$37,000,000
CREDIT AGREEMENT
DATED AS OF JUNE 3, 1998
BY AND AMONG
ANALYTICAL SURVEYS, INC., AS BORROWER
AND
THE BANKS LISTED ON THE SIGNATURE PAGES HEREOF
AND
BANK ONE, COLORADO, N.A., AS AGENT
ARRANGED BY
BANK ONE, COLORADO, N.A.
TABLE OF CONTENTS
Page
----
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS . . . . . . . . . . . . . . . . 1
SECTION 1.1 DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 ACCOUNTING TERMS AND DETERMINATIONS. . . . . . . . . . . . 20
ARTICLE II COMMITMENT; AMOUNTS AND TERMS OF
THE ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.1 COMMITMENT . . . . . . . . . . . . . . . . . . . . . . . . 20
(a) REVOLVING LOANS COMMITMENT . . . . . . . . . . . . . 21
(b) TERM LOAN COMMITMENT . . . . . . . . . . . . . . . . 21
(c) ACQUISITION LOAN COMMITMENT . . . . . . . . . . . . 21
SECTION 2.2 ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2.3 MAKING THE ADVANCES . . . . . . . . . . . . . . . . . . . 22
(a) REQUEST FOR ADVANCE . . . . . . . . . . . . . . . . 22
(b) REQUEST FOR ADVANCE IRREVOCABLE . . . . . . . . . . 22
(c) AVAILABILITY OF FUNDS, REVOLVING
LOANS AND ACQUISITION LOANS . . . . . . . . . . . . 23
(d) ADVANCES BY AGENT . . . . . . . . . . . . . . . . . 23
SECTION 2.4 COMMITMENT FEE . . . . . . . . . . . . . . . . . . . . . . 24
(a) COMMITMENT FEE RATE . . . . . . . . . . . . . . . . 24
(b) CALCULATION OF COMMITMENT FEE . . . . . . . . . . . 24
SECTION 2.5 REDUCTION OF THE REVOLVING LOANS AND
ACQUISITION LOANS COMMITMENT . . . . . . . . . . . . . . . 24
SECTION 2.6 REPAYMENT . . . . . . . . . . . . . . . . . . . . . . . . 24
(a) VOLUNTARY REPAYMENT . . . . . . . . . . . . . . . . 24
(b) INSTALLMENT PAYMENTS OF TERM LOAN . . . . . . . . . 25
(c) REPAYMENT OF ACQUISITION LOANS . . . . . . . . . . . 25
(d) MANDATORY REPAYMENT . . . . . . . . . . . . . . . . 26
(e) APPLICATION OF REPAYMENTS . . . . . . . . . . . . . 26
SECTION 2.7 DISTRIBUTION OF PAYMENTS BY THE AGENT . . . . . . . . . . 26
SECTION 2.8 PROMISSORY NOTES . . . . . . . . . . . . . . . . . . . . . 27
(a) THE REVOLVING NOTES . . . . . . . . . . . . . . . . 27
(b) TERM NOTES . . . . . . . . . . . . . . . . . . . . . 27
(c) ACQUISITION LOAN NOTE . . . . . . . . . . . . . . . 28
SECTION 2.9 PRO RATA TREATMENT . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.10 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . 29
(a) PRIME RATE LOANS . . . . . . . . . . . . . . . . . . 29
-i-
Page
----
(b) LIBOR RATE LOANS . . . . . . . . . . . . . . . . . . 29
(c) DEFAULT RATE INTEREST . . . . . . . . . . . . . . . 29
SECTION 2.11 YIELD PROTECTION . . . . . . . . . . . . . . . . . . . . . 29
(a) INCREASED COSTS . . . . . . . . . . . . . . . . . . 30
(b) ADDITIONAL INTEREST. . . . . . . . . . . . . . . . . 30
(c) INCREASED CAPITAL. . . . . . . . . . . . . . . . . . 31
(d) BREAKAGE COSTS . . . . . . . . . . . . . . . . . . . 31
SECTION 2.12 CONVERSION OF LOANS; CHANGE OF
INTEREST PERIODS . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.13 ILLEGALITY, ETC. . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.14 PAYMENTS AND COMPUTATIONS . . . . . . . . . . . . . . . . 33
ARTICLE III CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . 34
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE . . . . . . . . . 34
SECTION 3.2 CONDITIONS PRECEDENT TO ALL ADVANCES . . . . . . . . . . . 37
ARTICLE IV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 38
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF
THE BORROWER . . . . . . . . . . . . . . . . . . . . . . . 38
(a) CORPORATE EXISTENCE. . . . . . . . . . . . . . . . . 38
(b) POWERS, ETC. . . . . . . . . . . . . . . . . . . . . 39
(c) AUTHORIZATION; NO CONFLICT . . . . . . . . . . . . . 39
(d) APPROVALS. . . . . . . . . . . . . . . . . . . . . . 40
(e) ENFORCEABILITY . . . . . . . . . . . . . . . . . . . 40
(f) FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . 40
(g) LITIGATION . . . . . . . . . . . . . . . . . . . . . 40
(h) FEDERAL RESERVE REGULATIONS. . . . . . . . . . . . . 41
(i) INVESTMENT COMPANY ACT . . . . . . . . . . . . . . . 41
(j) ERISA. . . . . . . . . . . . . . . . . . . . . . . . 41
(k) COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . 42
(l) PAYMENT OF DEBTS AND TAXES . . . . . . . . . . . . . 42
(m) INDEBTEDNESS, GUARANTIES . . . . . . . . . . . . . . 43
(n) MATERIAL AGREEMENTS. . . . . . . . . . . . . . . . . 43
(o) PROPERTIES, INVENTORY AND EQUIPMENT. . . . . . . . . 43
(p) FINANCIAL CONDITION. . . . . . . . . . . . . . . . . 44
(q) INSURANCE. . . . . . . . . . . . . . . . . . . . . . 45
(r) FULL DISCLOSURE . . . . . . . . . . . . . . . . . . 45
(s) NO DEFAULT . . . . . . . . . . . . . . . . . . . . . 45
(t) STATUS OF LOANS AS SENIOR DEBT . . . . . . . . . . . 45
(u) SWAP OBLIGATIONS . . . . . . . . . . . . . . . . . . 45
ARTICLE V COVENANTS OF THE BORROWER. . . . . . . . . . . . . . . . . . . . 46
-ii-
Page
----
SECTION 5.1 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . 46
(a) USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . 46
(b) REPORTING AND NOTICE REQUIREMENTS . . . . . . . . . . 46
(c) MAINTENANCE OF EXISTENCE, ETC.. . . . . . . . . . . . 49
(d) COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . . 49
(e) INSURANCE . . . . . . . . . . . . . . . . . . . . . . 50
(f) MATERIAL AGREEMENTS . . . . . . . . . . . . . . . . . 50
(g) OBLIGATIONS AND TAXES . . . . . . . . . . . . . . . . 50
(h) MAINTAINING RECORDS; ACCESS TO
PROPERTIES AND INSPECTIONS. . . . . . . . . . . . . . 50
(i) ENVIRONMENTAL AND SAFETY MATTERS. . . . . . . . . . . 51
(j) DEPOSIT BALANCES. . . . . . . . . . . . . . . . . . . 52
(k) INTEREST RATE PROTECTION. . . . . . . . . . . . . . . 52
(l) SURVEYS . . . . . . . . . . . . . . . . . . . . . . . 52
(m) AUDIT OF ACCOUNTS RECEIVABLE AND
INVENTORY . . . . . . . . . . . . . . . . . . . . . . 52
(n) ADDITIONAL PLEDGES AND GUARANTORS . . . . . . . . . . 53
(p) LANDLORD'S WAIVER AND CONSENT . . . . . . . . . . . . 54
(q) FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . 54
SECTION 5.2 NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . 54
(a) FINANCIAL COVENANTS . . . . . . . . . . . . . . . . . 54
(b) PROHIBITION OF FUNDAMENTAL CHANGES. . . . . . . . . . 55
(c) LIMITATION ON LIENS . . . . . . . . . . . . . . . . . 55
(d) DEBT. . . . . . . . . . . . . . . . . . . . . . . . . 55
(e) GUARANTEES. . . . . . . . . . . . . . . . . . . . . . 56
(f) INVESTMENTS, LOANS, ADVANCES, ETC.. . . . . . . . . . 56
(g) SALES OF ASSETS . . . . . . . . . . . . . . . . . . . 57
(h) TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . . 57
(i) MODIFICATION OF CERTAIN DOCUMENTS;
PERFORMANCE OF MATERIAL AGREEMENTS. . . . . . . . . . 57
(j) DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . 58
(k) ACCOUNTING. . . . . . . . . . . . . . . . . . . . . . 58
(l) CHANGE OF ADDRESS; BUSINESS NAME(s) . . . . . . . . . 58
ARTICLE VI EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 6.1 EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 59
(a) PAYMENTS UNDER THE AGREEMENT AND
THE NOTES . . . . . . . . . . . . . . . . . . . . . . 59
(b) REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . 59
(c) OTHER LOAN INSTRUMENT OBLIGATIONS . . . . . . . . . . 59
(d) OTHER DEBT. . . . . . . . . . . . . . . . . . . . . . 59
(e) INSOLVENCY. . . . . . . . . . . . . . . . . . . . . . 60
-iii-
Page
----
(f) JUDGMENTS . . . . . . . . . . . . . . . . . . . . . 60
(g) TERMINATION OF CERTAIN LOAN
INSTRUMENTS . . . . . . . . . . . . . . . . . . . . 61
(h) COLLATERAL LIENS. . . . . . . . . . . . . . . . . . 61
SECTION 6.2 BANK'S RIGHTS UPON AN EVENT OF DEFAULT. . . . . . . . . . 61
ARTICLE VII THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 7.1 APPOINTMENT AND POWERS. . . . . . . . . . . . . . . . . . 61
SECTION 7.2 LIMITATION ON AGENT'S LIABILITY . . . . . . . . . . . . . 62
SECTION 7.3 DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 7.4 RIGHTS AS A BANK. . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.5 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 63
SECTION 7.6 NON-RELIANCE ON AGENT AND OTHER BANKS . . . . . . . . . . 64
SECTION 7.7 EXECUTION AND AMENDMENT OF LOAN
INSTRUMENTS ON BEHALF OF THE BANKS . . . . . . . . . . . . . . . . . . 64
SECTION 7.8 RESIGNATION OF THE AGENT. . . . . . . . . . . . . . . . . 65
ARTICLE VIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.1 AMENDMENTS; WAIVERS . . . . . . . . . . . . . . . . . . . 65
SECTION 8.2 NOTICES, ETC. . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.3 REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 8.4 COSTS, EXPENSES AND TAXES . . . . . . . . . . . . . . . . 67
SECTION 8.5 RIGHT OF SET-OFF. . . . . . . . . . . . . . . . . . . . . 68
SECTION 8.6 BINDING EFFECT. . . . . . . . . . . . . . . . . . . . . . 68
SECTION 8.7 INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 8.8 CONSENT TO EXCLUSIVE JURISDICTION . . . . . . . . . . . . 69
SECTION 8.9 WAIVER OF JURY TRIAL AND CERTAIN DAMAGES. . . . . . . . . 69
SECTION 8.10 ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 8.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 8.12 INCONSISTENT PROVISIONS . . . . . . . . . . . . . . . . . 70
SECTION 8.13 SHARING OF RECOVERIES . . . . . . . . . . . . . . . . . . 71
SECTION 8.14 ASSIGNMENTS AND PARTICIPATIONS. . . . . . . . . . . . . . 71
(a) ASSIGNMENTS . . . . . . . . . . . . . . . . . . . . 71
(b) PARTICIPATIONS. . . . . . . . . . . . . . . . . . . 73
SECTION 8.15 SURVIVAL OF REPRESENTATIONS AND
WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.18 SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 8.19 ENTIRE AGREEMENT, COMMITMENT LETTER
SUPERSEDED . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 8.20 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . 75
-iv-
SCHEDULES
Schedule I Banks
Schedule 2.1 Banks; Address; Commitment
Percentages
Schedule 4.1(a) Borrower's and Guarantors' Capital
Structure and Shareholders
Schedule 4.1(b) Borrower's and Guarantors' Business
Names and Jurisdictions where
Qualified to do Business
Schedule 4.1(d) Approvals
Schedule 4.1(f) Financial Disclosures
Schedule 4.1(g) Litigation
Schedule 4.1(j) ERISA Disclosures
Schedule 4.1(m) Indebtedness; Guaranties
Schedule 4.1(n) Material Agreements
Schedule 4.1(o) Real Property; Inventory; Liens
Schedule 4.1(q) Insurance
-v-
EXHIBITS
Exhibit A-1 Form of Revolving Note
Exhibit A-2 Form of Term Note
Exhibit A-3 Form of Acquisition Loan Note
Exhibit B-1 Form of Request for Advance
Exhibit B-2 Form of Compliance Certificate
Exhibit B-3 Form of Interest Period/Conversion Notice
Exhibit C Form of Guaranty
Exhibit D Form of Pledge and Security Agreement
Exhibit E Form of Security Agreement and
Assignment
Exhibit F-1 Form of Deed of Trust
Exhibit F-2 Form of Collateral Assignment of Leases
and Rents
Exhibit F-3 Landlord's Waiver and Consent
Exhibit F-4 Consent to Assignment of Contracts
Exhibit F-5 Form of Assignment of Lease
Exhibit G-1 Form of Borrower's Omnibus
Certificate
Exhibit G-2 Form of Guarantor's Omnibus Certificate
Exhibit H-1 Form of Opinion of Counsel to Borrower
Exhibit H-2 Form of Opinion of Counsel to Guarantors
Exhibit H-3 Form of Opinion of Local Counsel
Exhibit I Form of Notice of Assignment
-vi-
CREDIT AGREEMENT
Dated as of June 3,1998
THIS CREDIT AGREEMENT (the "AGREEMENT") is made and entered into as
of June 3, 1998 by and between Analytical Surveys, Inc., a Colorado
corporation,(the "BORROWER") and the Banks listed on the attached SCHEDULE I,
as revised from time to time (collectively the "BANKS" and individually the
"BANK"); and BANK ONE, COLORADO, N.A.,in its capacity as agent for the Banks
hereunder(in such capacity, the "AGENT").
RECITALS
Pursuant and subject to the terms and conditions of this Agreement,
the Banks will make available to the Borrower (a) until June30, 2001, a
Senior Secured Revolving Line of Credit in the maximum amount of up to
$11,000,000, (b) until June 30, 2003, a Senior Secured Term Loan of
$16,000,000, and (c) until June 30, 1999 a Senior Secured Acquisition Draw
Facility in the maximum amount of $10,000,000. Payment by the Borrower of
the amounts due hereunder will be secured by liens on and security interests
in the real and personal property of the Borrower and guaranteed by the
Subsidiaries of the Borrower.
AGREEMENT
In consideration of the covenants contained herein the Parties
hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 DEFINITIONS.
As used in this Agreement, the terms identified in this SECTION 1.1
shall have the meanings specified below.
"ACCOUNT RECEIVABLE" means any account (as such term is defined in
the Uniform Commercial Code as adopted in the State of
-1-
Colorado) or other right to payment for goods sold or services rendered of
the Borrower and its Subsidiaries.
"ACQUISITION LOANS" means the Advance of funds by the Banks to the
Borrower pursuant to the Acquisition Loan Commitment, which Loans will be
evidenced by the Acquisition Loan Notes.
"ACQUISITION LOANS COMMITMENT" means the commitment of each Bank to
Advance Acquisition Loans to the Borrower in the aggregate amount of
$10,000,000.00 as provided in SECTION 2.1(c) as the same may be adjusted or
terminated pursuant to SECTION 2.5 OR 6.2 or as otherwise provided in this
Agreement.
"ACQUISITION LOANS DRAW DATE" means June 30, 1999.
"ACQUISITION LOANS NOTE" means the promissory notes in the
aggregate principal amount of $10,000,000 evidencing the Acquisition Loan,
made by the Borrower and payable to the order of the Banks, substantially in
the form of EXHIBIT A-3 hereto, as the same may be supplemented, modified,
amended or restated from time to time in the manner provided herein.
"ACQUISITION LOAN RECORD" means a Record with respect to an
Acquisition Loan.
"ACQUISITION LOANS SCHEDULED MATURITY DATE" means June 30, 2004.
"ADVANCE" means an advance of funds by the Bank to the Borrower as
a Loan pursuant to a Request for Advance as provided in SECTION 2.2.
"AFFILIATE" means a Person that controls, is controlled by or is
under common control with another Person. For purposes hereof, "control"
means the practical power to direct the activities of a Person.
"AGENT" means Bank One, Colorado, N.A., as agent for and
representative (within the meaning of Section 9-105(m) of the Uniform
Commercial Code) of the Banks under the Loan Instruments, and any successor
Agent appointed pursuant to Section 7.8.
"AGREEMENT" means this Credit Agreement dated as of June 3, 1998
between the Borrower and the Banks, together with all schedules and exhibits
hereto, and all modifications, amendments, supplements, renewals and
extensions hereof in the manner provided herein.
-2-
"APPLICABLE LAW" means,(a) all applicable common law and principles
of equity and (b) all applicable provisions of all (i) constitutions,
statutes, rules, regulations and orders of governmental bodies, (ii)
approvals of Government Authorities and (iii) orders, decisions, judgements
and decrees of all courts (whether at law or in equity or admiralty) and
arbitrators.
"APPLICABLE MARGIN" means such percentage for the Type of Loan as
set forth in the following table opposite the applicable ratio of Total Debt
to Trailing Four Quarter EBITDA determined as of the end of the Fiscal
Quarter immediately preceding such period:
-----------------------------------------------------------------------
Ratio of Total Less Than LIBOR Base Rate + Prime Rate +
Debt to Trailing
Four Quarter
EBITDA
Greater Than or
Equal to
-----------------------------------------------------------------------
3.50x -- 2.25% 0.500%
-----------------------------------------------------------------------
3.00x 3.50x 2.00% 0.250%
-----------------------------------------------------------------------
2.50x 3.00x 1.75% 0.000%
-----------------------------------------------------------------------
2.00x 2.50x 1.50% 0.000%
-----------------------------------------------------------------------
-- 2.00x 1.25% 0.000%
-----------------------------------------------------------------------
(i) The ratio of Total Debt to Trailing Four Quarter EBITDA
shall be computed by the Borrower and such ratio and the Applicable
Margin for each Type of Loan will be set forth in the Compliance
Certificate furnished under SECTION 5.1(b)(iv). The Applicable Margin
shall be subject to adjustment, if necessary, on the earlier of (a) five
(5) days after the delivery of the Compliance Certificate for the
applicable Fiscal Quarter and (b) fifty (50) days after the end of each
Fiscal Quarter of the Borrower ("MARGIN ADJUSTMENT DATE"). Any change
in the Applicable Margin shall apply to all Loans outstanding of any
Type as of the Margin Adjustment Date.
(ii) Notwithstanding the foregoing, the Applicable Margin will
be equal to the LIBOR Base Rate + 2.25% or Prime Rate +0.50%, as the
case may be, from the Effective Date to fifty (50) days after the Fiscal
Quarter ended June 30, 1998, at which point the Applicable Margin will
be as set forth in the Compliance Certificate accompanying the
-3-
financial statements furnished under SECTION 5.1(b)(iv) for the Fiscal
Quarter ended June 30, 1998.
(iii) If the Borrower fails to furnish the Compliance
Certificate and the financial statements fifty (50) days after the end
of any Fiscal Quarter, the Applicable Margin shall be for the relevant
Fiscal Quarter equal to 2.25% for LIBOR Rate Loans or 0.50% for Prime
Rate Loans, as the case may be.
"ASSIGNMENT OF LEASE" means the assignment of lease pertaining to
the lessee's interest in leasehold estates held by the Borrower and its
Subsidiaries in the form of EXHIBIT F-5 hereto.
"AUTHORIZED SIGNATORY" means such Person or Persons as may be
designated from time to time in the most recent certificate delivered to the
Bank by the Borrower as being authorized to execute and deliver certificates
or other documents required or permitted to be executed and delivered to the
Bank by the Borrower or other Persons pursuant to this Agreement or any other
Loan Instrument, and in any case shall include the President, Treasurer and
the Chief Financial Officer of the Borrower.
"BANK" and "BANKS" means (a) the Agent and any Person listed on the
signature pages hereof following the Agent and (b) any Person that has been
assigned any or all of the rights or obligations of a Bank pursuant to
SECTION 8.14.
"BORROWER" means Analytical Surveys, Inc., a Colorado corporation.
"BORROWER'S ACCOUNT" means a demand deposit account maintained by
the Borrower with the Agent.
"BORROWER LOAN INSTRUMENTS" means, the Loan Instruments to which
the Borrower is a party.
"BORROWER'S OMNIBUS CERTIFICATE" means a certificate from the
Borrower substantially in the form of EXHIBIT G-1 hereto.
"BORROWER'S REAL PROPERTY" has the meaning given thereto in
SECTION 4.1(o).
"BUSINESS DAY" means a day of the year other than Saturday or
Sunday on which banks are not authorized to close in
-4-
Denver, Colorado and, if the applicable Business Day relates to any LIBOR
Rate Loans, on which dealings are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means amounts paid or indebtedness incurred
by the Borrower or any of its Subsidiaries in connection with the
acquisition, purchase or lease by such Borrower or any of its Subsidiaries of
capital assets that would be required to be capitalized (including the
applicable amount in respect of capitalized interest) and which amounts would
be shown as such capital expenditures on the consolidated statement of cash
flows of such Person in accordance with GAAP, PROVIDED, HOWEVER, Capital
Expenditures shall not include (i) amounts paid with insurance proceeds or
the proceeds of a condemnation award within twelve (12) months after receipt
by the Borrower or its Subsidiaries, as the case may be, in connection with
the purchase of capital assets to replace the capital assets destroyed in the
casualty loss giving rise to such insurance proceeds or taken in the
condemnation proceeding giving rise to such condemnation proceeds, as the
case may be, and (ii) capital assets acquired pursuant to a Qualified
Acquisition.
"CHANGE OF CONTROL" means the acquisition by any person or group
(other than Xxxxxx X. Xxxxxx, Xxx X. Xxxxxx and Xxxx X. Xxxxxx) of persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act of
1934, as amended) of beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of 30%
or more of the outstanding shares of common stock of the Borrower; or, during
any period of twelve consecutive calender months, individuals who were
directors of the Borrower on the first day of such period shall cease to
constitute a majority of the board of directors of the Borrower.
"CMLTD" means, with respect to the Borrower or any Guarantor, all
principal amounts due and payable by the Borrower or such Guarantor during
the then-current month and during the following eleven months with respect to
Debt of such Person, other than accounts payable, accrued expenses and income
taxes payable.
"CODE" means the Internal Revenue Code of 1986, as amended, and as
the same may be supplemented, modified, amended or restated from time to
time, and the rules and regulations promulgated thereunder, or any
corresponding or succeeding provisions of applicable law.
-5-
"COLLATERAL" shall mean all rights and interests of the Borrower
and of the Guarantors which are subject to the Collateral Documents.
"COLLATERAL DOCUMENTS" means the Deeds of Trust, the Security
Agreements, the Guaranties, the Landlord's Consent and Waiver and Consent,
the Assignments of Lease, the Collateral Assignments of Leases and Rents, and
the Pledge Agreement.
"COMMITMENT" means, with respect to each Bank, such Bank's
obligation to make Loans pursuant to the Revolving Loan Commitment, Term Loan
Commitment and Acquisition Loan Commitment.
"COMMITMENT FEE" has the meaning specified in SECTION 2.4 hereof.
"COMMITMENT FEE RATE" means the percentage set forth below in the
following table opposite the applicable ratio of Total Debt to Trailing Four
Quarter EBITDA determined as of the end of the Fiscal Quarter immediately
preceding such period:
---------------------------------------------------------------
Ratio of Total Less Than Commitment Fee Rate
Debt to Trailing
Four Quarter
EBITDA Greater
Than
or Equal to
---------------------------------------------------------------
2.50x -- 0.250%
---------------------------------------------------------------
2.00x 2.50x 0.185%
---------------------------------------------------------------
-- 2.00x 0.150%
---------------------------------------------------------------
The ratio of Total Debt to Trailing Four Quarter EBITDA shall be
computed by the Borrower and such ratio and the Commitment Fee Rate for the
Fiscal Quarter will be set forth in the Compliance Certificate furnished
under SECTION 5.1(b)(iv). The Commitment Fee Rate shall be subject to
adjustment, if necessary, on the earlier of (a) five (5) days after the
delivery of the Compliance Certificate for the applicable Fiscal Quarter and
(b) fifty (50) days after the end of each Fiscal Quarter of the Borrower.
Notwithstanding the foregoing, the Commitment Fee Rate shall be 0.250% from
the Effective Date to fifty (50) days after the Fiscal Quarter ended June 30,
1998, at which point the Commitment Fee Rate shall be as set forth in the
Compliance Certificate accompanying the financial statements furnished under
SECTION 5.1(b)(iv) for the Fiscal Quarter ended June 30, 1998.
-6-
"COMPLIANCE CERTIFICATE" means, a certificate substantially in the
form of EXHIBIT B-2.
"CONVERT", "CONVERSION" and "CONVERTED" each refers to a conversion
of a Loan of one Type into a Loan of another Type pursuant to SECTION 2.12 or
2.13.
"DEBT" means (i) indebtedness for borrowed money, (ii) obligations
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations to pay the deferred purchase price of property or services, (iv)
obligations as lessee under leases which shall have been or should be, in
accordance with GAAP, recorded as capital leases, and (v) obligations under
direct or indirect guaranties in respect of, and obligations (contingent or
otherwise) to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, indebtedness or obligations of others of
the kinds referred to in clauses (i) through (iv) above.
"DEED OF TRUST" and "DEEDS OF TRUST" mean, respectively, any
mortgage, deed of trust or other collateral security document pertaining to
non-leasehold interests in real property executed by the Borrower or any
Guarantor from time to time in favor of the Agent (on behalf of the
Banks)supporting or securing any of the Obligations, including the Deeds of
Trust substantially in the form of EXHIBIT F-1 hereto from the Borrower and
certain of the Guarantors, as the same may be supplemented, modified, amended
or restated from time to time in the manner provided therein.
"DEFAULT" means any event or state of affairs that, with the giving
of notice or the passage of time (or both) would constitute an Event of
Default.
"DEFAULT RATE" means an interest rate per annum equal to three
percent (3%) above the Prime Rate in effect with respect to Loans at the time
of occurrence of any Event of Default.
"DISPOSITION" means any sale, assignment, transfer or other
disposition (including a ground lease or other long term obligation which
under GAAP is the equivalent of a sale of such asset)of any asset (whether
now owned or hereafter acquired) of any Person, other than inventory in the
ordinary course of business. Disposition shall not include sale and lease
back of capital equipment in an amount not in excess of, at any one time, an
aggregate principal amount of $3,000,000.
-7-
"DOLLARS", "DOLLARS" and "$" means lawful money of the United
States of America.
"EBITDA" means, for any computation period, with respect to the
Borrower and all of its Subsidiaries on a consolidated basis or with respect
to a Person, an amount equal to Net Income for such period(determined in
accordance with GAAP) before deduction of interest expenses, taxes,
depreciation expenses and amortization for such period and excluding all
extraordinary items with respect to gains or losses arising out of the sale
or disposition of assets. This definition of EBITDA shall be used in the
calculation of the Applicable Margin, Commitment Fee Rate, Qualified
Acquisitions, covenants and for all other purposes under this Credit
Agreement.
"EFFECTIVE DATE" means June 3, 1998.
"EMPLOYEE BENEFIT PLAN" means an employee pension benefit plan as
defined in ERISA Section 3(2).
"ENVIRONMENTAL CLAIM" means: (a) any responsibility, liability or
unlawful act or omission under any Environmental Law (whether alleged or
otherwise); (b) any tortious act or omission or breach of contract pertaining
to any Environmental Substance (whether alleged or otherwise); or (c) any
other violation or claim under any Environmental Law or in respect of any
Hazardous Materials (whether alleged or otherwise).
"ENVIRONMENTAL AND SAFETY LAWS" means any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, codes and similar
provisions having the force or effect of law, all judicial and administrative
orders and determinations, all contractual obligations and common law
concerning public health or safety, worker health or safety or pollution or
protection of the environment, including without limitation those relating to
any emissions, discharges or releases of Hazardous Materials to ambient air,
surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, control, clean-up or handling of Hazardous Materials.
"EQUIPMENT" shall mean the equipment identified in SCHEDULE 4.1(o).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended, and as the same may be supplemented, modified, amended or
restated from time to time, and the rules
-8-
and regulations promulgated thereunder, or any corresponding or succeeding
provisions of applicable law.
"ERISA AFFILIATE" and "ERISA AFFILIATES" shall mean,
respectively, any one or more of any trade, business, person or persons
that together with the Borrower would be deemed to be a single employer
within the meaning of Section 4001(a)(14) of ERISA.
"ERISA EFFECT" means any material and adverse effect on (a) any
Plan, (b) the assets and properties of any Plan or (c) any funding or other
liability of any one or more of the Borrower or any ERISA Affiliate in
respect of any Plan (individually or in the aggregate).
"ERISA EVENT" means any (a) "accumulated funding deficiency"
(whether or not waived), "prohibited transaction," "reportable event"
(other than any event for which the 30-day notice requirement has been
waived by regulation), "disqualification," "partial withdrawal,"
involuntary "partial termination" or "termination," "insolvency,"
"reorganization" or the imposition of any "penalty" or "withdrawal
liability" in respect of any Plan under (and as such words and phrases are
defined in" ERISA or the Code, as applicable), (b) any other violation of
ERISA, the Code or any other applicable law in respect of any Plan (whether
asserted or otherwise), (c) supplement or amendment to or modification or
restatement of any Plan that could have or has had an ERISA Effect, or
(d) imposition, increase or other adverse change in any funding obligation
or other liability of any one or more of the Borrower or any ERISA
Affiliate in respect of any Plan or to the Pension Benefit Guaranty
Corporation (individually or in the aggregate).
"EVENT OF DEFAULT" shall have the meaning assigned thereto in
SECTION 6.1 hereof.
"EXISTING LOAN AGREEMENT" means (a) the Business Loan Agreement,
dated as of June 30, 1997, between the Borrower, MSE Corporation, ASI
Landmark, Inc. and Bank One, Colorado, N.A. and the promissory notes
referred to therein, and (b) and the promissory notes of the Borrower in
favor of Bank One, Colorado, N.A. dated (i) February 26, 1998 in the
principal amount of $2,500,000, (ii) December 20, 1995 in the principal
amount of $1,850,000, (iii) June 21, 1996 in the principal amount of
$5,182,692.12 and (iv) February 6, 1997 in the principal amount of
$1,000,000.
-9-
"FEDERAL FUNDS RATE" means, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York or, if such rate is
not so published for any day that is a Business Day, the average of
quotations for such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by the Agent.
"FEES" means the Commitment Fee.
"FISCAL QUARTER" means one of the three month accounting periods
comprising a Fiscal Year.
"FISCAL YEAR" means the twelve-month accounting period ending on
September 30 of each year.
"FIXED CHARGES" means, as of any date of determination, the
following, determined with respect to the immediately preceding four Fiscal
Quarters of the Borrower and the Guarantors for which financial statements
have been delivered pursuant to SECTION 5.1, the sum of (a) CMLTD,(b)
Interest Expense, (c) capital lease payments (d) federal and state income
tax expense and (e) dividends (other than dividends payable solely in
capital stock) for such period.
"GAAP" means generally accepted accounting principals applied in
the United States and practices which are recognized as such by the
American Institute of Certified Public Accountants or any successor
organization.
"GOVERNMENTAL AUTHORITIES" means any federal, state, county,
municipal, local or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"GUARANTEE" and "GUARANTEES" mean a guarantee, endorsement,
contingent agreement to purchase or furnish funds for the payment or
maintenance of, or otherwise to be or become contingently liable under or
with respect to, any indebtedness (including Debt) or other obligations of
any Person, or a guarantee of the payment of dividends or other
distributions upon the stock or other equity interests in any Person, or an
agreement to purchase, sell or lease (as lessee or lessor) real or personal
property or services primarily for the purpose of enabling a debtor to make
payment of its obligations or an agreement to assure a creditor against
loss, and including,
-10-
without limitation, causing a bank to issue a letter of credit for the
benefit of another Person.
"GUARANTOR" and "GUARANTORS" means, respectively, any one or more
of MSE Corporation, an Indiana corporation, and ASI Landmark, Inc., a
Colorado corporation and any Person added as a Guarantor pursuant to
SECTION 5.1(n).
"GUARANTOR OMNIBUS CERTIFICATE" means a certificate to be
provided to the Bank by each of the Guarantors, each substantially in the
form of EXHIBIT G-2 hereto.
"Guarantor's Real Property" has the meaning given thereto in
SECTION 4.1(o).
"GUARANTY" and "GUARANTIES" means, the Guaranty from each of the
Guarantors to the Bank substantially in the form of EXHIBIT C hereto, as
the same may be supplemented, modified, amended or restated from time to
time in the manner provided therein.
"HAZARDOUS MATERIALS" means, collectively, any polychlorinated
biphenyls, petroleum or petroleum derived substance, friable asbestos, and
any toxic or otherwise hazardous waste, material or substance, including,
without limitation, all substances with respect to which liability or
standards of conduct may be imposed pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
from time to time, the Resource Conservation and Recovery Act of 1976, as
amended from time to time, or any other Environmental and Safety Law.
"INTEREST EXPENSE" means, with respect to the Borrower and its
Subsidiaries, for any period, the interest payable by the Borrower and its
Subsidiaries during such period as determined in accordance with GAAP.
"INTEREST PERIOD" means, for each LIBOR Rate Loan, the period
commencing on the date of the Advance thereof or the date of the Conversion
of any Prime Rate Loan into such a LIBOR Rate Loan and ending on the last
day of the period selected by the Borrower pursuant to the provisions below
and, thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be 1, 3 or 6 months as the
Borrower may, upon notice received by the Bank not later than 11:00 a.m.
(Denver, Colorado time) on the third
-11-
Business Day prior to the first day of such Interest Period, select;
PROVIDED, HOWEVER, that:
(i) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on
the next succeeding Business Day, PROVIDED, that if such
extension would cause the last day of such Interest Period
to occur in the next following calendar month, the last day
of such Interest Period shall occur on the next preceding
Business Day; and
(ii) no Interest Period applicable to a Term Loan or
Acquisition Loan or portion thereof shall extend beyond any
date upon which is due any scheduled principal payment in
respect of the Term Loans and Acquisition Loans unless the
aggregate principal amount of Term Loans or Acquisition
Loans, respectively, represented by Prime Rate Loans or
LIBOR Rate Loans having Interest Periods that will expire on
or before such date, equals or exceeds the amount of such
principal payment; and
(iii) no Interest Period for any Term Loan shall extend
beyond June 30, 2003 and no Interest Period for any
Revolving Loan shall extend beyond June 30, 2001 and no
Interest Period for any Acquisition Loan shall extend beyond
June 30, 2004.
"INTEREST PERIOD/CONVERSION NOTICE" means a notice from the
Borrower to the Bank substantially in the form of EXHIBIT B-3 concerning
Conversions of Types of Advances, or concerning Interest Period elections.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate
protection agreement, future, option swap, cap or collar agreement or other
arrangement designed to fix interest rates or other wise hedge against
fluctuations in interest rates.
"INVENTORY" means all raw materials, work in process, finished
goods, merchandise, parts and supplies of every kind and description of the
Borrower, and of the Guarantors, and goods held for sale or lease or
furnished under contracts of service in which the Borrower or any Guarantor
now has or hereafter acquires any right, whether held by the Borrower or
others, and all documents of title, warehouse receipts, bills of lading, and
all
-12-
other documents of every type covering all or any part of the foregoing.
Inventory includes inventory temporarily out of the Borrower's or any
Guarantor's custody or possession.
"LANDLORD WAIVER AND CONSENT" means the Landlord Waiver and
Consent pertaining to the lessor's interest in the leasehold estates held
by the Borrower or its Subsidiaries in the form of EXHIBIT F-3 hereto.
"LIBOR BASE RATE" means, for any Interest Period for any LIBOR
Rate Loan, the offered rate for U.S. Dollar deposits of not less than
$1,000,000.00 as of 11:00 A.M. City of London, England time two London
Business Days prior to the first date of each Interest Period as shown on
the display designated as "British Bankers Assoc. Interest Settlement
Rates" on the Telerate System ("TELERATE"), Page 3750 or Page 3740, or such
other page or pages as may replace such pages on Telerate for the purpose
of displaying such rate. PROVIDED, HOWEVER, that if such offered rate is
not available on Telerate then such offered rate shall be otherwise
independently determined by Agent from an alternate, substantially similar
independent source available to Agent or shall be calculated by Agent by a
substantially similar methodology as that thereto for used to determine
such offered rate in Telerate. "LONDON BUSINESS DAY" means any day other
than a Saturday, Sunday or a day on which banking institutions are
generally authorized or obligated by law or executive order to close in the
City of London, England.
"LIBOR RATE" means, for any LIBOR Rate Loan for any Interest
Period therefor, a rate per annum (expressed as a decimal, rounded upwards,
if necessary, to the nearest 1/100,000 of 1%) determined by the Agent to be
equal to the sum of (a) the LIBOR Base Rate for such Advance for such
Interest Period, plus (b) the Applicable Margin.
"LIBOR RATE LOAN" means a Loan which bears interest as provided
in SECTION 2.10(b).
"LIEN" means any mortgage, deed of trust, lien, chattel mortgage,
conditional sale contract, pledge, charge, security interest or encumbrance
of any kind whatsoever.
"LOAN" and "LOANS" means, respectively, all funds Advanced by the
Banks to the Borrower pursuant to Requests for Advance submitted by the
Borrower to the Agent and all other amounts paid or otherwise advanced
pursuant to any other Loan Instrument, which Loans will be evidenced by the
Notes.
-13-
"LOAN INSTRUMENT" and "LOAN INSTRUMENTS" means, respectively, any
one or more of this Agreement, the Notes, the Requests for Advance, the
Guaranties, the Collateral Documents, and the various other deeds of trust,
mortgages, assignments, instruments and other documents creating or
evidencing the Banks' interest in any collateral securing or intended to
secure anyone's obligations under any of the foregoing, and all waivers,
consents, agreements, representations and warranties, reports, statements,
certificates, schedules and other documents executed by the requisite
Person(s) pursuant to or in connection with any of the foregoing and
accepted or delivered by the Agent (whether prior to, on or from time to
time after the Effective Date), as each may be supplemented, modified,
amended or restated from time to time in the manner provided therein.
"MATERIAL ADVERSE EFFECT" means any material and adverse effect,
whether individually or in the aggregate, upon (a) the assets, business,
operations, properties or condition, financial or otherwise, of the
Borrower and its wholly owned Subsidiaries, taken as a whole, (b) the
ability of the Borrower to make payment as and when due of all or any part
of the Obligations, or (c) the Collateral.
"MATERIAL AGREEMENTS" means all agreements of the Borrower or the
Guarantors which are Collateral Documents, and all other agreements and
contracts (written or oral, now existing or hereafter entered into) to
which the Borrower is a party, or by which the Borrower, or the Collateral
is bound, the nonperformance of which by the Borrower, the Guarantors or by
the Borrower's or a Guarantor's counter parties thereto would have a
Material Adverse Effect which Material Agreements in effect on the date
hereof are identified in SCHEDULE 4.1(n) hereto.
"MATURITY DATE" means, (a) with respect to the Revolving Loans,
the first to occur of (i) the Revolving Loans Scheduled Maturity Date and
(ii) the date on which the due date of the Loans has been accelerated and
payment demanded by the Agent by reason of an Event of Default pursuant to
ARTICLE VI; and (b) with respect to the Term Loans, the first to occur of
(ii) the Term Loans Scheduled Maturity Date and (i) the date on which the
due date of the Loans has been accelerated and payment demanded by the
Agent by reason of an Event of Default pursuant to ARTICLE VI; and (c) with
respect to the Acquisition Loans, the first to occur of (i) the Acquisition
Loans Scheduled Maturity Date and (ii) the date on which the due date of
the Loans has been accelerated and payment demanded by the Agent by reason
of an Event of Default pursuant to ARTICLE VI.
-14-
"MAXIMUM REVOLVING CREDIT AMOUNT" means $11,000,000.
"MULTIEMPLOYER PLAN" of any Person shall mean a multiemployer
plan defined as such in Section 3(37) of ERISA to which contributions have
been made by such Person or any ERISA Affiliate of such Person and which is
covered by Title IV of ERISA.
"NET INCOME" means, for any computation period, with respect to
the Borrower on a consolidated basis, cumulative net income earned during
such period as determined in accordance with GAAP.
"NET PROCEEDS" means the proceeds received by the Borrower in
cash from the sale, lease, assignment or other Disposition of any asset or
property (other than sales of assets in the ordinary course of business,
which, for purposes of this definition, shall not include any disposition
of assets in which the total consideration received or receivable is in
excess of $500,000), net of (a) reasonable and customary fees, costs,
commissions and expenses, including attorneys' fees, incurred in connection
with such sale, lease, assignment or other disposition and payable by or on
behalf of the seller or the transferor of the assets to which sale or
disposition relates, and (b) the amount of all foreign, Federal, state and
local taxes payable as a direct consequence of such sale, lease, assignment
or other disposition. For this purpose, all proceeds of insurance paid on
account of the loss of or damage to any such asset or property, or group of
assets or properties, and awards of compensation for any such asset or
property, or group of properties, taken by condemnation or eminent domain
shall be deemed to be Net Proceeds (PROVIDED that, in the case of proceeds
from insurance paid with respect to any loss or damage to any asset, such
proceeds, or any portion thereof, shall not constitute Net Proceeds if the
Agent has received notice from the Borrower of its intention to use such
proceeds or portion thereof at the time of such loss or damage, and such
proceeds or portion thereof are in fact so used within six months after the
occurrence of such loss or damage, to repair, restore or replace such
assets). With respect to the issuance or sale of equity securities, Net
Proceeds also means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' fees, discounts and
commissions and other expenses actually incurred in connection with such
sale or issuance. Net Proceeds do not include the proceeds from the
exercise of stock options issued pursuant to an employee stock option plan
described in the Borrower's proxy statements.
-15-
"NOTES" means, collectively, the Revolving Notes, the Term Notes
and the Acquisition Loans Notes.
"OBLIGATIONS" means the obligations of the Borrower to repay the
balance of the Loans outstanding hereunder, together with accrued and
unpaid interest thereon, fees payable hereunder, and all other amounts
payable or obligations to be performed by the Borrower hereunder or under
any other Loan Instrument or under any Permitted Swap Obligations for which
the counterparty is a Bank.
"PERMITTED LIEN" means:
(a) Liens imposed by any Governmental Authority for taxes,
assessments or charges not yet due or which are being contested
in good faith and with due diligence and with respect to which
adequate reserves have been established;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, or other like Liens arising in the ordinary course
of business not yet delinquent or which are being contested in
good faith and with due diligence and with respect to which
adequate reserves have been established;
(c) Liens (other than Liens imposed by ERISA) consisting of
pledges or deposits under workers' compensation, unemployment
insurance and other social security legislation;
(d) easements, rights-of-way, zoning restrictions and other
similar encumbrances of record on real property incurred in the
ordinary course of business which, in the aggregate, are not
material in dollar amount, and which do not in any case interfere
with the ordinary conduct of the business of the Borrower or any
Guarantor;
(e) Liens existing on the date hereof and disclosed in
SCHEDULE 4.1(o) hereto;
(f) purchase money security interests securing payment by the
Borrower or any Guarantor of a portion of the purchase price of
any asset, PROVIDED THAT (i) any such Lien attaches to such
property concurrently with or within 20 days after the
acquisition thereof, (ii) such Lien attaches solely to the
property so acquired in
-16-
such transaction, (iii) the principal amount of the debt secured
thereby does not exceed 100% of the cost of such property, and
(iv) the aggregate outstanding principal of such purchase money
security interest Liens shall not at any one time exceed $4,000,000;
(g) Liens, deposits or pledges to secure the non-delinquent
performance of bids, tenders, contracts (other than contracts for
the payment of money), leases (permitted under this Agreement),
public or statutory obligations, surety, stay, appeal, indemnity,
performance or other similar bonds, or other similar obligations
arising in the ordinary course of business; or
(h) Liens arising out of the lease of capital equipment in the
aggregate amount at any one time not exceed $4,000,000; or
(i) any attachment or judgment Lien either in existence less
than 30 calendar days after the entry thereof, or with respect to
which execution has been stayed, or with respect to which payment
in full above any deductible is covered by insurance.
"PERMITTED SWAP OBLIGATIONS" means all obligations (contingent or
otherwise) of the Borrower or any Subsidiary existing or arising under Swap
Contracts with one or more creditworthy parties as the swap counterparty,
provided that such obligations are (or were) entered into by such Person in
the ordinary course of business for the purpose of directly mitigating risks
associated with liabilities, commitments or assets held or reasonably
anticipated by such Person and not for the purpose of speculation. For the
purposes of this definition, the term "creditworthy party" means any Bank,
any Affiliate of any Bank or any third party having a credit rating from
Standard & Poor's and Moodys Investor's Services, Inc. not less than that of
the Bank with the lowest credit rating. All Swap Contracts with
counterparties who are not Banks will be unsecured.
"PERSON" means any individual, corporation, company, voluntary
association, partnership, joint venture, limited liability company, limited
liability partnership, trust, unincorporated organization or government (or
any agency, instrumentality or political subdivision thereof).
"PLAN" of a Person shall mean an employee benefit or other plan
established or maintained by such Person or any ERISA
-17-
Affiliate of such Person and which is covered by Title IV of ERISA, other
than a Multiemployer Plan of such Person.
"PLEDGE AGREEMENT" means the Pledge and Security Agreement of the
Borrower pertaining to its interest in its Subsidiaries and its other
personal property substantially in the form of EXHIBIT D hereto, as the same
may be supplemented, modified, amended or restated from time to time in the
manner provided therein.
"PRIME RATE" means a fluctuating interest rate per annum as shall
be in effect from time to time as announced publicly by the Agent in Denver,
Colorado, from time to time, as the Agent's prime rate. Such rate will not
necessarily be the lowest interest rate charged by the Agent for loans to its
customers. The Prime Rate shall change on each day on which the Agent
announces a change in such Prime Rate.
"PRIME RATE LOAN" means an Advance which bears interest as provided
in SECTION 2.10(a).
"PRO RATA SHARE" means, as to any Bank at any time, the percentage
equivalent (expressed as a decimal, rounded to the fifth decimal) at such
time of such Bank's Commitment divided by the combined Commitments of all
Banks.
"QUALIFIED ACQUISITION" means any Person acquired by the Borrower
or a Subsidiary who fulfills all of the following requirements as of the date
of acquisition:
(a) Total annual revenues of the acquired Person shall not exceed 50%
of Borrower's pre-acquisition consolidated revenues for the twelve
months immediately preceding the date of acquisition;
(b) The total consideration paid for the acquired Person (excluding
assumed Debt and equity securities issued by the Borrower) shall not
exceed $8,500,000.00;
(c) The consolidated pro-forma balance sheet of the Borrower and the
acquired Person shall comply with all applicable financial covenants
set forth in SECTION 5.2 as of the date of the acquisition; and
(d) The acquired Person had positive EBITDA during the twelve months
immediately preceding the date of acquisition.
-18-
"REAL PROPERTY" has the meaning given thereto in SECTION 4.1(O).
"RECORD" means the grid attached to a Note, or the continuation of
such grid, or any other similar record, including computer records,
maintained by any Bank with respect to any Loan referred to in such Note.
"REGULATIONS D, T, U AND X" mean, respectively, Regulations D, T, U
and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be amended or supplemented from time to time.
"REGULATORY CHANGE" means, with respect to the Banks, any change
enacted or adopted after the date of this Agreement in United States federal
or state law or regulations or any foreign law or regulations (including,
without limitation, Regulation D) or the adoption or publication after the
date of this Agreement of any interpretations, directives or requests
(whether or not having the force of law) applying to a class of banks,
including the Banks, by any court or governmental or monetary authority
charged with the interpretation or administration thereof.
"REQUEST FOR ADVANCE" means a written request by the Borrower to
the Agent for an Advance of funds as a Loan hereunder, which written request
will be in the form of EXHIBIT B-1 hereto.
"REQUIRED BANKS" means, at any particular time, those Banks having
66 2/3% of the Loans or, if there are no Loans outstanding, at least 66 2/3%
of the Commitments.
"REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
common), ordinance, treaty, code, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or
binding upon the Person or any of its assets to which the Person or any of
assets is subject.
"RESERVE REQUIREMENT" means, for any Interest Period for any LIBOR
Rate Loan, the average maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one billion dollars
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required
-19-
to be maintained by such member banks by reason of any Regulatory Change
against (i) any category of liabilities which includes deposits by reference
to which the LIBOR Base Rate is to be determined as provided in the
definition of "LIBOR Base Rate" in this SECTION 1.1, or (ii) any category of
extensions of credit or other assets which includes LIBOR Rate Loans.
"REVOLVING LOANS" means all Advances of funds by the Banks to the
Borrower pursuant to the Revolving Loans Commitment, which Loans will be
evidenced by the Revolving Note.
"REVOLVING LOANS COMMITMENT" means the commitment of the Banks to
Advance Revolving Loans to the Borrower from time to time in the aggregate
amount of $11,000,000.00 as provided in SECTION 2.1 as the same may be
adjusted or terminated pursuant to SECTIONS 2.5 AND 6.2 or as otherwise
provided in this Agreement.
"REVOLVING LOANS SCHEDULED MATURITY DATE" means June 30, 2001.
"REVOLVING NOTE" means the promissory notes in the aggregate
principal amount of $11,000,000, made by the Borrower and payable to the
order of the Banks, substantially in the form of EXHIBIT A-1 hereto, as the
same may be supplemented, modified, amended or restated from time to time in
the manner provided herein.
"REVOLVING NOTE RECORD" means a Record with respect to a Revolving
Note.
"SECURED PARTY" has the meaning ascribed to such term in the
Security Agreements, Pledge Agreements and the Deeds of Trust.
"SECURITY AGREEMENT" means a Security Agreement and Assignment from
the Borrower and the Guarantors substantially in the form of EXHIBIT E
hereto, as the same may be supplemented, modified, amended or restated from
time to time in the manner provided therein.
"SECURITY INTEREST" means the Liens created, or purported to be
created, by the Loan Instruments.
"SUBSIDIARY" or "SUBSIDIARIES" of a Person means, any corporation,
association, partnership, limited liability company, joint venture or other
business entity of which more than 50% of the voting stock, membership
interests or other equity interest (in the case of Persons other than
corporations), is owned or
-20-
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" refers to a
Subsidiary of the Borrower.
"SWAP CONTRACT" means any agreement, whether or not in writing,
relating to any transaction that is a rate swap, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap or
option, bond, note or xxxx option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction, currency option or
any other, similar transaction (including any option to enter into any of the
foregoing) or any combination of the foregoing, and, unless the context
otherwise clearly requires, any master agreement relating to or governing any
or all of the foregoing.
"TERM LOAN" means the Advance of funds by the Banks to the Borrower
pursuant to the Term Loan Commitment, which Loans will be evidenced by the
Term Notes.
"TERM LOAN COMMITMENT" means the commitment of each Bank to Advance
the Term Loan to the Borrower in a single Advance, as provided in
SECTION 2.1(b).
"TERM NOTE" means the promissory notes in the aggregate principal
amount of $16,000,000 evidencing the Term Loan, made by the Borrower and
payable to the order of the Banks, substantially in the form of EXHIBIT A-2
hereto, as the same may be supplemented, modified, amended or restated from
time to time in the manner provided herein.
"TERM LOAN RECORD" means a Record with respect to a Term Loan.
"TERM LOAN SCHEDULED MATURITY DATE" means June 30, 2003.
"TOTAL DEBT" means, at any time, the Debt of the Borrower and its
Subsidiaries on a consolidated basis for the purposes of calculating the
financial covenants in SECTION 5.2(a), the Applicable Margin and the
Commitment Fee Rate at such time.
"TRAILING FOUR QUARTER EBITDA" means, with respect to the Borrower
and all of its Subsidiaries on a consolidated basis, the EBITDA for the
immediately preceding four Fiscal Quarters of the Borrower.
-21-
"TYPE" means a type of Advance, being a Prime Rate Loan or a LIBOR
Rate Loan, as the case may be.
"UNIFORM COMMERCIAL CODE" means the Uniform Commercial Code as in
effect from time to time in the State of Colorado.
SECTION 1.2 ACCOUNTING TERMS AND DETERMINATIONS. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, all calculations for purposes of determining compliance with the
terms of this Agreement shall be made, and all financial statements and
certificates and reports as to financial matters required to be delivered to
the Agent hereunder shall be prepared in accordance with GAAP applied for all
periods to the extent practicable on a basis consistent with that used in the
preparation of the financial statements identified in SECTION 4.1(f), so as
to fairly present the financial condition and results of operations of the
applicable Person.
ARTICLE II
COMMITMENT; AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.1 COMMITMENT. Each Bank severally agrees, on the terms and
subject to the conditions contained in this Agreement and the Loan
Instruments, to make Loans to the Borrower for the account of the Borrower in
accordance with the provisions of this SECTION 2.1.
(a) REVOLVING LOANS COMMITMENT. Pursuant to the Revolving Loans
Commitment, from the Effective Date until the Maturity Date, each
Bank severally agrees to Advance funds to the Borrower as
Revolving Loans, PROVIDED, HOWEVER, that at no time shall the
Banks be required to Advance Revolving Loans to the Borrower if,
after such Advance the sum of the principal amount of Revolving
Loans outstanding is in excess of the Maximum Revolving Credit
Amount; and PROVIDED FURTHER, that no Bank shall be required to
Advance Revolving Loans in an aggregate amount exceeding the
Bank's Revolving Loan Commitment as described on SCHEDULE 2.1.
Subject to the terms of this Agreement, the Borrower may borrow,
repay and reborrow funds Advanced to the Borrower as Revolving
Loans.
(b) TERM LOAN COMMITMENT. Pursuant to the Term Loan Commitment,
each Bank severally agrees to Advance, on the Effective Date, a
Term Loan to the Borrower, in a
-22-
single Advance, in a principal amount not exceeding the Bank's Term
Loan Commitment as described on SCHEDULE 2.1.
(c) ACQUISITION LOAN COMMITMENT. Pursuant to the Acquisition
Loan Commitment, from the Effective Date to the Maturity Date,
each Bank severally agrees to Advance funds to the Borrower as
Acquisition Loans for the sole purpose of making Qualified
Acquisitions, PROVIDED, HOWEVER, that no Bank shall be required
to Advance Acquisition Loans in an aggregate amount exceeding the
Bank's Acquisition Loans Commitment as described on SCHEDULE 2.1,
PROVIDED, FURTHER, that at no time shall the Banks be required to
Advance Acquisition Loans to the Borrower if, after such Advance
the aggregate principal amount of Acquisition Loans Advanced
would exceed (A) the amount of the Acquisition Loans Commitment
MINUS (B) the aggregate principal amount of Acquisition Loans
Advanced to such time. The Borrower may not reborrow funds
Advanced as Acquisition Loans after such Advances, or any part
thereof, have been repaid.
SECTION 2.2 ADVANCES.
The Banks agree, on the terms and conditions set forth herein,
(a) to make Advances to the Borrower of Revolving Loans (as LIBOR Rate
Loans or as Prime Rate Loans) from time to time on any Business Day
from and after the Effective Date through the Maturity Date, (b) to
make Advances of to the Borrower of Acquisition Loans (as LIBOR Rate
Loans or as Prime Rate Loans) from time to time on any Business Day
from and after the Effective Date through the first to occur of the
Acquisition Loans Draw Date and the Maturity Date, and (c) to make an
Advance to the Borrower of the Term Loan (as a LIBOR Rate Loan or a
Prime Rate Loan) in a single Advance on the Effective Date. Each
LIBOR Rate Loan shall be in an amount not less than $500,000 or in
integral multiples of $250,000 in excess thereof, and each Prime Rate
Loan shall be in an amount not less than $100,000 or in integral
multiples of $10,000 in excess thereof, EXCEPT that an Advance of a
Prime Rate Loan may be in an amount equal to the entire unused
Revolving Loans Commitment. The total number of individual LIBOR Rate
Loan Advances outstanding at any time shall not exceed three (3) for
the Revolving Loans, two (2) for the Acquisition Loans and one (1) for
the Term Loan.
-23-
SECTION 2.3 MAKING THE ADVANCES.
(a) REQUEST FOR ADVANCE. Each Revolving Loan, Acquisition Loan
and Term Loan Advance shall be made after delivery by the
Borrower to the Agent of a Request for Advance, duly executed by
an Authorized Signatory, delivered to the Agent (i) in the case
of a Prime Rate Loan, not later than 11:00 a.m.(Denver, Colorado
time) on the Business Day which is the date of the proposed
Advance and (ii) in the case of a LIBOR Rate Loan, not later than
11:00 a.m. (Denver, Colorado time) on the third Business Day
prior to the date of the proposed Advance. The Request for
Advance shall specify (A) the date and amount of the Advance,
(B) whether a Revolving Loan, Acquisition Loan or Term Loan is
requested, (C) the Type of Advance requested, (D) if a LIBOR Rate
Loan is requested, the initial Interest Period therefor, (E)and
if an Acquisition Loan is requested, such information regarding
the Qualified Acquisition as the Agent and Banks may request.
Promptly upon receipt of such Request for Advance, the Agent
shall notify the Banks thereof and of their Pro Rata Share of
such proposed Advance. Not later than 2:00 p.m. (Denver,
Colorado time) on the date of such Advance, subject to
fulfillment of the applicable conditions set forth in ARTICLE III,
the Agent will make such Advance available to the Borrower in same
day funds by depositing such funds in the Borrower's Account.
(b) REQUEST FOR ADVANCE IRREVOCABLE. Each Request for Advance
from the Borrower to the Agent shall be irrevocable and binding
on the Borrower. In the case of any request for a LIBOR Rate
Loan the Borrower shall indemnify the Banks against any loss,
cost or expense incurred by the Banks as a result of any failure
to fulfill on or before the date specified in such notice for
such Advance the applicable conditions set forth in ARTICLE III,
including, without limitation, any loss, cost or expense incurred
by reason of the liquidation or reemployment of deposits or other
funds acquired by the Banks to fund the Advance when the Advance,
as a result of such failure, is not made on such date.
(c) AVAILABILITY OF FUNDS, REVOLVING LOANS AND ACQUISITION
LOANS. Not later than 2:00 p.m. (Denver, Colorado time) on the
proposed day of the Advance of any Revolving Loan or Acquisition
Loan, each of the Banks
-24-
will make available to the Agent, at its address referred to in
SECTION 8.2, in immediately available funds, the amount of such
Bank's Pro Rata Share of the requested Revolving Loan or
Acquisition Loan. Upon receipt from each Bank of such amount and
upon receipt of the documents required by SECTIONS 3.1 AND 3.2 and
the satisfaction of the other conditions set forth therein, to the
extent applicable, the Agent will make available to the Borrower
the aggregate amount of such Revolving Loan or Acquisition Loan
made available to the Agent by the Banks. The failure or refusal
of any Bank to make available to the Agent at the aforesaid time
and place the amount of its Pro Rata Share of the requested
Revolving Loan or Acquisition Loan shall not relieve any other Bank
from its several obligation hereunder to make available to the
Agent the amount of such other Bank's Pro Rata Share of any
requested Revolving Loan or Acquisition Loan Advance.
(d) ADVANCES BY AGENT. The Agent may, unless notified to the
contrary by any Bank prior to an Advance, reasonably assume that
such Bank has made available to the Agent on such day the amount
of such Bank's Pro Rata Share of the Revolving Loan or
Acquisition Loan to be made on such day, and the Agent may (but
it shall not be required to), in reliance upon such assumption,
make available to the Borrower a corresponding amount. If any
Bank makes available to the Agent such amount on a date after
such day of Advance, such Bank shall pay to the Agent on demand
an amount equal to the product of (i) the Federal Funds Rate each
day included in such period, TIMES (ii) the amount of such Bank's
Pro Rata Share of such Revolving Loan or Acquisition Loan, TIMES
(iii) a fraction, the numerator of which is the number of days
that elapse from and including such day of Advance to the date on
which the amount of such Bank's Pro Rata Share of such Revolving
Loan or Acquisition Loan shall become immediately available to
the Agent, and the denominator of which is 360. A statement of
the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be PRIMA FACIE evidence of the
amount due and owing to the Agent by such Bank.
SECTION 2.4 COMMITMENT FEE.
(a) COMMITMENT FEE RATE. The Borrower agrees to pay to the
Agent a Commitment Fee (the "COMMITMENT FEE") on
-25-
the average daily unused portion of the sum of the Revolving Loans
Commitment and Acquisition Loans Commitment at the Commitment Fee
Rate, payable in arrears on the last day of each Fiscal Quarter of
the Borrower, and payable on the Maturity Date.
(b) CALCULATION OF COMMITMENT FEE. The Commitment Fee payable
with respect to the Revolving Loans and Acquisition Loans will be
calculated for the period from the Effective Date through the
date the Commitments have been terminated in accordance with this
Agreement, and shall be based upon (i) the amount by which the
daily average of the aggregate principal amount of Revolving
Loans and Acquisition Loans outstanding is less than (ii) the
aggregate Revolving Loans Commitment and Acquisition Loans
Commitment at such time.
SECTION 2.5 REDUCTION OF THE REVOLVING LOANS AND ACQUISITION LOANS
COMMITMENT. The Borrower shall have the right at any time, upon at least
three (3) Business Days' notice to the Agent, to terminate in whole or
reduce in part the unused portion of the Revolving Loans Commitment and the
Acquisition Loans Commitment, PROVIDED that each partial reduction of the
Revolving Loans Commitment and Acquisition Loans Commitment shall be in the
amount of not less than $1,000,000 or an integral multiple thereof. Any
such termination or reduction of the Revolving Loans Commitment and
Acquisition Loans Commitment shall be irrevocable and permanent. Promptly
after receiving such notice from the Borrower, the Agent will notify the
Banks of the substance thereof. The Revolving Loans Commitments and
Acquisition Loans Commitment of the Banks shall be reduced PRO RATA
pursuant to the notice or, as the case may be, terminated.
SECTION 2.6 REPAYMENT.
(a) VOLUNTARY REPAYMENT. The Borrower may repay the principal
amount of the Loans at any time, at its election, (i) in the case
of a Prime Rate Loan, on any Business Day, without prior notice,
and (ii) in the case of LIBOR Rate Loans, upon not less than
three (3) Business Days prior notice to the Agent, subject to
breakage costs provided for in SECTION 2.11. Any such voluntary
repayment of the Loans shall be in the principal amount of not
less than (y) $100,000 for Prime Rate Loans and in integral
multiples of $10,000 in excess thereof and (z) $1,000,000 for
LIBOR Rate Loans and in integral multiples of $250,000 in excess
-26-
thereof. Any voluntary repayment of the Term Loan and the
Acquisition Loans shall be accompanied by payment of all accrued
but unpaid interest applicable to the principal amount of the
Term Loan and the Acquisition Loans so repaid.
(b) INSTALLMENT PAYMENTS OF TERM LOAN. The Borrower will repay
the Term Loan in quarterly installment payments of principal,
commencing on September 30, 1998 and on the last day of each
quarter thereafter, in accordance with the following:
QUARTERLY
REPAYMENT PRINCIPAL
DATE PAYMENT AMOUNT
------------------ ---------------
September 30, 1998 $650,000
December 31, 1998 $650,000
March 31, 1999 $650,000
June 30, 1999 $650,000
September 30, 1999 $725,000
December 31, 1999 $725,000
March 31, 2000 $725,000
June 30, 2000 $725,000
September 30, 2000 $800,000
December 31, 2000 $800,000
March 31, 2001 $800,000
June 30, 2001 $800,000
September 30, 2001 $875,000
December 31, 2001 $875,000
March 31, 2002 $875,000
June 30, 2002 $875,000
September 30, 2002 $950,000
December 31, 2002 $950,000
March 31, 2003 $950,000
June 30, 2003 $950,000
(c) REPAYMENT OF ACQUISITION LOANS. The Acquisition Loans shall be
paid as follows:
(i) Interest only shall be payable quarterly in accordance
with SECTION 2.10 on the outstanding principal balance of
the Acquisition Loans from the Effective Date to the
Acquisition Loans Draw Date.
-27-
(ii) After the Acquisition Loans Draw Date, twenty (20)
consecutive quarterly principal payments on the last
Business Day of each Fiscal Quarter in equal amounts, plus
interest payable in accordance with SECTION 2.10.
(d) MANDATORY REPAYMENT.
(i) The Borrower will repay the Loans in full on demand
upon the acceleration of the due date of any of the Loans by
the Agent pursuant to ARTICLE VI hereof.
(ii) The Borrower shall pay to the Agent Net Proceeds
within not more than five (5) Business Days after the
Borrower shall receive Net Proceeds from(x) Dispositions,
(y) any equity securities issuance or sale or (z) insurance
recoveries and condemnation and eminent domain awards.
Collateral shall be released from the liens of the
Collateral Documents upon any Disposition of such
Collateral, provided that (i) no Event of Default has
occurred and (ii) the Borrower shall have made the mandatory
repayment required under the terms of this SECTION 2.6.
(e) APPLICATION OF REPAYMENTS. All voluntary Loan repayments
received by the Agent from the Borrower will be applied to the
Revolving Loans, Acquisition Loans and Term Loans as the Borrower
shall instruct the Agent in writing concurrently with the
payment, and in the absence of such written instructions, will be
applied first to the Revolving Loans until they are repaid in
full, then to the Acquisition Loans until they are repaid in full
and finally to the Term Loan. All mandatory Loan repayments will
be applied first to reduce the Term Loan until the Term Loan is
paid in full, then to the repayment of the Acquisition Loans
until they are paid in full and finally to the repayment of the
Revolving Loans. All repayments of the Term Loan and Acquisition
Loans will be applied to the principal payments due with respect
to the such Loans in inverse order of maturity.
SECTION 2.7 DISTRIBUTION OF PAYMENTS BY THE AGENT.
The Agent shall promptly distribute to each Bank its Pro Rata Share of
each payment received by the Agent under the Loan
-28-
Instruments for the account of the Banks by credit to an account of such Bank
at the Agent's Bank identified at SECTION 8.2 or by wire transfer to an
account of such Bank.
Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Banks under the Loan
Instruments that the Borrower will not make such payment in full, the Agent
may assume that the Borrower has made such payment in full to the Agent on
such date and the Agent in its sole discretion may, in reliance upon such
assumption, cause to be distributed to each Bank on such due date a
corresponding amount with respect to the amount then due such Bank. If and
to the extent the Borrower shall not have so made such payment in full to
the Agent and the Agent shall have so distributed to any Bank a
corresponding amount, such Bank shall, on demand, repay to the Agent the
amount so distributed together with interest thereon, for each day from the
date such amount is distributed to such Bank until the date such Bank
repays such amount to the Agent at the Prime Rate.
SECTION 2.8 PROMISSORY NOTES.
(a) THE REVOLVING NOTES. The Revolving Loans shall be evidenced
by promissory notes of the Borrower in substantially the form of
EXHIBIT A-1 hereto (each a "REVOLVING NOTE"), dated as of the
Effective Date and completed with appropriate insertions. One
Revolving Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Revolving Loans Commitment
or, if different, the outstanding amount of all Revolving Loans
made (or held) by such Bank, plus interest accrued thereon, as
set forth below. The Borrower irrevocably authorizes each Bank
to make or cause to be made, at or about the time of an Advance
of any Revolving Loan or at the time of receipt of any payment of
principal on such Bank's Revolving Note, an appropriate notation
on such Revolving Note Record reflecting the making of such
Revolving Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Loans set forth
on such Bank's Revolving Note Record shall be PRIMA FACIE
evidence of the principal amount thereof owing and unpaid to such
Bank absent manifest error, but the failure to record, or any
error in so recording, any such amount shall not affect the
obligation of the Borrower hereunder or under any Revolving Note
to make payments of principal of or interest on any Revolving
Note when due.
-29-
(b) TERM NOTES. The Term Loans shall be evidenced by promissory
notes of the Borrower in substantially the form of EXHIBIT A-2
hereto (each a "TERM NOTE"), dated the Effective Date and
completed with appropriate insertions. One Term Note shall be
payable to the order of each Bank in a principal amount equal to
such Bank's Term Loan Commitment and representing the obligation
of the Borrower to pay to such Bank such principal amount or, if
less, the outstanding amount of such Bank's Term Loan Commitment,
plus interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Bank to make or cause to be made a
notation on such Bank's Term Note Record reflecting the original
principal amount of such Bank's Term Loan Commitment and, at or
about the time of such Banks' receipt of any principal payment on
such Bank's Term Note, an appropriate notation on such Bank's
Term Note Record reflecting such payment. The aggregate unpaid
amount set forth on such Bank's Term Note Record shall be PRIMA
FACIE evidence of the principal amount thereof owing and unpaid
to such Bank absent manifest error, but the failure to record, or
any error in so recording, any such amount on such Bank's Term
Note Record shall not affect the obligation of the Borrower
hereunder or under any Term Note to make payments of principal of
and interest on any Term Note when due.
(c) ACQUISITION LOAN NOTE. The Acquisition Loans shall be
evidenced by promissory notes of the Borrower in substantially
the form of EXHIBIT A-3 hereto (each a "ACQUISITION LOAN NOTE"),
dated as of the Effective Date and completed with appropriate
insertions. One Acquisition Loan Note shall be payable to the
order of each Bank in a principal amount equal to such Bank's
Acquisition Loan Commitment or, if different, the outstanding
amount of all Acquisition Loans made (or held) by such Bank, plus
interest accrued thereon, as set forth below. The Borrower
irrevocably authorizes each Bank to make or cause to be made, at
or about the time of an Advance of any Acquisition Loan or at the
time of receipt of any payment of principal on such Bank's
Acquisition Loan Note, an appropriate notation on such
Acquisition Loan Note Record reflecting the making of such
Acquisition Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Acquisition Loans set
forth on such Bank's Acquisition Loan Record shall be PRIMA FACIE
evidence
-30-
of the principal amount thereof owing and unpaid to such
Bank absent manifest error, but the failure to record, or any
error in so recording, any such amount on such Bank's Acquisition
Loan Note Record shall not affect the obligation of the Borrower
hereunder or under any Acquisition Loan Note to make payments of
principal and interest on any Acquisition Loan Note when due.
SECTION 2.9 PRO RATA TREATMENT. Except to the extent otherwise
provided herein, (a) Loans shall be made by the Banks pro rata in
accordance with their respective Commitments, (b) Loans of the Banks shall
be Converted and continued pro rata in accordance with their respective
amounts and Type and, in the case of LIBOR Rate Loans, having the Interest
Period being so Converted or continued, (c) each reduction in the Revolving
Loans Commitment, Acquisition Loan Commitment and the Term Loan Commitment
shall be made pro rata in accordance with the respective amounts thereof
and (d) each payment of the principal of or interest on the Loans shall be
made for the account of the Banks pro rata in accordance with their
respective amounts thereof then due and payable.
SECTION 2.10 INTEREST. The Borrower shall pay interest on the
unpaid principal amount of each Loan from the date of the Advance thereof
comprising such Loan until (but not including) the date such principal
amount has been repaid in full, at the following rates per annum:
(a) PRIME RATE LOANS. During such periods as such Loan is a
Prime Rate Loan, at a rate per annum equal at all times to the
Prime Rate PLUS Applicable Margin or the Default Rate, whichever
is applicable. Prime Rate interest PLUS the Applicable Margin
shall be payable quarterly in arrears, on the first day of each
Fiscal Quarter. Interest accruing at the Default Rate shall be
payable on demand.
(b) LIBOR RATE LOANS. During such periods as such Loan is a
LIBOR Rate Loan, at a rate per annum during the Interest Period
for such Loan equal to the LIBOR Rate or the Default Rate,
whichever is applicable. LIBOR Rate interest will be payable on
termination of the Interest Period applicable to the Loan, and,
if such Interest Period is longer than 3 months, then every 3
months. Interest accruing at the Default Rate shall be payable
on demand.
-31-
(c) DEFAULT RATE INTEREST. Subject to the provisions of
SECTION 6.2, all outstanding Loans will bear interest at the
Default Rate during all periods when an Event of Default has
occurred and is continuing.
(d) INTEREST CALCULATIONS. Interest on the Loans shall be
computed on a 365/360 simple interest basis, by applying the
ratio of the applicable annual interest rate over a year of 360
days, multiplied by the outstanding principal balance, multiplied
by the actual number of days the principal balance is
outstanding.
SECTION 2.11 YIELD PROTECTION. In order to protect the yield of the
Banks in connection with the Advances to be made hereunder, the Borrower
agrees as follows.
(a) INCREASED COSTS. If, due to either (i) the introduction of
or any change in or in the interpretation of any law or
regulation, or (ii) the compliance 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 the Banks of agreeing to make or making, funding or
maintaining LIBOR Rate Loans, then the Borrower shall from time
to time, upon demand by a Bank through the Agent, pay to such
Bank additional amounts sufficient to compensate the Bank for
such increased cost. A certificate as to the amount of such
increased cost, shall be submitted to the Borrower by the Agent.
Such certificate shall show in reasonable detail the Bank's
computations of its increased costs. Notwithstanding the
foregoing, there shall be no duplication of costs to the Borrower
as the result of the application of SECTION 2.11(b). Such
certificate of increased costs shall be conclusive and binding
for all purposes, absent manifest error.
(b) ADDITIONAL INTEREST. The Borrower shall pay to the Banks,
so long as the Banks shall be required under regulations of the
Board of Governors of the Federal Reserve System to maintain
reserves with respect to liabilities or assets consisting of or
including Eurocurrency liabilities (as such term is defined in
Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time), additional interest on
the unpaid principal amount of each LIBOR Rate Loan, from the
date of the Advance thereof until the principal amount thereof is
paid in
-32-
full, at an interest rate per annum equal at all times to
the remainder obtained by subtracting (i) the LIBOR Rate for the
Interest Period for such Loan from (ii) the rate obtained by
dividing such LIBOR Rate by a percentage equal to 100% minus the
reserve percentage applicable during such Interest Period (or if
more than one such percentage shall be so applicable, the daily
average of such percentages for those days in such Interest
Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the maximum Reserve Requirement (including, without
limitation, any emergency, supplemental or other marginal reserve
requirement) for the Banks with respect to liabilities or assets
consisting of or including Eurocurrency liabilities having a term
equal to such Interest Period, payable on each date on which
interest is payable on such Loan. Such additional interest shall
be determined by the Agent and a certificate as to the amount
shall be submitted to the Borrower. Such certificate shall show
in reasonable detail the Agent's computations. Such certificate
of additional interest shall be conclusive and binding for all
purposes, absent manifest error.
(c) INCREASED CAPITAL. If a Bank determines that compliance
with any law or regulation or any guideline or request from any
central bank or other Governmental Authority (whether or not
having the force of law) affects or would affect the amount of
capital required or expected to be maintained by the Bank or any
corporation controlling the Bank and that the amount of such
capital is increased by or based upon the existence of the Bank's
commitment to lend hereunder and other commitments of this type,
then, upon demand by the Bank through the Agent, the Borrower
shall immediately pay to the Bank, from time to time as specified
by the Bank, additional amounts sufficient to compensate the Bank
or such corporation in the light of such circumstances, to the
extent that the Bank reasonably determines such increase in
capital to be allocable to the existence of the Bank's commitment
to lend hereunder. A certificate as to such amounts submitted to
the Borrower by the Agent or a Bank, shall be conclusive and
binding for all purposes, absent manifest error. Such
certificate shall show in
-33-
reasonable detail the Agent's or the Bank's computations.
(d) BREAKAGE COSTS. If any payment of principal of any LIBOR
Rate Loan is made other than on the last day of the Interest
Period for such Loan as a result of acceleration of the maturity
of the Loans and the Notes pursuant to SECTION 6.2, or for any
other reason, the Borrower shall, upon demand by the Agent, hold
the Banks harmless and pay to the Banks, through the Agent, any
amounts required to compensate the Banks for additional losses,
costs or expenses which they may incur as a result of such
payment, including, without limitation, any loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits
or other funds acquired by the Banks to fund or maintain such
Advance provided, however, that such loss or expense shall not
include loss of Applicable Margin. Such payment shall be
calculated as though the Banks funded the principal amount
prepaid through the purchase of Dollar deposits in the London,
England interbank market having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the LIBOR
Rate less the Applicable Margin for such Interest Period, whether
in fact that is the case or not. The Agent's determination of
the amount of such payment shall be conclusive in the absence of
manifest error.
SECTION 2.12 CONVERSION OF LOANS; CHANGE OF INTEREST PERIODS. At
any time, with respect to Prime Rate Loans, and at any time not less than
three (3) Business Days prior to the end of the then current Interest
Period for any LIBOR Rate Loan, the Borrower may elect, by delivery to the
Bank of an Interest Period/Conversion Notice in the form of EXHIBIT B-3
duly executed by an Authorized Signatory, to Convert the Type of Advance
or, with respect to LIBOR Rate Loans, to select an Interest Period for such
Advance as permitted herein. If the Borrower fails to select the duration
of any Interest Period for any LIBOR Rate Loan in the foregoing manner,
such Advance will, unless paid in full on the last day of such Interest
Period, automatically, on the last day of the then existing Interest Period
therefor, Convert into a Prime Rate Loan.
SECTION 2.13 ILLEGALITY, ETC.
(a) Notwithstanding any other provision of this Agreement, if
the Agent or a Bank shall notify the
-34-
Borrower that the introduction of or any change in or in the
interpretation of any law or regulation makes it unlawful, or any
central bank or other Governmental Authority asserts that it is
unlawful, for a Bank to perform its obligations hereunder to make
LIBOR Rate Loans or to fund LIBOR Rate Loans hereunder, (i) the
obligation of the Bank to make, or to Convert Loans into LIBOR Rate
Loans shall be suspended until the Bank shall notify the Borrower
that the circumstances causing such suspension no longer exist and
(ii) the Borrower shall prepay in full all LIBOR Rate Loans of the
Bank then outstanding, together with interest accrued thereon, either
on the last day of the Interest Period thereof if the Banks may
lawfully continue to maintain LIBOR Rate Loans to such day, or
immediately, if the Banks may not lawfully continue to maintain LIBOR
Rate Loan, unless the Borrower, within five (5) Business Days of
notice from the Bank, Converts all LIBOR Rate Loans of the Bank then
outstanding into Prime Rate Loans in accordance with SECTION 2.12.
(b) If, with respect to any LIBOR Rate Loan, a Bank notifies the
Borrower that the LIBOR Rate for any Interest Period for such
Advance will not adequately reflect the cost to the Bank, in the
Bank's reasonable judgement, of making, funding or maintaining
such LIBOR Rate Loan for such Interest Period, such LIBOR Rate
Loan will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Prime Rate Loan, and the
obligation of the Bank to make, or to Convert Advances into,
LIBOR Rate Loans shall be suspended until the Bank shall notify
the Borrower that the circumstances causing such suspension no
longer exist. Upon receipt of such notice, the Borrower may
revoke any Request for Advance or Interest Period/Conversion
Notice then submitted by it. If the Borrower does not revoke
such request or notice, the Bank shall make, Convert or continue
the Loan, as proposed by the Borrower, in the amount specified in
the applicable request or notice submitted by the Borrower, but
such Loan shall be made, Converted or continued as a Prime Rate
Loan instead of a LIBOR Rate Loan.
SECTION 2.14 PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment under any Loan Instrument
not later than 12:00 noon (Denver,
-35-
Colorado time) on the day when due in Dollars to the Agent at its
address referred to in SECTION 8.2 in same day funds.
(b) The Borrower hereby authorizes the Agent, if and to the extent
payment is not made when due, subject to the expiration of applicable
grace periods, under any Loan Instrument, to charge from time to time
against the Borrower's Account or any or all other accounts of the
Borrower with the Agent any amount so due.
(c) All computations of interest and of Fees shall be made by the
Agent on the basis of a year of 360 days, in each case for the actual
number of days (including the first day but excluding the last day)
occurring in the period for which such interest or Commitment Fees
are payable. Each determination by the Agent of an interest rate
hereunder shall be conclusive and binding for all purposes, absent
manifest error, on the Borrower and the Banks.
(d) Whenever any payment under any Loan Instrument shall be stated
to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of
interest or the Commitment Fee, as the case may be; PROVIDED,
HOWEVER, if such extension would cause payment of interest on or
principal of LIBOR Rate Loans to be made in the next following
calendar month, such payment shall be made on the next preceding
Business Day.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation
of the Banks to make the initial Advance of the Loans is subject to the
satisfaction (or waiver by the Banks in their sole discretion) of the
following conditions precedent:
(a) that the Agent shall have received on or before the day of such
Advance the following, each dated as of the Effective Date, in form
and substance satisfactory to the Agent:
-36-
(i) The Notes, duly executed by Authorized Signatories
on behalf of the Borrower.
(ii) The Guaranties, duly executed by the Guarantors.
(iii) A Deed of Trust from and duly executed by Authorized
Signatories on behalf of the Borrower pertaining to all of
Borrower's owned Real Property.
(iv) A Security Agreement from and duly executed by
Authorized Signatories on behalf of the Borrower, pertaining to
the Borrower's Equipment, Accounts Receivable, Inventory and
all other personal property of the Borrower.
(v) A Collateral Assignment of Leases in the form of
EXHIBIT F-2 duly executed by Authorized Signatories on behalf of
the Borrower pertaining to the portion of Borrower's owned Real
Property consisting of leasehold interests.
(vi) The Pledge Agreement, duly executed by the Borrower,
pertaining to Borrower's shares of stock in Guarantors together
with the original stock certificates subject thereto and stock
powers therefor, and pertaining to Borrower's Equipment and the
Borrower's Accounts Receivable and Inventory and all the other
personal property of the Borrower except the personal property
subject to other Collateral Documents.
(vii) A Deed of Trust from and duly executed by each
Guarantor pertaining to the Real Property owned by such
Guarantor.
(viii) A Security Agreement from and duly executed by each
Guarantor pertaining to such Guarantor's portion of Guarantors'
Equipment, such Guarantor's Accounts Receivable, such
Guarantor's Inventory and all other personal property of each
such Guarantor except the personal property subject to other
Collateral Documents.
(ix) Uniform Commercial Code Financing Statements and
assignments of patents, trademarks
-37-
and copyrights pertaining to the Security Agreements, the
Pledge Agreement and the Collateral Assignments of Leases,
duly executed by the Borrower and the Guarantors, respectively,
as the Agent may request.
(x) Title insurance commitments in ALTA form pertaining to
Borrower's owned Real Property, in form and content and issued
by a title insurance company or companies reasonably acceptable
to the Agent, in an amount equal to the fair market value of
such Real Property insuring the Agent's first and prior Lien on
all such parcels established pursuant to the Deeds of Trust and
Collateral Assignments of Leases, together with a revolving
credit endorsement and such other endorsements and affirmative
coverages as the Agent may request, subject only to Permitted
Liens and other Liens and exceptions approved by the Banks in
their sole discretion, in all cases constituting the
unconditional commitment of such title insurance company or
companies to issue title insurance policies in favor of the
Agent on the terms of such title insurance commitments promptly
after the recording by such title insurance company or companies
of the Deeds of Trust and Collateral Assignments of Leases.
(xi) The results of Lien searches of the appropriate public
offices, including the United States Patent and Trademark Office
and Copyright Office, demonstrating to the Agent's satisfaction
that no Lien is of record with respect to the Borrower or any
Guarantor except (A) Liens which will be terminated or released
upon the repayment of the Borrower's obligations under the
Existing Loan Agreement and (B) Permitted Liens.
(xii) Certificates of insurance, in form and substance
satisfactory to the Agent from an independent insurance broker
dated as of the Effective Date, identifying insurers, types of
insurance, insurance limits, policy terms, and identifying the
Agent (on behalf of the Banks) as additional insured and loss
payee.
-38-
(xiii) The Borrower's Omnibus Certificate, duly executed by
Authorized Signatories on behalf of the Borrower.
(xiv) A Guarantor's Omnibus Certificate, on behalf of each of
the Guarantors, duly executed by Authorized Signatories on
behalf of each of such Persons.
(xv) The favorable opinion of Xxxxxxx and Xxxxxx L.L.C.
legal counsel to the Borrower and the Guarantors, substantially
in the form of EXHIBIT H-1 AND H-2 hereto and local counsel
opinions, substantially in form of EXHIBIT H-3 and otherwise
satisfactory to the Banks and the Agent, with respect to matters
involving the laws of Indiana.
(xvi) The articles or certificate of incorporation of the
Borrower and each Guarantor as in effect as of the Effective
Date, certified by the Secretary of State of its state of
incorporation.
(xvii) A good standing certificate or certificate of status
for the Borrower and each Guarantor from the Secretary of State
of its state of incorporation and each state where the Borrower
or such Guarantor is qualified to do business as a foreign
corporation as of a recent date.
(xviii) A Compliance Certificate, effective as of April 30,
1998, duly executed by the Borrower and certified as true and
correct by the Borrower.
(xix) Phase I Environmental Assessments of all of Borrower's
owned Real Property and Guarantors' owned Real Property
(excluding such parcels as the Agent may approve in its sole
discretion), in form and content and prepared by consultants,
reasonably acceptable to the Agent, indicating the absence of
conditions which would warrant a Phase II Environmental
Assessment of such Real Property.
(xx) An Assignment of Lease duly executed by Authorized
Signatories on behalf of the Borrower in the form of EXHIBIT F-5
pertaining to each of the Borrower's leased business premises.
-39-
(xxi) An Assignment of Lease duly executed by each Guarantor
in the form of EXHIBIT F-5 pertaining to each of the Guarantor's
leased business premises.
(xxii) Such other documents as the Agent and the Banks may
reasonably request to effect the purposes of this Agreement and
the other Loan Instruments.
(b) The Deeds of Trust identified in (a)(iii) and (a)(vii) shall
have been duly recorded and the Uniform Commercial Code Financing
Statements and assignments of patents, trademarks and copyrights
identified in (a)(ix) above shall have been duly filed.
(c) The Agent shall have received evidence satisfactory to it
that all amounts due from the Borrower to the lender under the
Existing Loan Agreement have been paid in full out of the
proceeds of the Loans on the Effective Date, or provision for
payment thereof in a manner acceptable to the Agent in its sole
discretion, shall have been made by the Borrower and approved by
the Agent, and the Agent shall have received executed termination
statements, in form satisfactory for filing, evidencing the
termination of the security interests in the Borrower's
properties which secured the Existing Loan Agreement.
(d) The Borrower shall have paid to the Agent the Fees and all
fees and expenses set forth in SECTION 8.4, including, without
limitation, all accrued and unpaid legal fees and disbursements
and the reasonable estimate of the Agent of the attorneys fees
and disbursements incurred by it through the closing (provided
that such estimate shall not thereafter preclude final settling
of accounts between the Agent and the Borrower with respect to
attorneys fees and disbursements incurred by the Agent
hereunder).
SECTION 3.2 CONDITIONS PRECEDENT TO ALL ADVANCES. The obligation of
the Banks to make each Advance (including the initial Advance) shall be
subject to the satisfaction (or written waiver by the Required Banks in their
sole discretion) of the following further conditions precedent that on the
date of such Advance:
-40-
(a) the following statements shall be true:
(i) Except as provided in SECTION 3.2(a)(ii), the
representations and warranties contained in SECTION 4.1 of
this Agreement and in the Guaranties, are correct on and as
of the date of such Advance, before and after giving effect
to such Advance and to the application of the proceeds
therefrom, as the case may be, as though made on and as of
such date;
(ii) The information contained in the Schedules to this
Agreement is correct, except that the Borrower may amend such
Schedules at the time of a Request for Advance if such amendment
to the Schedule does not disclose an Event of Default or a
Material Adverse Effect;
(iii) No event has occurred and is continuing, or would
result from such Advance or from the application of the
proceeds therefrom, which constitutes a Default or an Event
of Default hereunder;
(iv) No change shall have occurred in the financial
condition or business of the Borrower or any Guarantor which
would constitute a Material Adverse Effect; and
(v) With respect to an Acquisition Loan, the proceeds of
such Acquisition Loan Advance will be used only for the
purpose of making a Qualified Acquisition.
(b) the Agent shall have received a Request for Advance and such
other approvals, opinions or documents as the Agent may reasonably
request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The
Borrower represents and warrants as follows:
-41-
(a) CORPORATE EXISTENCE. The Borrower is a corporation duly
incorporated, validly existing and in good standing under the
laws of the State of Colorado. Each of MSE Corporation and ASI
Landmark, Inc. is a corporation duly incorporated, validly
existing and in good standing under the laws of the States of
Indiana and Colorado, respectively. The capital structure and
shareholders of the Borrower and the Guarantors are set forth in
SCHEDULE 4.1(a).
(b) POWERS, ETC. The Borrower and each of the Guarantors
(a) has the power and authority to carry on its business as now
conducted and to own or hold under lease the assets and
properties it purports to own or hold under lease; (b) is duly
qualified, licensed or registered to transact its business and is
in good standing in every jurisdiction in which failure to be so
qualified, licensed or registered could have a Material Adverse
Effect; (c) has the power and authority to execute and deliver
this Agreement and each of the other Loan Instruments to which it
is or will be a party and to perform all of its obligations
hereunder and thereunder; and (d) conducts its business under the
names (and only the names) set forth in SCHEDULE 4.1(B) hereto;
and (e) is qualified to do business in each of the states listed
on SCHEDULE 4.1(b).
(c) AUTHORIZATION; NO CONFLICT. The execution, delivery and
performance by the Borrower of each Loan Instrument to which it
is or will be a party are within the Borrower's powers, have been
duly authorized by all necessary corporate action, and do not
contravene (i) the Borrower's Articles of Incorporation or
Bylaws, (ii) any law or judgement, order, writ, injunction,
decree or consent of any court binding on or affecting the
Borrower, (iii) any contract to which the Borrower is a party, or
by which the Borrower or its properties are bound; and (iv) do
not result in or require the creation of any lien, security
interest or other charge or encumbrance (other than pursuant
hereto) upon or with respect to any of its properties. The
execution, delivery and performance by each of the Guarantors of
each Loan Instrument to which such Person is or will be a party
are within the such Person's respective corporate powers or
limited liability company, as applicable, have been duly
authorized by all necessary corporate or limited liability
company, as applicable,
-42-
action by such Person, and do not contravene (i) such Person's
articles of incorporation or by-laws, or (ii) any law or any
contractual restriction binding on or affecting such Person, and do
not result in or require the creation of any lien, security interest
or other charge or encumbrance (other than pursuant hereto) upon or
with respect to any of such Person's properties.
(d) APPROVALS. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or
regulatory body is required for the due execution, delivery and
performance by the Borrower or the Guarantors of any Loan
Instrument to which any such Person is or will be a party all of
which have been duly obtained and are in full force and effect,
except as indicated in SCHEDULE 4.1(d).
(e) ENFORCEABILITY. This Agreement is, and each other Loan
Instrument to which the Borrower will be a party when delivered
hereunder will be, the legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its
terms. Each Loan Instrument to which each Guarantor will be a
party when delivered hereunder will be the legal, valid and
binding obligation of each such Person, enforceable against such
Persons, respectively, in accordance with its terms.
(f) FINANCIAL STATEMENTS. The audited consolidated balance
sheets of the Borrower and the Guarantors and the related
consolidated statements of income and retained earnings of the
Borrower and the Guarantors as of September 30, 1997 for the
Fiscal Year then ended, and the unaudited balance sheets of the
Borrower and the Guarantors as at March 31, 1998, and the related
consolidated statements of income and retained earnings of the
Borrower and Guarantors for the Fiscal Quarter then ended, copies
of which have been furnished to the Banks, fairly present the
consolidated financial position of the Borrower and the
Guarantors as of such date and the consolidated results of the
operations of the Borrower and the Guarantors for the period
ended on such date, all in accordance with Regulation S-X
promulgated under the Securities Exchange Act of 1934, and since
September 30, 1997, there has been no material adverse change in
such condition or operations except as disclosed in
SCHEDULE 4.1(f) hereto.
-43-
(g) LITIGATION. Except as set forth in SCHEDULE 4.1(g) hereto,
there is no pending, or to the Borrower's knowledge, threatened
action or proceeding affecting the Borrower or any of its
properties or business activities or any of the Guarantors or
their respective properties or business activities, before any
court, governmental agency or arbitrator, in which there is a
reasonable possibility of a Material Adverse Effect or which
purports to affect the legality, validity or enforceability of
this Agreement or any Loan Instrument to which the Borrower or
any Guarantor will be a party.
(h) FEDERAL RESERVE REGULATIONS. None of the Advances to be
provided to the Borrower hereunder will be used in violation of
Regulations T, U or X. The Borrower is not engaged in the
business of extending credit for the purpose, whether immediate,
incidental or ultimate, of buying or carrying Margin Stock
(within the meaning of Regulations T, U and X). No part of the
proceeds of any extension of credit hereunder, whether directly
or indirectly, and whether immediately, incidentally or
ultimately, will be used (i) to purchase or carry Margin Stock or
to extend credit to others for the purpose of purchasing or
carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails
a violation of, or which is inconsistent with, the provisions of
the Regulations of the Board of governors of the Federal Reserve
system, including Regulations T, U or X.
(i) INVESTMENT COMPANY ACT. The Borrower is not an "investment
company' or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended.
(j) ERISA.
(i) The Borrower and Guarantors neither maintain nor
contribute to any Employee Benefit Plan or Multiemployer
Plan other than those specified in SCHEDULE 4.1(j).
(ii) The Borrower and the Guarantors are in compliance in
all material respects with all applicable provisions of ERISA
and the Code with
-44-
respect to all Employee Benefit Plans. Each Employee Benefit
Plan that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service
to be so qualified, and each trust related to such Plan has
been determined to be exempt from federal income tax under
Section 501(a) of the Code. The actuarial present value of
all accumulated benefit obligations under each Plan, as
disclosed in the most recent actuarial report with respect to
such Plan, do not exceed the fair market value of the assets
of such Plan. No material liability has been incurred by the
Borrower, any Guarantor or any of their ERISA Affiliates which
remains unsatisfied for any taxes, penalties or other amount
(other than contributions in the ordinary course) with respect
to any Employee Benefit Plan or any Multiemployer Plan, and to
the best knowledge of the Borrower no such material liability
is expected to be incurred.
(iii) The Borrower and the Guarantors have not
(a) engaged in a nonexempt prohibited transaction described
in Section 406 of ERISA or Section 4975 of the Code;
(b) incurred any liability to the Pension Benefit Guaranty
Corporation which remains outstanding other than the payment
of premiums and there are no premium payments which are due
and unpaid; (c) failed to make a required contribution or
payment to a Multiemployer Plan; or (d) failed to make a
required installment or other required payment under
Section 412 of the Code.
(iv) No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan or Multiemployer
Plan maintained or contributed to by the Borrower or any
Guarantor.
(v) No material proceeding, claim (other than routine
claims for benefits) lawsuit and/or investigation is
existing or, to the Borrower's knowledge, threatened
concerning or involving any Employee Benefit Plan or
Multiemployer Plan maintained or contributed to by the
Borrower or any Guarantor.
(k) COMPLIANCE WITH LAWS. The Borrower and the Guarantors are
in compliance with all applicable laws,
-45-
ordinances, treaties, rules, regulations and orders of, and all
applicable restrictions imposed by, all Governmental Authorities in
respect of the conduct of their respective businesses and the
ownership of their respective properties, except such noncompliance
as would not, individually or in the aggregate, have a Material
Adverse Effect.
(l) PAYMENT OF DEBTS AND TAXES.
(i) The Borrower and each Guarantor: (a) has filed all
required federal, state and local tax returns with
appropriate taxing authorities respecting its operations,
assets and properties; and (b) has paid or caused to be paid
all taxes shown on those returns to the extent due, and has
paid all tax or other assessments imposed by Governmental
Authorities, except in either case taxes which are being
contested in good faith and for which adequate bonds or
other sureties as required by law have been posted by the
Borrower or Guarantor.
(ii) The Borrower and each Guarantor is current in its
payment of Debts (other than Debt in an aggregate amount not
to exceed $1,000,000.00) and performance of material
obligations under Material Agreements except those being
contested in good faith.
(m) INDEBTEDNESS, GUARANTIES.
(i) SCHEDULE 4.1(m), PART I contains a complete and
accurate list of all Debt of the Borrower and each of the
Guarantors, whether individual, joint, several or otherwise,
and whether fixed or contingent, including commitments,
lines of credit and other credit availabilities, identifying
with respect to each the respective parties, amounts and
maturities.
(ii) SCHEDULE 4.1(m), PART II contains a complete and
accurate list of all guarantees or other surety arrangements
or undertakings of the Borrower and each of the Guarantors
for obligations of any other Person (except for negotiable
instruments endorsed for collection or deposit in the
ordinary course of business),
-46-
whether individual, joint, several or otherwise, identifying
with respect to each of the parties, amounts and maturities.
(n) MATERIAL AGREEMENTS. Except as set forth in
SCHEDULE 4.1(n), and except for the Loan Instruments, the
Borrower and the Guarantors are not a party to any Material
Agreements. The Borrower and each Guarantor is in compliance
with all Material Agreements and has not received any notices
from counter parties thereto asserting violations of any such
Material Agreements by the Borrower or any Guarantor or asserting
rights to terminate or modify any of such Material Agreements.
(o) PROPERTIES, INVENTORY AND EQUIPMENT. The Borrower owns or
leases the real property identified in PART I of SCHEDULE 4.1(o)
(the "BORROWER'S REAL PROPERTY") and owns the Equipment and
Inventory in the states identified in SCHEDULE 4.1(o). The
Guarantors own or lease the real property identified in PART II
of SCHEDULE 4.1(o) (the "GUARANTORS' REAL PROPERTY") and own the
Equipment and Inventory in the states identified in
SCHEDULE 4.1(o). The Borrower's Equipment and Inventory is
located in the states set forth in PART I of SCHEDULE 4.1(o).
The Guarantors' Equipment and Inventory is located in the states
listed in PART II of SCHEDULE 4.1(o). The Borrower has good,
marketable and insurable title to, or valid leasehold interests
in, all of Borrower's owned Real Property and good title to
Borrower's Equipment and the other assets of the Borrower, free
and clear of all Liens, other than the Liens identified in
PART III of SCHEDULE 4.1(o) and other Permitted Liens. The
Guarantors have good, marketable and insurable title to, or valid
leasehold interests in, all of Guarantors' Real Property and good
title to Guarantors' Equipment and the other assets of the
Guarantors, free and clear of all Liens, other than the Liens
identified in PART IV of SCHEDULE 4.1(o) and other Permitted
Liens.
(p) FINANCIAL CONDITION. Neither the Borrower nor any Guarantor
is entering into the arrangements contemplated by this Agreement
and the other Loan Instruments with actual intent to hinder,
delay or defraud either present or future creditors of the
Borrower or any Guarantor. On and as of the date of execution
hereof by the Borrower, and on and as of the date of each Advance
hereunder by the Banks, on a pro-forma basis
-47-
after giving effect to the transactions contemplated by the Loan
Instruments and to all indebtedness (including Debt) incurred or
to be created in connection herewith:
(i) the present fair saleable value of the assets of the
Borrower and each Guarantor, respectively, (on a going
concern basis) will exceed the probable liability of the
Borrower and each Guarantor, respectively, on its
indebtedness (including Debt and contingent obligations);
(ii) the Borrower and each Guarantor, respectively, has
not incurred, nor does Borrower intend to or believe it will
incur, nor will Borrower permit any Guarantor to incur
indebtedness (including Debt and contingent obligations)
beyond its ability to pay such indebtedness as such
indebtedness matures (taking into account the timing and
amounts of cash to be received from any source, and of
amounts to be payable on or in respect of such
indebtedness); and the amount of cash available to the
Borrower and Guarantors after taking into account all other
anticipated uses of funds is anticipated to be sufficient to
pay all such amounts on or in respect of its respective
indebtedness (including Debt and contingent liabilities)
when such amounts are required to be paid; and
(iii) the Borrower and each Guarantor will have sufficient
capital with which to conduct its present and proposed
business, and the assets of the Borrower and each Guarantor,
respectively, do not constitute unreasonably small capital
with which to conduct its present or proposed business.
(q) INSURANCE. The Borrower and each of the Guarantors
currently maintains with financially sound and reputable insurers
insurance concerning its assets and business, with such
deductibles and retentions and having coverages against risks,
losses or damages as are customarily carried by reputable
companies in the same or similar businesses, such insurance being
in amounts no less than those amounts which are customary for
such companies under similar circumstances, which third-party
insurance coverages are identified in SCHEDULE 4.1(q).
-48-
(r) FULL DISCLOSURE. No representation or warranty contained in
this Agreement or in any other Loan Instrument to which the
Borrower is a party, or in any other document furnished from time
to time by the Borrower to the Bank pursuant to this Agreement,
contains any untrue statement of a material fact or omits to
state any material fact necessary to make the statements herein
or therein not misleading in any material respect as of the date
made or deemed to be made. Except as may be set forth herein or
in any of the Schedules hereto or in the certificates and
information furnished pursuant to SECTION 5.1(b), there is no
fact known to the Borrower which has had, or is reasonably
expected to have, a Material Adverse Effect.
(s) NO DEFAULT. No Default or Event of Default has occurred and
is continuing.
(t) STATUS OF LOANS AS SENIOR DEBT. All Debt of the Borrower to
the Banks and the Agent in respect of the Loans constitutes
"Senior Debt" or "Senior Indebtedness" (or the analogous term
used therein) under the terms of any instrument evidencing or
pursuant to which there is issued indebtedness which purports to
be Debt of the Borrower.
(u) SWAP OBLIGATIONS. Neither the Borrower nor any of its
Subsidiaries has incurred any outstanding obligations under any
Swap Contracts, other than Permitted Swap Obligations. The
Borrower has undertaken its own independent assessment of its
consolidated assets, liabilities and commitments and has
considered appropriate means of mitigating and managing risks
associated with such matters and has not relied on any swap
counterparty or any Affiliate of any swap counterparty in
determining whether on not to enter into any Swap Contract.
(v) FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrower and the
Subsidiaries possess all franchises, patents, copyrights,
trademarks, trade names, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of their
business as now conducted without known conflict with any rights
of others.
-49-
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.1 AFFIRMATIVE COVENANTS. So long as any of the Notes
shall remain unpaid, or the Banks shall have any Commitment hereunder, or
any obligation of the Borrower or any Guarantor hereunder or under any Loan
Instrument has not been fully performed, the Borrower will, unless the
Required Banks shall otherwise consent in writing:
(a) USE OF PROCEEDS. Subject to compliance by the Borrower with
all of the terms and conditions hereof, use the Advances
exclusively to pay amounts due under the Existing Loan Agreement,
to make Qualified Acquisitions and for any corporate purpose of
the Borrower or any Guarantor.
(b) REPORTING AND NOTICE REQUIREMENTS. Provide to the Agent:
(i) as soon as available, and in any event within 90 days
after the end of each Fiscal Year of the Borrower, audited
consolidated statements of income, retained earnings and
cash flows for the Borrower and its Subsidiaries for such
Fiscal Year and the related audited consolidated balance
sheets of the Borrower and its Subsidiaries as of the end of
such Fiscal Year, setting forth in comparative form the
corresponding consolidated figures for such Fiscal Year and
the prior Fiscal Year, each accompanied by a report of the
Borrower's independent public accountants (who shall be a
nationally recognized firm or otherwise satisfactory to the
Agent), which reports shall state that such consolidated
financial statements fairly present the consolidated
financial position and results of operations of the Borrower
and its Subsidiaries in accordance with GAAP without
material qualification;
(ii) simultaneously with the delivery of the annual
financial statements referred to in SECTION 5.1(b)(i) above,
a report of the independent auditors who audited such
statements stating that, in connection with their audit of
such statements (and without conducting any procedures other
than those customarily conducted
-50-
in a year-end audit), such auditors have obtained no knowledge
of any condition or event which constitutes a Default or Event
of Default hereunder, or if such auditors have obtained
knowledge of any such condition or event, specifying in such
report each such condition or event of which they have
knowledge and the nature and status thereof; PROVIDED,
HOWEVER, that such auditors shall not be liable to the Banks
by reason of any failure to obtain knowledge of any condition
or event which constitutes a Default or Event of Default that
would not be disclosed in the course of their audit
examination;
(iii) as soon as available, and in any event within
90 days after the end of each Fiscal Year of the Borrower,
(a) a consolidated annual budget, broken down quarterly, for
the Borrower and the Guarantors for the following Fiscal
Year, and (b) an operating plan for the Borrower and the
Guarantors for the then current Fiscal Year and the four
following Fiscal Years, all in a form and at a level of
detail reasonably acceptable to the Agent;
(iv) within 45 days after the conclusion of each Fiscal
Quarter of the Borrower, a Compliance Certificate signed by
the chief executive officer or chief financial officer of
the Borrower,(a) to the effect that no Default or Event of
Default is in existence, (b) setting forth in reasonable
detail the computations necessary to demonstrate compliance
by the Borrower with the financial covenants set forth in
SECTION 5.2(a), (c) the computations in reasonable detail of
the ratio of Total Debt to Trailing Four Quarter EBITDA
ratio referred to in the definitions of Applicable Margin
and Commitment Fee Rate and (d)(if applicable)
reconciliations to reflect any relevant changes in GAAP
since the Effective Date;
(v) as soon as available, and in any event within 45 days
after the end of each Fiscal Quarter, (a) a Form 10-K or 10-Q,
as applicable, filed by the Borrower with the Securities
and Exchange Commission; and (b) a backlog summary report in
form and substance reasonably satisfactory to the Agent;
-51-
(vi) within 45 days after the end of each Fiscal
Quarter a listing and aging of all Accounts Receivable of
the Borrower and the Guarantors (with all of the foregoing
to be in form and at a level of detail reasonably acceptable
to the Agent);
(vii) at least 30 days prior to the acquisition date of
a proposed Qualified Acquisition, notice identifying the
Person to be acquired and such information concerning the
Person as the Agent may request in order to prepare the
Collateral Documents referred to in SECTION 5.1(n);
(viii) within 20 days after the date of acquisition of a
Qualified Acquisition, (a) a Compliance Certificate, as of
the last day of the month immediately preceding the date of
acquisition of the Qualified Acquisition, for the Borrower
and the acquired Person on a pro-forma basis and (b) a
certificate, in form and level of detail reasonably
acceptable to the Agent, establishing compliance with the
definition of Qualified Acquisition, all signed by the chief
executive officer or chief financial officer of the
Borrower;
(ix) promptly upon the request of the Agent, copies of
all "management letters" received by the Borrower from the
Borrower's independent accountants;
(x) as soon as possible, and in any event within 5 days
after the Borrower knows or has reason to know thereof,
notice of any ERISA Event, describing the same in reasonable
detail;
(xi) promptly upon the occurrence thereof, notice of
any Default or Event of Default describing the same in
reasonable detail, together with a report concerning the
steps which the Borrower is taking or will take to remedy
such Default or Event of Default;
(xii) promptly on the occurrence thereof, notice of any
Material Adverse Effect describing the same in reasonable
detail, together with a
-52-
report concerning the steps which the Borrower is taking or
will take to eliminate such Material Adverse Effect;
(xiii) promptly after receipt of written request from the
Agent or the Required Banks, such other information
concerning the Borrower or any of the Guarantors, and
concerning their respective businesses, operations, assets
or financial condition (including accounts payable listings
and agings, fixed asset schedules and information concerning
leases) as the Agent or Required Banks may reasonably
request; provided that so long as no Event of Default has
occurred, such request for information shall be limited to
one request per month; and
(xiv) promptly upon the occurrence thereof, notice of
all changes in the articles of incorporation or bylaws of
the Borrower or any of the Guarantors, or the employment
status with the Borrower or Guarantors of Xxxxxx X. Xxxxxx
or Xxxxx X. Xxxxxx;
(xv) promptly after the furnishing thereof to the
shareholders of the Borrower copies of all financial
statements, reports and proxy statements so furnished; and
(xvi) promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or
other regular reports which the Borrower or any of its
Subsidiaries files with the Securities and Exchange
Commission.
(c) MAINTENANCE OF EXISTENCE, ETC. Except as provided in
SECTION 5.2(b), maintain its corporate existence and cause each
Guarantor to maintain its corporate existence, and maintain and
cause each Guarantor to maintain their respective material
rights, privileges and franchises.
(d) COMPLIANCE WITH LAWS. Comply and cause each Guarantor to
comply in all material respects with all Requirements of Law of
any Governmental Authority having jurisdiction over each such
Person or their respective business, except where the failure to
comply would not have a Material Adverse Effect.
-53-
(e) INSURANCE.
(i) Maintain the third-party insurance identified in
SCHEDULE 4.1(q), PROVIDED, HOWEVER, that in no event shall
such insurance be for an amount less than the replacement
cost of the assets so insured.
(ii) Without limiting the obligations of the Borrower
under this SECTION 5.1(e), in the event the Borrower fails
to maintain the insurance required by the foregoing
provisions of this SECTION 5.1(e), then the Banks may, but
shall have no obligation to, procure insurance covering the
interests of the Banks, in such amounts and against such
risks as the Banks shall deem appropriate, and the Borrower
will reimburse the Banks in respect of any premiums paid by
the Banks as provided in SECTION 8.4.
(f) MATERIAL AGREEMENTS. Perform, and cause all Guarantors to
perform, all of each such Person's obligations under the Material
Agreements in substantial compliance with all terms and
conditions thereof.
(g) OBLIGATIONS AND TAXES. Pay and cause all Guarantors to pay
each such Person's Debt in excess of $1,000,000 and other
obligations in accordance with their terms and pay and discharge
promptly all Federal and State and local taxes, and all
governmental assessments and charges or levies imposed upon any
such Person or upon such Person's income or profits or in respect
of its assets or business, or in any event before the same shall
become delinquent or in default, as well as all lawful claims for
labor, materials and supplies or otherwise which, if unpaid,
might give rise to a Lien upon such properties or any part
thereof; PROVIDED, HOWEVER, that such payment and discharge shall
not be required so long as the validity or amount thereof shall
be contested in good faith by appropriate proceedings and the
Borrower or such Guarantor, as applicable, shall have set aside
on its books adequate reserves in accordance with GAAP with
respect thereto.
(h) MAINTAINING RECORDS; ACCESS TO PROPERTIES AND INSPECTIONS.
Maintain, and cause all Guarantors to
-54-
maintain, all financial records in accordance with GAAP and permit,
and cause all Guarantors to permit, after two weeks notice unless
an Event of Default has occurred, any Bank employees or other
representatives designated by the Agent or the Required Banks to
visit and inspect the properties of the Borrower or of any
Guarantor, and to inspect their respective financial and business
records and make extracts therefrom and copies thereof, all at
reasonable times and in a manner so as not to unreasonably disrupt
the operations of the Borrower or of such Guarantors and as often
as reasonably requested, and permit, and cause such Guarantors to
permit, any such employees or representatives to discuss the
affairs, finances and condition of the Borrower and Guarantors with
the officers and other representatives thereof, including the
Borrower's independent accountants if a representative of the
Borrower is present and if the Agent has notified the Borrower not
less than 24 hours prior to such meeting of the issues that will be
discussed.
(i) ENVIRONMENTAL AND SAFETY MATTERS.
(i) Comply and cause all Guarantors to comply with all
Environmental and Safety Laws applicable to the Borrower and
the Guarantors, respectively, in all material respects.
(ii) Keep its properties and facilities and cause all
Guarantors to keep their facilities and properties free from
any Liens arising under any applicable Environmental and
Safety Laws.
(iii) If the Banks at any time have reason to believe
that any property or facility owned or operated by the
Borrower or any Guarantor has been or may be operated in
violation of any Environmental or Safety Laws applicable
thereto or contaminated with any Hazardous Materials in
excess of levels allowed by Environmental or Safety Laws or
subject to any government-imposed obligation to conduct any
environmental investigation or clean-up, any of which in the
good faith judgement of the Banks may impair in any material
respect the ability of the Borrower or any Guarantor to
satisfy any obligations of the Borrower hereunder or under
any Loan Instrument,
-55-
the Borrower shall, upon the written request of the Banks, at
the Borrower's sole cost and expense, conduct such
investigation or study, through retention of a consulting firm
reasonably satisfactory to the Banks, as is necessary in the
good faith judgment of the Banks to demonstrate that no such
impairment could reasonably be expected to have a Material
Adverse Effect.
(j) DEPOSIT BALANCES. Maintain, and cause the Guarantors to
maintain, their respective primary operating, payroll and
investment deposit account balances with the Agent or its
Affiliates, except for accounts maintained in locations where the
Agent and its Affiliates have no bank.
(k) INTEREST RATE PROTECTION. If after the Effective Date an
issuance or sale of the equity securities of the Borrower
resulting in Net Proceeds to the Borrower of $20,000,000 or more
has not occurred by September 30, 1998, enter into as of
September 30, 1998 and maintain during the time that any Loan is
outstanding, interest rate protection, subject to an Interest
Rate Protection Agreement in form and substance satisfactory to
the Agent, in an amount to be negotiated by the Borrower and the
Agent.
(l) SURVEYS. At its expense provide to the Agent, on or before
May 31, 1998, a current ALTA/ACSM survey of the real property
described in the Deeds of Trust prepared by a surveyor acceptable
to the Agent showing the legal description of the land, the
location of all improvements thereon, the location of any
recorded easements or other restrictions affecting the land, the
flood plain status of the land and a description and the date of
the map or maps reviewed.
(m) AUDIT OF ACCOUNTS RECEIVABLE AND INVENTORY.
(i) No more often than annually, so long as there is
no Event of Default, permit, and cause the Guarantors to
permit, the Agent or representatives of the Agent to conduct
during regular business hours a field examination and
inspection of the Collateral, and to audit and copy all of
the Borrower's and the Guarantors' financial books, records,
journals and other records and data relating to the
Collateral to the
-56-
extent that the Agent deems necessary in regard to the Banks'
rights under the Loan Instruments.
(ii) Promptly pay or reimburse the Agent for the
actual cost of all field examinations and audits including
all out of pocket expenses for travel, food and lodging.
(n) ADDITIONAL PLEDGES AND GUARANTORS. Within ten (10) Business
Days after any Person becomes a Subsidiary of the Borrower,
(i) The Borrower shall grant to the Agent on behalf of
the Banks, a pledge of 100% of the shares of capital and
voting stock of such Person owned by the Borrower and the
Guarantors pursuant to a Pledge Agreement and execute and
deliver to the Agent such Pledge Agreement, original stock
certificates subject thereto and stock powers therefor.
(ii) Such Person shall execute and deliver to the
Agent a Guaranty, Deed of Trust, Pledge Agreement, Security
Agreement, Collateral Assignment of Leases, Assignment of
Lease, Landlord's Waiver and Consent, and Uniform Commercial
Code Financing Statements pertaining to all of such Person's
real and personal property, both tangible and intangible,
all in form and substance satisfactory to the Agent.
(iii) Borrower, at its expense, shall provide to Agent
(A) title insurance as provided under SECTION 3.1(a)( )
with respect to such Person's owned real property, (b) a
current ALTA/ACSM survey as provided under SECTION 5.1 ( )
with respect to such Person's owned real property,(C)Phase I
Environmental Assessments with respect to such Person's
owned real property as provided under SECTION 3.1(a) ( ),
(D) certificates of insurance, in form and substance
satisfactory to the Agent, from an independent insurance
broker identifying insurers, types of insurance, insurance
limits, policy terms, and identifying the Agent (on behalf
of the Banks) as additional insured and loss payee with
respect to such Person's property, and (E) such other
documents as the Agent and the Bank's may request
-57-
with respect to such Person's property to effect the purposes of
this Agreement and the other Loan Instruments.
(iv)Borrower shall pay all reasonable legal fees,
disbursements and expenses incurred by the Agent in
connection with the preparation, execution, delivery,
recording and filing of the Loan Instruments described in
this SECTION 5.2(n).
(o) YEAR 2000 COMPATIBILITY. Take all action necessary to
ensure that the computer based systems of the Borrower and
its Subsidiaries are able to operate and effectively process
data including dates on or after January 1, 2000, except
that such action shall not be required to the extent that
failure to take such action would not have a Material
Adverse Effect. At the request of the Agent, the Borrower
shall provide assurance reasonably acceptable to the Agent
of the year 2000 compatibility of the Borrower and its
Subsidiaries.
(p) LANDLORD'S WAIVER AND CONSENT. Promptly, but in no event
more than 30 days after the Effective Date, use commercially
reasonable efforts to provide a Landlord's Waiver and
Consent, in form and substance satisfactory to the Agent,
for each of the Borrower's or Guarantor's leased business
premises, executed by the landlord for such premises.
(q) FURTHER ASSURANCES. Execute and deliver such further
documents and do such other acts and things as the Banks may
reasonably request in order to effect fully the purposes of
this Agreement and each of the other Loan Instruments and to
provide for payment of the Loans and all other amounts due
hereunder within the scope of this Agreement.
SECTION 5.2 NEGATIVE COVENANTS. So long as any of the Notes shall
remain unpaid, or the Banks shall have any Commitment hereunder, or any
obligation of the Borrower or any Guarantor hereunder or under any Loan
Instrument has not been fully performed, the Borrower will not, unless the
Required Banks shall otherwise consent in writing:
-58-
(a) FINANCIAL COVENANTS.
(i) MAXIMUM TOTAL DEBT TO EBITDA RATIO. Permit, as of the
end of any Fiscal Quarter, for Borrower and all Subsidiaries on a
consolidated basis a ratio of (y) Total Debt to (z) Trailing
Four Quarter EBITDA to be greater than
TIME PERIOD MAXIMUM RATIO
From the Effective
Date to September
29, 1998 3.00:1.00
September 30, 1998
to September 29,
1999 2.50:1.00
September 30, 1999
and thereafter 2.00:1.00
(ii) MINIMUM FIXED CHARGE COVERAGE RATIO. Fail to
maintain a ratio of Trailing Four Quarter EBITDA to Fixed Charges
of less than 1.3:1.0.
(iii) MINIMUM NET INCOME. Fail to earn Net Income for two (2)
consecutive Fiscal Quarters.
(iv) MAXIMUM ANNUAL CAPITAL EXPENDITURES. During any
Fiscal Year, make Capital Expenditures for the Borrower and all
Subsidiaries on a consolidated basis in excess of $4,000,000.
(v) MINIMUM EBITDA. Fail to maintain for the Borrower and
all Subsidiaries on a consolidated basis a minimum Trailing Four
Quarter EBITDA of $10,000,000.
(b) PROHIBITION OF FUNDAMENTAL CHANGES. Effect, or permit to be
effected with respect to any Guarantor, any transaction of
merger, consolidation, recapitalization, reorganization,
liquidation or dissolution except any Subsidiary may merge,
consolidate or reorganize with, or liquidate and transfer its
assets to,(i) the Borrower, provided that the Borrower is the
continuing
-59-
or surviving corporation or (ii) any Subsidiary provided that if
any transaction shall be between a Guarantor and a Subsidiary, the
Guarantor shall be the continuing or surviving corporation, and in
each case no Default or Event of Default has occurred and is
continuing or no Material Adverse Effect has occurred.
(c) LIMITATION ON LIENS. Create or suffer to exist, or permit
any Guarantor to create or suffer to exist, any Liens on any
assets of any such Person, except for Permitted Liens.
(d) DEBT. Create, incur or suffer to exist, or permit any
Guarantor to create, incur or suffer to exist, any Debt except,
(i) Debt hereunder, (ii) intercompany Debt (iii) Debt of such
Persons in effect on the date hereof as reflected in the
financial statements identified in Section 4.1(f), (iv) Debt
consisting of trade payables incurred in the ordinary course of
business and (v) other Debt in the aggregate principal amount of
$4,000,000.00.
(e) GUARANTEES. Create or become liable, directly or
indirectly, or permit any Guarantor to create or become liable,
directly or indirectly, with respect to any guarantee of the
obligation of any other Person except, (i) guarantees resulting
from the endorsement of instruments for collection in the
ordinary course of business,(ii) guarantees in effect on the date
hereof and disclosed in the financial statements identified in
SECTION 4.1(f), (iii) the Guaranties of the Guarantors in favor
of the Bank as contemplated hereby and (iv) guarantees of
performance or obligations of any Subsidiary by the Borrower, if
such obligations were directly incurred or maintained by the
Borrower would not violate any provision of any Loan Instrument.
(f) INVESTMENTS, LOANS, ADVANCES, ETC. The Borrower shall not
directly or indirectly purchase or otherwise acquire, hold or
invest in the securities of any Person, acquire control of any
Person, make loans or advances or enter into any agreement or
other arrangement for the purpose of providing funds or credit to
any Person (other than guaranties permitted hereunder), or enter
into any partnership, joint venture or other entity or business
arrangement with or make any equity investment in any Person, or
offer or agree to do so, and will not permit any Guarantor to do
-60-
so except for: (i) securities issued by any of its Subsidiaries;
(ii) loans or advances between the Borrower and any wholly owned
Subsidiary; (iii) securities issued or guarantied by the United
States of America; (iv) except as provided in SECTION 5.1(j), and
deposit accounts for payment of ordinary course of business
expenses by the Borrower and Guarantors, with respect to which no
limits concerning the deposit bank apply, deposits in domestic
commercial banks that have, or are members of a group of domestic
commercial banks that has, consolidated total assets of not less
than one billion dollars, or investments in the certificates of
deposit, commercial paper or other permissible market rate
instruments offered by any such bank, the holding company of any
such bank or subsidiary of any such holding company; (v) normal
business banking accounts in federally insured institutions in
amounts not exceeding the limits of such insurance; (vi) commercial
paper or other short-term debt securities rated not less than "A"
or its equivalent by Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc.; (vii) investments constituting Permitted
Swap Obligations or payments or advances under Swap Contracts
relating to Permitted Swap Obligations; (viii) overnight cash
management services offered under the Agent's Corporate Cash
program; (ix) Qualified Acquisitions and (x) other investments not
exceeding $500,000 in the aggregate at any one time in Persons that
are not Affiliates of the Borrower or any Guarantor.
(g) SALES OF ASSETS. Make any Disposition of assets of the
Borrower, or permit any Guarantor to make any Disposition of
assets of such Guarantor other than (i) sales of inventory in the
ordinary course of business or (ii) Dispositions of obsolete or
surplus equipment or other assets or (iii) up to $1,000,000 in
fair market value of other Dispositions each Fiscal Year, or (iv)
Dispositions of its assets to the Borrower or a Subsidiary.
(h) TRANSACTIONS WITH AFFILIATES. Except for transactions
existing on the Effective Date, enter into or permit any
Subsidiary to enter into any transaction or series of
transactions, whether or not related or in the ordinary course of
business of the Borrower, with any Affiliate of the Borrower or
any Subsidiary (except for transactions between the Borrower and
its
-61-
Subsidiaries and between wholly owned subsidiaries of the
Borrower and a Subsidiary), other than pursuant to the reasonable
requirements of the Borrower's or such Subsidiaries's business
and on terms and conditions no less favorable to the Borrower or
any Subsidiary than would be obtainable by the Borrower or any
Subsidiary at the time in a comparable arm's-length transaction
with a Person not an Affiliate of the Borrower or any Subsidiary.
(i) MODIFICATION OF CERTAIN DOCUMENTS; PERFORMANCE OF MATERIAL
AGREEMENTS. Amend its articles of incorporation or bylaws in a
manner adverse to the Bank; or amend, modify, cancel, terminate,
waive any default under or breach of, in any manner any Material
Agreement other than in the ordinary course of business or permit
any Guarantor to do any of the foregoing; or enter into any new
agreement that is inconsistent with the obligations of the
Borrower or Guarantor under any Loan Instrument to which such
Person is a party, without the prior written consent of the
Required Banks, which consent shall not be unreasonably withheld.
The Borrower further agrees that it will not be in default under,
or otherwise fail to perform and will not permit any Guarantor to
be in default under or
-62-
otherwise fail to perform all of its material obligations under
any of the Material Agreements to which any such Person is a
party.
(j) DIVIDENDS. Declare or pay or permit any Guarantor to
declare or pay cash or stock dividends or other distributions
with respect to the Borrower's stock or Guarantor's stock, except
that () any Guarantor may declare and pay dividends and make
distributions to the Borrower and (ii) the Borrower may declare
and pay a dividend payable solely in the capital stock of the
Borrower.
(k) ACCOUNTING. Change, or permit any Guarantor to change its
respective Fiscal Years or accounting methods or practices
(except to conform to changes in GAAP). If any preparation of
the financial statements referred to in SECTION 4.1(f), hereafter
occasioned by the promulgation of rules, regulations,
pronouncements and opinions by or required by the Financial
Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or agencies with
similar functions) result in a material change in the method of
calculation of financial covenants, standards or terms found in
this Agreement, the Borrower will, and will cause each Guarantor
to, enter into good faith negotiations with the Bank in order to
amend such provisions so as to equitably reflect such changes
with the desired result that the criteria for evaluating the
Borrower's consolidated financial condition shall be the same
after such changes as if such changes had not been made. Unless
and until such provisions have been so amended, the provisions of
this agreement shall govern and the financial covenants hereunder
shall be calculated using GAAP as in effect prior to such
changes.
(l) CHANGE OF ADDRESS; BUSINESS NAME(S). Except upon not less
than 30 days prior written notice to the Agent, change or permit
any Guarantor to change the address at which the Borrower or such
Guarantor maintains its chief executive offices and principal
place of business; nor conduct its business activities under any
names other than those set forth SCHEDULE 4.1(b) hereto unless
the Borrower notifies the Agent of any such new name not less
than 30 days prior to beginning use of such new name, except that
no more than seven days notice shall be required in the case of
-63-
a new name resulting from an acquisition of a business or assets by
the Borrower.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1 EVENTS OF DEFAULT. Each of the following events shall
constitute an Event of Default hereunder:
(a) PAYMENTS UNDER THE AGREEMENT AND THE NOTES. The Borrower
shall fail to pay any principal of, or interest on, the Notes
when the same become due and payable or the Borrower shall fail
to pay any Fees or other amount due the Bank from the Borrower
hereunder and such failure, in the case of a payment other than a
payment of principal shall continue for three (3) Business Days.
(b) REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made by the Borrower or any of the Guarantors (or any of
their respective officers, if applicable) under or in connection
with any Loan Instrument shall prove to have been incorrect in
any material respect when made.
(c) OTHER LOAN INSTRUMENT OBLIGATIONS. (i) The Borrower shall
fail to perform or observe any term, covenant or agreement
contained in SECTION 5.2, or (ii) the Borrower shall fail to
perform or observe any term, covenant or agreement contained in
any Loan Instrument to which it is a party (other than any such
failures addressed by SUBSECTIONS (a), (b) and (c)(i) above in
this SECTION 6.1) and such failure continues unremedied for a
period of 15 days after the Borrower receives notice or otherwise
has actual knowledge thereof, or (iii) any Guarantor shall fail
to perform or observe any term, covenant or agreement contained
in any Loan Instrument to which it is a party, and such failure
under CLAUSE (i), (ii) or (iii) continues unremedied for a period
of 15 Business Days after such Person receives notice or
otherwise has actual knowledge thereof.
(d) OTHER DEBT. The Borrower or any Guarantor shall fail to pay
any principal of or premium or interest on
-64-
any Debt which is outstanding in a principal amount of at least
$1,000,000 in the aggregate (but excluding Debt evidenced by the
Notes) of such Person, when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or
instrument relating to such Debt; or any other event shall occur or
condition shall exist under any agreement or instrument relating to
any such Debt and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of
such event or condition is to accelerate, or to permit the
acceleration of, the maturity of such Debt; or any such Debt shall
be declared to be due and payable, or required to be prepaid (other
than by a regularly scheduled required prepayment), redeemed,
purchased or defeased, or an offer to prepay, redeem, purchase or
defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof.
(e) INSOLVENCY. The Borrower or any of the Guarantors shall
generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or
shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against the Borrower or
any of the Guarantors seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief, or composition of it
or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial
part of its property and, in the case of any such proceeding
instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of
45 days, or any of the actions sought in such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or
other similar official for, it or for any substantial part of its
property) shall occur; or Borrower or any Guarantor shall take
any corporate action to authorize any of the actions set forth
above in this SUBSECTION (e).
-65-
(f) JUDGMENTS. Any non-interlocutory judgment or order for the
payment of money which is not covered by existing insurance in
excess of $1,000,000 shall be rendered against the Borrower or
any Guarantor and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or
(ii) there shall be any period of thirty (30) consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect.
(g) TERMINATION OF CERTAIN LOAN INSTRUMENTS. Any provision of
this Agreement, the Notes, or any of the Collateral Documents
shall for any reason cease to be valid and binding on the
Borrower or Guarantors (as the case may be), or the Borrower or
any of the Guarantors shall so state in writing.
(h) COLLATERAL LIENS. The Deeds of Trust, Security Agreements,
Pledge Agreement or Collateral Assignment of Leases shall, after
delivery thereof by the Borrower or any Guarantor pursuant
hereto, for any reason (other than pursuant to the terms thereof)
cease to create a valid and perfected first priority security
interest in favor of the Agent in any of the collateral purported
to be covered thereby.
(i) CHANGE OF CONTROL. There occurs any Change of Control.
SECTION 6.2 BANK'S RIGHTS UPON AN EVENT OF DEFAULT. Upon the
occurrence and during the continuation of any Event of Default the Agent
(i) may, by notice to the Borrower, declare the obligation of the Banks to
make Advances to be terminated, whereupon the same shall forthwith
terminate, (ii) may, by notice to the Borrower, declare the Notes, all
accrued interest on the Loans and all other amounts payable under this
Agreement, the Notes and any other Loan Instrument to be forthwith due and
payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand,
protest, or further notice of any kind, all of which are hereby expressly
waived by the Borrower, and (iii) may exercise the Banks rights and
remedies under the Loan Instruments and such other rights and remedies as
may be available to the Banks at law or in equity; PROVIDED, HOWEVER, that
in the event of an actual or deemed entry of an order for relief with
respect to the Borrower or any of the Guarantors
-66-
under the Federal Bankruptcy Code, (A) the obligation of the Banks to make
Advances shall automatically be terminated and (B) the Advances, the Notes,
all such interest and all such amounts shall automatically become and be due
and payable, without presentment, demand, protest or any notice of any kind,
all of which are hereby expressly waived by the Borrower.
ARTICLE VII
THE AGENT
SECTION 7.1 APPOINTMENT AND POWERS. Each Bank hereby irrevocably
appoints and authorizes Bank One, Colorado, N.A., and Bank One, Colorado,
N.A. hereby agrees, to act as the agent for and representative (within the
meaning of Section 9-105(m) of the Uniform Commercial Code) of such Bank
under the Loan Instruments with such powers as are delegated to the Agent and
the Secured Party by the terms thereof, together with such other powers as
are reasonably incidental thereto. The Agent's duties shall be purely
ministerial and it shall have no duties or responsibilities except those
expressly set forth in the Loan Instruments. The Agent shall not be required
under any circumstances to take any action that, in its judgment, (a) is
contrary to any provision of the Loan Instruments or Applicable Law or (b)
would expose it to any Liability or expense against which it has not been
indemnified to its satisfaction. The Agent shall not, by reason of its
serving as the Agent, be a trustee or other fiduciary for any Bank.
SECTION 7.2 LIMITATION ON AGENT'S LIABILITY. Neither the Agent nor
any of its directors, officers, employees or agents shall be liable or
responsible for any action taken or omitted to be taken by it or them under
or in connection with the Loan Instruments, except for its or their own gross
negligence, willful misconduct or knowing violations of law. The Agent shall
not be responsible to any Bank for (a) any recitals, statements,
representations or warranties contained in the Loan Instruments or in any
certificate or other document referred to or provided for in, or received by
any of the Banks under, the Loan Instruments, (b) the validity, effectiveness
or enforceability of the Loan Instruments or any such certificate or other
document, (c) the value or sufficiency of the Collateral or (d) any failure
by the Borrower or other parties to the Loan Instruments to perform any of
their obligations under the Loan Instruments. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact so long as the Agent was
not grossly
-67-
negligent in selecting or directing such agents or attorneys-in-fact. The
Agent shall be entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex, telecopier,
telegram or cable) believed by it to be genuine and correct and to have been
signed or given by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Agent. As to any matters not expressly provided for
by the Loan Instruments, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, under the Loan Instruments in
accordance with instructions signed by the Required Banks, and such
instructions of the Required Banks and any action taken or failure to act
pursuant thereto shall be binding on all of the Banks.
SECTION 7.3 DEFAULTS. The Agent shall not be deemed to have
knowledge of the occurrence of a Default (other than the non-payment to it
of principal of or interest on Loans or fees) unless the Agent has received
notice from a Bank or the Borrower specifying such Default and stating that
such notice is a "Notice of Default." In the event that the Agent has
knowledge of such a non-payment or receives such a notice of the occurrence
of a Default, the Agent shall give prompt notice thereof to the Banks. In
the event of any Default, the Agent shall (a) in the case of a Default that
constitutes an Event of Default, take any or all of the actions referred to
in SECTION 6.2 if so directed by the Required Banks and (b) in the case of
any Default, take such other action with respect to such Default as shall
be reasonably directed by the Required Banks. Unless and until the Agent
shall have received such directions, in the event of any Default, the Agent
may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default as it shall deem advisable
in the best interests of the Banks.
SECTION 7.4 RIGHTS AS A BANK. Each Person acting as the Agent that
is also a Bank shall, in its capacity as a Bank, have the same rights and
powers under the Loan Instruments as any other Bank and may exercise the
same as though it were not acting as the Agent, and the term "Bank" or
"Banks" shall include such Person in its individual capacity. Each Person
acting as the Agent (whether or not such Person is a Bank) and its
Affiliates may (without having to account therefor to any Bank) accept
deposits from, lend money to and generally engage in any kind of banking,
trust or other business with the Borrower and other parties to the Loan
Instruments and their Affiliates as if it were not acting as the Agent, and
such Person and its Affiliates may accept fees and other consideration from
the Borrower and
-68-
other parties to the Loan Instruments and their Affiliates for services in
connection with the Loan Instruments or otherwise without having to account
for the same to the Banks.
SECTION 7.5 INDEMNIFICATION. The Banks agree to indemnify the
Agent (to the extent not reimbursed by the Borrower and other parties to
the Loan Instruments under the Loan Instruments), ratably on the basis of
the respective principal amounts of the Loans outstanding made by the Banks
(or, if no Loans are at the time outstanding, ratably on the basis of their
respective Commitments), for any and all Liabilities, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Agent (including the costs and expenses that the
Borrower and other parties to the Loan Instruments are obligated to pay
under the Loan Instruments) in any way relating to or arising out of the
Loan Instruments or any other documents contemplated thereby or referred to
therein or the transactions contemplated thereby or the enforcement of any
of the terms thereof or of any such other documents, provided that no Bank
shall be liable for any of the foregoing to the extent they arise from
gross negligence, willful misconduct or knowing violations of law by the
Agent.
SECTION 7.6 NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank
agrees that it has made and will continue to make, independently and
without reliance on the Agent or any other Bank, and based on such
documents and information as it deems appropriate, its own credit analysis
of the Borrower, its own evaluation of the Collateral and its own decision
to enter into the Loan Instruments and to take or refrain from taking any
action in connection therewith. The Agent shall not be required to keep
itself informed as to the performance or observance by the Borrower or
other parties to the Loan Instruments of the Loan Instruments or any other
document referred to or provided for therein or to inspect the properties
or books of the Borrower or any Subsidiary thereof or the Collateral.
Except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Agent under the Loan
Instruments, the Agent shall have no obligation to provide any Bank with
any information concerning the business, status or condition of the
Borrower or any other party to the Loan Instruments or any Subsidiary
thereof, the Loan Instruments or the Collateral that may come into the
possession of the Agent or any of its Affiliates.
SECTION 7.7 EXECUTION AND AMENDMENT OF LOAN INSTRUMENTS ON BEHALF
OF THE BANKS. Each Bank hereby authorizes the Agent to
-69-
(a) execute and deliver, in the name of and on behalf of such Bank, (i) the
Security Agreements, the Guaranty Agreements, the Deeds of Trust and the
Pledge Agreement, (ii) all Uniform Commercial Code financing and continuation
statements and other documents the filing or recordation of which are, in the
determination of the Agent, necessary or appropriate to create, perfect or
maintain the existence or perfected status of the Security Interest, (iii)
subordination agreements, subordinating the lien of the Banks to the lien of
Banc One Leasing Corporation with respect to capital equipment leased by the
Borrower or Guarantors in an aggregate principal amount not to exceed
$3,000,000 and (iv) any other Loan Instrument requiring execution by or on
behalf of such Bank, (b) release Collateral from the Security Interest to the
extent that such Collateral has been disposed of in accordance with SECTION
5.2(g). The Agent shall consent to any amendment of any term, covenant,
agreement or condition of the Security Agreements, the Guaranty Agreements,
the Deeds of Trust and the Pledge Agreement, or to any waiver of any right
thereunder, if, but only if, the Agent is directed to do so in writing by the
Required Banks; PROVIDED, HOWEVER, that (i) the Agent shall not be required
to consent to any such amendment or waiver that affects its rights or duties
and (ii) the Agent shall not, unless directed to do so in writing by each
Bank, (A) consent to any assignment by any Bank of any of its rights or
obligations under any such agreement or (B) release any Collateral from the
Security Interest, except as specified in clause (b) above.
SECTION 7.8 RESIGNATION OF THE AGENT. The Agent may at any time
give notice of its resignation to the Banks and the Borrower. Upon receipt
of any such notice of resignation, the Required Banks may, with the consent
of the Borrower which shall not be unreasonably withheld, appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Banks and shall have accepted such appointment within 30 days
after the resigning Agent's giving of notice of resignation, then the
resigning Agent may, on behalf of the Banks and after consultation with the
Borrower, appoint a successor Agent. Upon the acceptance by any Person of
its appointment as a successor Agent, (a) such Person shall thereupon
succeed to and become vested with all the rights, powers, privileges,
duties and obligations of the resigning Agent and the resigning Agent shall
be discharged from its duties and obligations as Agent under the Loan
Instruments and (b) the resigning Agent shall promptly transfer all
Collateral within its possession or control to the possession or control of
the successor Agent and shall execute and deliver such notices,
instructions and assignments as may be necessary or desirable to transfer
the rights of the Agent with
-70-
respect to the Collateral to the successor Agent. After any resigning
Agent's resignation as Agent, the provisions of this ARTICLE VII shall
continue in effect for its benefit in respect of any actions taken or omitted
to be taken by it while it was acting as the Agent.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 AMENDMENTS; WAIVERS. Any term, covenant, agreement or
condition of the Loan Instruments may be amended, and any right under the
Loan Instruments may be waived, if, but only if, such amendment or waiver
is in writing and is signed by (a) in the case of an amendment or waiver
with respect to the Loan Instruments referred to in SECTION 7.7(a), the
Agent, (b) in the case of an amendment or waiver with respect to any other
Loan Instrument, the Required Banks and, if the amendment or waiver would
affect the rights and duties of the Agent, by the Agent, and(c) in the case
of an amendment with respect to any Loan Instrument, by the Borrower;
PROVIDED, HOWEVER, that no amendment or waiver shall be effective, unless
in writing and signed by each Bank affected thereby, to the extent it
(i) changes the amount of such Bank's Commitment, (ii) reduces the
principal of or the rate of interest on such Bank's Loans or Note, or any
fees payable to such Bank hereunder, (iii) postpones any date fixed for any
reduction of the Revolving Loan Commitments or any payment of principal of
or interest on such Bank's Loans, Note or any fees payable to such Bank
hereunder, (iv) except as provided in this Agreement or any other Loan
Instrument, releases any Collateral from the Security Interest, or
(v) amends SECTION 2.9, this SECTION 8.1, the definition of "Required
Banks" contained in SECTION 1.1 or any other provision of this Agreement
requiring the consent or other action of all of the Banks. Unless
otherwise specified in such waiver, a waiver of any right under the Loan
Instruments shall be effective only in the specific instance and for the
specific purpose for which given. No election not to exercise, failure to
exercise or delay in exercising any right, nor any course of dealing or
performance, shall operate as a waiver of any right of the Agent or any
Bank under the Loan Instruments or Applicable Law, nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right of the Agent or any Bank under
the Loan Instruments or Applicable Law.
-71-
SECTION 8.2 NOTICES, ETC. All notices and other communications
provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, telexed, cabled or delivered,
if to the Borrower, at its address at:
Analytical Surveys, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Chairman of the Board, President and
Chief Executive Officer
Telecopy: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxx and Xxxxxx L.L.C.
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
and if to the Agent, at its address at:
Bank One, Colorado, N.A.
X.X. Xxx 0000
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. XxXxxxxx
Vice President
Telecopy: (000)000-0000
with a copy to:
Xxx X. Xxxxxx XX, Esq.
Xxxxx, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxxxx Xxxxxx 00xx Xxxxx
Xxxxxx, XX 00000
Telecopy: (000)000-0000
or, as to each party, at such other address as shall be designated by such
party in a written notice to the other Party. All such notices and
communications shall, when telecopied, telegraphed, telexed or cabled, be
effective when telecopied, delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company, respectively, or when
-72-
personally delivered. Any notice, if mailed and properly addressed with
first class postage prepaid, return receipt requested, shall be deemed given
three Business Days after deposit in the U.S. mail. Except that notices to
the Banks pursuant to the provisions of ARTICLE II shall not be effective
until received by the Bank.
SECTION 8.3 REMEDIES. The remedies provided in the Loan
Instruments are cumulative and not exclusive of any remedies provided by
law.
SECTION 8.4 COSTS, EXPENSES AND TAXES. The Borrower agrees to pay
on demand all out-of-pocket costs and expenses in connection with the
preparation, execution, delivery, administration, modification and
amendment of the Loan Instruments and the other documents to be delivered
under the Loan Instruments, including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel for the Agent with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities under the Loan Instruments. The Borrower further agrees
to pay on demand all costs and expenses, if any (including reasonable legal
counsel, consultants and appraisers fees and expenses), in connection with
the enforcement (whether through negotiations, legal proceedings or
otherwise) of the Loan Instruments and the other documents to be delivered
under the Loan Instruments, including, without limitation, counsel,
consultants and appraisers fees and expenses in connection with the
enforcement of rights under this SECTION 8.4, expressly including all such
costs and expenses incurred by the Agent and the Banks in connection with
or during the pendency of any bankruptcy or insolvency proceedings
involving the Borrower or any Guarantor. In addition, the Borrower shall
pay any and all recording fees and stamp and other taxes payable or
determined to be payable in connection with the execution, delivery, filing
and recording of the Loan Instruments and the other documents to be
delivered under the Loan Instruments, and agrees to save the Agent and the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such taxes.
SECTION 8.5 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default the Banks are hereby authorized at any
time and from time to time, 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 and other indebtedness at any time
owing by the Banks to or for the credit or the account of the Borrower
against any and all of the obligations of the Borrower now or
-73-
hereafter existing under any Loan Instrument, whether or not the Banks shall
have made any demand under such Loan Instrument and although such obligations
may be unmatured. The Banks agree promptly to notify the Borrower after any
such set-off and application, PROVIDED that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
the Banks under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which the Banks may
have.
SECTION 8.6 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Banks and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights hereunder or any interest herein without the prior written
consent of the Banks. Any assignment of rights or interests herein by the
Borrower without such prior written consent of the Bank will be void and
ineffective. It is expressly agreed that the Banks may transfer interests
herein to other lending institutions by way of assignment or participation
agreement as an to the extent permitted by SECTION 8.14.
SECTION 8.7 INDEMNITY. The Borrower agrees to indemnify the Agent and
the Banks, and their respective directors, officers, employees and agents
from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages or expenses incurred by any of them arising out
of or by reason of any investigation or litigation or other proceedings
(including any threatened investigation or litigation or other proceedings)
relating to the extensions of credit hereunder or any actual or proposed use
by the Borrower of the proceeds of any extensions of credit hereunder or the
past, present or future business activities of the Borrower including,
without limitation, the fees and disbursements of counsel incurred in
connection with any such investigation or litigation or other proceedings
(but excluding any such losses, liabilities, claims, damages or expenses that
are determined pursuant to a final, non-appealable order of a court of
competent jurisdiction to have resulted solely from the gross negligence or
willful misconduct of the Person to be indemnified).
SECTION 8.8 CONSENT TO EXCLUSIVE JURISDICTION. ANY LEGAL ACTION OR
OTHER PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN INSTRUMENT
SHALL BE BROUGHT EXCLUSIVELY IN THE COURTS OF COMPETENT JURISDICTION OF THE
STATE OF COLORADO OR OF THE UNITED STATES LOCATED IN THE CITY AND COUNTY OF
DENVER, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER
AND THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
-74-
PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER
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 OTHER LOAN INSTRUMENT. THE
BORROWER AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT
OR OTHER PROCESS WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY COLORADO
LAW.
SECTION 8.9 WAIVER OF JURY TRIAL AND CERTAIN DAMAGES. EACH OF THE
BORROWER AND THE BANKS HEREBY VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND
UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG
THE BORROWER AND THE BANKS ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT OR ANY LOAN INSTRUMENT. THE BORROWER HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE RIGHT TO INTERPOSE SET OFF OR COUNTERCLAIM
OR CROSS-CLAIM IN CONNECTION WITH ANY SUCH LITIGATION, IRRESPECTIVE OF THE
NATURE OF SET OFF, COUNTERCLAIM OR CROSS-CLAIM EXCEPT TO THE EXTENT THAT THE
FAILURE SO TO ASSERT A SET OFF, COUNTERCLAIM OR CROSS-CLAIM WOULD PERMANENTLY
PRECLUDE THE PROSECUTION OF OR RECOVERY UPON THE SAME. NOTWITHSTANDING
ANYTHING CONTAINED IN THIS AGREEMENT OR ANY OTHER LOAN INSTRUMENT TO THE
CONTRARY, NO CLAIM MAY BE MADE BY THE BORROWER AGAINST THE BANKS FOR ANY LOST
PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY
BREACH OR WRONGFUL CONDUCT (OTHER THAN WILLFUL MISCONDUCT CONSTITUTING ACTUAL
FRAUD) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY RELATED TO THE
TRANSACTIONS CONTEMPLATED HEREUNDER OR UNDER ANY OTHER LOAN INSTRUMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH; AND THE
BORROWER HEREBY WAIVES, RELEASES AND AGREES NOT TO XXX UPON ANY SUCH CLAIM
FOR ANY SUCH DAMAGES. THE BORROWER AGREES THAT THIS SECTION 8.9 IS A
SPECIFIC AND MATERIAL ASPECT OF THIS AGREEMENT AND ACKNOWLEDGES THAT THE
BANKS WOULD NOT EXTEND TO THE BORROWER THE CREDIT PROVIDED FOR HEREIN IF THIS
SECTION 8.9 WERE NOT PART OF THIS AGREEMENT.
SECTION 8.10 ARBITRATION. EACH OF THE BORROWER AND THE BANKS AGREE THAT
UPON THE WRITTEN DEMAND OF A PARTY HERETO, WHETHER MADE BEFORE OR AFTER THE
INSTITUTION OF ANY LEGAL PROCEEDINGS, BUT PRIOR TO THE RENDERING OF ANY
JUDGEMENT IN THAT PROCEEDING, ALL DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN
THEM, WHETHER INDIVIDUAL, JOINT, OR CLASS IN NATURE, ARISING UNDER THIS
AGREEMENT OR ANY OTHER LOAN INSTRUMENT OR OTHERWISE, INCLUDING
-75-
WITHOUT LIMITATION CONTRACT DISPUTES AND TORT CLAIMS, SHALL BE RESOLVED BY
BINDING ARBITRATION PURSUANT TO THE COMMERCIAL RULES OF THE AMERICAN
ARBITRATION ASSOCIATION. ANY ARBITRATION PROCEEDING HELD PURSUANT TO THIS
ARBITRATION PROVISION SHALL BE CONDUCTED IN DENVER, COLORADO, OR AT ANY OTHER
PLACE SELECTED BY MUTUAL AGREEMENT OF THE PARTIES. NO ACT TO TAKE OR DISPOSE
OF ANY COLLATERAL SHALL CONSTITUTE A WAIVER OF THIS ARBITRATION AGREEMENT OR
BE PROHIBITED BY THIS ARBITRATION AGREEMENT. THIS ARBITRATION PROVISION
SHALL NOT LIMIT THE RIGHT OF EITHER PARTY DURING ANY DISPUTE, CLAIM OR
CONTROVERSY TO SEEK, USE AND EMPLOY ANCILLARY, OR PRELIMINARY RIGHTS AND/OR
REMEDIES, JUDICIAL OR OTHERWISE, FOR THE PURPOSES OF REALIZING UPON,
PRESERVING, PROTECTING, FORECLOSING UPON OR PROCEEDING UNDER ANY FORCIBLE
ENTRY AND DETAINER FOR POSSESSION OF, ANY REAL OR PERSONAL PROPERTY, AND ANY
SUCH ACTION SHALL NOT BE DEEMED AN ELECTION OF REMEDIES. SUCH REMEDIES
INCLUDE, WITHOUT LIMITATION, OBTAINING INJUNCTIVE RELIEF OR A TEMPORARY
RESTRAINING ORDER, INVOKING A POWER OF SALE UNDER ANY DEED OF TRUST OR
MORTGAGE, OBTAINING A WRIT OF ATTACHMENT OR IMPOSITION OF A RECEIVERSHIP, OR
EXERCISING ANY RIGHTS RELATING TO PERSONAL PROPERTY, INCLUDING TAKING OR
DISPOSING OF SUCH PROPERTY WITH OR WITHOUT JUDICIAL PROCESS PURSUANT TO
ARTICLE 9 OF THE UNIFORM COMMERCIAL CODE OR WHEN APPLICABLE, A JUDGEMENT BY
CONFESSION OF JUDGEMENT. ANY DISPUTES, CLAIMS OR CONTROVERSIES CONCERNING
THE LAWFULNESS OR REASONABLENESS OF ANY ACT, OR EXERCISE OF ANY RIGHT OR
REMEDY CONCERNING ANY COLLATERAL, INCLUDING ANY CLAIM TO RESCIND, REFORM, OR
OTHERWISE MODIFY ANY AGREEMENT RELATING TO THE COLLATERAL, SHALL ALSO BE
ARBITRATED; PROVIDED, HOWEVER, THAT NO ARBITRATOR SHALL HAVE THE RIGHT OR THE
POWER TO ENJOIN OR RESTRAIN ANY ACT OF EITHER PARTY. JUDGEMENT UPON ANY
AWARD RENDERED BY ANY ARBITRATOR MAY BE ENTERED IN ANY COURT HAVING
JURISDICTION. NOTHING IN THIS ARBITRATION PROVISION SHALL PRECLUDE ANY PARTY
HERETO FROM SEEKING EQUITABLE RELIEF FROM A COURT OF COMPETENT JURISDICTION.
THE STATUTE OF LIMITATIONS, ESTOPPEL, WAIVER, LACHES AND SIMILAR DOCTRINES
WHICH WOULD OTHERWISE BE APPLICABLE IN AN ACTION BROUGHT BY A PARTY SHALL BE
APPLICABLE IN ANY ARBITRATION PROCEEDING, AND THE COMMENCEMENT OF AN
ARBITRATION PROCEEDING SHALL BE DEEMED THE COMMENCEMENT OF ANY ACTION FOR
THESE PURPOSES. THE FEDERAL ARBITRATION ACT (TITLE 9 OF THE UNITED STATES
CODE) SHALL APPLY TO THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT OF
THIS ARBITRATION PROVISION.
SECTION 8.11 GOVERNING LAW. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the State of
Colorado, without giving effect to any conflict
-76-
of law or choice of law provision or rule (whether of the State of Colorado
or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of Colorado.
SECTION 8.12 INCONSISTENT PROVISIONS. In the event of any
inconsistency or conflict between the terms of this Agreement and the terms
of any other Loan Instrument, the provisions of this Agreement will be
controlling.
SECTION 8.13 SHARING OF RECOVERIES. Each Bank agrees that, if, for any
reason, including as a result of (a) the exercise of any right of
counterclaim, set-off, banker's lien or similar right, (b) its claim in any
applicable bankruptcy, insolvency or other similar law being deemed secured
by a Debt owed by it to the Borrower and any Guarantor, including a claim
deemed secured under Section 506 of the Bankruptcy Code, or (c) the
allocation of payments by the Agent or the Borrower or any Guarantor in a
manner contrary to the provisions of SECTION 2.9, such Bank shall receive
payment of a proportion of the aggregate amount due and payable to it
hereunder as principal of or interest on the Loans or fees that is greater
than the proportion received by any other Bank in respect of the aggregate of
such amounts due and payable to such other Bank hereunder, then the Bank
receiving such proportionately greater payment shall purchase participations
(which it shall be deemed to have done simultaneously upon the receipt of
such payment) in the rights of the other Banks hereunder so that all such
recoveries with respect to such amounts due and payable hereunder (net of
costs of collection) shall be pro rata; PROVIDED that if all or part of such
proportionately greater payment received by the purchasing Bank is thereafter
recovered by or on behalf of the Borrower or any Guarantor from such Bank,
such purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such Bank to the extent of such recovery,
but without interest (unless the purchasing Bank is required to pay interest
on the amount recovered to the Person recovering such amount, in which case
the selling Bank shall be required to pay interest at a like rate). The
Borrower expressly consents to the foregoing arrangements and agrees that any
holder of a participation in any rights hereunder so purchased or acquired
pursuant to this SECTION 8.13 shall, with respect to such participation, be
entitled to all of the rights of a Bank under SECTIONS 2.9, 7.4, 7.5 AND 7.7
(subject to any condition imposed on a Bank hereunder with respect thereto)
and may exercise any and all rights of set-off with respect to such
participation as fully as though the Borrower were directly indebted to the
holder
-77-
of such participation for Loans in the amount of such participation.
SECTION 8.14 ASSIGNMENTS AND PARTICIPATIONS.
(a) ASSIGNMENTS.
(i) The Borrower may not assign any of its rights or
obligations under the Loan Instruments without the prior
written consent of (A) in the case of the Loan Instruments
referred to in SECTION 7.7(a), the Agent and (B) in the case
of any of the other Loan Instruments, each Bank, and no
assignment of any such obligation shall release such Borrower
therefrom unless the Agent and each Bank, as applicable,
shall have consented to such release in a writing
specifically referring to the obligation from which such
Borrower is to be released.
(ii) Each Bank may from time to time assign any or all
of its rights and obligations under the Loan Instruments to
one or more Persons; PROVIDED that, except in the case of the
grant of a security interest to a Federal Reserve Bank (which
may be made without condition or restriction), no such
assignment shall be effective unless (A) the assignment is
consented to by the Borrower (unless an Event of Default
exists) and the Agent, such consents not to be unreasonably
withheld, (B) in the case of a partial assignment, the
assignment shall involve the assignment of not less than
$5,000,000 of the assignor Bank's Commitment and there shall
at no time be more than three Banks and the assignment is
consented to by the Borrower, such consent not to be
unreasonably withheld, (C) a Notice of Assignment in the form
of EXHIBIT I with respect to the assignment, duly executed by
the assignor and the assignee, shall have been given to the
Borrower and the Agent, (D) except in the case of an
assignment by the Bank that is the Agent, the Agent shall
have been paid an assignment fee of $3,500, (E) unless
otherwise agreed to by each of the Banks, such assignment is
made on or after the earlier of the date that is 90 days
following the Effective Date and the date on which the
general syndication of the credit facility provided for
herein is completed, as specified by the Agent and (F) in
-78-
the case of an assignment of any Revolving Loan, Revolving
Loan Commitment, Term Loan, Acquisition Loan or Acquisition
Loan Commitment to any assignee, the assignment shall include
a PRO RATA portion of all of the Revolving Loans, Revolving
Loan Commitments, Term Loan, Acquisition Loans, and
Acquisition Loan Commitments of the assignor Bank. Upon any
effective assignment, the assignor shall be released from the
obligations so assigned and, in the case of an assignment of
all of its Loans and Commitment, shall cease to be a Bank.
In the event of any effective assignment by a Bank, the
Borrower shall issue new Notes to the assignee Bank (against,
other than in the case of a partial assignment, receipt of
the existing Note of the assignor Bank). Nothing in this
SECTION 8.14 shall limit the right of any Bank to assign its
interest in the Loans and its Notes to a Federal Reserve Bank
as collateral security under Regulation A of the Board of
Governors of the Federal Reserve System, but no such
assignment shall release such Bank from it obligations
hereunder.
(b) PARTICIPATIONS. Each Bank may from time to time sell or
otherwise grant participations in any or all of its rights and
obligations under the Borrower Loan Instruments. In the event of
any such grant by a Bank of a participation, such Bank's
obligations under the Loan Instruments to the other parties
thereto shall remain unchanged, such Bank shall remain solely
responsible for the performance thereof, and the Borrower, the
Agent and the other Banks may continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations thereunder. A Bank may not grant to any holder of a
participation the right to require such Bank to take or omit to
take any action under the Loan Instruments, except that a Bank
may grant to any such holder the right to require such holder's
consent to (i) reduce the principal of or the rate of interest on
such Bank's Loans, Note or any fees payable to such Bank
hereunder, (ii) postpone any date fixed for any payment of
principal of or interest on such Bank's Loans, Note or any fees
payable to such Bank hereunder, (iii) permit any Loan Party to
assign any of its obligations under the Loan Instruments to any
other Person or (iv) release any Collateral from the Security
Interest except as required or
-79-
contemplated by the Loan Instruments. Each holder of a
participation in any rights under the Borrower Loan Instruments, if
and to the extent the applicable participation agreement so
provides, shall, with respect to such participation, be entitled to
all of the rights of a Bank as fully as though it were a Bank under
SECTIONS 2.9, 2.11, 8.1 AND 8.7 (subject to any conditions imposed
on a Bank hereunder with respect thereto) and may exercise any and
all rights of set-off with respect to such participation as fully
as though the Borrower were directly indebted to the holder of such
participation for Loans in the amount of such participation;
PROVIDED, HOWEVER, that no holder of a participation shall be
entitled to any amounts that would otherwise be payable to it with
respect to its participation under SECTION 2.9 OR 2.11 unless (x)
such amounts are payable in respect of Regulatory Changes that are
enacted, adopted or issued after the date the applicable
participation agreement was executed or (y) such amounts would have
been payable to the Bank that granted such participation if such
participation had not been granted.
SECTION 8.15 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the Borrower contained in this Agreement or
of any of its subsidiaries contained in any other Loan Instrument shall
survive delivery of the Notes and the making of the Loans.
SECTION 8.16 TERMINATION OF EXISTING LOAN AGREEMENT. Upon payment in
full of all of Borrower's and MSE Corporation's obligations under the
Existing Loan Agreement, the Agent will deliver to the Borrower the
promissory notes listed in the definition of Existing Loan Agreement in
SECTION 1.1.
SECTION 8.17 CONFIDENTIALITY. Each Bank agrees to exercise normal and
reasonable precautions and to exercise due care to keep confidential all
information of a confidential nature received by it from the Borrower or any
of its Affiliates pursuant to any Loan Instrument; PROVIDED, HOWEVER, that
such information may be disclosed: (i) to directors, officers, employees,
agents, representatives or outside counsel of such Bank or such Bank's
Affiliates, (ii) to any auditor, examiner or Governmental Authorities, (iii)
pursuant to any subpoena or other court order or otherwise as may be required
by Applicable Law, (iv) to the extent reasonably
-80-
required in connection with any litigation or proceeding to which the Agent,
any Bank or their respective Affiliates may be party, (v) to the extent
reasonably required in connection with the exercise of any remedy hereunder
or under any other Loan Instrument, (vi) to any assignee of or participant
in, or prospective assignee of or participant in, any Bank's Loans or its
Commitment, or any part thereof, who, in each case, agrees in writing to be
bound by the terms of this provision, and PROVIDED, FURTHER, that no
confidentiality obligation shall attach to any information which (a) is or
becomes publicly known, through no wrongful act on the part of any person who
shall have received such information, (b) is rightfully received by such
person from a third party, (c) is independently developed by such person or
(d) is explicitly approved for release by the Borrower or any of its
Affiliates.
SECTION 8.18 SEVERABILITY. Any provision in any Loan Instrument that is
held to be inoperative, unenforceable or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability or validity of that provision in any other jurisdiction, and
to this end the provisions of all Loan Instruments are declared to be
severable.
SECTION 8.19 ENTIRE AGREEMENT, COMMITMENT LETTER SUPERSEDED. This
Agreement, together with the other Loan Instruments, embodies the entire
agreement and understanding among the Borrower, 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. The Commitment Letter between the Borrower and the Agent dated May
4, 1998 is superseded by this Agreement and the Loan Instruments. Nothing
herein shall in any manner effect the validity of the Fee Letter executed in
connection with the Commitment Letter.
SECTION 8.20 COUNTERPARTS. This Agreement and any amendment hereof may
be executed in several counterparts and by each party on a separate
counterpart, each of which when executed and delivered shall be an original,
and all of which together shall constitute one instrument. In proving the
Agreement it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom enforcement is sought.
-81-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective duly authorized officers, as of the date
first above written.
ANALYTICAL SURVEYS, INC.
By:
-------------------------------------
Xxxxx X. Xxxxxx
Senior Vice President of
Finance, Treasurer and Secretary
BANK ONE, COLORADO, N.A.
as Agent and as a Bank
By:
-------------------------------------
Xxxxx X. XxXxxxxx
Vice President
-82-
