corporate Authorization; No Contravention.................. 49
6.3 Governmental Authorization................................. 50
6.4 Binding Effect............................................. 50
6.5 Litigation................................................. 50
6.6 No Default................................................. 50
6.7 ERISA Compliance........................................... 50
6.8 Use of Proceeds; Margin Regulations........................ 51
6.9 Title to Properties........................................ 51
6.10 Taxes...................................................... 52
6.11 Financial Condition........................................ 52
6.12 Environmental Matters...................................... 52
6.13 Regulated Entities......................................... 52
6.14 No Burdensome Restrictions................................. 53
6.15 Copyrights, Patents, Trademarks and Licenses, etc. ........ 53
6.16 Subsidiaries............................................... 53
6.17 Insurance.................................................. 53
6.18 Full Disclosure............................................ 53
ARTICLE VII AFFIRMATIVE COVENANTS................................. 54
7.1 Financial Statements....................................... 54
7.2 Certificates; Other Information............................ 55
7.3 Notices.................................................... 55
7.4 Preservation of Corporate Existence, Etc. ................. 56
7.5 Maintenance of Property.................................... 57
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Section Page
7.6 Insurance.................................................. 57
7.7 Payment of Obligations..................................... 57
7.8 Compliance with Laws....................................... 57
7.9 Compliance with ERISA...................................... 57
7.10 Inspection of Property and Books and Records............... 58
7.11 Environmental Laws......................................... 58
7.12 Use of Proceeds............................................ 58
ARTICLE VIII NEGATIVE COVENANTS................................... 58
8.1 Limitation on Liens........................................ 58
8.2 Disposition of Assets...................................... 60
8.3 Consolidations and Mergers................................. 61
8.4 Loans and Investments...................................... 61
8.5 Limitation on Indebtedness................................. 62
8.6 Transactions with Affiliates............................... 63
8.7 Use of Proceeds............................................ 63
8.8 Contingent Obligations..................................... 63
8.9 Lease Obligations.......................................... 63
8.10 Restricted Payments........................................ 64
8.11 ERISA...................................................... 64
8.12 Change in Business......................................... 65
8.13 Accounting Changes......................................... 65
ARTICLE IX FINANCIAL COVENANTS................................... 65
9.1 Net Worth.................................................. 65
9.2 Fixed Charge Ratio......................................... 65
9.3 Indebtedness Ratio......................................... 65
9.4 Senior Indebtedness Ratio.................................. 65
9.5 Quick Ratio................................................ 66
ARTICLE X EVENTS OF DEFAULT..................................... 66
10.1 Event of Default........................................... 66
(a) Non-Payment........................................... 66
(b) Representation or Warranty............................ 66
(c) Specific Defaults..................................... 66
(d) Other Defaults........................................ 66
(e) Cross-Default......................................... 67
(f) Insolvency; Voluntary Proceedings..................... 67
(g) Involuntary Proceedings............................... 67
(h) ERISA................................................. 68
(i) Monetary Judgments.................................... 68
(j) Non-Monetary Judgments................................ 68
(k) Change of Control..................................... 68
10.2 Remedies................................................... 68
10.3 Rights Not Exclusive....................................... 69
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Section Page
ARTICLE XI THE AGENT............................................. 69
11.1 Appointment and Authorization............................. 69
11.2 Delegation of Duties...................................... 70
11.3 Liability of Agent........................................ 70
11.4 Reliance by Agent......................................... 70
11.5 Notice of Default......................................... 71
11.6 Credit Decision........................................... 71
11.7 Indemnification of Agent.................................. 72
11.8 Agent in Individual Capacity.............................. 72
11.9 Successor Agent........................................... 72
11.10 Withholding Tax........................................... 73
ARTICLE XII MISCELLANEOUS......................................... 75
12.1 Amendments and Waivers.................................... 75
12.2 Notices................................................... 76
12.3 No Waiver; Cumulative Remedies............................ 76
12.4 Costs and Expenses........................................ 77
12.5 Company Indemnification................................... 77
12.6 Payments Set Aside........................................ 78
12.7 Successors and Assigns.................................... 78
12.8 Assignments, Participations, etc. ........................ 78
12.9 Confidentiality........................................... 80
12.10 Set-off................................................... 81
12.11 Automatic Debits of Fees.................................. 81
12.12 Notification of Addresses, Lending Offices, Etc. ......... 81
12.13 Counterparts.............................................. 81
12.14 Severability.............................................. 82
12.15 No Third Parties Benefited................................ 82
12.16 Service of Process........................................ 82
12.17 Governing Law and Jurisdiction............................ 82
12.18 Entire Agreement.......................................... 83
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SCHEDULES
Schedule 1.1 Initial Control Group
Schedule 2.1 Commitments
Schedule 6.5 Litigation
Schedule 6.7 ERISA
Schedule 6.11 Permitted Liabilities
Schedule 6.12 Environmental Matters
Schedule 6.16 Subsidiaries and Minority Interests
Schedule 6.17 Insurance Matters
Schedule 8.1 Permitted Liens
Schedule 8.5 Permitted Indebtedness
Schedule 8.8 Contingent Obligations
Schedule 12.2 Lending Offices; Addresses for Notices
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit C Form of Compliance Certificate
Exhibit D-1 Form of Legal Opinion of Company's Counsel
Exhibit D-2 Form of Legal Opinion of Counsel to Additional Borrowers
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Promissory Note
Exhibit G Form of Guaranty
Exhibit H Form of Supplemental Signature Page
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CREDIT AGREEMENT
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This CREDIT AGREEMENT is entered into as of June 19, 1995, among System
Software Associates, Inc., a Delaware corporation (the "Company"), the
Subsidiary Borrowers (as such term is hereinafter defined), the several
financial institutions from time to time party to this Agreement (collectively,
the "Banks," and individually, a "Bank"), Bank of America National Trust and
Savings Association, as agent for the Banks and Bank of America Illinois, as
letter of credit issuing bank.
WHEREAS, the Banks have agreed to make available to the Company and the
Subsidiary Borrowers a revolving credit facility with letter of credit
subfacility upon the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
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1.1 Certain Defined Terms. The following terms have the following
meanings:
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the
acquisition of all or substantially all of the assets of a Person, or of
any business or division of a Person, (b) the acquisition of in excess of
50% of the capital stock, partnership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger or
consolidation or any other combination with another Person (other than a
Person that is a Subsidiary) provided that the Company or the Subsidiary is
the surviving entity.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another
Person if the controlling Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of
the other Person, whether through the ownership of voting securities, by
contract, or otherwise.
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"Agent" means BofA NT&SA in its capacity as agent for the Banks
hereunder, and any successor agent arising under Section 11.9.
"Agent-Related Persons" means BofA NT&SA and any successor agent
arising under Section 11.9 and any successor letter of credit issuing bank
hereunder, together with their respective Affiliates (including, in the
case of BofA NT&SA, the Arranger), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.
"Agent's Payment Office" means the address for payments set forth on
Schedule 11.2 or such other address as the Agent may from time to time
specify.
"Agreed Alternative Currency" has the meaning specified in subsection
2.5(e).
"Agreement" means this Credit Agreement.
"Applicable Currency" means, as to any particular payment or Loan or
Letter of Credit, Dollars or the Offshore Currency in which it is
denominated or is payable.
"Arranger" means BA Securities, Inc., a Delaware corporation.
"Assignee" has the meaning specified in subsection 12.8(a).
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost
of internal legal services and all disbursements of internal counsel.
"Bank" has the meaning specified in the introductory clause hereto.
References to the "Banks" shall include BofA Illinois, in its capacity as
Issuing Bank; for purposes of clarification only, to the extent that BofA
Illinois may have any rights or obligations in addition to those of the
Banks due to its status as Issuing Bank, its status as such will be
specifically referenced.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. (S)101, et seq.) as amended from time to time.
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
above the latest Federal Funds Rate; and (b) the rate of interest in
effect for such day as publicly announced from time to time by BofA in San
Francisco, California, as its "reference rate." (The "reference rate" is
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a rate set by BofA NT&SA based upon various factors including BofA NT&SA's
costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate.)
Any change in the reference rate announced by BofA NT&SA shall take
effect at the opening of business on the day specified in the public
announcement of such change.
"Base Rate Loan" means a Loan or an L/C Advance that bears interest
based on the Base Rate.
"BofA NT&SA" means Bank of America National Trust and Savings
Association, a national banking association.
"BofA Illinois" means Bank of America Illinois, an Illinois banking
corporation.
"Borrowing" means a borrowing hereunder consisting of Loans of the
same Type made to a Borrower on the same day by the Banks under Article II,
and, other than in the case of Base Rate Loans, having the same Interest
Period.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.3.
"Borrower" means the Company or any of the Subsidiary Borrowers; and
"Borrowers" means all of the foregoing, collectively.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in New York City, Chicago or San Francisco
are authorized or required by law to close and (i) with respect to
disbursements and payments in Dollars, a day on which dealings are carried
on in the applicable offshore Dollar interbank market, and (ii) with
respect to any disbursements and payments in and calculations pertaining to
any Offshore Currency Loan, a day on which commercial banks are open for
foreign exchange business in London, England, and on which dealings in the
relevant Offshore Currency are carried on in the applicable offshore
foreign exchange interbank market in which disbursement of or payment in
such Offshore Currency will be made or received hereunder.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
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"Cash Collateralize" means to pledge and deposit with or deliver to
the Agent, for the benefit of the Agent, the Issuing Bank and the Banks, as
collateral for the L/C Obligations, cash or deposit account balances
pursuant to documentation in form and substance satisfactory to the Agent
and the Issuing Bank (which documents are hereby consented to by the
Banks). Derivatives of such term shall have corresponding meaning. The
Company hereby grants the Agent, for the benefit of the Agent, the Issuing
Bank and the Banks, a security interest in all such cash and deposit
account balances. Cash collateral shall be maintained in blocked, non-
interest bearing deposit accounts at BofA.
"Change of Control" shall be deemed to have occurred at such time as:
(i) the Initial Control Group holds less than 25% of the fully diluted
common stock of the Company; or (ii) any person or group of persons (within
the meaning of Section 13 or 14 of the Exchange Act) other than the Initial
Control Group shall acquire at any time beneficial ownership of common
stock of the Company which on a fully diluted basis constitutes a greater
percentage of the common stock of the Company than is beneficially owned at
such time by the Initial Control Group.
"Closing Date" means the date on which all conditions precedent set
forth in Section 5.1 are satisfied or waived by all Banks (or, in the case
of subsection 5.1(g), waived by the Person entitled to receive such
payment).
"Code" means the Internal Revenue Code of 1986 as amended from time to
time, and regulations promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in Section
2.1.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
"Computation Date" has the meaning specified in subsection 2.5(a).
"Consolidated Indebtedness" means the total consolidated liabilities
of the Borrower and the Subsidiaries plus (without duplication) the undrawn
face amount of all outstanding letters of credit issued for the account of
the Borrower or any Subsidiary.
"Consolidated Income Available for Fixed Charges" means, for any
period, the sum of (i) Consolidated Net Income, plus (to the extent
deducted in determining Consolidated Net Income) plus (ii) all provisions
for any Federal, state, or
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other income taxes made by the Company and its Subsidiaries during such
period plus (iii) Fixed Charges.
"Consolidated Net Income" means, for any period, the consolidated net
income (or deficit) of the Company and its Subsidiaries after deducting,
without duplication, all operating expenses, provisions for all taxes and
reserves (including reserves for deferred income taxes) and all other
proper deductions, all determined in accordance with GAAP and after
deducting portions of income properly attributable to outstanding minority
interests, if any, in Subsidiaries; provided, however, that there shall be
excluded (i) any income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary or merges into or consolidates with the
Company or a Subsidiary, (ii) the income (or deficit) of any Person (other
than a Subsidiary) in which the Company or any Subsidiary has any ownership
interest (except that any such income actually received by the Company or
such Subsidiary in the form of cash dividends or similar distributions
shall be included without limitation), (iii) any gains or losses, or other
income, properly classified as extraordinary in accordance with GAAP, (iv)
any gains or losses, or other income, characterized as non-recurring in the
financial statements delivered pursuant to Section 7.1, (v) any gain
resulting from the sale of fixed or capital assets other than in the
ordinary course of business, (vi) any portion of the net income of a
Subsidiary which for any reason cannot be distributed as a cash dividend,
and (vi) any gains resulting from the reappraisal, revaluation or write-up
of assets.
"Consolidated Net Worth" means the sum of consolidated stockholders'
equity of the Company and its Subsidiaries determined in accordance with
GAAP, less, the sum of all goodwill, trade names, trademarks, patents,
organization expense, unamortized debt discount and expense and other
similar intangibles properly classified as such in accordance with GAAP,
which are incurred subsequent to August 15, 1993 and for which the Company
would not be entitled to a deduction for federal income tax purposes.
"Consolidated Senior Indebtedness" means Consolidated Indebtedness
less Subordinated Indebtedness.
"Consolidated Tangible Net Worth" means the consolidated shareholders'
equity of the Borrower and its Subsidiaries less the amount of any
intangible assets.
"Consolidated Total Capitalization" means the sum of Consolidated Net
Worth and Consolidated Indebtedness.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person, whether or not
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contingent, with or without recourse, (a) with respect to any Indebtedness,
lease, dividend, letter of credit or other obligation (the "primary
obligations") of another Person (the "primary obligor"), including any
obligation of that Person (i) to purchase, repurchase or otherwise acquire
such primary obligations or any security therefor, (ii) to advance or
provide funds for the payment or discharge of any such primary obligation,
or to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet item,
level of income or financial condition of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation, or (iv)
otherwise to assure or hold harmless the holder of any such primary
obligation against loss in respect thereof (each, a "Guaranty Obligation");
(b) with respect to any Surety Instrument (other than any Letter of Credit)
issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments; (c) to purchase
any materials, supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered, or (d) in
respect of any Swap Contract. The amount of any Contingent Obligation
shall, in the case of Guaranty Obligations, be deemed equal to the stated
or determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if indeterminable, the
maximum reasonably anticipated liability in respect thereof, and in the
case of other Contingent Obligations, shall be equal to the maximum
reasonably anticipated liability in respect thereof.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or any of its
property is bound.
"Conversion/Continuation Date" means any date on which, under Section
2.4, a Borrower, as the case may be, (a) converts Loans of one Type to
another Type, or (b) continues as Loans of the same Type, but with a new
Interest Period, Loans having Interest Periods expiring on such date.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not
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cured or otherwise remedied during such time) constitute an Event of
Default.
"Dollar Equivalent" means, at any time, (a) as to any amount
denominated in Dollars, the amount thereof at such time, and (b) as to any
amount denominated in an Offshore Currency, the equivalent amount in
Dollars as determined by the Agent at such time on the basis of the Spot
Rate for the purchase of Dollars with such Offshore Currency on the most
recent Computation Date provided for in subsection 2.5(a).
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Eligible Assignee" means (i) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; or (ii) 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 a combined capital
and surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States.
"Environmental Claims" means all claims, however asserted, by any
Governmental Authority or other Person alleging potential liability or
responsibility for violation of any Environmental Law, or for release or
injury to the environment.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with
all administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental
Authorities, in each case relating to environmental, health, safety and
land use matters.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Company within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code
for purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Company or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial
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employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Company or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer
Plan is in reorganization; (d) the filing of a notice of intent to
terminate, the treatment of a Plan amendment as a termination under Section
4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to
terminate a Pension Plan or Multiemployer Plan; (e) an event or condition
which might reasonably be expected to constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition
of any liability under Title IV of ERISA, other than PBGC premiums due but
not delinquent under Section 4007 of ERISA, upon the Company or any ERISA
Affiliate.
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances specified
in Section 10.1.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended from time to time, and regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including
any such successor, "H.15(519)") on the preceding Business Day opposite the
caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such
day will be the arithmetic mean as determined by the Agent of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m.
(New York City time) on that day by each of three leading brokers of
Federal funds transactions in New York City selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.11(a).
"Fixed Charges" means, for any period, the sum of (i) interest expense
(including the interest component of Rentals under capital leases),
amortization of debt discount and
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expense on Indebtedness of the Company and its Subsidiaries during such
period plus (ii) one-third of Rentals under operating leases.
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting Standards
Board (or agencies with similar functions of comparable stature and
authority within the U.S. accounting profession), which are applicable to
the circumstances as of the Closing Date.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Guaranty" means the guaranty executed by the Company in substantially
the form of Exhibit G.
"Guaranty Obligation" has the meaning specified in the definition of
"Contingent Obligation."
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of business on ordinary
terms); (c) all non-contingent reimbursement or payment obligations with
respect to Surety Instruments; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so
evidenced incurred in connection with the acquisition of property, assets
or businesses; (e) all indebtedness created or arising under any
conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the Person
(even though the rights and remedies of the seller or bank under such
agreement in the event of default are limited to repossession or sale of
such property); (f) all obligations with respect to capital leases; (g) all
Swap Contracts; (h) all indebtedness referred to in clauses (a) through (g)
above secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by)
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any Lien upon or in property (including accounts and contracts rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; and (i) all Guaranty
Obligations in respect of indebtedness or obligations of others of the
kinds referred to in clauses (a) through (g) above. The amount of any
Indebtedness arising under clause (g) above shall be deemed to equal 10% of
the notional amount of all Swap Contracts.
"Indemnified Liabilities" has the meaning specified in Section 12.5.
"Indemnified Person" has the meaning specified in Section 12.5.
"Independent Auditor" has the meaning specified in subsection 7.1(a).
"Initial Control Group" means the groups of Persons whose names appear
on Schedule 1.1.
"Insolvency Proceeding" means (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the
benefit of creditors, composition, marshalling of assets for creditors, or
other, similar arrangement in respect of its creditors generally or any
substantial portion of its creditors; undertaken under U.S. Federal, state
or foreign law, including the Bankruptcy Code.
"Interest Payment Date" means, as to any Offshore Rate Loan, the last
day of each Interest Period applicable to such Loan and, as to any Base
Rate Loan, the last Business Day of each calendar quarter and each date
such Loan is converted into another Type of Loan, provided, however, that
if any Interest Period for an Offshore Rate Loan exceeds three months, the
date that falls three months after the beginning of such Interest Period
and after each Interest Payment Date thereafter is also an Interest Payment
Date.
"Interest Period" means, as to any Offshore Rate Loan, the period
commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two, three
or six months thereafter as selected by the Company in its Notice of
Borrowing or Notice of Conversion/Continuation;
provided that:
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(a) if any Interest Period would otherwise end on a day that is
not a Business Day, that Interest Period shall be extended to the
following 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 preceding Business Day;
(b) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period; and
(c) no Interest Period for any Loan shall extend beyond the
Revolving Termination Date.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Issuance Date" has the meaning specified in subsection 3.1(a).
"Issue" means, with respect to any Letter of Credit, to issue or to
extend the expiry of, or to renew or increase the amount of, such Letter of
Credit; and the terms "Issued," "Issuing" and "Issuance" have corresponding
meanings.
"Issuing Bank" means BofA Illinois in its capacity as issuer of one or
more Letters of Credit hereunder, together with any replacement letter of
credit issuer arising under subsection 11.1(b) or Section 11.9.
"L/C Advance" has the meaning specified in subsection 3.3(d).
"L/C Amendment Application" means an application form for amendment of
outstanding standby or commercial documentary Letters of Credit as shall at
any time be in use at the Issuing Bank, as the Issuing Bank shall request.
"L/C Application" means an application form for issuances of standby
or commercial documentary letters of credit as shall at any time be in use
at the Issuing Bank, as the Issuing Bank shall request.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which shall not have been reimbursed on the date
when made nor converted into a Borrowing of Loans under subsection 3.3(c).
-11-
"L/C Commitment" means the commitment of the Issuing Bank to Issue,
and the commitment of the Banks severally to participate, in Letters of
Credit from time to time Issued or outstanding under Article III; provided
that the aggregate Dollar Equivalent amount of L/C Obligations at any one
time outstanding shall at no time exceed $25,000,000; and provided further
that the L/C Commitment is a part of the combined Commitments, rather than
a separate, independent commitment.
"L/C Obligations" means at any time the sum of (a) the aggregate
undrawn amount of all Letters of Credit then outstanding, plus (b) the
amount of all unreimbursed drawings under all Letters of Credit, including
all outstanding L/C Borrowings.
"L/C-Related Documents" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other document
relating to any Letter of Credit, including any of the Issuing Bank's
standard form documents for letter of credit issuances.
"Lending Office" means, as to any Bank, the office or offices of such
Bank specified as its "Lending Office" or "Domestic Lending Office" or
"Offshore Lending Office", as the case may be, on Schedule 12.2, or such
other office or offices as such Bank may from time to time notify the
Company and the Agent.
"Letters of Credit" means any letters of credit (whether standby
letters of credit or commercial documentary letters of credit) Issued by
the Issuing Bank pursuant to Article III which Letters of Credit may be
denominated in Dollars or in any Offshore Currency except for any Offshore
Currency with respect to which pursuant to Section 2.5(b) the Issuing Bank,
in its capacity as a Bank, would not be required to make an Offshore
Currency Loan.
"Leverage Ratio" means, at any time, the ratio of (a)(i) Consolidated
Indebtedness minus (ii) the aggregate principal Dollar Equivalent amount of
all Offshore Currency Loans to the Subsidiary Borrowers then outstanding,
provided the proceeds of such Offshore Currency Loans are maintained in a
deposit account with the Agent or one of its Affiliates, to (b)
Consolidated Tangible Net Worth.
"Lien" means any security interest, mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising
under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a capital
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lease, any financing lease having substantially the same economic effect as
any of the foregoing, or the filing of any financing statement naming the
owner of the asset to which such lien relates as debtor, under the Uniform
Commercial Code or any comparable law) and any contingent or other
agreement to provide any of the foregoing, but not including the interest
of a lessor under an operating lease.
"Loan" means an extension of credit by a Bank to the Company or a
Subsidiary Borrower under Article II and Article III, in the form of a
Revolving Loan or L/C Advance and may be a Base Rate Loan or an Offshore
Rate Loan (each, a "Type" of Loan).
"Loan Documents" means this Agreement, any Notes, the Guaranty, the
Fee Letters, the L/C-Related Documents, and all other documents delivered
to the Agent or any Bank in connection herewith.
"Majority Banks" means at any time Banks then holding at least 66-2/3%
of the then aggregate unpaid principal amount of the Loans, or, if no such
principal amount is then outstanding, Banks then having at least 66-2/3% of
the Commitments.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the current or future operations, business,
properties or condition (financial or otherwise) of the Company and its
Subsidiaries on a consolidated basis; (b) a material impairment of the
ability of the Company to perform under any Loan Document and to avoid any
Event of Default; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Company of any Loan
Document.
"Minimum Tranche" means, in respect of Loans comprising part of the
same Borrowing, or to be converted or continued under Section 2.4, (a) in
the case of Base Rate Loans, $500,000 or any multiple of $100,000 in excess
thereof, and (b) in the case of Offshore Currency Loans, the Dollar
Equivalent amount of $1,000,000 or any multiple of 100,000 units of the
Applicable Currency in excess thereof.
"Multiemployer Plan" means a "multiemployer plan", within the meaning
of Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate
makes, is making, or is obligated to make contributions or, during the
preceding three calendar years, has made, or been obligated to make,
contributions.
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"Note" means any promissory note executed by the Company or a
Subsidiary Borrower in favor of a Bank pursuant to subsection 2.2(b), in
substantially the form of Exhibit F.
"Notice of Borrowing" means a notice in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice in substantially
the form of Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document owing by the Company
and the Subsidiary Borrowers to any Bank, the Agent, or any Indemnified
Person, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising, including, without limitation, the obligations of the
Company under the Guaranty.
"Offshore Currency" means at any time English pounds sterling, Dutch
guilders, French francs, Italian liras, German deutsche marks, Japanese
yen, Australian dollars and any Agreed Alternative Currency.
"Offshore Currency L/C" means any Letter of Credit denominated in an
Offshore Currency.
"Offshore Currency Loans" means any Offshore Rate Loan denominated in
an Offshore Currency.
"Offshore Rate" means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/16th of 1%) determined by
the Agent as follows:
Offshore Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect on such
day (whether or not applicable to any Bank) under regulations issued
from time to time by the FRB for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"); and
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"LIBOR" means the rate of interest per annum (rounded upward to
the next 1/16th of 1%) notified to the Agent by the Reference Bank as
the rate of interest per annum at which deposits in the Applicable
Currency in the approximate amount of the amount of the Loan to be
made or continued as, or converted into, an Offshore Rate Loan by such
Reference Bank and having a maturity comparable to such Interest
Period would be offered to major banks in the London interbank market
at their request at approximately 11:00 a.m. (London time) two
Business Days prior to the commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on the
Offshore Rate, and may be an Offshore Currency Loan or a Loan denominated
in Dollars.
"Organization Documents" means, for any corporation, the certificate
or articles of incorporation, the bylaws, any certificate of determination
or instrument relating to the rights of preferred shareholders of such
corporation, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of such
corporation.
"Other Taxes" means any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other
Loan Documents.
"Overnight Rate" means, for any day, the rate of interest per annum at
which overnight deposits in the Applicable Currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day by BofA NT&SA's London Branch to
major banks in the London or other applicable offshore interbank market.
"Participant" has the meaning specified in subsection 12.8(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under
ERISA.
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"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Company sponsors, maintains,
or to which it makes, is making, or is obligated to make contributions, or
in the case of a multiple employer plan (as described in Section 4064(a) of
ERISA) has made contributions at any time during the immediately preceding
five (5) plan years.
"Permitted Liens" has the meaning specified in Section 8.1.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Company sponsors or maintains or to which the Company
makes, is making, or is obligated to make contributions and includes any
Pension Plan.
"Pro Rata Share" means, as to any Bank at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at
such time of such Bank's Commitment divided by the combined Commitments of
all Banks.
"Reference Bank" means BofA or such other Bank as may be elected by
the Majority Banks.
"Rentals" means as of the date of any determination thereof, all fixed
payments (including all payments which the lessee is obligated to make to
the lessor on termination of the lease or surrender of the property)
payable by the Company or a Subsidiary, as lessee or sublessee under a
lease of real or personal property but exclusive of any amounts required to
be paid by the Company or a Subsidiary (whether or not designated as rents
or additional rents) on account of maintenance, repairs, insurance, taxes,
assessments, amortization and similar charges. Fixed rents under any so-
called "percentage leases" shall be computed on the basis of the minimum
rents, if any, required to be paid by the lessee, regardless of sales
volume or gross revenues.
"Replacement Bank" has the meaning specified in Section 4.7.
"Reportable Event" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such event
for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or
-16-
determination of an arbitrator or of a Governmental Authority, in each case
applicable to or binding upon the Person or any of its property or to which
the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer or the
president of the Company, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of the
Company, or any other officer having substantially the same authority and
responsibility.
"Revolving Termination Date" means the earlier to occur of:
(a) June 19, 1997; or
(b) the date on which the Commitments otherwise terminate in
accordance with the provisions of this Agreement.
"Same Day Funds" means (i) with respect to disbursements and payments
in Dollars, immediately available funds, and (ii) with respect to
disbursements and payments in an Offshore Currency, same day or other funds
as may be determined by the Agent to be customary in the place of
disbursement or payment for the settlement of international banking
transactions in the relevant Offshore Currency.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Significant Subsidiary" shall mean any Subsidiary which would be a
"significant subsidiary" under either clause (a) or clause (b) of the
definition of Significant Subsidiary in Rule 1-02 of Regulation S-X under
the Securities Act of 1933 and the Securities Exchange Act of 1934, as
amended, as such Regulation is in effect on the date hereof.
"Spot Rate" for a currency means the rate quoted by BofA NT&SA as the
spot rate for the purchase by BofA NT&SA of such currency with another
currency through its Foreign Exchange Trading Center #5193, San Francisco,
California (or such other of BofA NT&SA's offices as BofA NT&SA may
designate from time to time) at approximately 8:00 a.m. (San Francisco
time) on the date two Business Days prior to the date as of which the
foreign exchange computation is made.
"Subordinated Indebtedness" means Indebtedness of any Borrower which
(i) is subordinated in priority of payment to
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the Obligations (including refinancings of the Obligations); (ii) has its
first scheduled principal payment at least six months after the Revolving
Termination Date (but may contain call provisions acceptable to the
Majority Banks); (iii) contains no financial maintenance covenants, other
than a net worth covenant acceptable to the Majority Banks, (iv) contains
no cross default clause but may contain a cross acceleration clause with an
automatic cross cure at any time prior to judgment; (v) contains no
negative pledge clause; and (vi) contains a "fish or cut bait" provision of
at least 180 days and a subsequent stop payment provision for events not
known by the Agent at the time of the issuance of the prior stop payment
notice.
"Subsidiary" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than 50%
of the voting stock or other equity interests (in the case of Persons other
than corporations), is owned or controlled directly or indirectly by the
Person, or one or more of the Subsidiaries of the Person, or a combination
thereof. Unless the context otherwise clearly requires, references herein
to a "Subsidiary" refer to a Subsidiary of the Company.
"Subsidiary Borrower" means System Software Associates Japan Limited
Liability Company, a Delaware limited liability company, and any other
Subsidiary of the Company which hereafter complies with the conditions
precedent set forth in Section 5.3; and "Subsidiary Borrowers" means all of
the foregoing, collectively;
"Surety Instruments" means all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds,
surety bonds and similar instruments.
"Swap Contract" means any agreement (including any master agreement
and any agreement, whether or not in writing, relating to any single
transaction) that is an interest rate swap agreement, basis swap, forward
rate agreement, commodity swap, commodity option, equity or equity index
swap or option, bond option, interest rate option, forward foreign exchange
agreement, rate cap, collar or floor agreement, currency swap agreement,
cross-currency rate swap agreement, swap option, currency option or any
other, similar agreement (including any option to enter into any of the
foregoing).
"Swap Reserve" means, at any time, an amount equal to 10% of the
aggregate notional Dollar Equivalent amount of all Swap Contracts then in
effect for the Borrowers; provided, that at such time as 10% of the
aggregate notional Dollar Equivalent
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amount of all Swap Contracts of the Borrowers is less than $5,000,000, the
Swap Reserve shall equal zero.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Bank and the Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured
by each Bank's net income by the jurisdiction (or any political subdivision
thereof) under the laws of which such Bank or the Agent, as the case may
be, is organized or maintains a lending office.
"Type" has the meaning specified in the definition of "Loan."
"UCP" has the meaning specified in Section 3.9.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of
that Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." each means the United States of America.
"Wholly-Owned Subsidiary" means any corporation, association,
partnership, joint venture or other business entity of which (other than
directors' qualifying shares required by law) 100% of the voting stock or
other equity interest of each class having ordinary voting power, and 100%
of the voting stock or other equity interest of every other class, in each
case, at the time as of which any determination is being made, is owned,
beneficially and of record, by the Company, or by one or more of the other
Wholly-Owned Subsidiaries, or both.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
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(ii) The term "including" is not limiting and means "including
without limitation."
(iii) 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."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience
of reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and 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 cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company
and the other parties, and are the products of all parties. Accordingly, they
shall not be construed against the Banks or the Agent merely because of the
Agent's or Banks' involvement in their preparation.
1.3 Accounting Principles. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer to
such fiscal periods of the Company.
1.4 Currency Equivalents Generally. For all purposes of this Agreement
(but not for purposes of the preparation of any financial statements delivered
pursuant hereto), the equivalent in any Offshore Currency or other currency of
an amount in Dollars, and the equivalent in Dollars of an amount in any Offshore
Currency or other currency, shall be determined at the Spot Rate.
-20-
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments. Each Bank severally agrees, on the
terms and conditions set forth herein, to make loans to any Borrower from time
to time on any Business Day during the period from the Closing Date to the
Revolving Termination Date, in an aggregate principal Dollar Equivalent amount
not to exceed at any time outstanding the amount set forth on Schedule 2.1 (such
amount as the same may be reduced under Section 2.6 or as a result of one or
more assignments under Section 12.8, the Bank's "Commitment"); provided,
however, that, after giving effect to any Borrowing, the aggregate principal
Dollar Equivalent amount of all outstanding Loans plus the aggregate Dollar
Equivalent amount of all L/C Obligations shall not at any time exceed the
combined Commitments of all Banks minus the Swap Reserve. Within the limits of
each Bank's Commitment, and subject to the other terms and conditions hereof,
the Borrowers may borrow under this Section 2.1, prepay under Section 2.7 and
reborrow under this Section 2.1.
2.2 Loan Accounts. (a) The Loans made by each Bank and the Letters of
Credit Issued by the Issuing Bank shall be evidenced by one or more loan
accounts or records maintained by such Bank or Issuing Bank in the ordinary
course of business. The loan accounts or records maintained by the Agent, the
Issuing Bank and each Bank shall be conclusive absent manifest error of the
amount and Applicable Currency of the Loans made by the Banks to the respective
Borrowers and the Letters of Credit Issued for the account of the respective
Borrowers and the interest and principal payments thereon. Any failure so to
record or any error in doing so shall not, however, limit or otherwise affect
the obligation of the Borrowers hereunder to pay any amount owing with respect
to the Loans or any Letter of Credit.
(b) Upon the request of any Bank made through the Agent, the Loans
made by such Bank may be evidenced by Notes, instead of loan accounts. Each
such Bank shall endorse on the schedules annexed to its Note the date, amount,
maturity and Applicable Currency of each Loan made by it and the amount of each
payment of interest and principal made by the respective Borrower with respect
thereto. Each such Bank is irrevocably authorized by the respective Borrower to
endorse its Note(s) and each Bank's record shall be conclusive absent manifest
error; provided, however, that the failure of a Bank to make, or an error in
making, a notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the respective Borrower hereunder or under any such
Note to such Bank.
2.3 Procedure for Borrowing. (a) Each Borrowing of Loans shall be made
upon the irrevocable written notice of the Company delivered to the Agent in the
form of a Notice of Borrowing (which
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notice must be received by the Agent prior to 9:00 a.m. (San Francisco time) (i)
five Business Days prior to the requested Borrowing Date, in the case of
Offshore Currency Loans; (ii) three Business Days prior to the requested
Borrowing Date, in the case of Offshore Rate Loans denominated in Dollars; and
(iii) 8:00 a.m. (San Francisco time) on such Borrowing Date, in the case of Base
Rate Loans, specifying:
(A) the identity of the Borrower for the Borrowing;
(B) the amount of the Borrowing, which shall be in an
aggregate amount not less than the Minimum Tranche;
(C) the requested Borrowing Date, which shall be a Business
Day;
(D) the Type of Loans comprising the Borrowing;
(E) in the case of Offshore Rate Loans, the duration of the
Interest Period applicable to such Loans included in such notice. If
the Notice of Borrowing fails to specify the duration of the Interest
Period, such Interest Period shall be one month;
(F) in the case of a Borrowing comprised of Offshore
Currency Loans, the Applicable Currency; and
(G) the account into which the proceeds of the Borrowing
are to be deposited.
(b) The Dollar Equivalent amount of any Borrowing in an Offshore
Currency will be determined by the Agent for such Borrowing on the Computation
Date therefor in accordance with subsection 2.5(a). Upon receipt of the Notice
of Borrowing, the Agent will promptly notify each Bank thereof and of the amount
of such Bank's Pro Rata Share of the Borrowing. In the case of a Borrowing
comprised of Offshore Currency Loans, such notice will provide the approximate
Dollar Equivalent amount of each Bank's Pro Rata Share of the Borrowing, and the
Agent will, upon the determination of the Dollar Equivalent amount of the
Borrowing as specified in the Notice of Borrowing, promptly notify each Bank of
the exact amount of such Bank's Pro Rata Share of the Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the respective Borrower on
the Borrowing Date requested by the Company in Same Day Funds and in the
Applicable Currency (i) in the case of a Borrowing comprised of Loans in
Dollars, at the Agent's Payment Office by 11:00 a.m. (San Francisco time), (ii)
in the case of a
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Borrowing comprised of Offshore Currency Loans, at such place of payment and by
such time as the Agent may specify. The proceeds of all such Loans will then be
made available to the respective Borrower by the Agent at such office by
crediting the account of such Borrower specified in the Notice of Borrowing with
the aggregate of the amounts made available to the Agent by the Banks and in
like funds as received by the Agent.
(d) After giving effect to any Borrowing, there may not be more than
fifteen (15) different Interest Periods in effect.
2.4 Conversion and Continuation Elections. (a) The Company on behalf of
any Borrower may, upon irrevocable written notice to the Agent in accordance
with subsection 2.4(b):
(i) elect, as of any Business Day, in the case of its Base Rate
Loans, or as of the last day of the applicable Interest Period, in the case
of its Offshore Rate Loans denominated in Dollars, to convert any such
Loans (or any part thereof in an amount not less than the Minimum Tranche)
into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any of its Loans having Interest Periods expiring on
such day (or any part thereof in an amount not less than the Minimum
Tranche);
provided, that if at any time the aggregate amount of Offshore Rate Loans
denominated in Dollars in respect of any Borrowing is reduced, by payment,
prepayment, or conversion of part thereof to be less than $1,000,000, such
Offshore Rate Loans denominated in Dollars shall automatically convert into Base
Rate Loans, and on and after such date the right of the Company on behalf of the
respective Borrower to continue such Loans as, and convert such Loans into,
Offshore Rate Loans shall terminate.
(b) The Company on behalf of any Borrower shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 8:00 a.m.
(San Francisco time) at least (i) five Business Days in advance of the
Continuation Date if the Loans are to be continued as Offshore Currency Loans;
(ii) three Business Days in advance of the Conversion/Continuation Date, if the
Loans are to be converted into or continued as Offshore Rate Loans denominated
in Dollars; and (iii) on the Conversion/Continuation Date, if the Loans are to
be converted into Base Rate Loans, specifying:
(A) The identity of the Borrower of the Loans to be
converted or continued;
(B) the proposed Conversion/Continuation Date;
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(C) the aggregate amount of Loans to be converted or
continued;
(D) the Type of Loans resulting from the proposed
conversion or continuation; and
(E) other than in the case of conversions into Base Rate
Loans, the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans denominated in Dollars, the Company on behalf of the
respective Borrower has failed to select timely a new Interest Period to be
applicable to such Offshore Rate Loans, or if any Default or Event of Default
then exists, the Company on behalf of the respective Borrower shall be deemed to
have elected to convert such Offshore Rate Loans into Base Rate Loans effective
as of the expiration date of such Interest Period. If the Company on behalf of
any Borrower has failed to select a new Interest Period to be applicable to
Offshore Currency Loans prior to the fifth Business Day in advance of the
expiration date of the current Interest Period applicable thereto as provided in
subsection 2.4(b), or if any Default or Event of Default shall then exist,
subject to the provisions of subsection 2.5(d), the Company on behalf of such
Borrower shall be deemed to have elected to continue such Offshore Currency
Loans on the basis of a one month Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company on behalf the respective Borrower, the Agent will promptly notify each
Bank of the details of any automatic conversion. All conversions and
continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Bank.
(e) Unless the Majority Banks otherwise agree, during the existence
of a Default or Event of Default, the Company may not elect on behalf of any
Borrower to have a Loan denominated in Dollars converted into or continued as an
Offshore Rate Loan denominated in Dollars, or an Offshore Currency Loan
continued on the basis of an Interest Period exceeding one month.
(f) After giving effect to any conversion or continuation of Loans,
there may not be more than fifteen (15) different Interest Periods in effect.
2.5 Utilization of Commitments in Offshore Currencies. (a) The Agent will
determine the Dollar Equivalent amount with respect to any (i) Borrowing
comprised of Offshore Currency Loans as of the requested Borrowing Date, (ii)
L/C Obligations relating to an
-24-
Offshore Currency L/C as of the requested Issuance Date of such Offshore
Currency L/C, (iii) outstanding Offshore Currency Loans and Offshore Currency
L/C's as of the last Business Day of each month, and (iv) outstanding Offshore
Currency Loans as of any redenomination date pursuant to Section 4.5 (each such
date under clauses (i) through (iv) a "Computation Date").
(b) In the case of a proposed Borrowing comprised of Offshore
Currency Loans, the Banks shall be under no obligation to make Offshore Currency
Loans in the requested Offshore Currency as part of such Borrowing if the Agent
has received notice from any of the Banks by 9:00 a.m. (San Francisco time) four
Business Days prior to the day of such Borrowing that it is impossible for such
Bank to provide Loans in the requested Offshore Currency due to the occurrence
of events beyond such Bank's control, in which event the Agent will give notice
to the respective Borrower no later than 5:00 p.m. (San Francisco time) on the
fourth Business Day prior to the requested date of such Borrowing that the
Borrowing in the requested Offshore Currency is not then available, and notice
thereof also will be given promptly by the Agent to the Banks. If the Agent
shall have so notified the respective Borrower that any such Borrowing in a
requested Offshore Currency is not then available, the respective Borrower shall
be deemed automatically to have withdrawn the related Notice of Borrowing and
the Borrowing requested therein shall not occur.
(c) In the case of a proposed continuation of Offshore Currency Loans
for an additional Interest Period pursuant to Section 2.4, the Banks shall be
under no obligation to continue such Offshore Currency Loans if the Agent has
received notice from any of the Banks by 9:00 a.m. (San Francisco time) four
Business Days prior to the day of such continuation that such Bank cannot
continue to provide Loans in the relevant Offshore Currency due to the
occurrence of events beyond such Bank's control, in which event the Agent will
give notice to the respective Borrower not later than 5:00 p.m. (San Francisco
time) on the fourth Business Day prior to the requested date of such
continuation that the Offshore Currency is not than available, and notice
thereof also will be given promptly by the Agent to the Banks. If the Agent
shall have so notified the respective Borrower that any such continuation of
Offshore Currency Loans is not then available, any Notice of
Continuation/Conversion with respect thereto shall be deemed withdrawn.
(d) Notwithstanding anything herein to the contrary, during the
existence of a Default or an Event of Default, upon the request of the Majority
Banks, all or any part of any outstanding Offshore Currency Loans shall be
redenominated and converted into Base Rate Loans in Dollars with effect from the
last day of the Interest Period with respect to any such Offshore Currency
Loans. The Agent will promptly notify the respective Borrower of any such
redenomination and conversion request.
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(e) The Company shall be entitled to request that Loans or Letters of
Credit hereunder also be permitted to be made in any other lawful currency
(other than Dollars), in addition to the eurocurrencies specified in the
definition of "Offshore Currency" herein, that in the opinion of the Majority
Banks is at such time freely traded in the offshore interbank foreign exchange
markets and is freely transferable and freely convertible into Dollars (an
"Agreed Alternative Currency"). The Company shall deliver to the Agent any
request for designation of an Agreed Alternate Currency in accordance with
Section 12.2, to be received by the Agent not later than 9:00 a.m. (San
Francisco time) at least eight Business Days in advance of the date of any
Borrowing hereunder proposed to be made in such Agreed Alternate Currency. Upon
receipt of any such request the Agent will promptly notify the Banks thereof,
and each Bank will use its best efforts to respond to such request within two
Business Days of receipt thereof. Each Bank may grant or accept such request in
its sole discretion. The Agent will promptly notify the Company of the
acceptance or rejection of any such request.
2.6 Voluntary Termination or Reduction of Commitments. The Company may,
upon not less than five Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate minimum
Dollar Equivalent amount of $1,000,000 or any Dollar Equivalent multiple of
$1,000,000 in excess thereof; unless, after giving effect thereto and to any
prepayments of Loans made on the effective date thereof, the then-outstanding
aggregate principal Dollar Equivalent amount of the Loans plus the then-
outstanding aggregate Dollar Equivalent Amount of the L/C Obligations would
exceed the amount of the combined Commitments then in effect. Once reduced in
accordance with this Section, the Commitments may not be increased. Any
reduction of the Commitments shall be applied to each Bank according to its Pro
Rata Share. All accrued commitment fees to, but not including the effective
date of any reduction or termination of Commitments, shall be paid on the
effective date of such reduction or termination.
2.7 Mandatory Optional Prepayments. (a) If on any date the Dollar
Equivalent amount of L/C Obligations exceeds the L/C Commitment, the Borrowers
shall Cash Collateralize on such date the outstanding Letters of Credit in an
amount equal to the excess of the maximum amount then available to be drawn
under the Letters of Credit over the amount of the L/C Commitment. Subject to
Section 4.4, if on any date after giving effect to any Cash Collateralization
made on such date pursuant to the preceding sentence, the aggregate principal
Dollar Equivalent amount of all Loans then outstanding plus the Dollar
Equivalent amount of all L/C Obligations exceeds the combined Commitments, the
Borrowers shall immediately, and without notice or demand, prepay the
outstanding principal amount of the Loans and L/C Advances by an amount equal to
the applicable excess.
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(b) Subject to Section 4.4, the Company on behalf of any Borrower may, at
any time or from time to time, upon irrevocable notice to the Agent, ratably
among the Banks prepay Loans in whole or in part, in minimum Dollar Equivalent
amounts of $100,000 or any Dollar Equivalent multiple of $100,000 in excess
thereof. The Company on behalf of the respective Borrower shall deliver a
notice of prepayment in accordance with Section 12.2 to be received by the Agent
not later than 9:00 a.m. (San Francisco time) in the case of clause (i) or (ii)
and 8:00 a.m. (San Francisco time) in the case of clause (iii) (i) at least five
Business Days in advance of the prepayment date if the Loans to be prepaid are
Offshore Currency Loans, (ii) at least three Business Days in advance of the
prepayment date if the Loans to be prepaid are Offshore Rate Loans in Dollars,
and (iii) on the prepayment date if the Loans to be prepaid are Base Rate Loans.
Such notice of prepayment shall specify the date and amount of such prepayment
and whether such prepayment is of Base Rate Loans, Offshore Rate Loans, or any
combination thereof, and the Applicable Currency. Such notice shall not
thereafter be revocable by the Company on behalf of the respective Borrower and
the Agent will promptly notify each Bank thereof and of such Bank's Pro Rata
Share of such prepayment. The respective Borrower shall make such prepayment
and the payment amount specified in such notice shall be due and payable on the
date specified therein, together with accrued interest to each such date on the
amount prepaid and any amounts required pursuant to Section 4.4.
2.8 Currency Exchange Fluctuations. Subject to Section 4.4, if on any
Computation Date the Agent shall have determined that the aggregate Dollar
Equivalent principal amount of all Loans then outstanding plus the Dollar
Equivalent amount of all L/C Obligations then outstanding exceeds the combined
Commitments of the Banks by more than $500,000, due to a change in applicable
rates of exchange between Dollars and Offshore Currencies, then the Agent shall
give notice to the Borrowers that a prepayment is required under this Section,
and the Borrowers agree within ten (10) days of such notice to make prepayments
of Loans such that, after giving effect to such prepayment the aggregate Dollar
Equivalent amount of all Loans plus the Dollar Equivalent amount of all L/C
Obligations does not exceed the combined Commitments.
2.9 Repayment. The Borrowers shall repay to the Agent for the account of
the Banks on the Revolving Termination Date the aggregate principal amount of
Loans outstanding on such date and shall Cash Collateralize all L/C Obligations,
if any, outstanding on such date.
2.10 Interest Rates. (a) With respect to each Loan, the respective
Borrower thereof hereby promises to pay interest on the unpaid principal amount
thereof for the period commencing on the date of such Loan until such Loan is
paid in full, as follows:
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(i) While such Loan is a Base Rate Loan, at a rate per annum
equal to the Base Rate from time to time in effect;
(ii) While such Loan is an Offshore Rate Loan, for each Interest
Period commencing on a day upon which the aggregate principal Dollar
Equivalent amount of all Loans plus all L/C Obligations then outstanding is
less than or equal to $25,000,000, at a rate per annum equal to the Offshore
Rate applicable to such Interest Period, plus 0.75% per annum; and
(iii) While such Loan is an Offshore Rate Loan, for each Interest
Period commencing on a day upon which the aggregate principal Dollar
Equivalent amount of all Loans plus all L/C Obligations then outstanding is
greater than $25,000,000, at a rate per annum equal to the Offshore Rate
applicable to such Interest Period, plus the applicable margin, based on the
Leverage Ratio then in effect, as set forth below:
Leverage Ratio Margin
-------------- ------
Less than or equal to 4.5 .75
Greater than 4.5 but less than
or equal to 5.00 1.00
Greater than 5.00 but less
than or equal to 5.25 1.50
Greater than 5.25 but less
than or equal to 5.50 2.00
Greater than 5.50 but less
than or equal to 5.75 2.50
Greater than 5.75 3.00
As of the Closing Date, the applicable margin for purposes of clause (iii)
above is .75; the applicable margin for the aggregate principal amount of all
Loans for purposes of clause (iii) above shall be adjusted automatically without
giving effect to rounding, to the extent applicable, on the forty-fifth day
after the end of each of the first three fiscal quarters of each fiscal year and
on the ninetieth day after the end of each fiscal year, based on the Leverage
Ratio as of the last day of the fiscal period then most recently ended; it being
understood that if the Company fails to deliver the Compliance Certificate
required by subsection 7.2(b) by the date required in subsection 7.2(b), the
applicable margin shall be 3.0% for Offshore Rate Loans until such Compliance
Certificate is delivered.
(b) Interest on each Loan shall be paid in arrears on each Interest
Payment Date. Interest shall also be paid on the date of any prepayment of
Loans under Section 2.7 or 2.8 for the portion of the Loans so prepaid and upon
payment (including prepayment) in full thereof and, during the existence of any
Event
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of Default, interest shall be paid on demand of the Agent at the request or with
the consent of the Majority Banks.
(c) Notwithstanding subsection (a) of this Section, while any Event of
Default exists at the request of the Majority Banks or at all times after
acceleration, a Borrower shall pay interest (after as well as before entry of
judgment thereon to the extent permitted by law) on the principal amount of all
of its outstanding Loans, at a rate per annum which is determined by adding 2%
per annum to the rate otherwise in effect hereunder for such Loans; provided,
however, that, on and after the expiration of any Interest Period applicable to
any Offshore Rate Loan outstanding on the date of occurrence of such Event of
Default or acceleration, the principal amount of such Loan shall, during the
continuation of such Event of Default or after acceleration, bear interest at a
rate per annum equal to the interest rate otherwise in effect hereunder plus 2%.
(d) Anything herein to the contrary notwithstanding, the obligations
of the Borrowers to any Bank hereunder shall be subject to the limitation that
payments of interest shall not be required for any period for which interest is
computed hereunder, to the extent (but only to the extent) that contracting for
or receiving such payment by such Bank would be contrary to the provisions of
any law applicable to such Bank limiting the highest rate of interest that may
be lawfully contracted for, charged or received by such Bank, in lieu thereof,
during any such period, the Borrowers shall pay such Bank interest at the
highest rate permitted by applicable law.
2.11 Fees. (a) Arrangement, Agency Fees. The Company shall pay an
arrangement fee to the Arranger for the Arranger's own account as required by
the letter agreement ("Fee Letter") between the Company and the Arranger dated
January 20, 1995.
(b) Commitment Fees. The Company shall pay to the Agent for the
account of each Bank a commitment fee on the average daily unused portion of
such Bank's Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily utilization
(including utilization of the L/C Commitment) for that quarter as calculated by
the Agent, equal to 0.125 percent per annum. Such commitment fee shall accrue
from the Closing Date to the Revolving Termination Date and shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
commencing on June 30, 1995 through the Revolving Termination Date, with the
final payment to be made on the Revolving Termination Date; provided that, in
connection with any reduction or termination of Commitments under Section 2.6,
the accrued commitment fee calculated for the period ending on such date shall
also be paid on the date of such reduction or termination, with the following
quarterly payment being calculated on the basis of the period from such
reduction or termination date
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to such quarterly payment date. The commitment fees provided in this subsection
shall accrue at all times after the above-mentioned commencement date, including
at any time during which one or more conditions in Article V are not met.
2.12 Computation of Fees and Interest. (a) All computations of all fees
hereunder and of interest for Base Rate Loans when the Base Rate is determined
by BofA's "reference rate" shall be made on the basis of a year of 365 or 366
days, as the case may be, and actual days elapsed. All other computations of
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last day
thereof.
(b) For purposes of determining utilization of each Bank's Commitment
in order to calculate the commitment fee due under Section 2.11(b), the amount
of any outstanding Offshore Currency Loan on any date shall be determined based
upon the Dollar Equivalent amount as of the most recent Computation Date with
respect to such Offshore Currency Loan.
(c) Each determination of an interest rate or a Dollar Equivalent
amount by the Agent shall be conclusive and binding on the Borrowers and the
Banks in the absence of manifest error. The Agent will deliver to the Company
and the Banks a statement showing the quotations used by the Agent in
determining any interest rate.
2.13 Payments by the Borrowers. (a) All payments to be made by the
Borrowers shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrowers shall be made
to the Agent for the account of the Banks at the Agent's Payment Office, and,
with respect to principal of, interest on, and any other amounts relating to,
any Offshore Currency Loan, shall be made in the Offshore Currency in which such
Loan is denominated or payable, and, with respect to all other amounts payable
hereunder, shall be made in Dollars. Such payments shall be made in Same Day
Funds, and (i) in the case of Offshore Currency payments, no later than such
time on the date specified herein as may be determined by the Agent and
communicated in writing to the Company to be necessary for such payment to be
credited on such date in accordance with normal banking procedures in the place
of payment, and (ii) in the case of any Dollar payments, no later than 10:00
a.m. (San Francisco time) on the date specified herein. The Agent will promptly
distribute to each Bank its Pro Rata Share (or other applicable share as
expressly provided herein) of such principal, interest, fees or other amounts,
in like funds as received. Any payment received by the Agent later than 10:00
a.m. (San Francisco time), or later than the time specified by the Agent as
provided
-30-
in clause (i) above (in the case of Offshore Currency payments), shall be deemed
to have been received on the following Business Day and any applicable interest
or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of "Interest
Period" herein, whenever any payment is due on a day other than a Business Day,
such payment shall be made on the following Business Day, and such extension of
time shall in such case be included in the computation of interest or fees, as
the case may be.
(c) Unless the Agent receives notice from the Company on behalf of the
respective Borrower prior to the date on which any payment is due to the Banks
that such Borrower will not make such payment in full as and when required, the
Agent may assume that such Borrower has made such payment in full to the Agent
on such date in Same Day Funds and the Agent may (but shall not be so required),
in reliance upon such assumption, distribute to each Bank on such due date an
amount equal to the amount then due such Bank. If and to the extent such
Borrower has not made such payment in full to the Agent, each Bank shall repay
to the Agent on demand such amount distributed to such Bank, together with
interest thereon at the Federal Funds Rate or, in the case of a payment in an
offshore Currency, the Overnight Rate, for each day from the date such amount is
distributed to such Bank until the date repaid.
2.14 Payments by the Banks to the Agent. (a) Unless the Agent receives
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the date of
such Borrowing, in the case of Offshore Rate Loans, or 9:00 a.m. (San Francisco
time) on the date of such Borrowing, in the case of Base Rate Loans, that such
Bank will not make available as and when required hereunder to the Agent for the
account of the respective Borrower the amount of that Bank's Pro Rata Share of
the Borrowing, the Agent may assume that each Bank has made such amount
available to the Agent in Same Day Funds on the Borrowing Date and the Agent may
(but shall not be so required), in reliance upon such assumption, make available
to the respective Borrower on such date a corresponding amount. If and to the
extent any Bank shall not have made its full amount available to the Agent in
Same Day Funds and the Agent in such circumstances has made available to the
respective Borrower such amount, that Bank shall on the Business Day following
such Borrowing Date make such amount available to the Agent, together with
interest at the Federal Funds Rate or, in the case of any Borrowing consisting
of Offshore Currency Loans, the Overnight Rate, for each day during such period.
A notice of the Agent submitted to any Bank with respect to amounts owing under
this subsection 2.14(a) shall be conclusive, absent manifest error. If such
amount is so made available, such payment to the Agent shall constitute such
Bank's Loan on the date of Borrowing for all
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purposes of this Agreement. If such amount is not made available to the Agent
on the Business Day following the Borrowing Date, the Agent will notify the
respective Borrower of such failure to fund and, upon demand by the Agent, such
Borrower shall pay such amount to the Agent for the Agent's account, together
with interest thereon for each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing Date
shall not relieve any other Bank of any obligation hereunder to make a Loan on
such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
2.15 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Pro Rata Share, such Bank shall
immediately (a) notify the Agent of such fact, and (b) purchase from the other
Banks such participations in the Loans made by them as shall be necessary to
cause such purchasing Bank to share the excess payment pro rata with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrowers
agree that any Bank so purchasing a participation from another Bank may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 12.9) with respect to such
participation as fully as if such Bank were the direct creditor of the
respective Borrower in the amount of such participation. The Agent will keep
records (which shall be conclusive and binding in the absence of manifest error)
of participations purchased under this Section and will in each case notify the
Banks and the Company following any such purchases or repayments.
ARTICLE III
-----------
THE LETTERS OF CREDIT
---------------------
3.1 The Letter of Credit Subfacility. (a) On the terms and conditions set
forth herein (i) the Issuing Bank agrees, (A) from time to time on any Business
Day during the period from the
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Closing Date to the Revolving Termination Date to issue Letters of Credit for
the accounts of the Borrowers, and to amend or renew Letters of Credit
previously issued by it, in accordance with subsection 3.2(c) and 3.2(d), and
(B) to honor drafts under the Letters of Credit; and (ii) the Banks severally
agree to participate in Letters of Credit Issued for the accounts of the
Borrowers; provided, that the Issuing Bank shall not be obligated to Issue, and
no Bank shall be obligated to participate in, any Letter of Credit if as of the
date of Issuance of such Letter of Credit (the "Issuance Date") (1) the
aggregate Dollar Equivalent amount of all L/C Obligations plus the aggregate
principal Dollar Equivalent amount of all Loans exceed the combined Commitments
of all Banks minus the Swap Reserve, (2) the participation of any Bank in the
aggregate Dollar Equivalent amount of all L/C Obligations plus the aggregate
principal Dollar Equivalent amount of all Loans of such Bank exceeds such Bank's
Commitment, or (3) the aggregate principal Dollar Equivalent amount of L/C
Obligations exceeds the L/C Commitment. Within the foregoing limits, and
subject to the other terms and conditions hereof, the Borrowers' ability to
obtain Letters of Credit shall be fully revolving, and, accordingly, the
Borrowers may, during the foregoing period, obtain Letters of Credit to replace
Letters of Credit which have expired or which have been drawn upon and
reimbursed.
(b) The Issuing Bank is under no obligation to Issue any Letter of
Credit if:
(i) any order, judgment or decree of any Governmental Authority
or arbitrator shall by its terms purport to enjoin or restrain the Issuing
Bank from Issuing such Letter of Credit or any Requirement of Law applicable
to the Issuing Bank or any request or directive (whether or not having the
force of law) from any Governmental Authority with jurisdiction over the
Issuing Bank shall prohibit, or request that the Issuing Bank refrain from,
the Issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Issuing Bank with respect to such Letter
of Credit any restriction, reserve or capital requirement (for which the
Issuing Bank is not otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon the Issuing Bank any unreimbursed loss,
cost or expense which was not applicable on the Closing Date and which the
Issuing Bank in good xxxxx xxxxx material to it;
(ii) the Issuing Bank has received written notice from any Bank,
the Agent or any Borrower, on or prior to the Business Day prior to the
requested date of Issuance of such Letter of Credit, that one or more of the
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applicable conditions contained in Article V is not then satisfied;
(iii) the expiry date of any requested Letter of Credit is, or
any automatic extension date could be, after the Revolving Termination Date,
unless all of the Banks have approved such expiry date in writing;
(iv) any requested Letter of Credit does not provide for drafts,
or is not otherwise in form and substance acceptable to the Issuing Bank, or
the Issuance of a Letter of Credit shall violate any applicable policies of
the Issuing Bank; or
(v) such Letter of Credit would be issued for the purpose of
supporting the issuance of any letter of credit by any other Person.
3.2 Issuance, Amendment and Renewal of Letters of Credit. (a) Each Letter
of Credit shall be issued upon the irrevocable written request of the Company on
behalf of the respective Borrower received by the Issuing Bank (with a copy sent
to the Agent) at least one Business Day in the case of Letters of Credit
denominated in Dollars (and five Business Days in the case of Letters of Credit
denominated in an Offshore Currency) prior to the proposed date of issuance.
Each such request for issuance of a Letter of Credit shall be by facsimile,
confirmed immediately in an original writing, in the form of an L/C Application,
and shall specify in form and detail satisfactory to the Issuing Bank: (i) the
identity of the applying Borrower; (ii) the proposed date of issuance of the
Letter of Credit (which shall be a Business Day); (iii) the face amount of the
Letter of Credit, and if such Letter of Credit is to be an Offshore Currency
L/C, the Applicable Currency; (iv) the expiry date of the Letter of Credit; (v)
the name and address of the beneficiary thereof; (vi) the documents to be
presented by the beneficiary of the Letter of Credit in case of any drawing
thereunder; (vii) the full text of any certificate to be presented by the
beneficiary in case of any drawing thereunder; and (viii) such other matters as
the Issuing Bank may require.
(b) At least four Business Days prior to the Issuance of any Letter of
Credit, the Issuing Bank will confirm with the Agent (by telephone or in
writing) that the Agent has received a copy of the L/C Application or L/C
Amendment Application from the respective Borrower and, if not, the Issuing Bank
will provide the Agent with a copy thereof. Unless the Issuing Bank has
received notice on or before the Business Day immediately preceding the date the
Issuing Bank is to issue a requested Letter of Credit (A) from the Agent
directing the Issuing Bank not to issue such Letter of Credit because such
issuance is not then permitted under subsection 3.1(a) as a result of the
limitations set forth in clauses (1) through (4) thereof or (B) pursuant to
subsection
-34-
3.1(b); then, subject to the terms and conditions hereof, the Issuing Bank
shall, on the requested date, issue a Letter of Credit for the account of the
Company in accordance with the Issuing Bank's usual and customary business
practices.
(c) From time to time while a Letter of Credit is outstanding and
prior to the Revolving Termination Date, the Issuing Bank will, upon the written
request of the Company on behalf of the respective Borrower received by the
Issuing Bank (with a copy sent by the Borrower to the Agent) at least five days
prior to the proposed date of amendment, amend any Letter of Credit issued by
it. Each such request for amendment of a Letter of Credit shall be made by
facsimile, confirmed immediately in an original writing, made in the form of an
L/C Amendment Application and shall specify in form and detail satisfactory to
the Issuing Bank: (i) the Letter of Credit to be amended; (ii) the proposed date
of amendment of the Letter of Credit (which shall be a Business Day); (iii) the
nature of the proposed amendment; and (iv) such other matters as the Issuing
Bank may require. The Issuing Bank shall be under no obligation to amend any
Letter of Credit if: (A) the Issuing Bank would have no obligation at such time
to issue such Letter of Credit in its amended form under the terms of this
Agreement; or (B) the beneficiary of any such letter of Credit does not accept
the proposed amendment to the Letter of Credit.
(d) The Issuing Bank and the Banks agree that, while a Letter of
Credit is outstanding and prior to the Revolving Termination Date, at the option
of the respective Borrower and upon the written request of the Company received
by the Issuing Bank (with a copy sent by the Company to the Agent) at least five
days prior to the proposed date of notification of renewal, the Issuing Bank
shall be entitled to authorize the automatic renewal of any Letter of Credit
issued by it. Each such request for renewal of a Letter of Credit shall be made
by facsimile, confirmed immediately in an original writing, in the form of an
L/C Amendment Application, and shall specify in form and detail satisfactory to
the Issuing Bank: (i) the Letter of Credit to be renewed; (ii) the proposed date
of notification of renewal of the Letter of Credit (which shall be a Business
Day); (iii) the revised expiry date of the Letter of Credit; and (iv) such other
matters as the Issuing Bank may require. The Issuing Bank shall be under no
obligation so to renew any Letter of Credit if: (A) the Issuing Bank would have
no obligation at such time to issue or amend such Letter of Credit in its
renewed form under the terms of this Agreement; or (B) the beneficiary of any
such Letter of Credit does not accept the proposed renewal of the Letter of
Credit.
(e) The Issuing Bank may, at its election (or as required by the Agent
at the direction of the Majority Banks), deliver any notices of termination or
other communications to any
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Letter of Credit beneficiary or transferee, and take any other action as
necessary or appropriate, at any time and from time to time, in order to cause
the expiry date of such Letter of Credit to be a date not later than the
Revolving Termination Date.
(f) This Agreement shall control in the event of any conflict with any
L/C-Related Document (other than any Letter of Credit).
(g) The Issuing Bank will also deliver to the Agent, concurrently or
promptly following its delivery of a Letter of Credit, or amendment to or
renewal of a Letter of Credit, to an advising bank or a beneficiary, a true and
complete copy of each such Letter of Credit or amendment to or renewal of a
Letter of Credit. The Agent will promptly notify the Banks of the Issuance by
the Issuing Bank of any Letter of Credit or any amendment to or renewal of a
Letter of Credit.
3.3 Risk Participations, Drawings and Reimbursements.
(a) Immediately upon the Issuance of each Letter of Credit, each Bank
shall be deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from the Issuing Bank a participation in such Letter of Credit and each
drawing thereunder in an amount equal to the product of (i) the Pro Rata Share
of such Bank, times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively.
(b) In the event of any request for a drawing under a Letter of Credit
by the beneficiary or transferee thereof, the Issuing Bank will promptly notify
the Company. The Company shall reimburse the Issuing Bank prior to 10:00 a.m.
(San Francisco time), on each date that any amount is paid by the Issuing Bank
under any Letter of Credit (each such date, an "Honor Date"), in an amount equal
to the amount so paid by the Issuing Bank. In the event the respective
Borrower, or in its place the Company, fails to reimburse the Issuing Bank for
the full amount of any drawing under any Letter of Credit by 10:00 a.m. (San
Francisco time) on the Honor Date, the Issuing Bank will promptly notify the
Agent and the Agent will promptly notify each Bank thereof, and the Company
shall be deemed to have requested that Base Rate Loans in the amount of such
draw (which, in the case of an Offshore Currency L/C, shall be the Dollar
Equivalent amount of such draw on the Honor Date) be made by the Banks to be
disbursed on the Honor Date under such Letter of Credit, subject to the amount
of the unutilized portion of the Commitments and subject to the conditions set
forth in Section 5.2. Any notice given by the Issuing Bank or the Agent
pursuant to this subsection 3.3(b) may be oral if immediately confirmed in
writing (including by facsimile); provided that the lack of such an immediate
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confirmation shall not affect the conclusiveness or binding effect of such
notice.
(c) Each Bank shall upon any notice pursuant to subsection 3.3(b) make
available to the Agent for the account of the relevant Issuing Bank an amount in
immediately available funds equal to its Pro Rata Share of the amount of the
drawing (which, in the case of an Offshore Currency L/C, shall be the Dollar
Equivalent amount of such drawing on the Honor Date), whereupon the
participating Banks shall (subject to subsection 3.3(d)) each be deemed to have
made a Loan consisting of a Base Rate Loan to the respective Borrower in that
amount. If any Bank so notified fails to make available to the Agent for the
account of the Issuing Bank the amount of such Bank's Pro Rata Share of the
amount of the drawing by no later than 12:00 noon (San Francisco time) on the
Honor Date, then interest shall accrue on such Bank's obligation to make such
payment, from the Honor Date to the date such Bank makes such payment, at a rate
per annum equal to the Federal Funds Rate in effect from time to time during
such period. The Agent will promptly give written notice of the occurrence of
the Honor Date, but failure of the Agent to give any such notice on the Honor
Date or in sufficient time to enable any Bank to effect such payment on such
date shall not relieve such Bank from its obligations under this Section 3.3.
(d) With respect to any unreimbursed drawing that is not converted
into Loans consisting of Base Rate Loans to the Company in whole or in part,
because of the respective Borrower's failure to satisfy the conditions set forth
in Section 5.2 or for any other reason, the respective Borrower shall be deemed
to have incurred from the Issuing Bank a borrowing in the amount of such
drawing, which L/C Borrowing shall be due and payable on demand (together with
interest) and shall bear interest at a rate per annum equal to the Base Rate
plus 2% per annum, and each Bank's payment to the Issuing Bank pursuant to
subsection 3.3(d) shall be deemed payment in respect of its participation in
such L/C Borrowing and shall constitute an L/C Advance from such Bank in
satisfaction of its participation obligation under this Section 3.3.
(e) Each Bank's obligation in accordance with this Agreement to make
the Loans or L/C Advances, as contemplated by this Section 3.3, as a result of a
drawing under a Letter of Credit, shall be absolute and unconditional and
without recourse to the Issuing Bank and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Bank may have against the Issuing Bank, the Company or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default; or (iii) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing; provided,
however,
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that each Bank's obligation to make Loans under this Section 3.3 is subject to
the conditions set forth in Section 5.2.
3.4 Repayment of Participations.
(a) Upon (and only upon) receipt by the Agent for the account of the
Issuing Bank of immediately available funds from the respective Borrower (i) in
reimbursement of any payment made by the Issuing Bank under the Letter of Credit
with respect to which any Bank has paid the Agent for the account of the Issuing
Bank for such Bank's participation in the Letter of Credit pursuant to Section
3.3 or (ii) in payment of interest thereon, the Agent will pay to each Bank, in
the same funds as those received by the Agent for the account of the Issuing
Bank, the amount of such Bank's Pro Rata Share of such funds, and the Issuing
Bank shall receive the amount of the Pro Rata Share of such funds of any Bank
that did not so pay the Agent for the account of the Issuing Bank.
(b) If the Agent or the Issuing Bank is required at any time to return
to the respective Borrower, or to a trustee, receiver, liquidator, custodian, or
any official in any Insolvency Proceeding, any portion of the payments made by
the respective Borrower to the Agent for the account of the Issuing Bank
pursuant to subsection 3.4(a) in reimbursement of a payment made under the
Letter of Credit or interest or fee thereon, each Bank shall, on demand of the
Agent, forthwith return to the Agent or the Issuing Bank the amount of its Pro
Rata Share of any amounts so returned by the Agent or the Issuing Bank plus
interest thereon from the date such demand is made to the date such amounts are
returned by such Bank to the Agent or the Issuing Bank, at a rate per annum
equal to the Federal Funds Rate in effect from time to time.
3.5 Role of the Issuing Bank.
(a) Each Bank and the Borrowers agree that, in paying any drawing
under a Letter of Credit, the Issuing Bank shall not have any responsibility to
obtain any document (other than any sight draft and certificates expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document.
(b) No Agent-Related Person nor any of the respective correspondents,
participants or assignees of the Issuing Bank shall be liable to any Bank for:
(i) any action taken or omitted in connection herewith at the request or with
the approval of the Banks (including the Majority Banks, as applicable); (ii)
any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any L/C-Related Document.
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(c) The Borrowers hereby assume all risks of the acts or omissions of
any beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude the Borrowers' pursuing such rights and remedies as they may have
against the beneficiary or transferee at law or under any other agreement. No
Agent-Related Person, nor any of the respective correspondents, participants or
assignees of the Issuing Bank, shall be liable or responsible for any of the
matters described in clauses (i) through (vii) of Section 3.6; provided,
however, anything in such clauses to the contrary notwithstanding, that the
Borrowers may have a claim against the Issuing Bank, and the Issuing Bank may be
liable to the Borrowers, to the extent, but only to the extent, of any direct,
as opposed to consequential or exemplary, damages suffered by the Borrowers
which the Borrowers prove were caused by the Issuing Bank's willful misconduct
or gross negligence or the Issuing Bank's willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a sight
draft and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. In furtherance and not in limitation of the foregoing: (i)
the Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary; and (ii) the Issuing Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason.
3.6 Obligations Absolute. The obligations of the Borrowers under this
Agreement and any L/C-Related Document to reimburse the Issuing Bank for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing
under a Letter of Credit converted into Loans, shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement and each such other L/C-Related Document under all circumstances,
including the following:
(i) any lack of validity or enforceability of this Agreement or
any L/C-Related Document;
(ii) any change in the time, manner or place of payment of, or in
any other term of, all or any of the obligations of a Borrower in respect of
any Letter of Credit or any other amendment or waiver of or any consent to
departure from all or any of the L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or other right
that a Borrower may have at any time against any beneficiary or any
transferee of any Letter of Credit (or any Person for whom any such
beneficiary or any such
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transferee may be acting), the Issuing Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by
the L/C-Related Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under any Letter of Credit;
(v) any payment by the Issuing Bank who is a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of any Letter of Credit, including any arising
in connection with any Insolvency Proceeding; or
(vi) any exchange, release or non-perfection of any collateral,
or any release or amendment or waiver of or consent to departure from any
other guarantee, for all or any of the obligations of a Borrower in respect
of any Letter of Credit.
3.7 Cash Collateral Pledge. Upon (i) the request of the Agent, (A) if the
Issuing Bank has honored any full or partial drawing request on any Letter of
Credit and such drawing has resulted in an L/C Borrowing hereunder, or (B) if,
as of the Revolving Termination Date, any Letters of Credit may for any reason
remain outstanding and partially or wholly undrawn, or (ii) the occurrence of
the circumstances described in Section 2.7(a) requiring the Company to Cash
Collateralize Letters of Credit, then, the Company shall immediately Cash
Collateralize the L/C Obligations in an amount equal to such L/C Obligations.
3.8 Letter of Credit Fees.
(a) The Company shall pay to the Agent for the account of each of the
Banks a letter of credit fee with respect to the Letters of Credit equal to the
applicable margin applied to Offshore Rate Loans as set forth in Sections
2.10(ii) and 2.10(iii), as the case may be, of the average daily maximum Dollar
Equivalent amount available to be drawn of the outstanding Letters of Credit,
computed on a quarterly basis in arrears on the last Business Day of each
calendar quarter based upon Letters of Credit outstanding for that quarter as
calculated by the Agent. Such letter of credit fees shall be due and payable
quarterly in arrears on the last Business Day of each calendar quarter during
which Letters of Credit are outstanding, commencing on the first such quarterly
date to occur after the Closing Date, through the
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Revolving Termination Date (or such later date upon which the outstanding
Letters of Credit shall expire), with the final payment to be made on the
Revolving Termination Date (or such later expiration date).
(b) Following the Issuance of five (5) Letters of Credit during any
one calendar year, the Company shall pay to the Issuing Bank a letter of credit
issuance fee for each Letter of Credit Issued by the Issuing Bank thereafter
during such calendar year at a rate equal to the rate then customarily charged
by the Issuing Bank, of which rate the Issuing Bank shall notify the Company in
writing with a copy to the Agent. Such Letter of Credit issuance fee shall be
due and payable on each date of Issuance of a Letter of Credit.
3.9 Uniform Customs and Practice. The Uniform Customs and Practice for
Documentary Credits as published by the International Chamber of Commerce
("UCP") most recently at the time of issuance of any Letter of Credit shall
(unless otherwise expressly provided in the Letters of Credit) apply to the
Letters of Credit.
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
--------------------------------------
4.1 Taxes. (a) With the sole exception of withholding taxes on interest
payments paid to the Banks, any and all payments by the Borrowers to each Bank
or the Agent under this Agreement and any other Loan Document shall be made free
and clear of, and without deduction or withholding for any Taxes. In addition,
the Borrowers shall pay all Other Taxes.
(b) The Company agrees to indemnify and hold harmless each Bank, the
Issuing Bank and the Agent for the full amount of Taxes or Other Taxes
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section) arising in connection with this Agreement or any
other Loan Document paid by the Bank, the Issuing Bank or the Agent and any
liability (including penalties, interest, additions to tax and expenses) arising
therefrom or with respect thereto. Payment under this indemnification shall be
made within 30 days after the date the Bank, the Issuing Bank or the Agent makes
written demand therefor.
(c) With the sole exception of withholding taxes on interest payments
paid to the Banks, if any Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Bank, the Issuing Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that after
making all required deductions and withholdings
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(including deductions and withholdings applicable to additional sums payable
under this Section) such Bank, the Issuing Bank or the Agent, as the case
may be, receives an amount equal to the sum it would have received had no
such deductions or withholdings been made;
(ii) such Borrower shall make such deductions and withholdings;
(iii) such Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance
with applicable law; and
(iv) such Borrower shall also pay to each Bank or the Agent for
the account of such Bank, at the time interest is paid, all additional
amounts which the respective Bank specifies in a written invoice delivered
to such Borrower as necessary to preserve the gross revenue the Bank would
have received if such Taxes or Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by a Borrower of
Taxes or Other Taxes, such Borrower shall furnish the Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of
payment satisfactory to the Agent.
(e) If a Borrower is required to pay additional amounts to any Bank or
the Agent pursuant to subsection (c) of this Section, then such Bank shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by a Borrower which may thereafter accrue, if such change in the
judgment of such Bank is not otherwise disadvantageous to such Bank.
4.2 Illegality. (a) If any Bank determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Bank or its applicable Lending Office to make
Offshore Rate Loans (including Offshore Rate Loans in any Applicable Currency),
then, on notice thereof by the Bank to the Company through the Agent, any
obligation of that Bank to make Offshore Rate Loans shall be suspended until the
Bank notifies the Agent and the Company that the circumstances giving rise to
such determination no longer exist.
(b) If a Bank determines that it is unlawful to maintain any Offshore
Rate Loan, the Borrowers shall, upon receipt by the Company of notice of such
fact and demand from such Bank (with a copy to the Agent), prepay in full such
Offshore Rate Loans of
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that Bank then outstanding, together with interest accrued thereon and amounts
required under Section 4.4, either on the last day of the Interest Period
thereof, if the Bank may lawfully continue to maintain such Offshore Rate Loans
to such day, or within five (5) Business Days after receipt of such notice, if
the Bank may not lawfully continue to maintain such Offshore Rate Loan.
(c) If the obligation of any Bank to make or maintain Offshore Rate
Loans has been so terminated or suspended, the Company may elect, by giving
notice to the Bank through the Agent that all Loans which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section, the
affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
4.3 Increased Costs and Reduction of Return. (a) If any Bank determines
that, due to either (i) the introduction of or any change (other than any change
by way of imposition of or increase in reserve requirements included in the
calculation of the Offshore Rate or in respect of the assessment rate payable by
any Bank to the FDIC for insuring U.S. deposits) in or in the interpretation of
any law or regulation or (ii) the compliance by that Bank with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Bank
of agreeing to make or making, funding or maintaining any Offshore Rate Loans or
participating in Letters of Credit, or, in the case of the Issuing Bank, any
increase in the cost to the Issuing Bank of agreeing to issue, issuing or
maintaining any Letter of Credit or of agreeing to make or making, funding or
maintaining any unpaid drawing under any Letter of Credit, then the respective
Borrower shall be liable for, and shall from time to time, upon demand (with a
copy of such demand to be sent to the Agent), pay to the Agent for the account
of such Bank, additional amounts as are sufficient to compensate such Bank for
such increased costs.
(b) If any Bank shall have determined that (i) the introduction of any
Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation,
(iii) any change in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Bank (or its
Lending Office) or any corporation controlling the Bank with any Capital
Adequacy Regulation, affects or would affect the amount of capital required or
expected to be maintained by the Bank or any corporation controlling the Bank
and (taking into consideration such Bank's or such corporation's
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policies with respect to capital adequacy and such Bank's desired return on
capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Bank to the Company through the Agent, the
Company shall pay to the Bank, from time to time as specified by the Bank,
additional amounts sufficient to compensate the Bank for such increase.
4.4 Funding Losses. Each Borrower shall reimburse each Bank and hold each
Bank harmless from any reasonable, direct and supportable loss or expense which
the Bank has sustained or incurred as a consequence of:
(a) the failure of such Borrower to make on a timely basis any payment
of principal of any Offshore Rate Loan;
(b) the failure of such Borrower to borrow, continue or convert a Loan
after such Borrower has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/ Continuation;
(c) the failure of such Borrower to make any prepayment in accordance
with any notice delivered under Section 2.7;
(d) the prepayment (including pursuant to Section 2.8) or other
payment (including after acceleration thereof) of an Offshore Rate Loan on a day
that is not the last day of the relevant Interest Period; or
(e) the automatic conversion under Section 2.4 of any Offshore Rate
Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any actual, supportable loss or expense arising from the liquidation
or reemployment of funds obtained by it to maintain its Offshore Rate Loans or
from fees payable to terminate the deposits from which such funds were obtained
or from charges relating to any Offshore Currency Loans. For purposes of
calculating amounts payable by such Borrower to the Banks under this Section and
under subsection 4.3(a), each Offshore Rate Loan made by a Bank (and each
related reserve, special deposit or similar requirement) shall be funded at the
LIBOR used in determining the Offshore Rate for such Offshore Rate Loan by a
matching deposit or other borrowing in the interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Offshore Rate
Loan is in fact so funded.
4.5 Inability to Determine Rates. If the Agent reasonably determines that
adequate and reasonable means do not exist for determining the Offshore Rate for
any requested Interest Period with respect to a proposed Offshore Rate Loan, or
that the Offshore Rate applicable pursuant to subsection 2.10(a) for any
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requested Interest Period with respect to a proposed Offshore Rate Loan does not
adequately and fairly reflect the cost to the Banks of funding such Loan due to
costs or other charges of the nature described in Section 4.3, the Agent will
promptly so notify the Company and each Bank. Thereafter, the obligation of the
Banks to make or maintain Offshore Rate Loans hereunder shall be suspended until
the Agent revokes such notice in writing. Upon receipt of such notice, the
Borrowers may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by them. If the Borrowers do not revoke
such Notice, the Banks shall make, convert or continue the Loans, as proposed by
the respective Borrower, in the amount specified in the applicable notice
submitted by the respective Borrower, but such Loans shall be made, converted or
continued as Base Rate Loans instead of Offshore Rate Loans. In the case of any
Offshore Currency Loans, the Borrowing or continuation shall be in an aggregate
amount equal to the Dollar Equivalent amount of the originally requested
Borrowing or continuation in the Offshore Currency, and to that end any
outstanding Offshore Currency Loans which are the subject of any continuation
shall be redenominated and converted into Base Rate Loans in Dollars with effect
from the last day of the Interest Period with respect to any such Offshore
Currency Loans.
4.6 Certificates of Banks. Any Bank claiming reimbursement or compensation
under this Article IV shall deliver to the Company (with a copy to the Agent) a
certified invoice setting forth in reasonable detail the amount payable to the
Bank hereunder and such certified invoice shall be conclusive and binding on the
Borrowers in the absence of manifest error.
4.7 Substitution of Banks. Upon the receipt by the Borrowers from any Bank
(an "Affected Bank") of a claim for compensation under Section 4.3, the Company
may: (i) request the Agent to use its best efforts to obtain a replacement bank
or financial institution satisfactory to the Company to acquire and assume all
or a ratable part of all of such Affected Bank's Loans and Commitment (a
"Replacement Bank"); (ii) request one more of the other Banks to acquire and
assume all or part of such Affected Bank's Loans and Commitment; or (iii)
designate a Replacement Bank. Any such designation of a Replacement Bank under
clause (i) or (iii) shall be subject to the prior written consent of the Agent
(which consent shall not be unreasonably withheld).
4.8 Survival. The agreements and obligations of the Company in this
Article IV shall survive the payment of all other Obligations.
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ARTICLE V
CONDITIONS PRECEDENT
--------------------
5.1 Conditions of Initial Loans. The effectiveness of this Agreement and
obligation of each Bank to make Loans hereunder is subject to the condition that
the Agent have received each of the following, in form and substance
satisfactory to the Agent and each Bank, and in sufficient copies for each Bank:
(a) Credit Agreement. This Agreement executed by each party thereto;
(b) Notes. The Notes executed by each Borrower;
(c) Guaranty. The Guaranty executed by the Company;
(d) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of each
Borrower authorizing the transactions contemplated hereby, certified as of
the Closing Date by the Secretary or an Assistant Secretary of such
Borrower; and
(ii) A certificate of the Secretary or Assistant Secretary of
each Borrower certifying the names and true signatures of the officers of
such Borrower authorized to execute, deliver and perform, as applicable,
this Agreement, and all other Loan Documents (including notices of such
Borrower pursuant to Section 2.3) to be delivered by it hereunder;
(e) Organization Documents; Good Standing. Each of the following
documents:
(i) the articles or certificate of incorporation and the bylaws
of each Borrower as in effect on the Closing Date, certified by the
Secretary or Assistant Secretary of such Borrower as of the Closing Date;
and
(ii) a good standing certificate and, if applicable, tax good
standing certificate for each Borrower from the Secretary of State (or
similar, applicable Governmental Authority) of its jurisdiction of
incorporation and each jurisdiction where such Borrower is qualified to do
business as a foreign corporation, each dated as of a recent date;
(f) Legal Opinion. An opinion of Xxxxxxxx & Xxxxxx LTD, counsel to
the Borrowers and addressed to the Agent and the Banks, substantially in the
form of Exhibit D-1;
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(g) Payment of Fees. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with Attorney Costs of BofA NT&SA to the extent
invoiced prior to or on the Closing Date;
(h) Certificate. A certificate signed by a Responsible Officer, dated
as of the Closing Date, stating that:
(i) the representations and warranties contained in Article VI
are true and correct on and as of such date, as though made on and as of
such date; and
(ii) no Default or Event of Default then exists;
(i) Other Documents. Such other approvals, opinions, documents or
materials as the Agent or any Bank may request reasonably.
5.2 Conditions to All Borrowings and Letters of Credit. The obligation of
each Bank to make any Loan to be made by it (including its initial Loan) or to
continue or convert any Loan under Section 2.4 or of the Issuing Bank to issue
any Letters of Credit or amend an outstanding Letter of Credit so as to extend
its expiry date is subject to the satisfaction of the following conditions
precedent on the relevant Borrowing Date or Conversion/Continuation Date:
(a) Notice of Transaction. The Agent shall have received a Notice of
Borrowing or a Notice of Conversion/Continuation or the Issuing Bank shall have
received the L/C Application or the L/C Amendment Application, as applicable;
(b) Continuation of Representations and Warranties. The
representations and warranties in Article VI shall be true and correct on and as
of such Borrowing Date, Conversion/Continuation Date, Issuance Date or date of
extension, as the case may be, with the same effect as if made on and as of such
date (except to the extent such representations and warranties expressly refer
to an earlier date, in which case they shall be true and correct as of such
earlier date); and
(c) No Existing Default. No Default or Event of Default shall exist
or shall result from such Borrowing, continuation or conversion, Issuance or
extension.
Each Notice of Borrowing and Notice of Conversion/Continuation and L/C
Application or L/C Amendment Application submitted by a Borrower hereunder shall
constitute a representation and warranty by all Borrowers hereunder, as of the
date of each such notice or application and as of each Borrowing Date,
Conversion/Continuation
-47-
Date or Issuance Date or date of extension, as applicable, that the conditions
in this Section 5.2 are satisfied.
5.3 Addition of Subsidiary Borrowers. Upon not less than ten (10) Business
Days' prior written notice from the Company to the Agent, additional Subsidiary
of the Company may become Subsidiary Borrowers under this Agreement; provided
that any such Subsidiary shall be organized under and shall maintain its
principal place of business in a jurisdiction in which the Agent or one of its
Affiliates shall maintain an office from which it is permitted under the laws of
such jurisdiction to lend funds. The addition of such Subsidiary Borrowers
shall be effective on such date (each, a "Subsequent Closing Date") on which the
Agent shall have received each of the following, in form and substance
satisfactory to the Agent and each Bank, and in sufficient copies for each Bank:
(a) Supplemental Signature Page. A Supplemental Signature Page
executed by such Subsidiary Borrower;
(b) Note. A Note executed by such Subsidiary Borrower;
(c) Reaffirmation of Guaranty. A Reaffirmation of Guaranty executed
by the Company acknowledging that the Guaranty shall apply to all Obligations of
such Subsidiary Borrower;
(d) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of such
Subsidiary Borrower authorizing the transactions contemplated hereby,
certified as of the respective Subsequent Closing Date by the Secretary or
an Assistant Secretary of such Subsidiary Borrower; and
(ii) A certificate of the Secretary or Assistant Secretary of
such Subsidiary Borrower certifying the names and true signatures of the
officers of such Subsidiary Borrower authorized to execute, deliver and
perform, as applicable, the Supplemental Signature Page, and all other Loan
Documents (including notices of such Borrower pursuant to Section 2.3) to be
delivered by it hereunder;
(e) Organization Documents; Good Standing. Each of the following
documents:
(i) the articles or certificate of incorporation and the bylaws
of such Subsidiary Borrower as in effect on such Subsequent Closing Date,
certified by the Secretary or Assistant Secretary of such Subsidiary
Borrower as of such Subsequent Closing Date; and
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(ii) a good standing certificate and, if applicable, tax good
standing certificate for such Subsidiary Borrower from the Secretary of
State (or similar, applicable Governmental Authority) of its jurisdiction of
incorporation and each jurisdiction where such Subsidiary Borrower is
qualified to do business as a foreign corporation, each dated as of a recent
date; and
(f) Legal Opinion. In the case where such Subsidiary Borrower is
organized under the laws of any state within the United States of America, an
opinion of counsel to such Subsidiary Borrower and addressed to the Agent and
the Banks, substantially in the form of Exhibit D-2.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
------------------------------
The Company represents and warrants to the Agent and each Bank that:
6.1 Corporate Existence and Power. The Company and each of its
Subsidiaries:
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;
(c) is duly qualified as a foreign corporation and is licensed and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and
(d) is in compliance with all Requirements of Law; except, in each
case referred to in clause (c) or clause (d), to the extent that the failure to
do so could not reasonably be expected to have a Material Adverse Effect.
6.2 Corporate Authorization; No Contravention. The execution, delivery and
performance by the Borrowers of this Agreement and each other Loan Document to
which any Borrower is party, have been duly authorized by all necessary
corporate action, and do not and will not:
(a) contravene the terms of any of such Borrower's Organization
Documents;
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(b) conflict in any material respect with or result in any breach or
contravention of, or the creation of any Lien under, any document evidencing any
Contractual Obligation to which such Borrower is a party or any order,
injunction, writ or decree of any Governmental Authority to which such Borrower
or its property is subject; or
(c) violate any Requirement of Law.
6.3 Governmental Authorization. To the best of its knowledge, no approval,
consent, exemption, authorization, or other action by, or notice to, or filing
with, any Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Borrowers of
the Agreement or any other Loan Document.
6.4 Binding Effect. This Agreement and each other Loan Document to which
any Borrower is a party constitute the legal, valid and binding obligations of
each Borrower to the extent it is a party thereto, enforceable against such
Borrower in accordance with their respective terms, except as enforceability may
be limited by applicable bankruptcy, insolvency, or similar laws affecting the
enforcement of creditors' rights generally or by equitable principles relating
to enforceability.
6.5 Litigation. Except as specifically disclosed in Schedule 6.5, there
are no actions, suits, proceedings, claims or disputes pending, or to the best
knowledge of the Company, threatened or contemplated, at law, in equity, in
arbitration or before any Governmental Authority, against the Company, or its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
(b) if determined adversely to the Company or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect.
No injunction, writ, temporary restraining order or any order of any nature has
been issued by any court or other Governmental Authority purporting to enjoin or
restrain the execution, delivery or performance of this Agreement or any other
Loan Document, or directing that the transactions provided for herein or therein
not be consummated as herein or therein provided.
6.6 No Default. No Default or Event of Default exists or would result from
the incurring of any Obligations by the Borrowers. As of the Closing Date,
neither the Company nor any Subsidiary is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all
-50-
such defaults, could reasonably be expected to have a Material Adverse Effect,
or that would, if such default had occurred after the Closing Date, create an
Event of Default under subsection 10.1(e).
6.7 ERISA Compliance. Except as specifically disclosed in Schedule 6.7:
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state law. Each
Plan which is intended to qualify under Section 401(a) of the Code has received
a favorable determination letter from the IRS and to the best knowledge of the
Company, nothing has occurred which would cause the loss of such qualification.
The Company and each ERISA Affiliate has made all required contributions to any
Plan subject to Section 412 of the Code, and no application for a funding waiver
or an extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction
or violation of the fiduciary responsibility rules with respect to any Plan
which has resulted or could reasonably be expected to result in a Material
Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Company nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and (v)
neither the Company nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
6.8 Use of Proceeds; Margin Regulations. The proceeds of the Loans are to
be used solely for the purposes set forth in and permitted by Section 7.12 and
Section 8.7. Neither the Company nor any Subsidiary is generally engaged in the
business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
6.9 Title to Properties. The Company and each Subsidiary have good record
and marketable title in fee simple to, or valid
-51-
leasehold interests in, all real property necessary or used in the ordinary
conduct of their respective businesses, except for such defects in title as
could not, individually or in the aggregate, have a Material Adverse Effect. As
of the Closing Date, the property of the Company and its Subsidiaries is subject
to no Liens, other than Permitted Liens.
6.10 Taxes. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
6.11 Financial Condition. (a) The audited consolidated financial
statements of the Company and its Subsidiaries dated October 31, 1994 and
October 31, 1993, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for the fiscal year ended on
that date:
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly noted
therein;
(ii) fairly present the financial condition of the Company and
its Subsidiaries as of the date thereof and results of operations for the
period covered thereby; and
(iii) except as specifically disclosed in Schedule 6.11, show all
material indebtedness and other liabilities, direct or contingent, of the
Company and its consolidated Subsidiaries as of the Closing Date, including
liabilities for taxes, material commitments and Contingent Obligations.
(b) Since October 31, 1994, there has been no Material Adverse Effect.
6.12 Environmental Matters. The Company conducts in the ordinary course of
business a review of the effect of existing Environmental Laws and existing
Environmental Claims on its business, operations and properties, and as a result
thereof the Company has reasonably concluded that, except as specifically
disclosed in Schedule 6.12, such Environmental Laws and Environmental Claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
6.13 Regulated Entities. None of the Company, any Person controlling the
Company, or any Subsidiary, is an "Investment
-52-
Company" within the meaning of the Investment Company Act of 1940. The Company
is not subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation limiting its
ability to incur Indebtedness.
6.14 No Burdensome Restrictions. Neither the Company nor any Subsidiary is
a party to or bound by any Contractual Obligation, or subject to any restriction
in any Organization Document, or any Requirement of Law, which could reasonably
be expected to have a Material Adverse Effect.
6.15 Copyrights, Patents, Trademarks and Licenses, etc. The Company or its
Subsidiaries own or are licensed or otherwise have the right to use all of the
patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Company or any
Subsidiary infringes upon any rights held by any other Person. Except as
specifically disclosed in Schedule 6.5, no claim or litigation regarding any of
the foregoing is pending or threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or, to the knowledge of the Company, proposed, which, in either case,
could reasonably be expected to have a Material Adverse Effect.
6.16 Subsidiaries. The Company has no Subsidiaries other than those
specifically disclosed in part (a) of Schedule 6.16 hereto and has no equity
investments in any other corporation or entity other than those specifically
disclosed in part (b) of Schedule 6.16. Each of the Subsidiary Borrowers is a
Wholly-Owned Subsidiary.
6.17 Insurance. Except as specifically disclosed in Schedule 6.17, the
properties of the Company and its Subsidiaries are insured with financially
sound and reputable insurance companies not Affiliates of the Company, in such
amounts, with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar properties
in localities where the Company or such Subsidiary operates.
6.18 Full Disclosure. None of the representations or warranties made by
the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on
-53-
behalf of the Company or any Subsidiary in connection with the Loan Documents
(including the offering and disclosure materials delivered by or on behalf of
the Company to the Banks prior to the Closing Date), contains any untrue
statement of a material fact or omits any material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
ARTICLE VII
AFFIRMATIVE COVENANTS
---------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
7.1 Financial Statements. The Company shall deliver to the Agent, in form
and detail satisfactory to the Agent and the Majority Banks, with sufficient
copies for each Bank (and the Agent, in turn, shall promptly deliver to the
Banks):
(a) as soon as available, but not later than ninety days after the end
of each fiscal year, a copy of the audited consolidated balance sheet of the
Company and its Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the opinion of Price Waterhouse
or another nationally-recognized independent public accounting firm
("Independent Auditor") which report shall state that such consolidated
financial statements present fairly the financial position for the periods
indicated in conformity with GAAP applied on a basis consistent with prior
years. Such opinion shall not be qualified or limited because of a restricted
or limited examination by the Independent Auditor of any material portion of the
Company's or any Subsidiary's records and shall be delivered to the Agent
pursuant to a reliance agreement between the Agent and Banks and such
Independent Auditor in form and substance satisfactory to the Agent;
(b) as soon as available, but not later than forty-five days after the
end of each of the first three fiscal quarters of each fiscal year (commencing
with the fiscal quarter ended January 31, 1995), a copy of the unaudited
consolidated balance sheet of the Company and its Subsidiaries as of the end of
such quarter and the related consolidated statements of income, shareholders'
equity and cash flows for the period commencing on the first day and ending on
the last day of such quarter, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP
-54-
(subject to ordinary, good faith year-end audit adjustments), the financial
position and the results of operations of the Company and the Subsidiaries;
(c) As soon as available, but in any event within ninety (90) days
after the beginning of each fiscal year of the Company, a copy of the plan
(including a projected closing consolidated balance sheet, income statement and
funds flow statements) of the Company for each quarter of such fiscal year.
7.2 Certificates; Other Information. The Company shall furnish to the
Agent, with sufficient copies for each Bank (and the Agent, in turn, shall
promptly deliver to the Banks):
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a), a certificate of the Independent Auditor
stating that in making the examination necessary therefor no knowledge was
obtained of any Default or Event of Default, except as specified in such
certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 7.1(a) and (b), a Compliance Certificate executed by
a Responsible Officer;
(c) promptly, copies of all financial statements and reports that the
Company sends to its shareholders, and copies of all financial statements and
regular, periodical or special reports (including Forms 10K, 10Q and 8K) that
the Company or any Subsidiary may make to, or file with, the SEC;
(d) promptly following the occurrence thereof, notice from a
Responsible Officer that 10% of the aggregate notional Dollar Equivalent amount
of all Swap Contracts of the Borrowers equals or exceeds $5,000,000; and
(e) promptly, such additional information regarding the business,
financial or corporate affairs of the Company or any Subsidiary as the Agent, at
the reasonable request of any Bank, may from time to time request.
7.3 Notices. The Company shall promptly notify the Agent (who shall, in
turn, promptly notify the Banks):
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that foreseeably will
become a Default or Event of Default;
(b) of any matter that has resulted or is likely to result in a
Material Adverse Effect, including (i) breach or non-performance of, or any
default under, a Contractual Obligation of the Company or any Subsidiary; (ii)
any dispute, litigation,
-55-
investigation, proceeding or suspension between the Company or any Subsidiary
and any Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Company or any
Subsidiary, including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any of the following events affecting the
Company or any ERISA Affiliate (but in no event more than 10 days after such
event), and deliver to the Agent (who shall, in turn, promptly notify the Banks)
a copy of any notice with respect to such event that is filed with a
Governmental Authority and any notice delivered by a Governmental Authority to
the Company or any ERISA Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension Liability of any
Pension Plan;
(iii) the adoption of, or the commencement of contributions to,
any Plan subject to Section 412 of the Code by the Company or any ERISA
Affiliate; or
(iv) the adoption of any amendment to a Plan subject to Section
412 of the Code, if such amendment results in a material increase in
contributions or Unfunded Pension Liability.
(d) of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated Subsidiaries.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Company or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under subsection 7.3(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.
7.4 Preservation of Corporate Existence, Etc. The Company shall, and shall
cause each Subsidiary to:
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
incorporation;
(b) preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its
-56-
business except in connection with transactions permitted by Section 8.3 and
sales of assets permitted by Section 8.2;
(c) use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
7.5 Maintenance of Property. The Company shall maintain, and shall cause
each Subsidiary to maintain, and preserve all its property which is used or
useful in its business in good working order and condition, ordinary wear and
tear excepted, except as permitted by Section 8.2. The Company and each
Subsidiary shall use the standard of care typical in the industry in the
operation and maintenance of its facilities.
7.6 Insurance. The Company shall maintain, and shall cause each Subsidiary
to maintain, with financially sound and reputable independent insurers,
insurance with respect to its properties and business against loss or damage of
the kinds customarily insured against by Persons engaged in the same or similar
business, of such types and in such amounts as are customarily carried under
similar circumstances by such other Persons.
7.7 Payment of Obligations. The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable, all
their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets, unless the same are being contested
in good faith by appropriate proceedings and adequate reserves in accordance
with GAAP are being maintained by the Company or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien
upon its property; and
(c) all Indebtedness, as and when due and payable, but subject to any
subordination provisions contained in any instrument or agreement evidencing
such Indebtedness.
7.8 Compliance with Laws. The Company shall comply, and shall cause each
Subsidiary to comply, in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
-57-
7.9 Compliance with ERISA. The Company shall, and shall cause each of its
ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
7.10 Inspection of Property and Books and Records. The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company and such Subsidiary. The
Company shall permit, and shall cause each Subsidiary to permit, representatives
and independent contractors of the Agent or any Bank to visit and inspect any of
their respective properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
directors, officers, and independent public accountants, at such reasonable
times during normal business hours and as often as may be reasonably desired,
upon reasonable advance notice to the Company; provided, however, when an Event
of Default exists the Agent or any Bank may do any of the foregoing at the
expense of the Company at any time during normal business hours and without
advance notice. Representatives and independent contractors of the Agent and
the Banks shall be bound by the provisions of Section 12.9.
7.11 Environmental Laws. The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.
7.12 Use of Proceeds. The Company shall use the proceeds of the Loans for
working capital and other general corporate purposes not in contravention of any
Requirement of Law or of any Loan Document.
ARTICLE VIII
NEGATIVE COVENANTS
------------------
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
8.1 Limitation on Liens. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or
-58-
with respect to any part of its property, whether now owned or hereafter
acquired, other than the following ("Permitted Liens"):
(a) any Lien existing on property of the Company or any Subsidiary on
the Closing Date and set forth in Schedule 8.1 securing Indebtedness outstanding
on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges
which are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 7.7, provided that no notice of
lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges
or deposits required in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the property of the Company or its Subsidiary securing
(i) the non-delinquent performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, (ii) contingent obligations on
surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business;
(g) Liens consisting of judgment or judicial attachment liens,
provided that the enforcement of such Liens is effectively stayed and all such
liens in the aggregate at any time outstanding for the Company and its
Subsidiaries do not exceed $500,000;
(h) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Company and its Subsidiaries;
(i) Liens securing obligations in respect of capital leases on assets
subject to such leases, provided that such capital leases are otherwise
permitted hereunder;
-59-
(j) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by the Company or any Subsidiary in excess of those set forth by
regulations promulgated by the FRB, and (ii) such deposit account is not
intended by the Company or any Subsidiary to provide collateral to the
depository institution; and
(k) Liens (i) existing on property at the time of its acquisition by
the Company or a Subsidiary and not created in contemplation thereof, whether or
not the Indebtedness secured by such Lien is assumed by the Company or such
Subsidiary or (ii) on property created substantially contemporaneously with the
date of acquisition or completion of construction thereof to secure or provide
for all or a portion of the purchase price or cost of construction of such
property or (iii) existing on property of a corporation at the time such
corporation is merged into or consolidated with or is acquired by, or
substantially all of its assets are acquired by, the Company or a Subsidiary and
not created in contemplation thereof; provided, that such Liens do not extend to
other property of the Company or any Subsidiary and that the aggregate principal
amount of Indebtedness secured by each such Liens does not exceed 100% of the
lesser of the cost or fair market value (at the time of acquisition or
completion of construction) of the property subject thereto; and provided
further, that after giving effect to the acquisition of the assets subject to
such Liens, no Default or Event of Default would exist.
8.2 Disposition of Assets. The Company shall not, and shall not suffer or
permit any Subsidiary to, directly or indirectly, sell, assign, lease, convey,
transfer or otherwise dispose of (whether in one or a series of transactions)
any property (including accounts and notes receivable, with or without recourse)
or enter into any agreement to do any of the foregoing, except:
(a) dispositions of inventory (including the sale or licensing of the
Borrowers' computer software products), or used, worn-out or surplus equipment,
all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment; and
(c) dispositions not otherwise permitted hereunder which are made for
fair market value; provided, that (i) after giving
-60-
effect to any such disposition, no Default or Event of Default would exist, and
(ii) the assets which are subject to such disposition do not include accounts or
notes receivable.
8.3 Consolidations and Mergers. The Company shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary may merge with the Company, provided that the
Company shall be the continuing or surviving corporation, or with any one or
more Subsidiaries, provided that if any transaction shall be between a
Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned Subsidiary shall be
the continuing or surviving corporation;
(b) any Subsidiary may sell all or substantially all of its assets
(upon voluntary liquidation or otherwise), to the Company or another Wholly-
Owned Subsidiary; and
(c) Acquisitions which comply with the provisions of subsection
8.4(d).
8.4 Loans and Investments. The Company shall not purchase or acquire, or
suffer or permit any Subsidiary to purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or commit to make any
Acquisitions, or make or commit to make any advance, loan, extension of credit
or capital contribution to or any other investment in, any Person including any
Affiliate of the Company, except for:
(a) investments in cash equivalents, short term marketable securities
and other securities consented to in writing by the Majority Banks;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(c) extensions of credit by the Company to any of its Wholly-Owned
Subsidiaries or by any of its Wholly-Owned Subsidiaries to another of its
Wholly-Owned Subsidiaries;
(d) investments incurred in order to consummate Acquisitions otherwise
permitted herein, provided that (i) the cash consideration paid by the Company
and/or its Subsidiaries in connection with such Acquisition, together with the
amount of Indebtedness and Contingent Obligations arising as part thereof,
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plus the cash consideration paid by the Company and/or its Subsidiaries in
connection with all prior Acquisitions, together with the amount of Indebtedness
and Contingent Obligations arising as a part thereof, undertaken by the Company
and its Subsidiaries since July 31, 1993 plus the amount of payments of the type
described in subsections 8.4(e) and 8.10(c) made by the Company and its
Subsidiaries since July 31, 1993 shall not exceed at the time such payments are
made the sum of (A) $13,000,000 plus (B) 50% of Consolidated Net Income (or less
100% of any net deficit) subsequent to July 31, 1993 plus (C) the net cash
proceeds received by the Company after August 15, 1993 from the sale of shares
of its common stock or evidences of Indebtedness which are subsequently
converted into or exchanged for its common stock, and (ii) immediately after
giving effect to such Acquisition no Default or Event of Default would exist,
(iii) such Acquisitions are undertaken in accordance with all applicable
Requirements of Law; and (iv) the prior, effective written consent or approval
to such Acquisition of the board of directors or equivalent governing body of
the acquiree is obtained; and
(e) the acquisition of equity interests in any Person other than an
individual or a Subsidiary (which acquisition does not constitute an
Acquisition) or the acquisition of additional equity units of, or capital
contribution to, any Subsidiary, provided that (i) the payments made by the
Company and its Subsidiaries with respect to any such acquisition or capital
contribution, together with, in the case of acquisitions of equity interests in
Persons other than an individual or a Subsidiary, the amount of Indebtedness and
Contingent Obligations arising as part thereof, plus all other such payments
made by the Company and its Subsidiaries, together with, in the case of
acquisitions of equity interests in Persons other than an individual or a
Subsidiary, the amount of Indebtedness and Contingent Obligations arising as
part thereof, since July 31, 1993, plus the amount of payments of the type
described in subsections 8.4(d) and 8.10(c) made by the Company and its
Subsidiaries since July 31, 1993 shall not exceed at the time such payments are
made the sum of (A) $13,000,000 plus (B) 50% of Consolidated Net Income (or less
100% of any net deficit) subsequent to July 31, 1993 plus (C) the net cash
proceeds received by the Company after August 15, 1993 from the sale of shares
of its common stock or evidences of Indebtedness which are subsequently
converted into or exchanged for its common stock, and (ii) immediately after
giving effect to such acquisition or capital contribution no Default or Event of
Default would exist.
8.5 Limitation on Indebtedness. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
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(b) Indebtedness consisting of Contingent Obligations permitted
pursuant to Section 8.8;
(c) Indebtedness existing on the Closing Date and set forth in
Schedule 8.5;
(d) Indebtedness incurred in connection with leases permitted pursuant
to Section 8.9;
(e) Indebtedness secured by Liens permitted by subsection 8.1(k) in an
aggregate amount outstanding not to exceed $5,000,000;
(f) Indebtedness permitted by subsection 8.4(c); and
(g) Indebtedness complying with the requirements of subsections 8.4(d)
or (e), provided, that such Indebtedness is owed to the Person who is the
selling party in the associated transaction.
8.6 Transactions with Affiliates. The Company shall not, and shall not
suffer or permit any Subsidiary to, enter into any transaction with any
Affiliate of the Company, except upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would be obtained in a
comparable arm's-length transaction with a Person not an Affiliate of the
Company or such Subsidiary.
8.7 Use of Proceeds. The Company shall not, and shall not suffer or permit
any Subsidiary to, use any portion of the Loan proceeds or any Letter of Credit,
directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or
otherwise refinance indebtedness of the Company or others incurred to purchase
or carry Margin Stock, (iii) to extend credit for the purpose of purchasing or
carrying any Margin Stock, or (iv) to acquire any security in any transaction
that is subject to Section 13 or 14 of the Exchange Act.
8.8 Contingent Obligations. The Company shall not, and shall not suffer or
permit any Subsidiary to, create, incur, assume or suffer to exist any
Contingent Obligations except:
(a) endorsements for collection or deposit in the ordinary course of
business;
(b) Swap Contracts entered into in the ordinary course of business as
bona fide hedging transactions;
(c) Contingent Obligations existing as of the Closing Date and listed
in Schedule 7.8; and
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(d) Contingent Obligations complying with the requirements of
subsections 8.4(d) or (e), provided that such Contingent Obligation is owed to
the Person who is the selling party in the associated transaction.
8.9 Lease Obligations. The Company shall not, and shall not suffer or
permit any Subsidiary to, create or suffer to exist any obligations for the
payment of rent for any property under lease or agreement to lease, except for:
(a) leases of the Company and of Subsidiaries in existence on the
Closing Date and any renewal, extension or refinancing thereof;
(b) operating leases entered into by the Company or any Subsidiary
after the Closing Date in the ordinary course of business; and
(c) capital leases other than those permitted under clause (a) of this
Section, entered into by the Company or any Subsidiary after the Closing Date to
finance the acquisition of equipment; provided that the aggregate net present
value of all future rental payments for all such capital leases shall not exceed
in any fiscal year $5,000,000;
8.10 Restricted Payments. The Company shall not, and shall not suffer or
permit any Subsidiary to, declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of its capital stock or any warrants,
rights or options to acquire such shares, now or hereafter outstanding; except
to:
(a) declare and make dividend payments or other distributions payable
solely in its common stock;
(b) in the case of the Company, purchase, redeem or otherwise acquire
shares of its common stock or warrants or options to acquire any such shares
with the proceeds received from the substantially concurrent issue of new shares
of its common stock;
(c) in the case of the Company, declare or pay cash dividends to its
stockholders and purchase, redeem or otherwise acquire shares of its capital
stock or warrants, rights or options to acquire any such shares for cash;
provided, that, (i) the value of such cash dividends and purchases, redemptions
and other acquisitions since July 31, 1993 plus the amount of payments of the
type described in subsections 8.4(d) and 8.4(e) made by the Company and its
Subsidiaries since July 31, 1993 shall not exceed at the time such payments are
made the sum of (A) $13,000,000 plus
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(B) 50% of Consolidated Net Income (or less 100% of any net deficit) subsequent
to July 31, 1993 plus (C) the net cash proceeds received by the Company after
August 15, 1993 from the sale of shares of its common stock or evidences of
Indebtedness which are subsequently converted into or exchanged for its common
stock, and (ii) immediately after giving effect to such proposed action, no
Default or Event of Default would exist; and
(d) in the case of any Subsidiary, declare and make divided payments
or other distributions to the Company or any other Subsidiary.
8.11 ERISA. The Company shall not, and shall not suffer or permit any of
its ERISA Affiliates to: (a) engage in a prohibited transaction or violation of
the fiduciary responsibility rules with respect to any Plan which has resulted
or could reasonably be expected to result in liability of the Company in an
aggregate amount in excess of $200,000; or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
8.12 Change in Business. The Company shall not, and shall not suffer or
permit any Subsidiary to, engage in any material line of business substantially
different from those lines of business carried on by the Company and its
Subsidiaries on the date hereof.
8.13 Accounting Changes. The Company shall not, and shall not suffer or
permit any Subsidiary to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal year of
the Company or of any Subsidiary.
ARTICLE IX
FINANCIAL COVENANTS
So long as any Bank shall have any Commitment hereunder, or any Loan or
other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, unless the Majority Banks waive compliance in writing:
9.1 Net Worth. The Company shall not permit at any time its Consolidated
Net Worth to be less than $73,000,000 plus the sum of 50% of its Consolidated
Net Income (without reduction for any losses) as of the end of each fiscal
quarter ending after July 31, 1993.
9.2 Fixed Charge Ratio. The Company shall not permit at any time the ratio
of Consolidated Income Available for Fixed Charges to Fixed Charges for the most
recently completed four fiscal quarters to be less than 3.5 to 1.0.
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9.3 Indebtedness Ratio. The Company shall not permit at any time the ratio
of (a) Consolidated Indebtedness (but excluding any sums which arise under
clause (g) of the definition of "Indebtedness") to (b) Consolidated Total
Capitalization as in effect at the end of the fiscal quarter then most recently
ended to be more than .60 to 1.00.
9.4 Senior Indebtedness Ratio. The Company shall not permit at any time
the ratio of (a) Consolidated Senior Indebtedness (but excluding any sums which
arise under clause (g) of the definition of "Indebtedness") to (b) Consolidated
Total Capitalization as in effect at the end of the fiscal quarter then most
recently ended to be more than .40 to 1.00.
9.5 Quick Ratio. The Company shall not permit its Quick Ratio at any time
to be less than 1.0:1.0. For purposes hereof, "Quick Ratio" means, at any time,
the ratio of (a) the sum of (i) (x) cash balances maintained by the Company and
its Subsidiaries minus (y) any proceeds of Loans which are maintained in deposit
accounts with the Agent or any Agent-Related Person, plus (ii) the lesser of (x)
the Dollar Equivalent amount of all accounts receivables of the Company and its
Subsidiaries less any write-offs in accordance with GAAP or (y) the product of
nine and the amount of cash balances referenced in clause (a)(i) above to (b)
the sum of (i) consolidated current liabilities of the Company and its
Subsidiaries plus (ii) without double counting, the aggregate principal Dollar
Equivalent amount of all Loans outstanding hereunder other than proceeds of
Loans which are maintained in deposit accounts with the Agent or any Agent-
Related Person.
ARTICLE X
EVENTS OF DEFAULT
-----------------
10.1 Event of Default. Any of the following shall constitute an "Event of
Default":
(a) Non-Payment. Any Borrower fails to pay, (i) when and as required
to be paid herein, any amount of principal of any Loan or of any L/C Obligation,
or (ii) within five (5) days after the same becomes due, any interest, fee or
any other amount payable hereunder or under any other Loan Document; or
(b) Representation or Warranty. Any representation or warranty by the
Company or any Subsidiary made herein, in any other Loan Document, or which is
contained in any certificate, document or financial or other statement by the
Company, any Subsidiary, or any Responsible Officer, furnished at any time under
this Agreement, or in or under any other Loan Document, is incorrect in any
material respect on or as of the date made or deemed made; or
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(c) Specific Defaults. The Company fails to perform or observe any
term, covenant or agreement contained in any of Section 7.1, 7.2, 7.3 or 7.10 or
in Article VIII; or
(d) Other Defaults. The Borrowers fail to perform or observe any
other term or covenant contained in this Agreement or any other Loan Document,
and such default shall continue unremedied for a period of 20 days after the
earlier of (i) the date upon which a Responsible Officer knew or reasonably
should have known of such failure or (ii) the date upon which written notice
thereof is given to the Company by the Agent or any Bank; or
(e) Cross-Default. The Company or any Subsidiary (i) fails to make
any payment in respect of any Indebtedness or Contingent Obligation having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than $1,000,000 when due (whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) and such failure
continues after the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure; or (ii) fails to perform or
observe any other condition or covenant, or any other event shall occur or
condition exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after the
applicable grace or notice period, if any, specified in the relevant document on
the date of such failure if the effect of such failure, event or condition is to
cause, or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause such Indebtedness to
be declared to be due and payable prior to its stated maturity, or such
Contingent Obligation to become payable or cash collateral in respect thereof to
be demanded; or
(f) Insolvency; Voluntary Proceedings. The Company or any Significant
Subsidiary (i) admits in writing its inability to pay, its debts as they become
due, subject to applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) voluntarily ceases to conduct its business in the ordinary
course; (iii) commences any Insolvency Proceeding with respect to itself; or
(iv) takes any action to effectuate or authorize any of the foregoing; or
(g) Involuntary Proceedings. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Significant
Subsidiary, or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of the Company's or any
Significant Subsidiary's properties, and any such proceeding or petition shall
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not be dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within 60 days
after commencement, filing or levy; (ii) the Company or any Significant
Subsidiary admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief (or similar order under non-U.S.
law) is ordered in any Insolvency Proceeding; or (iii) the Company or any
Significant Subsidiary acquiesces in the appointment of a receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent therefor),
or other similar Person for itself or a substantial portion of its property or
business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a Pension
Plan or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of the Company under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $250,000;
(ii) the aggregate amount of Unfunded Pension Liability among all Pension Plans
at any time exceeds $250,000; or (iii) the Company or any ERISA Affiliate shall
fail to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of
$250,000; or
(i) Monetary Judgments. One or more non-interlocutory judgments, non-
interlocutory orders, decrees or arbitration awards is entered against the
Company or any Subsidiary involving in the aggregate a liability (to the extent
not covered by independent third-party insurance as to which the insurer does
not dispute coverage) as to any single or related series of transactions,
incidents or conditions, of $1,000,000 or more, and the same shall remain
unsatisfied, unvacated and without application to stay pending appeal for a
period of 15 Business Days after the entry thereof; or
(j) Non-Monetary Judgments. Any non-monetary judgment, order or
decree is entered against the Company or any Subsidiary which does or would
reasonably be expected to have a Material Adverse Effect, and the same shall
remain unsatisfied, unvacated and without application to stay pending appeal for
a period of 15 Business Days after the entry thereof; or
(k) Change of Control. There occurs any Change of Control.
10.2 Remedies. If any Event of Default occurs, the Agent shall, at the
request of, or may, with the consent of, the Majority Banks,
(a) declare the commitment of each Bank to make Loans and any
obligation of the Issuing Bank to issue Letters of Credit
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to be terminated, whereupon such commitments and obligation shall be terminated;
(b) require the maximum aggregate amount that is or at any time
thereafter may become available for drawing under any outstanding Letters of
Credit to be Cash Collateralized, and declare the unpaid principal amount of all
outstanding Loans, all interest accrued and unpaid thereon, and all other
amounts owing or payable hereunder or under any other Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Borrowers;
and
(c) exercise on behalf of itself and the Banks all rights and remedies
available to it and the Banks under the Loan Documents or applicable law;
provided, however, that upon the occurrence of any event specified in subsection
(f) or (g) of Section 10.1 (in the case of clause (i) of subsection (g) upon the
expiration of the 60-day period mentioned therein), the obligation of each Bank
to make Loans and any obligation of the Issuing Bank to Issue Letters of Credit
shall automatically terminate and the unpaid principal amount of all outstanding
Loans and all interest and other amounts as aforesaid shall automatically become
due and payable without further act of the Agent, the Issuing Bank or any Bank.
10.3 Rights Not Exclusive. The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.
ARTICLE XI
THE AGENT
---------
11.1 Appointment and Authorization. (a) Each Bank hereby irrevocably
(subject to Section 11.9) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
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liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
(b) The Issuing Bank shall act on behalf of the Banks with respect to
any Letters of Credit Issued by it and the documents associated therewith until
such time and except for so long as the Agent may agree at the request of the
Majority Lenders to act for such Issuing Bank with respect thereto; provided,
however, that the Issuing Bank shall have all of the benefits and immunities (i)
provided to the Agent in this Article XI with respect to any acts taken or
omissions suffered by the Issuing Bank in connection with Letters of Credit
Issued by it or proposed to be Issued by it and the application and agreements
for letters of credit pertaining to the Letters of Credit as fully as if the
term "Agent", as used in this Article XI, included the Issuing Bank with respect
to such acts or omissions, and (ii) as additionally provided in this Agreement
with respect to the Issuing Bank.
11.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.
11.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No Agent-
Related Person shall be under any obligation to any Bank to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
11.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or
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other document or conversation 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 (including counsel to the Borrowers),
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
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Majority Banks as it deems appropriate and, if it so
requests, it shall first be indemnified to its satisfaction by the Banks against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of the Majority
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
11.5 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will inform the Banks and the Company of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Majority Banks in
accordance with Article X; provided, however, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Banks.
11.6 Credit Decision. Each Bank acknowledges that none of the Agent-
Related Persons has made any representation or warranty to it, and that no act
by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and
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investigation into the business, prospects, operations, property, financial and
other condition and creditworthiness of the Company and its Subsidiaries, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Borrowers hereunder. Each Bank also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company and its Subsidiaries. Except for notices,
reports and other documents expressly herein required to be furnished to the
Banks by the Agent, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of the Company and its Subsidiaries which may come into the
possession of any of the Agent-Related Persons.
11.7 Indemnification of Agent. Whether or not the transactions
contemplated hereby are consummated, the Banks shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of the
Borrowers and without limiting the obligation of the Borrowers to do so), pro
rata, from and against any and all Indemnified Liabilities; provided, however,
that no Bank shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting solely from such Person's
gross negligence or willful misconduct. Without limitation of the foregoing,
each Bank shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) incurred by the Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrowers. The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
11.8 Agent in Individual Capacity. BofA NT&SA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA NT&SA were not the
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Agent hereunder and without notice to or consent of the Banks. The Banks
acknowledge that, pursuant to such activities, BofA NT&SA or its Affiliates may
receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans, if
any, BofA NT&SA shall have the same rights and powers under this Agreement as
any other Bank and may exercise the same as though it were not the Agent, and
the terms "Bank" and "Banks" include BofA in NT&SA its individual capacity.
11.9 Successor Agent. The Agent may, and at the request of the Majority
Banks shall, resign as Agent upon 30 days' notice to the Banks and the Company.
If the Agent resigns under this Agreement, the Majority Banks shall appoint from
among the Banks a successor agent for the Banks subject to the Company's
reasonable consent. If no successor agent is appointed prior to the effective
date of the resignation of the Agent, the Agent may appoint, after consulting
with the Banks and the Company, a successor agent from among the Banks. Upon
the acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring Agent
and the term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article XI and
Sections 12.4 and 12.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Majority Banks appoint a successor agent as provided for above.
Notwithstanding the foregoing, however, BofA NT&SA may not be removed as the
Agent at the request of the Majority Banks unless BofA Illinois shall also
simultaneously be replaced as "Issuing Bank" hereunder pursuant to documentation
in form and substance reasonably satisfactory to BofA Illinois.
11.10 Withholding Tax. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees with and in favor of the Agent, to deliver to
the Agent:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS
Forms 1001 and W-8 before the payment of any interest in the first calendar
year and before
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the payment of any interest in each third succeeding calendar year during
which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Bank, two properly
completed and executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Bank and in each
succeeding taxable year of such Bank during which interest may be paid under
this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code
or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part of
the Obligations of the Company to such Bank, such Bank agrees to notify the
Agent of the percentage amount in which it is no longer the beneficial owner of
Obligations of the Company to such Bank. To the extent of such percentage
amount, the Agent will treat such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the Obligations of the Borrowers to
such Bank, such Bank agrees to undertake sole responsibility for complying with
the withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for
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the account of any Bank (because the appropriate form was not delivered, was not
properly executed, or because such Bank failed to notify the Agent of a change
in circumstances which rendered the exemption from, or reduction of, withholding
tax ineffective, or for any other reason) such Bank shall indemnify the Agent
fully for all amounts paid, directly or indirectly, by the Agent as tax or
otherwise, including penalties and interest, and including any taxes imposed by
any jurisdiction on the amounts payable to the Agent under this Section,
together with all costs and expenses (including Attorney Costs). The obligation
of the Banks under this subsection shall survive the payment of all Obligations
and the resignation or replacement of the Agent.
ARTICLE XII
MISCELLANEOUS
-------------
12.1 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by any Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) and any Borrower and acknowledged by the Agent,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such waiver, amendment, or consent shall, unless in writing and signed by all
the Banks and the Borrowers and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitment of any Bank (or reinstate any
Commitment terminated pursuant to Section 10.2);
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to the Banks (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or (subject to clause (ii) below) any fees or other amounts payable
hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Banks or any of
them to take any action hereunder; or
(e) amend this Section, or Section 2.15, or any provision herein
providing for consent or other action by all Banks;
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and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank in addition to the Majority Banks or all
the Banks, as the case may be, affect the rights or duties of the Issuing Bank
under this Agreement or any L/C-Related Document relating to any Letter of
Credit Issued or to be Issued by it, (ii) no amendment, waiver or consent shall,
unless in writing and signed by the Agent in addition to the Majority Banks or
all the Banks, as the case may be, affect the rights or duties of the Agent
under this Agreement or any other Loan Document, and (iii) the Fee Letters may
be amended, or rights or privileges thereunder waived, in a writing executed by
the parties thereto.
12.2 Notices. (a) All notices, requests and other communications shall be
in writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by the Borrowers by
facsimile (i) shall be immediately confirmed by a telephone call and (ii) shall
be followed promptly by delivery of a hard copy original thereof) and mailed,
faxed or delivered, to the address or facsimile number specified for notices on
Schedule 12.2; or, as directed to the Borrowers or the Agent, to such other
address as shall be designated by such party in a written notice to the other
parties, and as directed to any other party, at such other address as shall be
designated by such party in a written notice to the Company and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when delivered for
overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II, III or XI shall not be effective until actually
received by the Agent, and notices pursuant to Article III to the Issuing Bank
shall not be effective until actually received by the Issuing Bank at the
address specified for the "Issuing Bank" on Schedule 11.2.
(c) Any agreement of the Agent and the Banks herein to receive certain
notices by telephone or facsimile is solely for the convenience and at the
request of the Borrowers. The Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person previously authorized by
the Borrowers to give such notice and the Agent and the Banks shall not have any
liability to the Borrowers or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Borrowers to repay the Loans and L/C Obligations
shall not be affected in any way or to any extent by any failure by the Agent
and the Banks to receive written confirmation of any telephonic or facsimile
notice or the receipt by the Agent and the
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Banks of a confirmation which is at variance with the terms understood by the
Agent and the Banks to be contained in the telephonic or facsimile notice.
12.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Bank, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege.
12.4 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA NT&SA (including in its capacity as Agent)
within five Business Days after demand (subject to subsection 5.1(f)) for all
reasonable, supportable and direct costs and expenses incurred by BofA NT&SA
(including in its capacity as Agent) in connection with the development,
preparation, delivery, administration and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other documents prepared
in connection herewith or therewith, and the consummation of the transactions
contemplated hereby and thereby, including reasonable Attorney Costs incurred by
BofA NT&SA (including in its capacity as Agent) with respect thereto; and
(b) pay or reimburse the Agent, the Arranger and each Bank within five
Business Days after demand (subject to subsection 5.1(g)) for all reasonable and
direct costs and expenses (including Attorney Costs) incurred by them in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or any other Loan Document during the
existence of an Event of Default or after acceleration of the Loans (including
in connection with any "workout" or restructuring regarding the Loans, and
including in any Insolvency Proceeding or appellate proceeding).
12.5 Company Indemnification. Whether or not the transactions contemplated
hereby are consummated, the Company shall indemnify and hold the Agent-Related
Persons, and each Bank and each of its respective officers, directors,
employees, counsel, agents and attorneys-in-fact (each, an "Indemnified Person")
harmless from and against any and all direct liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, charges, expenses and
disbursements (including Attorney Costs) of any kind or nature whatsoever which
may at any time (including at any time following repayment of the Loans, the
termination of the Letters of Credit and the termination, resignation or
replacement of the Agent or replacement of any
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Bank) be imposed on, incurred by or asserted against any such Person in any way
relating to or arising out of this Agreement or any document contemplated by or
referred to herein, or the transactions contemplated hereby, or any action taken
or omitted by any such Person under or in connection with any of the foregoing,
including with respect to any investigation, litigation or proceeding (including
any Insolvency Proceeding or appellate proceeding) related to or arising out of
this Agreement or the Loans or Letters of Credit or the use of the proceeds
thereof, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "Indemnified Liabilities"); provided, that the
Company shall have no obligation hereunder to any Indemnified Person with
respect to liabilities resulting solely from the gross negligence or willful
misfeasance or nonfeasance of such Indemnified Person. The agreements in this
Section shall survive payment of all other Obligations.
12.6 Payments Set Aside. To the extent that any Borrower makes a payment
to the Agent or the Banks, or the Agent or the Banks exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
12.7 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Borrowers may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Bank.
12.8 Assignments, Participations, etc. (a) Any Bank may, with the written
consent of the Agent, the Issuing Bank and the Company, which consent shall not
be unreasonably withheld, at any time assign and delegate to one or more
Eligible Assignees (provided that no written consent of the Agent or the Issuing
Bank shall be required in connection with any assignment and delegation by a
Bank to an Eligible Assignee that is an Affiliate of such Bank) (each an
"Assignee") all, or any ratable part of all, of the Loans, the Commitments, the
L/C Obligations and the other rights and obligations of such Bank hereunder, in
a minimum amount of $10,000,000; provided, however, that the Borrowers and the
Agent may continue to deal solely and directly with such Bank in
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connection with the interest so assigned to an Assignee until (i) written notice
of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Borrowers
and the Agent by such Bank and the Assignee; (ii) such Bank and its Assignee
shall have delivered to the Borrowers and the Agent an Assignment and Acceptance
in the form of Exhibit E ("Assignment and Acceptance") together with any Note or
Notes subject to such assignment and (iii) the assignor Bank or Assignee has
paid to the Agent a processing fee in the amount of $2,500.
(b) From and after the date that the Agent receives the Company's
consent, and notifies the assignor Bank that it has received (and provided its
consent with respect to) an executed Assignment and Acceptance and payment of
the above-referenced processing fee, (i) the Assignee thereunder shall be a
party hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Bank under the Loan Documents, and (ii) the assignor Bank
shall, to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Loan Documents.
(c) After receiving the Company's consent, and within five Business
Days after its receipt of notice by the Agent that it has received an executed
Assignment and Acceptance and payment of the processing fee, (and provided that
it consents to such assignment in accordance with subsection 12.8(a)), the
Company shall execute and deliver to the Agent, new Notes evidencing such
Assignee's assigned Loans and Commitment and, if the assignor Bank has retained
a portion of its Loans and its Commitment, replacement Notes in the principal
amount of the Commitment retained by the assignor Bank (such Notes to be in
exchange for, but not in payment of, the Notes held by such Bank). Immediately
upon each Assignee's making its processing fee payment under the Assignment and
Acceptance, this Agreement shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce such Commitments of the assigning Bank
pro tanto.
(d) Any Bank may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Company (a "Participant") participating
interests in any Loans, the Commitment of that Bank and the other interests of
that Bank (the "originating Bank") hereunder and under the other Loan Documents;
provided, however, that (i) the originating Bank's obligations under this
Agreement shall remain unchanged, (ii) the originating Bank shall remain solely
responsible for the performance of such
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obligations, (iii) the Borrowers, the Agent and the Issuing Bank shall continue
to deal solely and directly with the originating Bank in connection with the
originating Bank's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Bank shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document. In the case of any such participation, the Participant shall not have
any rights under this Agreement, or any of the other Loan Documents, and all
amounts payable by the Company hereunder shall be determined as if such Bank had
not sold such participation; except that, if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall be deemed to have the right of set-off in respect of its participating
interest in amounts owing under this Agreement to the same extent as if the
amount of its participating interest were owing directly to it as a Bank under
this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement and the Note held by it in favor
of any Federal Reserve Bank in accordance with Regulation A of the FRB or U.S.
Treasury Regulation 31 CFR (S)203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
12.9 Confidentiality. The Agent, the Issuing Bank and each Bank agree to
take and to cause its Affiliates to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of all information identified
as "confidential" or "secret" by the Company and provided to it by the Company
or any Subsidiary, or by the Agent on such Company's or Subsidiary's behalf,
under this Agreement or any other Loan Document, and neither it nor any of its
Affiliates shall use any such information other than in connection with or in
enforcement of this 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 a Bank, or (ii) was or becomes available on a non-
confidential basis from a source other than the Company or any Subsidiary,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; provided, that any Bank may disclose such information
(A) at the request or pursuant to any requirement of any Governmental Authority
to which the Bank is subject or in connection with an examination of such Bank
by any such authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; (D) to the extent reasonably required in connection with any
litigation or proceeding to which the Agent,
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any Bank or their respective Affiliates 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 such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential,
provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Banks hereunder; (H) as to any
Bank or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Bank or such Affiliate; and (I)
to its Affiliates provided that such Affiliates agree in writing to keep such
information confidential to the same extent required by the Banks hereunder;
provided further, that with respect to the foregoing clauses (B), (C), (D) and
(E), the respective Bank shall give prompt notice of such disclosure to the
Company.
12.10 Set-off. In addition to any rights and remedies of the Banks
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Bank is authorized at any time and from time to time, without
prior notice to the Borrowers, any such notice being waived by the Borrowers to
the fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Bank to or for the credit or
the account of the Borrowers against any and all Obligations owing to such Bank,
now or hereafter existing, irrespective of whether or not the Agent or such Bank
shall have made demand under this Agreement or any Loan Document and although
such Obligations may be contingent or unmatured. Each Bank shall upon
exercising its set-off rights to notify the Company and the Agent after any such
set-off and application made by such Bank; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application.
12.11 Automatic Debits of Fees. With respect to any fee, or any other cost
or expense (excluding Attorney Costs) due and payable to the Agent, the Issuing
Bank, BofA or the Arranger under the Loan Documents, the Borrowers hereby
authorize BofA to debit with timely notice to the Company a prearranged deposit
account of the Borrowers with BofA in an amount such that the aggregate amount
debited from all such deposit accounts does not exceed such fee or other cost or
expense. If there are insufficient funds in such deposit accounts to cover the
amount of the fee or other cost or expense then due, such debits will be
reversed (in whole or in part, in BofA's sole discretion) and such amount not
debited shall be deemed to be unpaid. No such debit under this Section shall be
deemed a set-off.
12.12 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Agent and the Company in writing of any
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changes in the address to which notices to the Bank should be directed, of
addresses of any Lending Office, of payment instructions in respect of all
payments to be made to it hereunder and of such other administrative information
as the Agent shall reasonably request.
12.13 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
12.14 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
12.15 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of the Borrowers, the Banks, the Agent
and the Agent-Related Persons, and their permitted successors and assigns, and
no other Person shall be a direct or indirect legal beneficiary of, or have any
direct or indirect cause of action or claim in connection with, this Agreement
or any of the other Loan Documents.
12.16 Service of Process. Each Subsidiary Borrower hereby irrevocably
appoints C.T. Corporation (the "Process Agent"), with an office on the date
hereof at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Xxxxxx Xxxxxx, as
its agent to receive on behalf of the Subsidiary Borrowers and their property
service of copies of the summons and complaint and any other process which may
be served in any such action or proceeding, provided that a copy of such process
is also mailed by registered or certified mail, postage prepaid, to the
respective Subsidiary Borrower at its address specified pursuant to Section
12.2. Such service may be made by mailing or delivering a copy of such process
to the Subsidiary Borrower in care of the Process Agent at the Process Agent's
above address, and the respective Subsidiary Borrower hereby irrevocably
authorizes and directs the Process Agent to accept such service on its behalf.
The Subsidiary Borrowers agree to indemnify such Process Agent in connection
with all matters relating to its appointment as agent of the Subsidiary
Borrowers for such purposes, to enter into any agreement relating to such
appointment which such Process Agent may customarily require, and to pay such
Process Agent's customary fees upon demand. Nothing in this Section 12.16 shall
affect the right of the Agent or any Bank to serve legal process in any other
manner permitted by law or affect the right of the Agent or any Bank to bring
any action or proceeding against the Borrower, the Subsidiary Borrowers or their
respective properties in the courts of any other jurisdictions.
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12.17 Governing Law and Jurisdiction. (a) THIS AGREEMENT AND OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF ILLINOIS; PROVIDED THAT THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR
OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWERS, THE AGENT AND THE BANKS
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE BORROWERS, THE AGENT AND THE BANKS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE BORROWERS, THE AGENT AND
THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY ILLINOIS.
12.18 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Borrowers,
the Banks and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered in Chicago, Illinois by their proper and duly authorized
officers as of the day and year first above written.
SYSTEM SOFTWARE ASSOCIATES, INC.
By: _________________________
Title: ______________________
SYSTEM SOFTWARE ASSOCIATES
JAPAN LIMITED LIABILITY COMPANY
By: _________________________
Title: ______________________
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: _________________________
Title: ______________________
BANK OF AMERICA ILLINOIS, as a Bank
By: _________________________
Title: ______________________
BANK OF AMERICA ILLINOIS, as
Issuing Bank
By: _________________________
Title: ______________________
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO
By: _________________________
Title: ______________________
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SCHEDULE 2.1
------------
COMMITMENTS
-----------
AND PRO RATA SHARES
-------------------
Pro Rata
Bank Commitment Share
---- ---------- --------
Bank of America Illinois $25,000,000 50%
American National Bank and
Trust Company of Chicago $25,000,000 50%
TOTAL $50,000,000 100%
SCHEDULE 12.2
-------------
OFFSHORE AND DOMESTIC LENDING OFFICES,
--------------------------------------
ADDRESSES FOR NOTICES
---------------------
BANK OF AMERICA NATIONAL TRUST
------------------------------
AND SAVINGS ASSOCIATION,
-----------------------
as Agent
Bank of America National Trust
and Savings Association
Agency Management Services #5596
0000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
BANK OF AMERICA ILLINOIS,
------------------------
as Issuing Bank and as a Bank
Domestic and Offshore Lending Office:
Bank of America Illinois
000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices (other than Borrowing notices and Notices of
Conversion/Continuation):
Bank of America Illinois
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
AMERICAN NATIONAL BANK AND
--------------------------
TRUST COMPANY OF CHICAGO
------------------------
as a bank
Domestic and Offshore Lending Office:
American National Bank and
Trust Company of Chicago
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Isra X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notices (other than Borrowing notices and Notices of
Conversion/Continuation):
American National Bank and
Trust Company of Chicago
00 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Isra X. Xxxxx
Vice President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
