Exhibit 10.42
CREDIT AGREEMENT
DATED AS OF JUNE 29, 1999
among
VISTA INFORMATION SOLUTIONS, INC.,
a Delaware corporation,
as Borrower
and
VISTA ENVIRONMENTAL INFORMATION, INC.,
a Delaware corporation,
E/RISK INFORMATION SERVICES,
a California corporation,
GEOSURE, INC.,
a Delaware corporation,
GEOSURE, L.P.,
a New York liability partnership,
NRC INSURANCE SERVICES, INC.,
a North Carolina corporation,
NRC ACQUISITION, L.L.C. D/B/A NATIONAL RESEARCH CENTER/ERIIS LLC,
a North Carolina limited liability company,
ENSITE CORPORATION OF DENVER D/B/A ENTRAC,
a Colorado corporation
ECOSEARCH ACQUISITION, INC.,
a Delaware corporation
and
ECOSEARCH ENVIRONMENTAL RESOURCES, INC.,
an Indiana corporation,
as Guarantors
and
IBJ WHITEHALL BANK & TRUST COMPANY,
as Lender
CREDIT AGREEMENT
TABLE OF CONTENTS
SECTION 1. DEFINITIONS 2
1.1 Certain Defined Terms 2
1.2 Accounting Terms: Utilization of GAAP for Purposes of Calculations
Under Agreement 28
1.3 Other Definitional Provisions 29
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS 29
2.1 Commitments; Making of Loans: the Register; Notes 29
2.2 Interest on the Loans 32
2.3 Fees 37
2.4 Repayment and Prepayments; General Provisions Regarding Payments 38
2.5 Use of Proceeds 45
2.6 Special Provisions Governing Eurodollar Rate Loans 46
2.7 Increased Costs; Taxes, Capital Adequacy 48
SECTION 3. CONDITIONS TO LOANS 50
3.1 Conditions to Term Loan and Initial Revolving Loans 50
3.2 Conditions to All Loans 54
SECTION 4. REPRESENTATIONS AND WARRANTIES 56
4.1 Organization, Powers, Qualification, Good Standing, Business,
Subsidiaries and Collateral Documents 56
4.2 Authorization of Borrowing, etc 57
4.3 Financial Condition; Projections 58
4.4 No Material Adverse Change; No Restricted Junior Payments 59
4.5 Title to Properties: Liens 59
4.6 Litigation: Adverse Facts 59
4.7 Payment of Taxes 59
4.8 Real Property 60
4.9 Performance of Agreements; Materially Adverse Agreements 60
4.10 Governmental Regulation 60
4.11 Securities Activities 60
4.12 Employee Benefit Plans; No Non-exempt Prohibited Transaction 61
4.13 Certain Fees 61
4.14 Environmental Protection 61
4.15 Employee Matters 62
4.16 Solvency 63
4.17 Disclosure 63
4.18 No Joint Ventures or Partnerships. 63
4.19 No Assumed Names or Trade Names 63
4.20 No Actual or Pending Material Modification of Business 63
4.21 Intellectual Property 63
4.22 Indebtedness 64
4.23 Investments 64
4.24 Compliance with Laws 64
4.25 Lender's Security Interest 65
4.26 Employment, Product Recalls and Other Regulations 65
4.27 Insurance 65
4.28 Bank Accounts 65
4.29 Year 2000 66
4.30 Capitalization 66
4.31 SEC Filings 66
4.32 Management Structure 66
SECTION 5. AFFIRMATIVE COVENANTS 67
5.1 Financial Statements and Other Reports 67
5.2 Corporate Existence, etc 72
5.3 Payment of Taxes and Claims; Tax Consolidation 72
5.4 Maintenance of Properties; Insurance 73
5.5 Inspection; Lender Meeting; Access to Accountants 74
5.6 Compliance with Laws, etc 74
5.7 Environmental Disclosure and Inspection 75
5.8 Borrower's Remedial Action Regarding Hazardous Materials 76
5.9 Interest Rate Protection 76
5.10 Further Assurances; New Subsidiaries 76
5.11 After-Acquired Real Property; Pledge of Additional Collateral 77
5.12 Year 2000 Compliance 78
5.13 Determination of Borrowing Base 78
5.14 Landlords'Waivers 80
5.15 Opinion of New York Counsel 80
SECTION 6. NEGATIVE COVENANTS 80
6.1 Indebtedness 80
6.2 Liens and Related Matters 81
6.3 Investments; Joint Ventures 82
6.4 Contingent Obligations 82
6.5 Restricted Junior Payments 82
6.6 Financial Covenants 83
6.7 Restriction on Fundamental Changes; Asset Sales and Acquisitions;
New Subsidiaries 85
6.8 Transactions with Shareholders and Affiliates; Management Fees 86
6.9 Disposal of Subsidiary Stock 86
6.10 Conduct of Business 86
6.11 Changes in Ownership 86
6.12. Defaults Under Other Agreements 86
6.13 Fiscal Year 87
6.14. Brokers or Finders Fees 87
6.15. Compensation 87
6.16. Maximum Amount 87
6.17. Leasing Transactions 87
6.18. Sales and Lease-Backs 87
6.19 Inconsistent Agreements 87
SECTION 7. EVENTS OF DEFAULT 87
7.1 Failure to Make Payments When Due 88
7.2 Default in Other Agreements 88
7.3 Breach of Certain Covenants 88
7.4 Breach of Warranty 88
7.5 Other Defaults Under Loan Documents 88
7.6 Involuntary Bankruptcy: Appointment of Receiver, etc 88
7.7 Voluntary Bankruptcy; Appointment of Receiver, etc 89
7.8 Judgments and Attachments 89
7.9 Dissolution 89
7.10 Employee Benefit Plans 89
7.11 Invalidity of Loan Documents 90
7.12 Failure of Security 90
7.13 Material Adverse Change 90
7.14 Failure to Pledge 90
7.15 Damage, Strike, Casualty 90
7.16 Licenses and Permits 90
SECTION 8. GUARANTY 91
8.1. The Guaranty 91
8.2 Waiver of Notice 92
8.3 Lender's Rights 92
8.4 Guaranty Absolute 93
8.5 Independent Obligation 93
8.6 Reliance 93
8.7 Guaranty Continuing 93
8.8 Binding Nature of Guaranty 93
8.9 Judgments Binding 93
8.10 Statute of Limitations 94
8.11 Subordination 94
8.12 No Subrogation, etc 94
8.13 Contribution 94
8.14 Guarantee Secured 95
8.15 Effectiveness; Reinstatement 95
8.16 Merger 95
8.17. Additional Guarantors 96
8.18. Integration 96
SECTION 9. MISCELLANEOUS 96
9.1 Assignments and Participations in Loans 96
9.2 Expenses 98
9.3 Indemnity; Release 98
9.4 Set-Off 100
9.5 Amendments and Waivers. 100
9.6 Independence of Covenants 101
9.7 Notices 101
9.8. No Fiduciary Relationship 102
9.9 Complete Agreement 102
9.10 Survival of Representations, Warranties and Agreements 103
9.11 Failure or Indulgence No Waiver: Remedies Cumulative 103
9.12 Marshalling; Payments Set Aside 103
9.13 Severability 103
9.14 Headings 103
9.15 Applicable Law 104
9.16 Successors and Assigns 104
9.17 Consent to Jurisdiction and Service of Process 104
9.18 Waiver of Jury Trial; Consequential Damages 104
9.19 Counterparts; Effectiveness 105
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF TERM LOAN NOTE
IV FORM OF REVOLVING NOTE
V FORM OF ACQUISITION NOTE
VI FORM OF COMPLIANCE CERTIFICATE
VII FORM OF OPINION OF COUNSEL TO LOAN PARTIES
VIII FORM OF SECURITY AGREEMENT
IX FORM OF BORROWING BASE CERTIFICATE
X FORM OF WARRANT
XI FORM OF SUPPLEMENT
SCHEDULES
4.1 SUBSIDIARIES OF BORROWER
4.8 REAL PROPERTY
4.14 ENVIRONMENTAL MATTERS
4.15 EMPLOYEE MATTERS
4.18 JOINT VENTURES AND PARTNERSHIPS
4.19 ASSUMED NAMES AND TRADE NAMES
4.21 PENDING REGISTRATION AND APPLICATIONS
4.27 INSURANCE
4.28 BANK ACCOUNTS
4.30 CAPITALIZATION
4.32 MANAGEMENT STRUCTURE
6.1 CERTAIN EXISTING INDEBTEDNESS
6.2 CERTAIN EXISTING LIENS
6.3 CERTAIN EXISTING INVESTMENTS
VISTA INFORMATION SOLUTIONS, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of June 29, 1999 and entered into by
and among VISTA INFORMATION SOLUTIONS, INC., a Delaware corporation
("Borrower"), VISTA ENVIRONMENTAL INFORMATION, INC., a Delaware corporation
("VISTA Environmental"), E/RISK INFORMATION SERVICES, a California corporation
("E/Risk" ), GEOSURE, L.P., a New York limited partnership ("GeoSure"), GEOSURE,
INC., a Delaware corporation ("GeoSure, Inc."), NRC ACQUISITION, L.L.C., a North
Carolina limited liability company d/b/a National Research Center/ ERIIS LLC
("NRC"), NRC INSURANCE SERVICES, INC., a North Carolina corporation ("NRCIS"),
ENSITE CORPORATION OF DENVER, a Colorado corporation D/B/A ENTRAC ("ENSITE"),
ECOSEARCH ENVIRONMENTAL RESOURCES, INC., an Indiana corporation ("EcoSearch"),
ECOSEARCH ACQUISITION, INC., a Delaware corporation ("EcoSearch Acquisition"),
and IBJ WHITEHALL BANK & TRUST COMPANY, a New York banking corporation
("Lender").
RECITALS
WHEREAS (1) Borrower and Guarantors desire that Lender extend certain
credit facilities (a) to refinance existing debt of Borrower, (b) to fund a
portion of the purchase price of certain identified and permitted acquisitions
by Borrower, and (c) to provide for working capital and other general corporate
purposes of Borrower;
WHEREAS (2) VISTA Environmental, E/Risk, GeoSure, GeoSure, Inc., NRC,
NRCIS, Ensite, EcoSearch Acquisition and EcoSearch are willing , jointly and
severally, to guaranty all of the obligations of Borrower with respect to the
credit facilities provided by Lender;
WHEREAS (3) each of Borrower,VISTA Environmental, E/Risk, GeoSure,
GeoSure, Inc., NRC, NRCIS, Ensite, EcoSearch Acquisition and EcoSearch is
willing to grant to Lender a security interest in all of its real and personal
property in order to secure the credit facilities; and
WHEREAS (4) Borrower is willing to pledge to Lender all of the capital
stock of the Guarantors in order to secure the obligations of Borrower under
this Agreement, the Notes and the other Loan Documents; and
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Borrower and Lender agree as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACCOUNTS RECEIVABLE" means, as at any date of determination, the
unpaid portion of the obligations (which, if an invoice has been issued, shall
be as stated on the respective invoice issued to a customer) with respect to
inventory sold and shipped or services performed in the ordinary course of
business of Borrower and its Subsidiaries.
"ACQUISITION means any transaction, or any series of related
transactions, consummated on, prior to, or after the date of this Agreement, in
which the Borrower or any of its Subsidiaries (in one transaction or as the most
recent transaction in a series of transactions) (i) acquires any business or all
or substantially all of the assets of any Person or any division or business
unit thereof, whether through purchase of assets, merger or otherwise, (ii)
directly or indirectly acquires control of at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors or (iii) directly or indirectly acquires control of a
majority ownership interest in any partnership or joint venture.
"ACQUISITION DOCUMENTS" means all agreements, documents and
instruments executed and/or delivered in connection with any Permitted
Acquisition.
"ACQUISITION LOAN COMMITMENT" means the commitment of Lender to
make Acquisition Loans to Borrower pursuant to subsection 2.1(a)(iii).
"ACQUISITION LOAN COMMITMENT TERMINATION DATE" means June 30,
2000.
"ACQUISITION LOAN MATURITY DATE" means June 30, 2005.
"ACQUISITION LOANS" means the Loans made by Borrower to Lender
pursuant to subsection 2.1(a)(iii).
"ACQUISITION NOTES" means (i) any promissory note or notes issued
pursuant to subsection 2.1(e) to evidence the Acquisition Loans of Lender, and
(ii) any promissory note or notes of Borrower issued by Borrower pursuant to the
last sentence of subsection 9.1(a) in connection with assignments of the
Acquisition Loan Commitment and Acquisition Loans, in each case substantially in
the form of EXHIBIT V annexed hereto, as it or they may be amended, restated,
replaced, supplemented or otherwise modified from time to time; and "ACQUISITION
NOTE" means one of the Acquisition Notes.
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"ADJUSTMENT DATE" means each date which is the first day of the
month immediately following the month in which Borrower's quarterly unaudited
financial statements and related Compliance Certificate are required to be
delivered by Borrower to Lender pursuant to subsection 5.1(ii) and subsection
5.1(vii) hereof, respectively.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date with respect to an Interest Period for a Eurodollar Rate
Loan, the rate per annum obtained by DIVIDING (i) the rate appearing on Page
3750 of the Telerate Service (or on any successor or substitute page of such
Service, or any successor to or substitute for such Service, providing rate
quotations comparable to those currently provided on such page of such Service,
as determined by Lender from time to time for purposes of providing quotations
of interest rates applicable to U.S. dollar deposits in the London Interbank
market) at approximately 11:00 a.m., London time, on such Interest Rate
Determination Date, as the rate for U.S. dollar deposits with a maturity
comparable to such Interest Period BY (ii) a percentage equal to 100% MINUS the
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves) applicable on
such Interest Rate Determination Date to any member bank of the Federal Reserve
System in New York City in respect of "Eurocurrency liabilities" as defined in
Regulation D (or any successor category of liabilities under Regulation D). In
the event that the rate referred to in clause (i) above is not available at such
time for any reason, then such rate referred to in clause (i) with respect to
such Eurodollar Rate Loan for such Interest Period shall be the arithmetic
average (rounded upward to the nearest 1/16 of one percent) of the offered
quotation, if any, to first class banks in the London interbank Eurodollar
market by Lender for U.S. dollar deposits of amounts in same day funds
comparable to the principal amount of the Eurodollar Rate Loan of Lender for
which the Adjusted Eurodollar Rate is then being determined with maturities
comparable to such Interest Period as of approximately 11:00 a.m. (London time)
on such Interest Rate Determination Date.
"AFFECTED LOANS" has the meaning assigned to that term in
subsection 2.6(c).
"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise.
"AGREEMENT" means this Credit Agreement dated as of June 29, 1999,
as it may be amended, restated, supplemented or otherwise modified from time to
time.
"APPLICABLE MARGIN" has the meaning assigned to that term in
Section 2.2(b)(ii) hereof.
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"ASSET SALE" means the sale (including any sale-leaseback
transaction) by Borrower or any of its Subsidiaries to any Person other than
Borrower or any of its Subsidiaries of (i) any of the stock of any Subsidiaries
of Borrower, (ii) substantially all of the assets of any division or line of
business of Borrower or any of its Subsidiaries, or (iii) any other assets
(whether tangible or intangible) of Borrower or any of its Subsidiaries other
than sales of Inventory in the ordinary course of business.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASE RATE" means, at any time, the higher of (x) the Prime Rate
or (y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined
by reference to the Base Rate as provided in subsection 2.2(a).
"BORROWER" has the meaning ascribed to that term in the
introductory paragraph to this Agreement.
"BORROWER SEC REPORTS" has the meaning ascribed to that term in
subsection 4.31.
"BORROWING BASE" means, as of any date of determination, 85% of
Eligible Accounts Receivable in which lender holds a fully perfected first
priority security interest, as calculated pursuant to the most recent Borrowing
Base Certificate.
"BORROWING BASE CERTIFICATE" means a certificate substantially in
the form annexed hereto as EXHIBIT IX delivered by Borrower pursuant to
subsection 5.1(vi).
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law or
other governmental action to close, and (ii) with respect to all notices,
determinations, fundings and payments in connection with the Adjusted Eurodollar
Rate or any Eurodollar Rate Loans, any day that is a Business Day described in
clause (i) above and that is also a day for trading by and between banks in
Dollar deposits in the London interbank Eurodollar market.
"CAPITAL LEASE" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" means any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all similar
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ownership interests in any Person which is not a corporation, and any and all
warrants, options or other rights to acquire any of the foregoing.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) commercial paper maturing no more than one year from the
date of creation thereof and having, at the time of the acquisition thereof, a
rating of at least A-1 (or the equivalent) from S&P or at least P-1 (or the
equivalent) from Xxxxx'x; and (iii) certificates of deposit or bankers'
acceptances maturing within one year after such date and issued or accepted by
Lender or by any commercial bank organized under the laws of the United States
of America or any state thereof or the District of Columbia that (a) is at least
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $100,000,000.
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise, but only as and when so
received) received from such Asset Sale.
"CLOSING DATE" means the date on or before August 26, 1999, on
which the initial Loans are made.
"COLLATERAL" means all of the properties and assets (including
capital stock) in which Liens are purported to be granted by the Collateral
Documents.
"COLLATERAL DOCUMENTS" means the Security Agreements, the Pledge
Agreement, the Mortgages and the UCC-1 Financing Statements and Notices of
Security Interest executed in connection with any or all of the foregoing.
"COMMITMENT" means the commitment of Lender to make Loans as set
forth in subsection 2.1(a).
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of EXHIBIT VI annexed hereto delivered to Lender by Borrower pursuant to
subsection 5.1(vii).
"CONDEMNATION PROCEEDS" has the meaning assigned to that term in
subsection 2.4(b)(iii)(c).
"CONSOLIDATED ADJUSTED EBITDA" means, for any period, Consolidated
Net Income for such period, PLUS, without duplication and to the extent deducted
from
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revenues in determining Consolidated Net Income for such period, the sum of
the amounts for such period of (i) Consolidated Interest Expense, (ii)
provisions for taxes based on income actually paid in cash, (iii) total
depreciation expense, (iv) total amortization expense, and (v) other non-cash
expenses LESS, without duplication and to the extent added to revenues in
determining Consolidated Net Income for such period, any non-cash items on a
pre-tax basis increasing Consolidated Net Income, all of the foregoing as
determined on a consolidated basis for Borrower and its Subsidiaries in
conformity with GAAP; PROVIDED, however, that notwithstanding the foregoing,
for purposes of determining the ratios described in subsection 6.6 and the
definition of "Permitted Acquisitions" for the fiscal quarters of Borrower
ending September 30, 1999 and December 31, 1999, Consolidated Adjusted EBITDA
shall include Restructuring and Integration Charges in an amount not to
exceed $1,309,000.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, (i) the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Borrower and its Subsidiaries)
by Borrower and its Subsidiaries during that period (a) in connection with the
purchase or lease by Borrower of any of its Subsidiaries of assets that, in
conformity with GAAP, are included in "additions to property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
flows of Borrower and its Subsidiaries or (b) the lease of any assets by
Borrower or any of its Subsidiaries as lessee under any synthetic lease referred
to in clause (vi) of the definition of the term "Indebtedness" to the extent
that such assets would have been capital assets had the synthetic lease been
treated for accounting purposes as a Capital Lease, PLUS (ii) to the extent not
covered by clause (i) of this definition, the aggregate of all expenditures by
Borrower and its Subsidiaries during that period to acquire (by purchase or
otherwise) the business, property or fixed assets of any Person (other than
acquisitions of inventory and supplies in the ordinary course of business), or
the stock or other evidence of beneficial ownership of any Person that, as a
result of such acquisition, becomes a Subsidiary of Borrower.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Borrower and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP, PROVIDED that (i) notes and accounts receivable shall be
included only if good and collectible as determined by Borrower in accordance
with established practice consistently applied and, with respect to such notes,
only if payable on demand or within one (1) year from the date as of which
Consolidated Current Assets are to be determined and if not directly or
indirectly renewable or extendible at the option of the debtors, by their terms,
or by the terms of any instrument or agreement relating thereto, beyond such
year, and, with respect to such accounts receivable, only if payable and
outstanding not more than ninety (90) days after the date of the shipment of
goods or other transaction out of which any such account receivable arose; and
such notes and accounts receivable shall be taken at their face value less
reserves determined to be sufficient in accordance with generally accepted
accounting principles; and (ii) inventory shall be included only if and to the
extent that
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the same shall consist of saleable finished goods ready and available for
shipment to purchasers thereof.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Borrower and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP.
"CONSOLIDATED EXCESS CASH FLOW" means, for any Fiscal Year, an
amount equal to the sum of Consolidated Adjusted EBITDA for such Fiscal Year and
the Consolidated Working Capital Adjustment for such Fiscal Year, MINUS the sum
of the amounts for such Fiscal Year of (i) scheduled repayments of principal of
the Loans, mandatory prepayments of the principal of the Loans (other than from
Consolidated Excess Cash Flow or the proceeds of Asset Sales), voluntary
prepayments of the principal of the Loans to the extent that such amount may not
be reborrowed once repaid, (ii) that portion of Consolidated Interest Expense
actually paid in cash, (iii) Consolidated Capital Expenditures and (iv) the
portion of taxes based on income or revenues actually paid in cash.
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum of the
amounts for such period of (i) Consolidated Interest Expense, (ii) cash payments
for taxes based on income, (iii) the current maturities of Consolidated Total
Debt paid during such period, and (iv) Restricted Junior Payments paid or
payable in cash and not otherwise deducted in determining Consolidated Adjusted
EBITDA, all of the foregoing as determined on a consolidated basis for Borrower
and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases or any
synthetic leases referred to in clause (vi) of the definition of the term
"Indebtedness", in either case in accordance with GAAP, and capitalized
interest) of Borrower and its Subsidiaries on a consolidated basis with respect
to all outstanding Indebtedness of Borrower and its Subsidiaries, including,
without limitation, all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers' acceptance financing and net
costs due under Interest Rate Agreements (including but not limited to costs of
acquisition and/or breakage of same).
"CONSOLIDATED NET INCOME" means, for any period, the net income
(or loss) of Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
PROVIDED that there shall be excluded (i) the income (or loss) of any Person
(other than a Subsidiary of Borrower) in which any other Person (other than
Borrower or any of its Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to Borrower or
any of its Subsidiaries by such Person during such period, (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of
Borrower or is merged into or consolidated with Borrower or any of its
Subsidiaries or
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that Person's assets are acquired by Borrower or any of its Subsidiaries,
(iii) the income of any Subsidiary of Borrower to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary, (iv)
any after-tax gains or losses attributable to Asset Sales or returned surplus
assets of any Pension Plan, and (v) (to the extent not included in clauses
(i) through (iv) above) any net extraordinary gains or net noncash
extraordinary losses.
"CONSOLIDATED NET WORTH" means, as at any date of determination,
the sum of the capital stock and additional paid-in capital plus retained
earnings (or minus accumulated deficits) of Borrower and its Subsidiaries on a
consolidated basis determined in conformity with GAAP.
"CONSOLIDATED TOTAL SENIOR DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all Indebtedness of
Borrower and its Subsidiaries other than Subordinated Indebtedness, determined
on a consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL DEBT" means, as at any date of determination
and as applied to any Person, the aggregate stated balance sheet amount of all
Indebtedness of such Person and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated Current Assets (other than Cash and
Cash Equivalents) over Consolidated Current Liabilities (other than the current
portion of any Funded Debt).
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any Fiscal
Year on a consolidated basis, the amount (which may be a negative number) by
which the Consolidated Working Capital of Borrower and its Subsidiaries as of
the beginning of the period exceeds (or is less than) the Consolidated Working
Capital of Borrower and its Subsidiaries as of the end of such period.
"CONTINGENT OBLIGATION" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected (in whole, or in part) against loss in respect
thereof, (ii) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings, or (iii) under Interest Rate Agreements and Currency Agreements.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise
8
than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of
the obligation of another, (b) the obligation to make take-or-pay or similar
payments if required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the
obligation of another through any agreement (contingent or otherwise) (X) to
purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital
contributions or otherwise) or (Y) to maintain the solvency or any balance
sheet item, level of income or financial condition of another if, in the case
of any agreement described under subclauses (X) or (Y) of this sentence, the
primary purpose or intent thereof is as described in the preceding sentence.
The amount of any Contingent Obligation of any Person shall be equal to the
amount of the obligation so guaranteed or otherwise supported or, if not
stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by Lender in good faith or, if less, the amount to which such
Contingent Obligation is specifically limited.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any partnership agreement,
joint venture agreement or limited liability company operating agreement,
indenture, mortgage, deed of trust, contract, undertaking, agreement or other
instrument to which that Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"CONTROL," "CONTROLS" AND "CONTROLLING" have the meanings as
applied to those terms in the definition of "Affiliate" above.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect Borrower or any of its
Subsidiaries against fluctuations in currency values.
"DEFAULT" has the same meaning as "Potential Event of Default."
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"ELIGIBLE ACCOUNTS RECEIVABLE" means, as at any date of
determination, the Dollar value as determined by Lender and as shown on the
Borrowing Base Certificate of Borrower, of all of Borrower's Accounts
Receivable, EXCLUDING:
9
(a) any Accounts Receivable which do not represent a final sale,
or the goods giving rise to such Accounts Receivable have not been
shipped and delivered to and received by the account debtor, or the
services giving rise to such Accounts Receivable have not been
performed by Borrower and accepted by the account debtor, or for which
payment is not absolute or is contingent upon the fulfillment of any
condition;
(b) any Accounts Receivable for which the amount due thereunder
has not yet been invoiced by Borrower;
(c) any Accounts Receivable which are due or unpaid more than the
lesser of (i) 90 days after the original due date or (ii) 120 days from
the original invoice date;
(d) any Accounts Receivable which are non-dated and remain due or
unpaid more than 90 days after the date of the original invoice with
respect thereto;
(e) any Accounts Receivable with respect to which any warranty or
covenant contained in this Agreement or any other Loan Document has
been breached;
(f) any Accounts Receivable against which the account debtor or
any Person obligated to make payment thereon or any commercial carrier
asserts any defense, offset, counterclaim, or other right to avoid or
reduce the liability represented by such Accounts Receivable but only
to the extent of such claim;
(g) any Accounts Receivable which are, or in Lender's judgment is
reasonably likely to become, subject to any claim of setoff which is
formally or informally asserted by the account debtor, and such account
debtor has not entered into an agreement acceptable to Lender with
respect to the waiver of rights of setoff but only to the extent of
such claim;
(h) any Accounts Receivable for which the account debtor is also
Borrower's supplier or creditor, and that account debtor has not
entered into an agreement acceptable to Lender with respect to waiver
of rights of setoff (but excluding Accounts Receivable for which the
account debtor is also Borrower's supplier or creditor for cores and
goods that are returned to such account debtor);
(i) the Accounts Receivable of an account debtor which, at the
time of determination exceed in the aggregate 25% of the aggregate
amount of Borrower's aggregate Accounts Receivable at such time of
determination (but only to the extent such Accounts Receivable exceed
such percentage);
(j) any Accounts Receivable with respect to which any document or
agreement executed or delivered in connection with such Accounts
Receivable, or any procedure used in connection with any such document
or agreement, fails in
10
any respect to comply with any requirements of applicable law, and
such failure would, in the judgment of Lender, (a) have a material
adverse effect upon the collectibility of such Accounts Receivable
or (b) subject payments with respect to such Accounts Receivable to
any claim for recovery thereof,
(k) any Accounts Receivable for which the sale to the account
debtor is on a xxxx-and-hold, guaranteed sale, sale on approval,
consignment or any other repurchase or return basis or otherwise
contingent on or subject to the fulfillment of any condition;
(l) any Accounts Receivable that arise from a sale or lease
outside of the ordinary course of business or to or for goods sold or
services rendered to any employee or Affiliate of Borrower;
(m) any Accounts Receivable that are an obligation of any Person
whose principal place of business is located in a country other than
the United States, UNLESS such Accounts Receivable are supported by a
letter of credit issued by a bank satisfactory to Lender;
(n) any Accounts Receivable subject to any Lien other than the
security interests granted pursuant to the Collateral Documents;
(o) any Accounts Receivable that are obligations of the United
States government or any agency thereof, or of any state or political
subdivision thereof, unless and until all documents or other action
required by Lender to assign such Accounts Receivable to Lender
pursuant to the Assignment of Claims Act of 1940, as amended (31 U.S.C.
Section 3727), shall have been executed and delivered to Lender, and
otherwise taken to the satisfaction of Lender;
(p) any Accounts Receivable if the account debtor or any Person
liable in connection therewith is insolvent, subject to bankruptcy or
receivership proceedings, or has made an assignment for the benefit of
creditors, or whose credit standing for this purpose is reasonably
unacceptable to Lender and Lender has so notified Borrower;
(q) any Accounts Receivable if the account debtor is located in
Indiana, New Jersey or Minnesota, or any other state denying creditors
access to its courts in the absence of a Notice of Business Activities
Report, or any other state denying creditors access to its courts in
the absence of a Notice of Business Activities Report, unless Borrower
(y) has received a certificate of authority to do business and is good
standing in such state, or (z) has filed a Notice of Business
Activities Report with the appropriate office or agency of such state
for the then current year;
11
(r) all of the Accounts Receivable of any account debtor if more
than twenty-five percent (25%) of the total Accounts Receivable owed by
that account debtor to Borrower are ineligible under any of the
provisions of paragraphs (c), (d) or (q) above;
(s) to the extent not already excluded from Eligible Accounts
Receivable, any reserves required by Lender for returns, discounts,
claims, credits, allowances and other reductions by Lender; and
(t) to the extent not already excluded from Eligible Accounts
Receivable, any Accounts Receivable which are reasonably determined by
Lender to be unacceptable in accordance with standard practices in the
banking industry for the evaluation of Accounts Receivable.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is covered by ERISA and (i) which is
currently maintained, contributed to or required to be contributed to by
Borrower or any of its ERISA Affiliates, (ii) which was at any time during the
last six years maintained, contributed to, required to be contributed to or
terminated by Borrower or any of its ERISA Affiliates, including any Person
which was at such time an ERISA Affiliate of Borrower; or (iii) with respect to
which there is any potential or outstanding liability of Borrower.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice of
violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
damage, including, without limitation, personal injury (including sickness,
disease or death), tangible or intangible property damage, contribution,
indemnity, indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the environment,
or for fines, penalties or restrictions, in each case relating to, resulting
from or in connection with Hazardous Materials and relating to Borrower, any of
its Subsidiaries, any of their respective Affiliates or any Facility.
"ENVIRONMENTAL LAWS" means all statutes, ordinances, orders,
rules, regulations, guidance documents or decrees relating to (i) environmental
matters, including, without limitation, those relating to fines, injunctions,
penalties, damages, contribution, cost recovery compensation, losses or injuries
resulting from the Release or threatened Release of Hazardous Materials, (ii)
the generation, use, storage, transportation or disposal of Hazardous Materials,
or (iii) occupational safety and health, industrial hygiene, or the protection
of human, plant or animal health or welfare from injury as a result of exposure
to Hazardous Materials or loss of ecological resources, in any manner applicable
to Borrower or any of its Subsidiaries or any of their respective properties,
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 ET SEQ.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801 ET SEQ.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 ET SEQ.) the Federal Water
Pollution Control Act ( 33 U.S.C. Section
12
1251 ET SEQ.), the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), the Toxic
Substances Control Act (15 U.S.C. Section 2601 ET SEQ.), the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 ET SEQ.),
the Occupational Safety and Health Act (29 U.S.C. Section 651 ET SEQ.) and
the Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section
11001 ET SEQ.), each as amended or supplemented, and any analogous future or
present local, state and federal statutes and regulations promulgated
pursuant thereto, each as in effect as of the date of determination.
"EQUITY PROCEEDS" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith) from
the issuance of any equity Securities of Borrower or any of its Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which that Person is a
member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is a
member; and (iii) any member of an affiliated service group within the meaning
of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation) which could reasonably be expected to result
in the termination of such Pension Plan or in a liability of Borrower or any of
its ERISA Affiliates; (ii) the failure to meet the minimum funding standard of
Section 412 of the Internal Revenue Code with respect to any Pension Plan
(whether or not waived in accordance with Section 412(d) of the Internal Revenue
Code) or the failure to make by its due date a required installment under
Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or
the failure to make any required contribution to a Multiemployer Plan; (iii) the
provision by the administrator of any Pension Plan pursuant to Section
4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the withdrawal by
Borrower or any of its ERISA Affiliates from any Pension Plan with two or more
contributing sponsors or the termination of any such Pension Plan resulting in
liability pursuant to Sections 4063 or 4064 of ERISA; (v) the institution by the
PBGC of proceedings to terminate any Pension Plan, or the occurrence of any
event or condition which might constitute grounds under ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan;
(vi) the imposition of liability on Borrower or any of its ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (vii) the withdrawal by Borrower or any of its ERISA
Affiliates in a complete or partial
13
withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any
Multiemployer Plan, or the receipt by Borrower or any of its ERISA Affiliates
of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Borrower or any of its ERISA Affiliates of fines, penalties, taxes or related
charges under Chapter 43 of the Internal Revenue Code or under Section 409 or
502(c), (i) or (1) or 4071 of ERISA in respect of any Employee Benefit Plan;
(ix) the assertion of a claim (other than routine claims for benefits)
against any Employee Benefit Plan other than a Multiemployer Plan or the
assets thereof, or against Borrower or any of its ERISA Affiliates in
connection with any such Employee Benefit Plan; (x) receipt from the Internal
Revenue Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal
Revenue Code, or the failure of any trust forming part of any Pension Plan to
qualify for exemption from taxation under Section 501(a) of the Internal
Revenue Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29)
or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to
any Pension Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2(a).
"EVENT OF DEFAULT" means each of the events set forth in Section
7.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"FACILITIES" means any and all real property (including, without
limitation, all buildings, fixtures or other improvements located thereon) now,
hereafter or heretofore owned, leased, operated or used by Borrower or any of
its Subsidiaries or any of their respective predecessors or Affiliates; and
"FACILITY" means one of the Facilities.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System of New York 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 which is a Business Day, the average of the
quotations for such day on such transactions received by Lender from three
Federal funds brokers of recognized standing selected by Lender.
"FEE LETTER" means the letter of even date herewith between
Borrower and Lender.
14
"FISCAL YEAR" means the fiscal year of Borrower ending on the last
day in December of each calendar year. For purposes of this Agreement, any
particular Fiscal Year shall be designated by reference to the calendar year in
which such Fiscal Year ends.
"FUNDED DEBT" means, as applied to any Person, all Indebtedness of
that Person which by its terms or by the terms of any instrument or agreement
relating thereto matures more than one year from, or is directly renewable or
extendable at the option of the debtor to a date more than one year from
(including an option of the debtor under a revolving credit or similar agreement
obligating Lender to extend credit over a period of one year or more from), the
date of the creation thereof.
"FUNDING AND PAYMENT OFFICE" means the office of Lender located at
Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GOVERNMENT ACTS" has the meaning assigned to that term in
subsection 3.5(a).
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"GUARANTORS" means (a) VISTA Environmental, (b) E/Risk, (c)
GeoSure, Inc., (d) GeoSure, (e) NRC, (f) NRCIS, (g) Ensite, (h) EcoSearch
Acquisition, (i) EcoSearch and (j) each Subsidiary Guarantor.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance at any time defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
waste", "restricted hazardous waste", "infectious waste", "toxic substances" or
any other formulations intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws or
regulations promulgated pursuant thereto; (ii) any oil, petroleum, petroleum
fraction or petroleum derived substance; (iii) any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, natural gas or
15
geothermal resources; (iv) any flammable substances or explosives; (v) any
radioactive materials; (vi) asbestos in any form; (vii) urea formaldehyde
foam insulation; (viii) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million; (ix) pesticides; and (x) any other chemical,
material or substance, exposure to which is prohibited, limited or regulated
by any governmental authority or which may or could pose a hazard to the
health and safety of the owners, occupants or any Persons in the vicinity of
the Facilities.
"HEREIN", "HEREBY", "HEREOF", "HERETO", "HEREUNDER" and similar
terms have the meanings ascribed to those terms in subsection 1.3(b) hereof;
"INCLUDING" (as provided in subsection 1.3(b) hereof) is deemed to
read "including but not limited to."
"INDEBTEDNESS" means, as applied to any Person, without
duplication, (i) all indebtedness for borrowed money, (ii) that portion of
obligations with respect to Capital Leases that is properly classified as a
liability on a balance sheet in conformity with GAAP, (iii) notes payable and
drafts accepted representing extensions of credit whether or not representing
obligations for borrowed money, (iv) any obligation owed for all or any part of
the deferred purchase price of property or services (excluding trade accounts
payable and accrued expenses arising in the ordinary course of business in
accordance with customary trade terms), (v) all indebtedness secured by any Lien
on any property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person and (vi) all obligations of such Person
under any lease (a "synthetic lease") treated as an operating lease under GAAP
and as a loan or financing for U.S. income tax purposes. Except for purposes of
Section 7.2, obligations under Interest Rate Agreements and Currency Agreements
constitute Contingent Obligations and not Indebtedness.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that term in
subsection 8.3.
"INDEMNITEE" has the meaning assigned to that term in subsection
8.3.
"INSURANCE PROCEEDS" has the meaning assigned to that term in
subsection 2.4(b)(iii)(c).
"INTELLECTUAL PROPERTY" means all patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of the business of Borrower as currently conducted.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate
Loan, each March 31, June 30, September 30 and December 31 of each year,
commencing on September 30, 1999, and (ii) with respect to any Eurodollar Rate
Loan, the last day of each Interest Period applicable to such Loan; PROVIDED
that in the case of each Interest
16
Period of six months, "INTEREST PAYMENT DATE" shall also include the date
that is three months after the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2(b).
"INTEREST RATE AGREEMENT" means any fixed rate loan, interest rate
swap agreement, interest rate cap agreement or interest rate collar agreement
designed to protect Borrower or any of its Subsidiaries against fluctuations in
interest rates, including but not limited to any such agreements entered into by
Lender in connection with the provision to Borrower of a fixed rate loan or
loans.
"INTEREST RATE DETERMINATION DATE" means, with respect to any
Interest Period, the second Business Day prior to the first day of such Interest
Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986,
as amended to the date hereof and from time to time hereafter.
"INVENTORY" means all of the inventory of Borrower and its
Subsidiaries, including without limitation: (i) all raw materials, work in
process, parts, components, assemblies, supplies and materials used or consumed
in the business of Borrower and its Subsidiaries; and (ii) all goods, wares and
merchandise, finished or unfinished, held for sale or lease or leased or
furnished or to be furnished under contracts of service.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Borrower or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person, (ii) any direct or indirect
redemption, retirement, purchase or other acquisition for value by Borrower or
any of its Subsidiaries, of any equity Securities or (iii) any direct or
indirect loan, advance (other than advances to employees for moving,
entertainment and travel expenses, drawing accounts and similar expenditures in
the ordinary course of business) or capital contribution by Borrower or any of
its Subsidiaries to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not arise
from sales to that other Person in the ordinary course of business. The amount
of any Investment shall be the original cost of such Investment plus the cost of
all additions thereto, without any adjustments for increases or decreases in
value, or write-ups, write-downs or write-offs with respect to such Investment.
"JOINDER AGREEMENT" means a joinder agreement substantially in the
form annexed to the Security Agreement as EXHIBIT G thereto.
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
PROVIDED that in no event shall any corporate Subsidiary or equity owner of any
Person be considered to be a Joint Venture to which such Person is a party.
17
"LENDER" means IBJ Whitehall Bank & Trust Company, a New York
banking corporation, together with its successors and permitted assigns pursuant
to subsection 9.1.
"LEVERAGE RATIO" shall have the same meaning as Total Funded Debt
Leverage Ratio.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Term Loans, Revolving
Loans, or Acquisition Loans, or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Warrant, the
Interest Rate Agreements, the Fee Letter, the Collateral Documents, the other
instruments, documents and agreements executed pursuant to the Collateral
Documents or any of them, and all other instruments, documents and agreements
executed by or on behalf of any Loan Party and heretofore delivered or delivered
concurrently herewith or at any time hereafter to or for the benefit of Lender
in connection with the Loans, this Agreement or the other transactions
contemplated by the Agreement.
"LOAN PARTIES" means Borrower and the Guarantors; and "LOAN PARTY"
means one of the Loan Parties.
"MARGIN STOCK" has the meaning assigned to that term in Regulation
U of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon
the business, operations, properties, assets, condition (financial or otherwise)
or prospects of Borrower and its Subsidiaries (or its predecessors (or any of
them) as owner of the assets of Borrower and its or their Subsidiaries) on an
individual basis or taken as a whole (including but not limited to any
suspension of trading of the stock of Borrower on any national stock exchange
for more than five Business Days or any involuntary delisting of the Capital
Stock of Borrower by any national stock exchange), or (ii) the impairment of the
ability of any Loan Party to perform its or his obligations under any Loan
Document to which it or he is a party, or of Lender to enforce or collect any of
the Obligations.
"MATERIAL CONTRACTS" means any and all contracts that are material
to the operation of the business of Borrower or any of its Subsidiaries as of
the Closing Date.
"MORTGAGE" means any mortgage, deed of trust or other similar
document granted by Borrower or any of its Subsidiaries in any interest in real
property to secure the Obligations.
18
"MOST RECENT REFERENCE PERIOD" means the most recent Reference
Period for which unaudited quarterly financial statements of Borrower and its
Subsidiaries and related Officers' Certificate and Compliance Certificate have
been delivered to Lender in compliance with subsection 5.1(ii) and subsection
5.1(vii) hereof, respectively.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan that is a
"multiemployer plan", as defined in Section 3(37) of ERISA.
"NET CASH PROCEEDS" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale including (i)
income taxes only if and to the extent reasonably estimated to be actually
payable in cash as a result of such Asset Sale within two years of the date of
such Asset Sale, (ii) payment of the outstanding principal amount of, premium or
penalty, if any, and interest on any Indebtedness (other than the Loans) that is
secured by a Lien on the stock or assets in question and that is required to be
repaid under the terms thereof as a result of such Asset Sale and (iii)
reasonable fees and expenses directly incurred in connection with such Asset
Sale.
"NET EQUITY PROCEEDS" has the meaning assigned to such term in
subsection 2.4(c)(iii)(E).
"NET REVERSION AMOUNT" has the meaning assigned to that term in
subsection 2.4(c)(iii)(C).
"NOTES" means one or more of the Term Notes, the Revolving Notes
or the Acquisition Notes, or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
EXHIBIT I annexed hereto delivered by Borrower to Lender pursuant to subsection
2.1(b) with respect to a proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially
in the form of EXHIBIT II annexed hereto delivered by Borrower to Lender
pursuant to subsection 2.2(d) with respect to a proposed conversion or
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"NOTICE(S) OF SECURITY INTEREST" means the notice(s) to be filed
by Borrower and its Subsidiaries, pursuant to the terms of the Security
Agreement, to perfect the security interest of Lender in the Intellectual
Property Collateral (as defined in the Security Agreement) granted under the
Security Agreement.
"OBLIGATIONS" means all obligations, indebtedness and liabilities
of every nature of each Loan Party, individually or collectively, existing on
the date of this Agreement or arising from time to time thereafter, direct or
indirect, joint or several,
19
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Agreement or any of the other Loan Documents
or in respect of any of the Loans made or any of the Notes, or other
instruments at any time evidencing any thereof or arising or incurred under
any Currency Agreements or Interest Rate Agreements entered into by any of
the Loan Parties with Lender, whether for principal, interest, fees,
expenses, indemnification or otherwise.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the board
(if an officer) or its president or one of its vice presidents and by its chief
financial officer or its treasurer; PROVIDED that every Officers' Certificate
with respect to the compliance with a condition precedent to the making of any
Loans hereunder shall include (i) a statement that the officer or officers
making or giving such Officers' Certificate have read such condition and any
definitions or other provisions contained in this Agreement relating thereto,
(ii) a statement that, in the opinion of the signers, they have made or have
caused to be made such examination or investigation as is necessary to enable
them to express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of the
signers, such condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multi-employer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 of ERISA.
"PERMITTED ACQUISITION" means an Acquisition by Borrower or a
wholly-owned Subsidiary of Borrower after the Closing Date of another Person or
of any division or operating unit of another Person (as used in this definition,
the "TARGET") so long as, in each case, Lender shall be satisfied in its sole
discretion with the terms and conditions of such Acquisition and shall have
given its prior written consent thereto, and all of the following conditions
have been satisfied, as certified by the chief financial officer of Borrower:
(i) after giving effect to such acquisition, the assets comprising
such Target (as used in this definition, the "ACQUIRED ASSETS") shall
be owned exclusively by Borrower or a wholly-owned Subsidiary of
Borrower;
20
(ii) no Default or Event of Default shall exist immediately prior
to such acquisition, and no Default or Event of Default would result
therefrom;
(iii) the business of the Target is a substantially domestic line
of business that is substantially the same as or, in the sole
discretion of Lender, complimentary to, that conducted by Borrower on
the date hereof;
(iv) prior to any such Acquisition, Borrower shall have delivered
to Lender the definitive Acquisition Documents relating thereto,
including but not limited to all employment contracts and leases, which
documents shall be satisfactory to, and approved in writing by, Lender
in its sole discretion;
(v) Lender shall have received satisfactory evidence that such
Target has complied with, is in compliance with, and, after the
acquisition, will continue to be in compliance with, applicable
Requirements of Law;
(vi) the Total Consideration (as defined below) payable by
Borrower in connection with such Acquisition shall not exceed
$7,000,000;
(vii) Borrower or its wholly-owned Subsidiary shall not incur any
liabilities or Contingent Obligations in connection with any such
Acquisition, except: (A) notes payable to the sellers of the Target
which are subordinated to the Loans on terms and conditions
satisfactory to Lender; (B) the assumption of trade credit; and (C)
liabilities incurred by the Target in the ordinary course of business;
(viii) Borrower shall have delivered the most recent audited and
unaudited financial statements of the Target to Lender, which financial
statements shall be satisfactory to and approved in writing by Lender;
(ix) Borrower shall have demonstrated to the reasonable
satisfaction of Lender (based on, among other things, operating and
financial projections and PRO FORMA financial statements and
projections delivered to Lender and certified by the chief financial
officer of Borrower) that, immediately after giving effect to such
acquisition (including the making of any Loans and the incurrence of
any Indebtedness in connection therewith, with the acquisition and the
incurrence of Indebtedness in connection therewith being deemed to have
occurred on the first day of the period of four consecutive fiscal
quarters most recently ended), (A) all covenants contained in this
Agreement would have been satisfied on a PRO FORMA basis, (B) the
Senior Leverage Ratio would not exceed 3.00:1.00 on a PRO FORMA basis
for the Most Recent Reference Period, and (C) the Total Funded Debt
Leverage Ratio would not exceed 3.50:1.00 on a PRO FORMA basis for the
Most Recent Reference Period; PROVIDED, that, for purposes of
calculating the ratios referred to in clauses (B) and (C) above and in
subsections 6.6(c) and 6.6(d) of this Agreement for any period,
Consolidated Total Debt and Consolidated Total Senior Debt for such
period shall be decreased by the amount of any cash balances reflected
on the balance sheet of
21
the Target immediately prior to the completion of such
acquisition that are deposited with and held by Lender in escrow
during such period pursuant to an escrow agreement in form and
substance satisfactory to Lender in Lender's sole discretion;
(x) with respect to any Permitted Acquisition:
(A) Borrower shall have delivered to Lender
reasonable (and, in any event, thirty (30) days) prior written
notice of such acquisition, which notice (1) shall provide
Lender with a reasonably detailed description of the proposed
acquisition, (2) shall include true and complete copies of (to
the extent available at such time but in any event prior to
the closing of any such Permitted Acquisition) all instruments
and agreements executed or delivered or to be executed or
delivered by Borrower or any of its Subsidiaries in connection
with such acquisition, all of which shall be satisfactory in
form and substance to Lender, and (3) shall include evidence
satisfactory to Lender of the Borrower's compliance with all
conditions of this definition necessary to make the proposed
acquisition a Permitted Acquisition;
(B) the business and assets to be acquired by
Borrower or any of its Guarantors would not subject Lender to
regulatory approvals in connection with the exercise of any of
their rights or remedies under this Credit Agreement or any
other Loan Document;
(C) as of the consummation of the acquisition, the
business and assets so acquired shall be acquired free and
clear of all Liens (other than Permitted Liens) and
Indebtedness;
(D) Borrower and its Subsidiaries (if any) that are
involved in the acquisition (1) shall have taken or caused to
be taken all necessary actions, including but not limited to
all actions required by Section 5.11 with respect to any real
property, to grant to Lender a first priority perfected Lien
in all real and personal property and Capital Stock to be
acquired in connection with such acquisition, and (2) to the
extent requested by Lender, shall have delivered to Lender
environmental surveys or assessments with respect to any real
property acquired in connection therewith, with such
environmental surveys or assessments to be satisfactory to
Lender; and
(E) in the case of any acquisition of Capital Stock,
the acquired Person and all of its Subsidiaries shall be
merged with and into Borrower or a new Subsidiary of Borrower
created in order to effect such Permitted Acquisition; and
Borrower or such new Subsidiary shall have complied with all
applicable provisions of Sections 5.10 and 5.11 hereof;
22
(xi) all computations required to satisfy the conditions specified
in subparagraphs (ii), (vi) and (ix) above shall be satisfactory to
Lender, including without limitation, any and all PRO FORMA adjustments
to the Borrower's historical Consolidated Adjusted EBITDA;
(xii) the terms of any debt instruments or preferred stock
evidencing, governing or issued in connection with such Investment
shall be reasonably satisfactory to Lender and shall be otherwise
permitted by this Credit Agreement; and
(xiii) the board of directors and, to the extent required by
applicable law, the equity holders of such Person being, or whose
business, division or operating unit is being, acquired, shall have
approved such acquisition.
As used in this definition, "TOTAL CONSIDERATION" means all
consideration payable by Borrower or its wholly-owned Subsidiary in
connection with the Permitted Acquisition, including cash payments at
closing, the principal amount of any notes issued by Borrower or its
Subsidiary, the amount of any debt assumed by Borrower or its
Subsidiary, the value of any Capital Stock issued by Borrower or any of
its Subsidiaries, and the cost of
23
refinancing existing Indebtedness (but excluding reasonable expenses
associated with the negotiation and closing of such acquisition.)
For purposes of permitting Borrower to satisfy the leverage
covenants referred to above in clause (ix)of this definition, Lender
may, in Lender's sole discretion, require Borrower to escrow funds with
Lender, pursuant to escrow terms satisfactory to Lender, whereupon such
escrow funds shall be calculated as a reduction from each of
Consolidated Total Debt and Consolidated Total Senior Debt for purposes
of such leverage covenants.
"PERMITTED ENCUMBRANCES" means the following types of Liens (other
than any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA and any such Lien relating to Environmental
Claims):
(i) Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 5.3;
(ii) statutory Liens of landlords, Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed by
law incurred in the ordinary course of business (x) that do not in
the aggregate materially detract from the value of such property
or assets or materially impair the use thereof in the operation of
the business of any Loan Party or its respective subsidiaries or
(y) that are being contested in good faith by appropriate
proceedings, if such reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made therefor;
(iii) Liens incurred or deposits made in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money);
(iv) any attachment or judgment Lien not constituting an Event
of Default under subsection 7.8;
(v) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects, encroachments or irregularities in
title and other similar charges or encumbrances not rendering
title unmarketable or interfering with the ordinary conduct of the
business of Borrower or any of its Subsidiaries;
(vi) any interest or title of a lessor under any Capital Lease
not prohibited by this Agreement;
24
(vii) Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement; and
(viii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods.
"PERSONS" means and includes natural persons, corporations,
limited partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof; and "PERSON" means any of such "Persons".
"PLEDGE AGREEMENT" means that certain Pledge Agreement by and
between Borrower and Lender dated as of the Closing Date and substantially in
the form of EXHIBIT VIII annexed hereto, as such Pledge Agreement may be
amended, restated, supplemented or otherwise modified from time to time.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate that Lender announces from time to
time as its prime lending rate, as in effect from time to time. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"PROCEEDINGS" has the meaning assigned to that term in subsection
5.1(xiii).
"PROJECTIONS" has the meaning assigned to that term in subsection
3.1(o).
"REAL PROPERTY" means all real property from time to time owned in
fee by Borrower or any of its Subsidiaries and all rights, title and interest in
and to any and all leases of real property as to which Borrower or any of its
Subsidiaries has a leasehold interest, in any such case whether or not listed on
SCHEDULE 4.8 annexed hereto, including, without limitation, any such fee or
leasehold interests acquired by Borrower or any of its Subsidiaries after the
date hereof.
"REFERENCE PERIOD" means each period of four consecutive fiscal
quarters of Borrower.
"REGISTER" has the meaning assigned to that term in subsection
2.1(d).
25
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"REQUIREMENTS OF LAW" means, as to any Loan Party, (i) the
Articles or Certificate of Incorporation and Bylaws of such Loan Party, and (ii)
any law, treaty, rule or regulation (whether Federal, state, local or foreign)
or determination of any arbitrator or a court or other governmental authority,
in each case applicable to or binding upon such Loan Party or any of its
property or to which such or any of its property is subject.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Borrower or any of its respective existing or future direct or indirect
Subsidiaries, whether now or hereafter outstanding, EXCEPT for mandatory
payments of dividends on Borrower's Series F Preferred Stock in an aggregate
annual amount not to exceed $300,000; (ii) any redemption, conversion, exchange,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares, partnership interest or interests, or
membership interest or interests referred to in clause (i) above, EXCEPT the
conversion of Borrower's preferred stock into shares of Borrower's common stock
by holders of Borrower's preferred stock pursuant to the terms thereof on the
date hereof; (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire any shares,
partnership interest or interests or membership interest or interests referred
to in clause (i) above; (iv) any retirement of any shares, partnership interest
or interests or membership interests referred to in clause (i) above; (v) the
entering into of any agreement with any Person granting it a share of the
profits, earnings or income (for any reason) of Borrower; (vi) the payment of
management fees (other than reasonable and customary board of director fees) in
excess of $50,000 per annum (A) to Affiliates of Borrower or any Loan Party or
(B) other than in the ordinary course of business; and (vii) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption,
purchase, conversion, exchange, retirement, defeasance (including in-substance
or legal defeasance), sinking fund or similar payment with respect to, any
Subordinated Indebtedness.
"RESTRUCTURING AND INTEGRATION CHARGES" means, for any period, (i)
all restructuring charges and (ii) the actual reasonable out-of-pocket expenses
incurred by Borrower and its Subsidiaries in connection with any Permitted
Acquisition, in each case to the extent expensed during such period.
26
"REVOLVING LOAN COMMITMENT" means the commitment of Lender to make
Revolving Loans to Borrower pursuant to subsection 2.1(a)(ii).
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means December 31,
2004.
"REVOLVING LOAN EXPOSURE" means, as of any date of determination
(i) prior to the termination of the Revolving Loan Commitment, the Revolving
Loan Commitment and (ii) after the termination of the Revolving Loan Commitment,
the aggregate outstanding principal amount of the Revolving Loans.
"REVOLVING LOANS" means the Loans made by Lender to Borrower
pursuant to subsection 2.1(a)(ii).
"REVOLVING NOTES" means (i) any promissory note or notes of
Borrower issued pursuant to subsection 2.1(e) to evidence the Revolving Loans,
and (ii) any promissory notes issued by Borrower pursuant to the last sentence
of subsection 9.1(a) in connection with assignments of the Revolving Loan
Commitment and Revolving Loans, in each case substantially in the form of
EXHIBIT IV annexed hereto, as it or they may be amended, restated, replaced,
supplemented or otherwise modified from time to time; and "REVOLVING NOTE" means
one of the Revolving Notes.
"SECURITIES" means any stock, shares, partnership interests,
membership interests, voting trust certificates, certificates of interest or
participation in any profit-sharing agreement or arrangement, options, warrants,
bonds, debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as "securities" or any certificates of interest, shares or
participation in temporary or interim certificates for the purchaser or
acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
"SECURITY AGREEMENT" means that certain Security Agreement by and
among Borrower, the Guarantors and Lender dated as of the Closing Date and
substantially in the form of EXHIBIT VIII annexed hereto, as such Security
Agreement may be amended, restated, supplemented or otherwise modified from time
to time.
"SENIOR LEVERAGE RATIO" has the meaning assigned to that term in
subsection 6.6(d) of this Agreement.
"SOLVENT" means, with respect to any Person, that as of the date
of determination both (A) (i) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount that
will be required to pay the probable liabilities on such Person's then existing
debts as they become absolute and matured
27
considering all financing alternatives and potential asset sales reasonably
available to such Person; (ii) such Person's capital is not unreasonably
small in relation to its business or any contemplated or undertaken
transaction; and (iii) such Person does not intend to incur, or believe (nor
should it reasonably believe) that it will incur, debts beyond its ability to
pay such debts as they become due; and (B) such Person is "solvent" within
the meaning given that term and similar terms under applicable laws relating
to fraudulent transfers and conveyances. For purposes of this definition, the
amount of any contingent liability at any time shall be computed as the
amount that, in light of all of the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an
actual or matured liability.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of Borrower
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to Lender.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, joint venture or other business entity of which more
than 50% of the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any contingency) to vote
in the election of the Person or Persons (whether directors, managers, trustees
or other Persons performing similar functions) having the power to direct or
cause the direction of the management and policies thereof is at the time owned
or controlled, directly or indirectly, by that Person or one or more of the
other Subsidiaries of that Person or a combination thereof.
"SUBSIDIARY GUARANTOR" means each Subsidiary of Borrower that
hereafter becomes party to this Agreement as a Guarantor by executing and
delivering to Lender a Supplement to this Agreement.
"SUPPLEMENT" means an agreement, substantially in the form annexed
hereto as EXHIBIT XI, executed and delivered by a Subsidiary of Borrower
pursuant to subsection 8.17.
"TAX" or "TAXES" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever called,
by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; PROVIDED that "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in which that
Person's principal office (and/or, in the case of Lender, its lending office) is
located or in which that Person is deemed to be doing business on all or part of
the net income, profits or gains of that Person (whether worldwide, or only
insofar as such income, profits or gains are considered to arise in or to relate
to a particular jurisdiction, or otherwise).
28
"TERM LOAN" means the Loan made by Lender to Borrower pursuant to
Subsection 2.1(a)(i).
"TERM LOAN COMMITMENT" means the Commitment of Lender to make a
Term Loan to Borrower pursuant to subsection 2.1(a)(i).
"TERM LOAN EXPOSURE" means (i) prior to the date of the funding of
the Term Loan, the Term Loan Commitment, and (ii) after the funding of the Term
Loan, the outstanding principal amount of the Term Loan.
"TERM LOAN MATURITY DATE" means December 31, 2004.
"TERM LOAN NOTES" means (i) the promissory note of Borrower issued
pursuant to subsection 2.1(e) on the Closing Date and (ii) any promissory notes
issued by Borrower pursuant to the last sentence of subsection 9.1(a) in
connection with assignments of the Term Loan Commitment or Term Loan, in each
case substantially in the form of EXHIBIT III annexed hereto, as they may be
amended, restated, replaced, supplemented or otherwise modified from time to
time; and "TERM LOAN NOTE" means one of the Term Loan Notes.
"TOTAL FUNDED DEBT LEVERAGE RATIO" means, with respect to Borrower
and its Subsidiaries as of the last day and for any Reference Period, the ratio
of (i) Consolidated Total Debt of Borrower and its Subsidiaries as of the last
day of such Reference Period to (ii) Consolidated Adjusted EBITDA of Borrower
and its Subsidiaries for such period.
"TRANSACTION COSTS" means the fees, costs and expenses payable by
Borrower and its Subsidiaries in connection with the transactions contemplated
by this Agreement and the consummation thereof.
"WARRANT" means the common stock purchase warrant, substantially
in the form of EXHIBIT X annexed hereto, executed and delivered by Borrower to
Lender on the Closing Date.
29
"YEAR 2000 PROBLEM" means the risk that computer applications used
by the Borrower and its Subsidiaries may be unable to recognize and properly
perform date-sensitive functions involving certain dates prior to, and any date
after, December 31, 1999.
1.2 ACCOUNTING TERMS: UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
AGREEMENT. Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Borrower to Lender pursuant to clauses (i), (ii) and
(iii) of subsection 5.1 shall be prepared in accordance with GAAP as in effect
at the time of such preparation (and delivered together with the reconciliation
statements provided for in subsection 6.1(vii)); PROVIDED that the consolidated
financial statements delivered by Borrower to Lender pursuant to clauses (i) and
(ii) of subsection 5.1 shall not be required to give effect to adjustments
relating to purchase accounting including those required or permitted by
Accounting Principles Board Opinions Nos. 16 and 17 prior to the time that
Borrower has completed such adjustments, which Borrower shall complete as soon
as practicable but in no event later than 6 months after the Closing Date. All
calculations in connection with the definitions, covenants and other provisions
of this Agreement shall utilize accounting principles and policies in conformity
with those used to prepare the financial statements referred to in subsection
4.3(a).
1.3 OTHER DEFINITIONAL PROVISIONS.
1.3(a) References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless otherwise
specifically provided. Any of the terms defined in subsection 1.1 may, unless
the context otherwise requires, be used in the singular or the plural, depending
on the reference.
30
1.3(b) This Agreement and the other documents delivered at the
Closing shall be construed without regard to any presumption or other rule
requiring construction against the party causing such instrument to be drafted.
The terms "herein", "hereby", "hereof", "hereto", "hereunder" and any similar
terms, as used in this Agreement, refer to this Agreement in its entirety and
not only to the particular portion of this Agreement where the term is used. The
rule of EJUSDEM GENERIS shall not be applicable herein to limit a general
statement, which is followed by or referable to an enumeration of specific
matters, to matters similar to the matters specifically mentioned. Wherever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter terms. Wherever the word "including" is used in this
Agreement or in any of the other documents delivered at the Closing, it shall be
deemed to read "including but not limited to". References to an existing
document shall be understood to refer to the relevant document in the form as
delivered to Lender prior to or at the Closing.
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS: THE REGISTER; NOTES.
2.1(a) COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Borrower
herein set forth, Lender hereby agrees to make the Loans described in
subsections 2.1(a)(i), 2.1(a)(ii) and 2.1(a)(iii).
2.1(a)(i) TERM LOAN. Subject to the terms and conditions set
forth in this Agreement, Lender agrees to lend to Borrower on the
Closing Date an amount not exceeding $3,500,000 to be used for the
purposes identified in subsection 2.5(a). Lender's Term Loan Commitment
shall expire immediately and without further action on August 26, 1999
if the Term Loan is not made on or before that date. Borrower may make
only one borrowing under the Term Loan Commitment. Amounts borrowed
under this subsection 2.1(a)(i) and subsequently repaid or prepaid may
not be reborrowed.
31
2.1(a)(ii) REVOLVING LOANS. Lender agrees, subject to the
limitations set forth below with respect to the maximum amount of
Revolving Loans permitted to be outstanding from time to time, to lend
to Borrower from time to time during the period from the Closing Date
to but excluding the Revolving Loan Commitment Termination Date an
aggregate principal amount at any time outstanding (after giving effect
to all requests therefor) up to, but not exceeding $3,500,000, less
such reserves as Lender shall deem reasonable and proper, to be used
for the purposes identified in subsection 2.5(b); PROVIDED, that the
amount of the Revolving Loan Commitment shall be reduced from time to
time by the amount of any reductions thereto made pursuant to
subsection 2.4(c)(ii). The Revolving Loan Commitment shall expire on
the Revolving Loan Commitment Termination Date and all Revolving Loans
and all other amounts owed hereunder with respect to the Revolving
Loans and the Revolving Loan Commitment shall be paid in full no later
than that date; PROVIDED that Lender's Revolving Loan Commitment shall
expire immediately and without further action on August 26, 1999 if the
Term Loan is not made on or before that date. Amounts borrowed under
this subsection 2.1(a)(ii) may be repaid and reborrowed up to but
excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Revolving Loans and the Revolving Loan Commitment
shall be subject to the limitation that in no event shall the aggregate
principal amount of all outstanding Revolving Loans at any time exceed
the lesser of (i) the Revolving Loan Commitment then in effect and (ii)
the Borrowing Base.
2.1(a)(iii) ACQUISITION LOANS. Subject to the terms and
conditions set forth in this Agreement, Lender agrees to lend to
Borrower from time to time during the period from the Closing Date to
and including the Acquisition Loan Commitment Termination Date, on the
closing date of each Permitted Acquisition, an aggregate principal
amount at any time outstanding (after giving effect to all requests
therefor) up to, but not exceeding $3,000,000, to be used for the
purposes identified in subsection 2.5(c); PROVIDED, that the amount of
the Acquisition Loan Commitment shall be reduced from time to time by
the amount of any reductions thereto made pursuant to subsection
2.4(c)(iii). The Acquisition Loan Commitment shall expire on the
Acquisition Loan Commitment Termination Date and all Acquisition Loans
and all other amounts owed hereunder with respect to the Acquisition
Loans and the Acquisition Loan
32
Commitment shall be paid in full no later than the Acquisition Loan
Maturity Date; PROVIDED that Lender's Acquisition Loan Commitment
shall expire immediately and without further action on August 26,
1999 if the Term Loan is not made on or before that date. Amounts
borrowed under this subsection 2.1(a)(iii) and subsequently repaid
or prepaid may not be reborrowed.
33
2.1(b) BORROWING MECHANICS.
2.1(b)(i) Revolving Loans or Acquisition Loans made on any Funding Date
shall be in an aggregate minimum amount of $100,000 and integral multiples of
$25,000 in excess of that amount. Whenever Borrower desires that Lender make
Revolving Loans or Acquisition Loans, it shall deliver to Lender a Notice of
Borrowing no later than 2:00 P.M. (New York time) at least three Business Days
in advance of the proposed Funding Date (in the case of a Eurodollar Rate Loan)
or on the proposed Funding Date (in the case of a Base Rate Loan). The Notice of
Borrowing shall specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount and type of Loans requested, (iii) whether such Loans
shall be Base Rate Loans or Eurodollar Rate Loans, and (iv) in the case of any
Loans requested to be made as Eurodollar Rate Loans, the initial Interest Period
requested therefor. The Term Loan, Revolving Loans, and Acquisition Loans may be
continued as or converted into Base Rate Loans and Eurodollar Rate Loans in the
manner provided in subsection 2.2(d). In lieu of delivering the above-described
Notice of Borrowing, Borrower may give Lender telephonic notice by the required
time of any proposed borrowing under this subsection 2.1(b) with respect to the
Term Loan or a Revolving Loan or Acquisition Loan; PROVIDED that such notice
shall be promptly confirmed in writing by delivery of a Notice of Borrowing to
Lender on or before the applicable Funding Date.
2.1(b)(ii) Lender shall not incur any liability to Borrower in acting
upon any telephonic notice referred to in this subsection 2.1(b) that Lender
believes in good faith to have been given by a duly authorized officer or other
person authorized to borrow on behalf of Borrower or for otherwise acting in
good faith under this subsection 2.1(b), and upon funding of Loans by Lender in
accordance with this Agreement pursuant to any such telephonic notice Borrower
shall have effected Loans hereunder.
2.1(b)(iii) Borrower shall notify Lender prior to the funding of any
Loans in the event that any of the matters to which Borrower is required to
certify in the applicable Notice of Borrowing is no longer true and correct as
of the applicable Funding Date, and the acceptance by Borrower of the proceeds
of any Loans shall constitute a re-certification by Borrower, as of the
applicable Funding Date, as to the matters to which Borrower is required to
certify in the applicable Notice of Borrowing.
2.1(b)(iv) Except as otherwise provided in subsections 2.6(b), 2.6(c)
and 2.6(g), a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic
notice in lieu thereof) shall be irrevocable on and after the related Interest
Rate Determination Date, and Borrower shall be bound to make a borrowing in
accordance therewith.
2.1(c) DISBURSEMENT OF FUNDS. Upon satisfaction or waiver of the
conditions precedent specified in subsections 3.1 (in the case of Loans made on
the Closing Date) and 3.2 (in the case of all Loans), Lender shall make the
proceeds of such Loans available to Borrower on the applicable Funding Date by
causing an amount in Dollars equal to the
34
amount of such Loans to be credited to the account of Borrower at the Funding
and Payment Office.
2.1(d) THE REGISTER. Lender shall record on its internal records (the
"REGISTER") (including, without limitation, the Notes held by Lender) the amount
of the Term Loan and each Revolving Loan and Acquisition Loan made by it and
each payment in respect thereof. Any such recordation shall be conclusive and
binding on Borrower, absent demonstrable error; PROVIDED that failure to make
any such recordation, or any error in such recordation, shall not affect
Borrower's Obligations in respect of the applicable Loans.
2.1(e) NOTES. Borrower shall execute and deliver on the Closing Date to
Lender (a) a Term Loan Note substantially in the form of EXHIBIT III annexed
hereto to evidence Lender's Term Loan, in the principal amount of Three Million
Five Hundred Thousand Dollars ($3,500,000), and with other appropriate
insertions, (b) a Revolving Note substantially in the form of EXHIBIT IV annexed
hereto to evidence Lender's Revolving Loans, in the principal amount of Three
Million Five Hundred Thousand Dollars ($3,500,000) and with other appropriate
insertions, and (c) an Acquisition Note substantially in the form of EXHIBIT V
annexed hereto to evidence Lender's Acquisition Loans, in the principal amount
of Three Million and 00/100 Dollars ($3,000,000), and with other appropriate
insertions.
2.2 INTEREST ON THE LOANS.
2.2(a) RATE OF INTEREST. Subject to the provisions of subsections 2.6
and 2.7, the Term Loan and each Revolving Loan and Acquisition Loan shall bear
interest on the unpaid principal amount thereof from the date made through
maturity (whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate or the Adjusted Eurodollar Rate, as the case may be.
The applicable basis for determining the rate of interest with respect to any
Loan shall be selected by Borrower initially at the time a Notice of Borrowing
is given with respect to such Loan pursuant to subsection 2.1(b). The basis for
determining the interest rate with respect to the Term Loan or any Revolving
Loan or Acquisition Loan may be changed from time to time pursuant to subsection
2.2(d). If on any day the Term Loan or a Revolving Loan or Acquisition Loan is
outstanding with respect to which notice has not been delivered to Lender in
accordance with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2(e) and 2.7, the Term Loan
and the Revolving Loans and Acquisition Loans shall bear interest through
maturity as follows:
2.2(a)(i) if a Base Rate Loan, then at the sum of the Base
Rate PLUS the Applicable Margin; or
35
2.2(a)(ii) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate PLUS the Applicable Margin.
2.2(a)(iii) As used herein, "APPLICABLE MARGIN" means, with
respect to each period commencing on an Adjustment Date (each a "RATE
ADJUSTMENT PERIOD") through the date immediately preceding the next
Adjustment Date, the applicable margin or rate (in each case per annum)
set forth below with respect to the Leverage Ratio, as determined as of
the end of the Most Recent Reference Period ending immediately prior to
the applicable Rate Adjustment Period and pertaining to such Adjustment
Date:
------------------------------------------------------------------------------------------------------------------
REVOLVING CREDIT &
TERM LOAN ACQUISITION FACILITY
------------------------------------------------------------------------------------------------------------------
Eurodollar Base Rate Eurodollar BASE RATE
LEVEL LEVERAGE RATIO Rate Loans Loans Rate Loans LOANS
------------------------------------------------------------------------------------------------------------------
I Greater than or equal 3.25% 1.50% 3.50% 1.75%
to 2.75x
------------------------------------------------------------------------------------------------------------------
II Less than 2.75x but 3.00% 1.25% 3.25% 1.50%
greater than or equal
to 2.50x
------------------------------------------------------------------------------------------------------------------
III Less than 2.50x but 2.75% 1.00% 3.00% 1.25%
greater than or equal
to 2.25x
------------------------------------------------------------------------------------------------------------------
IV Less than 2.25x 2.50% 0.75% 2.75% 1.00%
------------------------------------------------------------------------------------------------------------------
Changes in the Applicable Margin shall be based in the quarterly
financial statements and the Officers' Certificate and Compliance
Certificate most recently delivered pursuant to subsection 5.1(ii) and
subsection 5.1(vii) hereof, respectively. Notwithstanding any other
provision hereof, (a) for the period commencing on the Closing Date to
the date on which Borrower delivers to Lender such financial statements
and Officers' Certificate and Compliance Certificate for the period
ended September 30, 1999, the Applicable Margin shall be the Applicable
Margin set forth on Level I on the chart set forth above and (b) if
Borrower fails to deliver any financial statements or any Officers'
Certificate or Compliance Certificate when due pursuant to subsection
5.1(ii) and subsection 5.1(vii) hereof, for the period commencing on
the next Adjustment Date to occur subsequent to such failure (if such
failure is then continuing uncured) through the date following the date
on which such financial statements and/or Officers' Certificate and
Compliance Certificate is delivered, the Applicable Margin shall be the
Applicable Margin set forth on Level I on the chart set forth above.
36
2.2(a)(iv) Nothing in the table set forth in subsection
2.2(b)(iii) above shall be deemed to constitute a waiver of the
requirements of Section 6.6(c), default under which will result in an
Event of Default and the application of the default rate of interest
specified in Section 2.2(e).
2.2(a)(vii) Notwithstanding the foregoing, no downward
adjustment of the Applicable Margin hereunder shall be permitted if, as
of the date of such proposed downward adjustment, there shall exist an
Event of Default.
2.2(b) INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
Borrower may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each an
"INTEREST PERIOD") to be applicable to such Loan, which Interest Period shall
be, at Borrower's option, either a one, two, three or six month period; PROVIDED
that:
2.2(b)(i) the initial Interest Period for any Eurodollar Rate
Loan shall commence on the Funding Date in respect of such Loan, in the
case of a Loan initially made as a Eurodollar Rate Loan, or on the date
specified in the applicable Notice of Conversion/Continuation, in the
case of a Loan converted to a Eurodollar Rate Loan;
2.2(b)(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as such pursuant
to a Notice of Conversion/ Continuation, each successive Interest
Period shall commence on the day on which the next preceding Interest
Period expires;
2.2(b)(iii) if an Interest Period would otherwise expire on a
day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day; PROVIDED that, if any Interest Period
would otherwise expire on a day that is not a Business Day but is a day
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
2.2(b)(iv) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (v) of this subsection
2.2(b), end on the last Business Day of a calendar month;
2.2(b)(v) no Interest Period with respect to any portion of
the Term Loan shall extend beyond the Term Loan Maturity Date, no
Interest Period with respect to any portion of the Revolving Loans
shall extend beyond the Revolving Loan Commitment Termination Date, and
no Interest Period
37
with respect to any portion of the Acquisition Loans shall extend
beyond the Acquisition Loan Maturity Date;
2.2(b)(vi) no Interest Period with respect to any portion of
the Term Loan or the Acquisition Loans shall extend beyond a date on
which Borrower is required to make a scheduled payment of principal of
the Term Loan or the Acquisition Loans, respectively, unless the sum of
(A) the aggregate principal amount of the Term Loan advances or the
Acquisition Loans advances, as the case may be, that are Base Rate
Loans PLUS (B) the aggregate principal amount of the Term Loan advances
or the Acquisition Loans advances, as the case may be, that are
Eurodollar Rate Loans with Interest Periods expiring on or before such
date equals or exceeds the principal amount required to be paid on the
Term Loan or the Acquisition Loans on such date;
2.2(b)(vii) there shall be no more than six Interest Periods
outstanding at any time; and
2.2(b)(viii) in the event Borrower fails to specify an
Interest Period for any Eurodollar Rate Loan in the applicable Notice
of Borrowing or Notice of Conversion/Continuation, Borrower shall be
deemed to have selected an Interest Period of one month.
2.2(c) INTEREST PAYMENTS. Subject to the provisions of subsection
2.2(e), interest on each Loan shall be payable in arrears on and to each
Interest Payment Date applicable to that Loan, upon any prepayment of that Loan
(to the extent accrued and unpaid on the amount being prepaid) and at maturity
(including final maturity), whether by acceleration or otherwise.
2.2(d) CONVERSION OR CONTINUATION. (i) Subject to the provisions of
subsection 2.6, Borrower shall have the option (A) to convert at any time all or
any part of its outstanding Term Loan, Revolving Loans or Acquisition Loans
equal to $100,000 and integral multiples of $25,000 in excess of that amount
from Loans bearing interest at a rate determined by reference to one basis to
Loans bearing interest at a rate determined by reference to an alternative basis
or (B) upon the expiration of any Interest Period applicable to a Eurodollar
Rate Loan, to continue all or any portion of such Loan equal to $100,000 and
integral multiples of $25,000 in excess of that amount as a Eurodollar Rate
Loan; PROVIDED, HOWEVER, that a Eurodollar Rate Loan may only be converted into
a Base Rate Loan on the expiration date of an Interest Period applicable
thereto; and PROVIDED FURTHER that no outstanding loan may be continued as, or
converted into, a Eurodollar Rate Loan when any Event of Default or Potential
Event of Default has occurred and is continuing.
2.2(d)(ii) Borrower shall deliver a Notice of Conversion/Continuation
to Lender no later than 11:00 A.M. (New York time) on the proposed conversion
date (in the case of a conversion to a Base Rate Loan) and at least three
Business Days in
38
advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan). A Notice of
Conversion/Continuation shall specify (A) the proposed conversion/
continuation date (which shall be a Business Day), (B) the amount and type of
the Loan to be converted/continued, (C) the nature of the proposed
conversion/ continuation, (D) in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan, the requested Interest Period, and
(E) in the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, that no Potential Event of Default or Event of Default has occurred and
is continuing. In lieu of delivering the above-described Notice of
Conversion/Continuation, Borrower may give Lender telephonic notice by the
required time of any proposed conversion/continuation under this subsection
2.2(d); PROVIDED that such notice shall be promptly confirmed in writing by
delivery of a Notice of Conversion/Continuation to Lender on or before the
proposed conversion/continuation date. If Borrower shall not have given
notice in accordance with this subsection 2.2(d) to continue any Loan into a
subsequent Interest Period (and shall not otherwise have given notice in
accordance with this subsection 2.2(d) to convert such Loan), such Loan
shall, at the end of the Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), automatically be continued as a Base Rate Loan.
2.2(d)(iii) Lender shall not incur any liability to Borrower in acting
upon any telephonic notice referred to above that Lender believes in good faith
to have been given by a duly authorized officer or other person authorized to
act on behalf of Borrower or for otherwise acting in good faith under this
subsection 2.2(d), and upon conversion or continuation of the applicable basis
for determining the interest rate with respect to any Loans in accordance with
this Agreement pursuant to any such telephonic notice Borrower shall have
effected a conversion or continuation, as the case may be, hereunder.
2.2(d)(iv) Except as otherwise provided in subsections 2.6(b), 2.6(c)
and 2.6(g), a Notice of Conversion/Continuation for conversion to, or
continuation of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after the related Interest Rate Determination Date,
and Borrower shall be bound to effect a conversion or continuation in accordance
therewith.
2.2(e) DEFAULT RATE. Upon the occurrence and during the continuation of
any Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); PROVIDED that, in the case of Eurodollar Rate Loans, upon the expiration
of the Interest Period in effect at the time any such increase in interest rate
is
39
effective such Eurodollar Rate Loans shall thereupon become Base Rate Loans
and shall thereafter bear interest payable upon demand at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans. Payment or acceptance of the increased rates of interest
provided for in this subsection 2.2(e) is not a permitted alternative to timely
payment and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of Lender.
2.2(f) COMPUTATION OF INTEREST. Interest on the Loans shall be computed
(i) in the case of Base Rate Loans, on the basis of a 365-day or 366-day year,
as the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis
of a 360-day year, in each case for the actual number of days elapsed in the
period during which it accrues. In computing interest on any Loan, the date of
the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar
Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, as the case may be, shall be included, and the date of payment of such
Loan or the expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the
date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the
case may be, shall be excluded; PROVIDED that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on that Loan.
2.2(g) INTEREST LAWS. Notwithstanding any provision to the contrary
contained in this Agreement or the other Loan Documents, Borrower shall not be
required to pay, and Lender shall not be permitted to collect, any amount of
interest in excess of the maximum amount of interest permitted by law ("Excess
Interest"). If any Excess Interest is provided for or determined by a court of
competent jurisdiction to have been provided for in this Agreement or in any of
the other Loan Documents, then in such event: (i) the provisions of this
subsection shall govern and control; (ii) neither Borrower nor any Loan Party
shall be obligated to pay any Excess Interest; (iii) any Excess Interest that
Lender may have received hereunder shall be, at Lender's option, (A) applied as
a credit against the outstanding principal balance of the Obligations or accrued
and unpaid interest (not to exceed the maximum amount permitted by law), (B)
refunded to the payor thereof, or (C) any combination of the foregoing; (D) the
interest rate(s) provided for herein shall be automatically reduced to the
maximum lawful rate allowed from time to time under applicable law (the "Maximum
Rate"), and this Agreement and the other Loan Documents shall be deemed to have
been and shall be, reformed and modified to reflect such reduction; and (E)
neither Borrower nor any Loan Party shall have any action against Lender for any
damages arising out of the payment or collection of any Excess Interest.
Notwithstanding the foregoing, if for any period of time interest on any
Obligations is calculated at the Maximum Rate rather than the applicable rate
under this Agreement, and thereafter such applicable rate becomes less than the
Maximum Rate, the rate of interest payable on such Obligations shall remain at
the Maximum Rate until Lender shall have received the amount of
40
interest which Lender would have received during such period on such
Obligations had the rate of interest not been limited to the Maximum Rate
during such Interest Period.
2.3 FEES.
2.3(a) COMMITMENT FEES. (i) Borrower agrees to pay to Lender commitment
fees for the period from and including the Closing Date to and excluding the
Revolving Loan Commitment Termination Date equal to the average of the daily
excess of the Revolving Loan Commitments over the aggregate principal amount of
Revolving Loans outstanding, MULTIPLIED BY 0.5 of 1% per annum, such commitment
fees to be calculated on the basis of a 365-day or 366-day year, as the case may
be, and the actual number of days elapsed and to be payable quarterly in arrears
on March 31, June 30, September 30 and December 31 of each year, commencing on
the first such date to occur after the Closing Date, and on the Revolving Loan
Commitment Termination Date.
2.3(a)(ii) Borrower agrees to pay to Lender commitment fees for the
period from and including the Closing Date to and including the Acquisition Loan
Commitment Termination Date equal to the average of the daily excess of the
Acquisition Loan Commitments over the aggregate principal amount of Acquisition
Loans outstanding, MULTIPLIED BY 0.5 of 1% per annum, such commitment fees to be
calculated on the basis of a 365-day or 366-day year, as the case may be, and
the actual number of days elapsed and to be payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year, commencing on the
first such date to occur after the Closing Date, and on the Acquisition Loan
Maturity Date.
2.3(b) FEE LETTER. Borrower agrees to pay to Lender such other fees in
the amounts and at the times set forth in the Fee Letter.
2.3(c) OTHER FEES. Borrower agrees to pay to Lender such other fees in
the amounts and at the times separately agreed upon by Borrower and Lender.
2.4 REPAYMENT AND PREPAYMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
2.4(a) SCHEDULED PAYMENTS OF TERM LOAN. Borrower shall make principal
payments on the Term Loan in installments on the dates and in the amounts set
forth below:
-----------------------------------------------------------------
SCHEDULED REPAYMENT
DATE OF TERM LOAN
-----------------------------------------------------------------
September 30, 2000 $100,000
-----------------------------------------------------------------
December 31, 2000 $100,000
-----------------------------------------------------------------
March 31, 2001 $125,000
41
-----------------------------------------------------------------
June 30, 2001 $125,000
-----------------------------------------------------------------
September 30, 2001 $125,000
-----------------------------------------------------------------
December 31, 2001 $125,000
-----------------------------------------------------------------
March 31, 2002 $150,000
-----------------------------------------------------------------
June 30, 2002 $150,000
-----------------------------------------------------------------
September 30, 2002 $150,000
-----------------------------------------------------------------
December 31, 2002 $150,000
-----------------------------------------------------------------
March 31, 2003 $250,000
-----------------------------------------------------------------
June 30, 2003 $250,000
-----------------------------------------------------------------
September 30, 2003 $250,000
-----------------------------------------------------------------
December 31, 2003 $250,000
-----------------------------------------------------------------
March 31, 2004 $300,000
-----------------------------------------------------------------
June 30, 2004 $300,000
-----------------------------------------------------------------
September 30, 2004 $300,000
-----------------------------------------------------------------
Term Loan Maturity Date $300,000
-----------------------------------------------------------------
; PROVIDED that the scheduled installments of principal of the Term Loan set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Term Loan in accordance with subsection 2.4(c)(iv); and
PROVIDED, FURTHER that the Term Loan and all other amounts owed hereunder with
respect to the Term Loan shall be paid in full no later than the Term Loan
Maturity Date, and the final installment payable by Borrower in respect of the
Term Loan on such date shall be in an amount, if such amount is different from
that specified above, sufficient to repay all amounts owing by Borrower under
this Agreement with respect to the Term Loan.
2.4(b) SCHEDULED PAYMENTS OF ACQUISITION LOANS. Borrower shall make
principal payments on the Acquisition Loans in installments on the dates set
forth below (each such date an "ACQUISITION LOAN PAYMENT DATE") in an amount
based upon the quarterly percentage reductions set forth in the chart below. The
aggregate principal amount of the Acquisition Loans due each Acquisition Loan
Payment Date shall be the amount obtained by multiplying (i) the aggregate
principal amount of the Acquisition Loans outstanding on the Acquisition Loan
Commitment Termination Date by (ii) the percentage set forth below opposite such
Acquisition Loan Payment Date.
42
-----------------------------------------------------------------
PERCENTAGE
DATE REDUCTION
-----------------------------------------------------------------
September 30, 2000 3.33%
-----------------------------------------------------------------
December 31, 2000 3.33%
-----------------------------------------------------------------
March 31, 2001 4.17%
-----------------------------------------------------------------
June 30, 2001 4.17%
-----------------------------------------------------------------
September 30, 2001 4.17%
-----------------------------------------------------------------
December 31, 2001 4.17%
-----------------------------------------------------------------
March 31, 2002 4.17%
-----------------------------------------------------------------
June 30, 2002 4.17%
-----------------------------------------------------------------
September 30, 2002 4.17%
-----------------------------------------------------------------
December 31, 2002 4.17%
-----------------------------------------------------------------
March 31, 2003 4.17%
-----------------------------------------------------------------
June 30, 2003 4.17%
-----------------------------------------------------------------
September 30, 2003 4.17%
-----------------------------------------------------------------
December 31, 2003 4.17%
-----------------------------------------------------------------
March 31, 2004 4.17%
-----------------------------------------------------------------
June 30, 2004 4.17%
-----------------------------------------------------------------
September 30, 2004 4.17%
-----------------------------------------------------------------
December 31, 2004 4.17%
-----------------------------------------------------------------
March 31, 2005 13.34%
-----------------------------------------------------------------
Acquisition Loan Maturity Date 13.34%
-----------------------------------------------------------------
; PROVIDED that the Acquisition Loans and all other amounts owed hereunder with
respect to the Acquisition Loans shall be paid in full no later than the
Acquisition Loan Maturity Date, and the final installment payable by Borrower in
respect of the Acquisition Loans on such date shall be in an amount sufficient
to repay all amounts owing by Borrower under this Agreement with respect to the
Acquisition Loans.
2.4(c) VOLUNTARY AND MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS.
2.4(c)(i) VOLUNTARY PREPAYMENTS. Subject to the provisions of
subsection 2.4(c)(v) hereof, Borrower may, upon prior written or telephonic
notice of not less than
43
two Business Days (in the case of Base Rate Loans) and not less than three
Business Days (in the case of Eurodollar Rate Loans) given to Lender by 11:00
A.M. (New York time) on the date required and, if given by telephone,
promptly confirmed in writing to Lender, at any time and from time to time
prepay the Term Loan or any Revolving Loans or Acquisition Loans on any
Business Day in whole or in part in an aggregate minimum amount of $100,000
and integral multiples of $25,000 in excess of that amount; PROVIDED,
HOWEVER, that a Eurodollar Rate Loan may only be prepaid in compliance with
the provisions of Section 2.6(d) hereof. Notice of prepayment having been
given as aforesaid, the principal amount of the Loans specified in such
notice shall become due and payable on the prepayment date specified therein.
Any such voluntary prepayment shall be applied as specified in subsection
2.4(c)(iv). Upon prepayment in full of the Term Loan, the Term Loan
Commitment shall terminate. Optional prepayments of Revolving Credit Loans
may, subject to the terms and conditions hereof, be reborrowed hereunder
until the Revolving Credit Commitments are terminated. Optional prepayments
of the Term Loan or the Acquisition Loans may not be reborrowed.
44
2.4(c)(ii) VOLUNTARY REDUCTIONS OF LOAN COMMITMENTS. Borrower may, upon
not less than three Business Days' prior written or telephonic notice confirmed
in writing to Lender, at any time and from time to time (A) terminate or (B)
reduce in part, without premium or penalty, (x) the Revolving Loan Commitment in
an amount up to the amount by which the Revolving Loan Commitment exceeds the
aggregate principal amount of all outstanding Revolving Loans at the time of
such proposed reduction, or (y) the Acquisition Loan Commitment in an amount up
to the amount by which the Acquisition Loan Commitment exceeds the aggregate
principal amount of all outstanding Acquisition Loans; PROVIDED that any such
partial reduction of the Revolving Loan Commitment or Acquisition Loan
Commitment shall be in an aggregate minimum amount of $100,000 and integral
multiples of $25,000 in excess of that amount. Borrower's notice to Lender shall
designate the date (which shall be a Business Day) of such termination or
reduction and the amount of any partial reduction, and such termination or
reduction shall be effective on the date specified in Borrower's notice. Any
such reduction shall be permanent and irrevocable.
2.4(c)(iii) MANDATORY PREPAYMENTS.
2.4(c)(iii)(A) PREPAYMENTS FROM ASSET SALES. No later than
the fifth Business Day following the date of receipt by Borrower or any
of its Subsidiaries of Cash Proceeds of any (x) Asset Sale generating
Cash Proceeds in excess of $100,000 or (y) any Asset Sale that,
together with previous Asset Sales occurring within the same
twelve-month period, generates Cash Proceeds in excess of $250,000,
Borrower shall prepay the Obligations in the amount of the Net Cash
Proceeds of such Asset Sale. Concurrently with any prepayment of the
Loans pursuant to this subsection 2.4(c)(iii)(A), Borrower shall
deliver to Lender an Officers' Certificate demonstrating the derivation
of the Net Cash Proceeds of the correlative Asset Sale from the gross
sales price thereof. In the event that the prepayments previously made
in respect of such Asset Sale were in an aggregate amount less than
that required by the terms of this subsection 2.4(c)(iii)(A), Borrower
shall promptly make an additional prepayment of the Term Loan,
Acquisition Loans, or Revolving Loans, as the case may be, in an amount
equal to the amount of any such deficit, and Borrower shall
concurrently therewith deliver to Lender an Officers' Certificate
demonstrating the derivation of the additional Net Cash Proceeds
resulting in such deficit. Any mandatory prepayments pursuant to this
subsection 2.4(c)(iii)(A) shall be applied as specified in subsection
2.4(c)(iv).
2.4(c)(iii)(B) PREPAYMENTS FROM CONSOLIDATED EXCESS CASH FLOW.
On April 30 of each year, commencing with April 30, 2000, Borrower
shall prepay Obligations in an amount equal to 50% of the Consolidated
Excess Cash Flow, if any, for the Fiscal Year of the Borrower most
recently ended if the Consolidated Adjusted EBITDA for such Fiscal Year
was less than $5,000,000. Any such mandatory prepayments shall be
applied as specified in subsection 2.4(c)(iv).
45
2.4(c)(iii)(C) PREPAYMENTS DUE TO INSURANCE AND CONDEMNATION
PROCEEDS. No later than 120 days following the date of receipt by
Borrower or any of its Subsidiaries of any cash payments under any of
the casualty insurance policies covering damage to or loss of property
resulting from damage to or loss of all or any portion of the
Collateral or any other tangible asset (net of actual and documented
reasonable costs incurred by Borrower in connection with adjustment and
settlement thereof, "INSURANCE PROCEEDS") or any proceeds resulting
from the taking of assets by the power of eminent domain, condemnation
or otherwise (net of actual and documented reasonable costs incurred by
Borrower in connection with adjustment and settlement thereof,
"CONDEMNATION PROCEEDS") (in each case, other than the portion of such
proceeds promptly applied by Borrower or such Subsidiary to replace or
repair the property in respect of which such proceeds were paid and
only if such proceeds equals or exceeds $100,000), Borrower shall
prepay the Obligations in an amount equal to such Insurance Proceeds or
Condemnation Proceeds. Borrower shall, no later than twelve months
after receipt of any such Insurance Proceeds or Condemnation Proceeds
that have not theretofore been applied to the Obligations or the
replacement or repair of the property in respect of which such proceeds
were paid, make an additional prepayment of the Term Loan or Revolving
Loans, as the case may be, in the full amount of all such proceeds that
have not then been reinvested in similar assets. Any such mandatory
prepayments shall be applied as specified in subsection 2.4(c)(iv).
2.4(c)(iii)(D) PREPAYMENTS DUE TO REVERSION OF SURPLUS ASSETS
OF PENSION PLANS. No later than the first Business Day following the
date of return to Borrower or any of its Subsidiaries of any surplus
assets of any pension plan of Borrower or such Subsidiary, Borrower
shall prepay the Obligations in an amount (the "NET REVERSION AMOUNT")
equal to 100% of such returned surplus assets, net of transaction costs
and expenses incurred in obtaining such return, including incremental
taxes payable as a result thereof. Any such mandatory prepayments shall
be applied as specified in subsection 2.4(c)(iv).
2.4(c)(iii)(E) PREPAYMENT FROM EQUITY OFFERINGS. In the event
that Borrower or any of its Subsidiaries issues Capital Stock, no later
than the third Business Day following the date of receipt of the
proceeds from any sale of such stock (other than (1) proceeds from the
issuance of Capital Stock to Borrower or any Subsidiary of Borrower by
any Person that was a Subsidiary of Borrower immediately prior to such
issuance; and (2) equity contributions to any Subsidiary by Borrower or
any of its Subsidiaries), Borrower shall prepay the Obligations in an
amount equal to fifty percent (50%) of such proceeds, net of
underwriting discounts and commissions and other reasonable costs
associated therewith ("NET EQUITY PROCEEDS"); PROVIDED, that the
foregoing shall not obligate Borrower to make any mandatory prepayment
from the proceeds of any such sale of Capital Stock if the Net Equity
Proceeds are less than or equal to $100,000; PROVIDED, FURTHER, that
notwithstanding the foregoing, Borrower shall make a mandatory
46
prepayment of the Obligations in an amount equal to fifty percent (50%)
of all Net Equity Proceeds in excess of $500,000 during any calendar
year, to the extent not paid pursuant to the preceding clause. All
mandatory prepayments pursuant to this subsection 2.4(c)(iii)(E) shall
be applied as specified in subsection 2.4(c)(iv) hereof.
2.4(c)(iii)(F) PREPAYMENT FROM AMOUNTS RECEIVED UNDER
ACQUISITION AGREEMENTS. On each date upon which Borrower or any of its
Subsidiaries receives cash proceeds pursuant to any agreement or
understanding relating to an acquisition agreement in respect of any
Acquisition by Borrower or any of its Subsidiaries, including but not
limited to indemnification or similar payments and post-closing
adjustments, but excluding in each case amounts payable to third
parties and reimbursement of out-of-pocket costs and expenses, Borrower
shall prepay the Obligations in an amount equal to such proceeds (net
of reasonable expenses incurred in connection with obtaining such
proceeds.) Any such mandatory prepayments shall be applied as specified
in subsection 2.4(c)(iv).
2.4(c)(iii)(G) MANDATORY PAYMENTS IF LOANS EXCEED RELATED
MAXIMUM COMMITMENTS.
2.4(c)(iii)(G)(1) Upon any reduction in the amount of the
Revolving Loan Commitment, Borrower agrees immediately to
prepay Revolving Loans in such amount as may be necessary so
that the aggregate principal amount of outstanding Revolving
Loans does not exceed the lesser of (i) the amount of the
Revolving Loan Commitment as so reduced and (ii) the Borrowing
Base.
2.4(c)(iii)(G)(2) Upon any reduction in the amount of the
Acquisition Loan Commitment, Borrower agrees immediately to
prepay the Acquisition Loans in such amount as may be
necessary so that the aggregate principal amount of the
outstanding Acquisition Loans does not exceed the amount of
the Acquisition Loan Commitment, as so reduced.
2.4(c)(iv) APPLICATION OF PREPAYMENTS.
2.4(c)(iv)(A)APPLICATION OF VOLUNTARY PREPAYMENTS BY TYPE OF
LOANS AND ORDER OF MATURITY. Any voluntary prepayments pursuant to
subsection 2.4(c)(i) shall be applied first to repay the outstanding
Term Loan to the full extent thereof, and second to repay outstanding
Acquisition Loans to the full extent thereof. Any voluntary prepayments
of the Term Loan pursuant to subsection 2.4(c)(i) shall be applied, on
a PRO RATA basis, to reduce the scheduled installments of principal of
the Term Loan set forth in subsection 2.4(a).
2.4(c)(iv)(B) APPLICATION OF MANDATORY PREPAYMENTS. Any
mandatory prepayments pursuant to subsections 2.4(c)(iii) shall be
applied (1) to prepay the
47
Term Loan in the amount of such prepayment, (2) to the extent the
amount of such prepayment exceeds the aggregate outstanding
principal of the Term Loan, to prepay the Acquisition Loans in the
amount of such excess, and (3) to the extent that the amount of such
prepayment exceeds the sum of (x) the aggregate outstanding
principal of the Term Loan PLUS (y) the outstanding principal amount
of the Acquisition Loans, to prepay the Revolving Loans and
permanently reduce the Revolving Loan Commitment in the amount of
such excess.
2.4(c)(iv)(C)APPLICATION OF MANDATORY PREPAYMENTS OF TERM LOAN
BY ORDER OF MATURITY. Any mandatory prepayments of the Term Loan
pursuant to subsection 2.4(c)(iv)(B) shall be applied to reduce the
scheduled installments of principal of the Term Loan set forth in
subsection 2.4(a) that are unpaid at the time of such prepayment, in
the inverse order of maturity thereof.
2.4(c)(iv)(D)APPLICATION OF PREPAYMENTS TO BASE RATE LOANS AND
EURODOLLAR RATE LOANS. Considering Term Loan and Revolving Loans being
prepaid separately, any prepayment thereof shall be applied first to
Base Rate Loans to the full extent thereof before application to
Eurodollar Rate Loans, in each case in a manner which minimizes the
amount of any payments required to be made by Borrower pursuant to
subsection 2.6(d).
2.4(d) GENERAL PROVISIONS REGARDING PAYMENTS.
2.4(d)(i) MANNER AND TIME OF PAYMENT. All payments by Borrower of
principal, interest, fees and other Obligations hereunder and under the Notes
shall be made in Dollars in same day funds, without defense, set off or
counterclaim, free of any restriction or condition, and delivered to Lender not
later than 2:00 P.M. (New York time) on the date due at the Funding and Payment
Office for the account of Lender; funds received by Lender after that time on
such due date shall be deemed to have been paid by Borrower on the next
succeeding Business Day. Borrower hereby authorizes Lender to charge its
accounts with Lender in order to cause timely payment to be made to Lender of
all principal, interest, fees and expenses due hereunder (subject to sufficient
funds being available in its accounts for that purpose).
2.4(d)(ii) APPLICATION OF PAYMENTS TO PRINCIPAL AND INTEREST. All
payments in respect of the principal amount of any Loan shall include payment of
accrued and unpaid interest on the principal amount being repaid or prepaid, and
all such payments shall be applied to the payment of interest, fees and late
charges (in such order as Lender may elect) before application to principal.
2.4(d)(iii) PAYMENTS ON BUSINESS DAY. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, such
payment shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of interest hereunder
or of the commitment fees hereunder, as the case may be.
48
2.5 USE OF PROCEEDS.
2.5(a) TERM LOAN. The proceeds of the Term Loan, together with other
funds available to Borrower, shall be applied by Borrower to (i) to refinance
existing Indebtedness of Borrower in an amount not to exceed $3,500,000, and
(ii) to pay Transaction Costs in an amount not to exceed $650,000.
2.5(b) REVOLVING LOANS. The proceeds of Revolving Loans, together with
other funds available to Borrower, shall be applied by Borrower (i) to fund a
portion of the purchase price of identified Permitted Acquisitions, (ii) for
working capital and general corporate purposes, and (iii) to pay Transaction
Costs in an amount which, together with the amount of all other Transaction
Costs (whether paid pursuant to subsection 2.5(a)(ii) above or otherwise) does
not exceed $650,000.
2.5(c) ACQUISITION LOANS. The proceeds of Acquisition Loans, together
with other funds available to Borrower, shall be used to fund the purchase
prices of certain identified Permitted Acquisitions.
2.5(d) MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by Borrower or any of its Subsidiaries in any
manner that might cause the borrowing or the application of such proceeds to
violate Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS. Notwithstanding any
other provision of this Agreement to the contrary, the following provisions
shall govern with respect to Eurodollar Rate Loans as to the matters covered
herein:
2.6(a) DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 11:00 A.M. (New York time) on each Interest Rate Determination
Date, Lender shall determine (which determination shall, absent demonstrable
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to Borrower.
2.6(b) INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event
that Lender shall have determined (which determination shall be final and
conclusive and binding upon all parties hereto) on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that adequate and
fair means do not exist for ascertaining the interest rate applicable to such
Loans on the basis provided for in the definition of Adjusted Eurodollar Rate,
or dollar deposits in the amount of each Eurodollar Rate Loan are not generally
available in the London interbank Eurodollar market, or that the
49
rate at which dollar deposits are being offered will not reflect adequately
and fairly the cost to Lender of making or maintaining such Eurodollar Rate
Loan during such Interest Period, Lender shall on such date give notice (by
telefacsimile or by telephone confirmed in writing) to Borrower of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as Lender notifies Borrower that the
circumstances giving rise to such notice no longer exist and (ii) any Notice
of Borrowing or Notice of Conversion/Continuation given by Borrower with
respect to the Loans in respect of which such determination was made shall be
deemed to be rescinded by Borrower.
2.6(c) ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In the
event that on any date Lender shall have determined (which determination shall
be final and conclusive and binding upon all parties hereto but shall be made
only after consultation with Borrower) that the making, maintaining or
continuation of its Eurodollar Rate Loans (i) has become unlawful as a result of
compliance by Lender in good faith with any law, treaty, governmental rule,
regulation, guideline or order (or would conflict with any such treaty,
governmental rule, regulation, guideline or order not having the force of law
even though the failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause Lender material hardship, as a result of
contingencies occurring after the date of this Agreement which materially and
adversely affect the London interbank Eurodollar market or the position of
Lender in that market, then, and in any such event, Lender shall on that day
give notice (by telefacsimile or by telephone confirmed in writing) to Borrower
of such determination. Thereafter (a) the obligation of Lender to make Loans as,
or to convert Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by Lender, (b) to the extent such determination by
Lender relates to a Eurodollar Rate Loan then being requested by Borrower
pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, Lender
shall make such Loan as (or convert such Loan to, as the case may be) a Base
Rate Loan, (c) Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "AFFECTED LOANS") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by Lender as described above
relates to a Eurodollar Rate Loan then being requested by Borrower pursuant to a
Notice of Borrowing or a Notice of Conversion/ Continuation, Borrower shall have
the option, subject to the provisions of subsection 2.6(d) to rescind such
Notice of Borrowing or Notice of Conversion/Continuation by giving notice (by
telefacsimile or by telephone confirmed in writing) to Lender of such rescission
on the date on which Lender gives notice of its determination as described
above.
2.6(d) COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Borrower shall compensate Lender, upon written request by Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including, without limitation, any
interest paid by Lender to
50
lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans,
any loss, expense or liability sustained by Lender in connection with the
liquidation or reemployment of such funds, and any loss, expense or liability
sustained by Lender under Interest Rate Agreements) which Lender may sustain:
(i) if for any reason (other than a default by Lender) a borrowing of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice
of Borrowing or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Conversion/Continuation or a telephonic request for
conversion or continuation, (ii) if any prepayment or other principal payment
or any conversion of any of its Eurodollar Rate Loans occurs on a date prior
to the last day of an Interest Period applicable to that Loan, (iii) if any
prepayment of any of its Eurodollar Rate Loans is not made on any date
specified in a notice of prepayment given by Borrower, or (iv) as a
consequence of any other default by Borrower in the repayment of its
Eurodollar Rate Loans when required by the terms of this Agreement.
2.6(e) BOOKING OF EURODOLLAR RATE LOANS. Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of Lender.
2.6(f) ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to Lender under this subsection 2.6 and under
subsection 2.7(a) shall be made as though Lender had actually funded each of its
relevant Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the definition
of Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of
Lender to a domestic office of Lender in the United States of America; PROVIDED,
HOWEVER, that Lender may fund each of its Eurodollar Rate Loans in any manner it
sees fit and the foregoing assumptions shall be utilized only for the purposes
of calculating amounts payable under this subsection 2.6 and under subsection
2.7(a).
51
2.6(g) EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of and
during the continuation of a Potential Event of Default or an Event of Default,
(i) Borrower may not elect to have a Loan be made or maintained as, or converted
to, a Eurodollar Rate Loan after the expiration of any Interest Period then in
effect for that Loan and (ii) subject to the provisions of subsection 2.6(d),
any Notice of Borrowing or Notice of Conversion/ Continuation given by Borrower
with respect to a requested borrowing or conversion/ continuation that has not
yet occurred shall be deemed to be rescinded by Borrower.
2.7 INCREASED COSTS; TAXES, CAPITAL ADEQUACY.
2.7(a) COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7(b), in the event that Lender shall determine (which
determination shall, absent demonstrable error, be final and conclusive and
binding upon all parties hereto) that any law, treaty or governmental rule,
regulation or order, or any change therein (including but not limited to any
change by way of imposition or increase of reserve requirements) or in the
interpretation, administration or application thereof (including the
introduction of any new law, treaty or governmental rule, regulation or order),
or any determination of a court or governmental authority, or compliance by
Lender with any guideline, request or directive issued or made by any central
bank or other governmental or quasi-governmental authority (whether or not
having the force of law):
2.7(a)(i) subjects Lender (or its applicable lending office)
to any additional Tax (other than any Tax on the overall net income of
Lender) with respect to this Agreement or any of its obligations
hereunder or any payments to Lender (or its applicable lending office)
of principal, interest, fees or any other amount payable hereunder;
2.7(a)(ii) imposes, modifies or holds applicable any reserve
(including without limitation any marginal, emergency, supplemental,
special or other reserve), special deposit, compulsory loan, FDIC
insurance or similar requirement against assets held by, or deposits or
other liabilities in or for the account of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any
office of Lender (other than any such reserve or other requirements
with respect to Eurodollar Rate Loans that are reflected in the
definition of Adjusted Eurodollar Rate); or
2.7(a)(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting Lender (or its applicable
lending office) or its obligations hereunder or the London interbank
Eurodollar market;
and the result of any of the foregoing is to increase the cost to Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or
52
receivable by Lender (or its applicable lending office) with respect thereto;
then, in any such case, Borrower shall promptly pay to Lender, upon receipt
of the statement referred to in the next sentence, such additional amount or
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as Lender in its sole discretion shall
determine) as may be necessary to compensate Lender for any such increased
cost or reduction in amounts received or receivable hereunder. Lender shall
deliver to Borrower a written statement, setting forth in reasonable detail
the basis for calculating the additional amounts owed to Lender under this
subsection 2.7(a), which statement shall be conclusive and binding upon all
parties hereto absent demonstrable error.
2.7(b) WITHHOLDING OF TAXES.
2.7(b)(i) PAYMENTS TO BE FREE AND CLEAR. All sums payable by Borrower
under this Agreement and the other Loan Documents shall be paid free and clear
of and (except to the extent required by law) without any deduction or
withholding on account of any Tax (other than a Tax on the overall net income of
Lender) imposed, levied, collected, withheld or assessed by or within the United
States of America or any political subdivision in or of the United States of
America or any other jurisdiction from or to which a payment is made by or on
behalf of Borrower or by any federation or organization of which the United
States of America or any such jurisdiction is a member at the time of payment.
2.7(b)(ii) GROSSING-UP OF PAYMENTS. If Borrower or any other Person is
required by law to make any deduction or withholding on account of any such Tax
from any sum paid or payable by Borrower to Lender under any of the Loan
Documents:
2.7(b)(ii)(a)Borrower shall notify Lender of any such
requirement or any change in any such requirement as soon as possible
after Borrower becomes aware of it;
2.7(b)(ii)(b)Borrower shall pay any such Tax before the date
on which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Borrower) for its own account or (if
that liability is imposed on Lender) on behalf of and in the name of
Lender;
2.7(b)(ii)(c)the sum payable by Borrower in respect of which
the relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, Lender receives on the due date
a net sum equal to what it would have received had no such deduction,
withholding or payment been required or made; and
2.7(b)(ii)(d)within 30 days after paying any sum from which it
is required by law to make any deduction or withholding, and within 30
days after
53
the due date of payment of any Tax which it is required by
clause (b) above to pay, Borrower shall deliver to Lender evidence
satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority.
2.7(c) CAPITAL ADEQUACY ADJUSTMENT. If Lender shall have determined
that the adoption, effectiveness, phase-in or applicability of any law, rule,
guideline or regulation (or any provision thereof) regarding capital adequacy,
including, without limitation, the July 1998 report of the Basle Committee on
Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards", or any change therein
or in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by Lender (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental or quasi-governmental authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on the capital of
Lender or any corporation controlling Lender as a consequence of, or with
reference to, Lender's Loans or Commitments or other obligations hereunder with
respect to the Loans to a level below that which Lender or such controlling
corporation could have achieved but for such adoption, effectiveness, phase in,
applicability, change or compliance (taking into consideration the policies of
Lender or such controlling corporation with regard to capital adequacy), then
from time to time, within five Business Days after receipt by Borrower from
Lender of the statement referred to in the next sentence, Borrower shall pay to
Lender such additional amount or amounts as will compensate Lender or such
controlling corporation on an after-tax basis for such reduction. Lender shall
deliver to Borrower a written statement, setting forth in reasonable detail the
basis of the calculation of such additional amounts, which statement shall be
conclusive and binding upon all parties hereto absent demonstrable error.
SECTION 3.
CONDITIONS TO LOANS
The obligations of Lender to make Loans hereunder are subject to the
satisfaction of the following conditions.
3.1 CONDITIONS TO TERM LOAN AND INITIAL REVOLVING LOANS. The obligations of
Lender to make the Term Loan and any Revolving Loans or Acquisition Loans to be
made on the Closing Date are, in addition to the conditions precedent specified
in subsection 3.2, subject to prior or concurrent satisfaction of the following
conditions:
3.1(a) CORPORATE DOCUMENTS. On or before the Closing Date,
Borrower,VISTA Environmental, E/Risk, GeoSure, GeoSure, Inc., NRC, NRCIS,
Ensite, EcoSearch
54
Acquisition and EcoSearch shall deliver or cause to be delivered to Lender
the following, each, unless otherwise noted, dated the Closing Date:
3.1(a)(i) Certified copies of its certificate of incorporation or, in
the case of NRC and GeoSure, its articles of organization and partnership
certificate, respectively, together with a good standing certificate from the
Secretary of State of its jurisdiction of incorporation and each other
jurisdiction in which it is qualified as a foreign corporation to do business
and, to the extent generally available, a certificate or other evidence of good
standing as to payment of any applicable franchise or similar taxes from the
appropriate taxing authority of each of such jurisdictions, each dated a recent
date prior to the Closing Date;
3.1(a)(ii) Copies of its bylaws, operating agreement, or partnership
agreement, as the case may be, certified as of the Closing Date by its corporate
secretary or an assistant secretary;
3.1(a)(iii) Resolutions of its Board of Directors (or, in the case of
NRC and GeoSure, the Board of Directors of its Managing Member and several
partners, respectively) approving and authorizing the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a
party, and approving and authorizing the payment of the Notes, and the granting
of the Liens contemplated by the Loan Documents to which it is a party, in form
and substance satisfactory to Lender and its counsel, certified as of the
Closing Date by its corporate secretary or an assistant secretary as being in
full force and effect without modification or amendment;
3.1(a)(iv) Signature and incumbency certificates of its officers
executing this Agreement and the other Loan Documents to which it is a party;
3.1(b) LOAN DOCUMENTS. On or before the Closing Date, Borrower,VISTA
Environmental, E/Risk, GeoSure, GeoSure, Inc., NRC, NRCIS, Ensite, EcoSearch
Acquisition and EcoSearch shall each deliver or cause to be delivered to Lender
each Loan Document to which it is a party, including but not limited to, this
Agreement, the Notes (duly executed in accordance with subsection 2.1(e) drawn
to the order of Lender and with appropriate insertions), and the Warrant, and
such other documents as Lender may reasonably request, each dated the closing
Date unless otherwise noted.
3.1(c) CAPITALIZATION. Lender shall be satisfied with the capital,
organization, ownership and management structure of Borrower and its
Subsidiaries and with the form and substance of all intercompany contracts and
transactions between Borrower and its Subsidiaries and any of their respective
Affiliates.
3.1(d) NECESSARY CONSENTS AND APPROVALS. Borrower shall have obtained
and delivered to Lender all regulatory approvals and consents (including but not
limited to consents of landlords and mortgagees and consents of third parties
that might have claims against the Collateral or any part thereof) necessary in
connection with the transactions
55
contemplated by the Loan Documents, and each of the foregoing shall be in
full force and effect and in form and substance reasonably satisfactory to
Lender.
3.1(e) LIEN SEARCHES. Lender shall have received written advice, in
form and substance reasonably satisfactory to Lender, relating to such Lien and
judgment searches as Lender may require and the results of such searches shall
be satisfactory to Lender.
3.1(f) PERFECTION OF SECURITY INTERESTS. Borrower shall have taken or
caused to be taken such actions in such a manner so that Lender has a valid and
perfected first priority security interest in the entire Collateral granted by
the Collateral Documents. Such actions shall include, without limitation: (i)
the delivery pursuant to the applicable Collateral Documents of such
certificates (which certificates shall be registered in the name of Lender or
properly endorsed in blank for transfer or accompanied by irrevocable undated
stock powers duly endorsed in blank, all in form and substance reasonably
satisfactory to Lender) representing all of the shares of Capital Stock required
to be pledged pursuant to the Collateral Documents; (ii) the delivery to Lender
of Uniform Commercial Code financing statements, executed by the applicable Loan
Parties as to the Collateral granted by such Loan Parties for all jurisdictions
as may be necessary or desirable to perfect Lender's security interest in such
Collateral; and (iii) evidence reasonably satisfactory to Lender that all other
filings (including, without limitation, Uniform Commercial Code termination
statements), recordings and other actions Lender deems necessary or advisable to
establish, preserve and perfect the first priority Liens granted to Lender in
personal and mixed property shall have been made.
3.1(g) LEASES. Lender shall have received copies of all real property
leases identified on SCHEDULE 4.8 hereto, certified by Borrower to be true and
correct as of the Closing Date, in form and substance satisfactory to Lender.
3.1(h) OPINIONS OF COUNSEL. Lender and its counsel shall have received
originally executed copies of one or more favorable written opinions of Xxxx,
Xxxx, Xxxx & Freidenrich LLP, counsel for the Loan Parties, in form and
substance satisfactory to Lender and its counsel, addressed to Lender, dated as
of the Closing Date and setting forth substantially the matters in the opinions
designated in EXHIBIT VII annexed hereto and as to such other matters as Lender
may reasonably request.
3.1(i) FEES. Borrower shall have paid to Lender the fees payable on the
Closing Date referred to in subsection 2.3.
3.1(j) PRO FORMA BALANCE SHEETS; PROJECTIONS; FINANCIAL STATEMENTS. On
or before the Closing Date, Lender shall have received from Borrower (i) a PRO
FORMA consolidated balance sheet of Borrower and its Subsidiaries as at the
Closing Date, prepared in accordance with GAAP, after giving effect to the Loan
Documents, which shall be in form and substance satisfactory to Lender; (ii) a
plan and financial forecast prepared by senior management of Borrower on a
consolidated and consolidating basis, in form and substance satisfactory to
Lender, including consolidated and consolidating
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balance sheets, income statements, cash flow statements and underlying
assumptions for Borrower and its Subsidiaries on an annual basis for the
period from June 30, 1999 through June 30, 2005, demonstrating, without
limitation, the ability of the Loan Parties to meet all of the Obligations as
they mature (the "PROJECTIONS"); and (iii) the consolidated and consolidating
balance sheet of Borrower and its Subsidiaries as at April 30, 1999 and the
related consolidated and consolidating statements of income and cash flows of
Borrower and its Subsidiaries (x) for such month and (y) for the four-month
period ended April 30, 1999, showing the Consolidated Adjusted EBITDA during
such four-month period of not less than $1,300,000, and otherwise in form and
substance satisfactory to Lender.
3.1(k) EVIDENCE OF INSURANCE. Borrower shall have delivered to Lender
certificates of insurance naming Lender as loss payee under the casualty
insurance policies and as additional insured under the liability and business
interruption policies, all as required pursuant to subsection 5.4 hereof or
pursuant to the Collateral Documents, together with the insurance policies
evidenced by such certificates. All such certificates of insurance shall contain
such endorsements as are reasonably required by Lender.
3.1(l) NO MATERIAL ADVERSE EFFECT. Since December 31, 1998, no Material
Adverse Effect shall have occurred.
3.1(m) REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENT.
Borrower shall have delivered to Lender an Officers' Certificate, in form and
substance reasonably satisfactory to Lender, to the effect that the
representations and warranties in Section 4 hereof are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date and that Borrower shall have
performed in all material respects all agreements and satisfied in all material
respects all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise disclosed to
and agreed to in writing by Lender.
3.1(n) ACCOUNTS. Borrower and its Subsidiaries shall have opened
concentration accounts and operating accounts at Lender.
3.1(o) INTEREST RATE AGREEMENTS. Borrower shall have obtained and
Lender shall have reviewed and approved Interest Rate Agreements in accordance
with the provisions of subsection 5.9 hereof.
3.1(p) BORROWING BASE. Lender shall have received a Borrowing Base
Certificate demonstrating the Borrowing Base as of May 31, 1999 and certified by
the chief financial officer of Borrower to be true and complete in all material
respects as of such date.
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3.1(q) INSURANCE AUDIT. Lender shall have received a review of
Borrower's insurance policies and coverage, in form and substance satisfactory
to Lender in all respects, by The Xxxxx Group.
3.1(r) PAYOFF AND RELEASE LETTERS. Lender shall have received payoff
and release letters (and related UCC-3 financing statements or other discharges)
in form and substance satisfactory to Lender from (i) State Street Bank and
Trust Company and (ii) Silicon Valley National Bank, and arrangements
satisfactory to Lender shall have been made by Borrower with respect thereto.
3.1(s) YEAR 2000 COMPLIANCE. Borrower shall have provided with details
as to acts previously taken, to address the Year 2000 Problem, including for the
remediation, monitoring and testing of the Borrower and each of its
Subsidiaries' computer systems.
3.1(t) MATERIAL CONTRACTS. Lender shall have received copies of all
Material Contracts, certified by Borrower to be true, correct and complete
copies.
3.1(u) BOOKS AND RECORDS. Lender shall have completed a satisfactory
review of the books and records of Borrower and its Subsidiaries, including but
not limited to all material sales contracts, vendor supply contracts and
satisfactory trade references, and also including receipt and review of and
satisfaction with due diligence reports prepared by a CPA firm acceptable to
Lender and Borrower concerning accounts receivable and inventory of each Loan
Party and the quality of accounting procedures and MIS.
3.1(v) FEES AND EXPENSES. Borrower shall have provided Lender with an
itemization of all Transaction Costs and all fees referred to in subsection 2.3
not later than five (5) Business Days prior to the scheduled Closing Date.
Lender shall have approved all Transaction Costs and such Transaction Costs
shall not in any event exceed $650,000.
3.1(w) REGULATORY AND COMPLIANCE ISSUES. Lender shall have completed a
review of all regulatory issues, restrictions and compliance issues that affect
Borrower, including but not limited to environmental matters, pension
liabilities and the Year 2000 Problem.
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3.1(x) COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by Lender and
its counsel shall be reasonably satisfactory in form and substance to Lender and
such counsel, and Lender and such counsel shall have received all such
counterpart originals or certified copies of such documents as Lender may
reasonably request.
3.2 CONDITIONS TO ALL LOANS.
The obligations of Lender to make Loans on each Funding Date are
subject to the following further conditions precedent:
3.2(a) Lender shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1(b), an originally executed
Notice of Borrowing, in each case signed by the chief executive officer, the
chief financial officer or the treasurer or assistant treasurer of Borrower.
3.2(b) As of that Funding Date:
3.2(b)(i) The representations and warranties contained herein and in
the other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made on and
as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties shall have been true, correct and complete in all material respects
on and as of such earlier date;
3.2(b)(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event of
Default;
3.2(b)(iii) Borrower shall have performed all agreements and satisfied
all conditions which this Agreement provides shall be performed or satisfied by
it on or before that Funding Date;
3.2(b)(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain Lender from making
the Loans to be made by it on that Funding Date;
3.2(b)(v) The making of the Loans requested on such Funding Date shall
not violate any law including, without limitation, Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors of the Federal Reserve
System;
3.2(b)(vi) There shall not be pending or, to the knowledge of Borrower,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Borrower or any of its Subsidiaries or any
property of Borrower or any of its
59
Subsidiaries that has not been disclosed by Borrower in writing pursuant to
subsection 4.6 or 5.1(xiii) prior to the making of the last preceding Loans
(or, in the case of the initial Loans, prior to the execution of this
Agreement), and there shall have occurred no development not so disclosed in
any such action, suit, proceeding, governmental investigation or arbitration
so disclosed, that, in either event, in the reasonable opinion of Lender,
would be expected to have a Material Adverse Effect; and no injunction or
other restraining order shall have been issued and no hearing to cause an
injunction or other restraining order to be issued shall be pending or
noticed with respect to any action, suit or proceeding seeking to enjoin or
otherwise prevent the consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated by this Agreement or the
making of Loans hereunder;
3.2(b)(vii) The Borrowing Base shall not be less than the aggregate
principal amount of the outstanding Revolving Loans and Borrower shall have
delivered to Lender the Borrowing Base Certificate for the most recent month as
required by subsection 5.1(vi).
The acceptance of the proceeds of each Borrowing of Loans shall
constitute a representation and warranty by each Loan Party to Lender that all
of the applicable conditions specified in this Section 3.2 have been satisfied
or waived.
All of the certificates, legal opinions and other documents and papers
referred to in this Section 3.2, unless otherwise specified, shall be delivered
to Lender at the Lender's Funding and Payment Office (or such other location as
may be specified by Lender) and shall be satisfactory in form and substance to
Lender.
SECTION 4.
REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and to make the
Loans, Borrower and the Guarantors, jointly and severally, represent and warrant
to Lender, on the date of this Agreement and on each Funding Date, that the
following statements are true, correct and complete:
4.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS,
SUBSIDIARIES AND COLLATERAL DOCUMENTS.
4.1(a) ORGANIZATION AND POWERS. Borrower is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Borrower has all requisite corporate power and authority to own and
operate its properties, to carry on its business as now conducted and as
proposed to be conducted, to enter into the Loan Documents and to carry out the
transactions contemplated thereby.
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4.1(b) QUALIFICATION AND GOOD STANDING. Borrower is qualified to do
business and in good standing in every jurisdiction where its assets are located
and wherever necessary to carry out its business and operations, except where
such failure to qualify and be in good standing would not have a Material
Adverse Effect.
4.1(c) LOAN PARTIES; SUBSIDIARIES. Borrower has no Subsidiaries except
the wholly owned Subsidiaries identified on SCHEDULE 4.1 annexed hereto. As
such, SCHEDULE 4.1 may be supplemented from time to time pursuant to the
provisions of subsection 5.10. Such SCHEDULE 4.1 lists each Subsidiary of the
Borrower existing on the Closing Date, indicating (a) its jurisdiction of
incorporation or formation, (b) its owners (by holder and percentage interest),
(c) all options of the Borrower or any Subsidiary to acquire or redeem its own
stock, (d) the total amount payable in respect of the exercise of any such
option or redemption as of June 30, 1999, and (e) the annual amount by which
such option exercise or redemption price will increase. Each option or
redemption agreement is in full force and effect and is enforceable against the
other party thereto in accordance with its terms. The Capital Stock of each of
the Loan Parties is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock constitutes Margin Stock. Each
Guarantor is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, has all requisite power and authority
to own and operate its properties and to carry on its business as now conducted
and as proposed to be conducted, and is qualified to do business and in good
standing in every jurisdiction where its assets are located and wherever
necessary to carry out its business and operations.
4.1(d) COLLATERAL DOCUMENTS. The security interests created in favor of
Lender under the Collateral Documents will at all times from and after the
Closing Date constitute, as security for the obligations purported to be secured
thereby, a legal, valid and enforceable security interest in and Lien on all of
the Collateral referred to therein in favor of Lender, perfected and prior to
the rights of all third persons in accordance with the requirements of all
applicable Collateral Documents, except as may be permitted thereby. Each Loan
Party has good and marketable title to its respective Collateral, and all such
Collateral is free and clear of all Liens except for Liens permitted by
subsection 5.2. No consents, filings or recordings are required in order to
perfect (or maintain the perfection or priority of) the security interests
purported to be created by any of the Collateral Documents, other than such as
have been obtained and which remain in full force and effect, Uniform Commercial
Code financing statements to be filed, or delivered to Lender for filing, on the
Closing Date, periodic Uniform Commercial Code continuation filings or as may be
specifically otherwise permitted by the terms of any applicable Collateral
Document and recordings of Notices of Security Interest with the United States
Patent and Trademark Office.
4.2 AUTHORIZATION OF BORROWING, ETC.
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4.2(a) AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents have been duly authorized by all necessary
corporate action on the part of each Loan Party.
4.2(b) NO CONFLICT. The execution, delivery and performance by the Loan
Parties of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not (i) violate any provision
of any law or any governmental rule or regulation applicable to any Loan Party,
the Certificate or Articles of Incorporation or Bylaws of any Loan Party or any
order, judgment or decree of any court or other agency of government binding on
any Loan Party, (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a material default under any Contractual
Obligation of any Loan Party, (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of any Loan Party
(other than any Liens created under any of the Loan Documents in favor of
Lender), or (iv) require any approval of stockholders, partners or members or
any approval or consent of any Person under any Contractual Obligation of any
Loan Party, except for such approvals or consents which will be obtained on or
before the Closing Date and disclosed in writing to Lender.
4.2(c) GOVERNMENTAL CONSENTS. The execution, delivery and performance
by the Loan Parties of the Loan Documents and the consummation of the
transactions contemplated by the Loan Documents do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any federal, state or other governmental authority or regulatory
body or any applicable securities exchange, except for routine filings with the
Securities and Exchange Commission that may be made after the Closing Date.
4.2(d) BINDING OBLIGATION. Each of the Loan Documents has been duly
executed and delivered by each of the Loan Parties party thereto and is the
legally valid and binding obligation of each such Loan Party, enforceable
against such Loan Party in accordance with its respective terms, except as may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
4.3 FINANCIAL CONDITION; PROJECTIONS.
4.3(a) FINANCIAL STATEMENTS. Borrower has heretofore delivered to
Lender, at Lender's request, the unaudited consolidated and consolidating
balance sheets of Borrower and its Subsidiaries as at April 30, 1999 and the
related unaudited consolidated and consolidating statements of income,
stockholders' equity and cash flows of Borrower and its Subsidiaries for the
fiscal period then ended, including footnotes. All such statements were prepared
in conformity with GAAP and fairly present, in all material respects, the
financial position as of the respective dates thereof of Borrower and cash flows
of Borrower for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal
year-end
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adjustments and footnote disclosures. Borrower does not have any Contingent
Obligation, contingent liability or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in the
foregoing financial statements or the notes thereto or which is material in
relation to the business, operations, properties, assets, condition
(financial or otherwise) or prospects of Borrower.
4.3(b) PROJECTIONS. On and as of the Closing Date, the Projections of
Borrower and its Subsidiaries for the period from December 31, 1999 through June
30, 2005 are based on good faith estimates and assumptions made by the
management of Borrower, it being recognized, however, that projections as to
future events are not to be viewed as facts and that the actual results during
the period or periods covered by the Projections may differ from the projected
results and that the differences may be material.
4.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS. Since December
31, 1998, no event or change has occurred that has caused or evidences, either
in any case or in the aggregate, a Material Adverse Effect. Neither Borrower nor
any of its Subsidiaries has directly or indirectly declared, ordered, paid or
made, or set apart any sum or property for, any Restricted Junior Payment paid
or payable on or after the Closing Date or agreed to do so except as permitted
by subsection 6.5.
4.5 TITLE TO PROPERTIES: LIENS. Borrower and its Subsidiaries have (i) valid
leasehold interests in (in the case of leasehold interests in real or personal
property) or (ii) good and marketable title to (in the case of all other
personal property) all of the properties and assets reflected in the financial
statements referred to in subsection 4.3 or in the most recent financial
statements delivered pursuant to subsection 5.1. Except as may be permitted by
this Agreement, all such properties and assets are free and clear of Liens. Each
Loan Party or its respective Subsidiaries holds all material licenses,
certificates of occupancy or operation and similar certificates and clearances
of municipal and other authorities necessary to own and operate its properties
in the manner and for the purposes currently operated by such party. There are
no actual, threatened or alleged defaults of a material nature with respect to
any leases of real property under which any Loan Party or its respective
Subsidiaries is lessor or lessee.
4.6 LITIGATION: ADVERSE FACTS. There are no actions, suits, proceedings,
arbitrations or governmental investigations (whether or not purportedly on
behalf of Borrower or any of its Subsidiaries) at law or in equity or before
or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
any applicable national securities exchange, pending or threatened against or
affecting any Loan Party or any property of any Loan Party that (a),
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect or (b) involve the transactions contemplated by this
Agreement. None of the Loan Parties is in violation of any applicable laws,
rules, or regulations of any governmental authority or the rules or
regulations of any applicable national securities exchange, that,
individually or in the aggregate, could reasonably be
63
expected to result in a Material Adverse Effect or subject to or in default
with respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other
governmental department commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
4.7 PAYMENT OF TAXES. Except to the extent permitted by subsection 5.3,
all tax returns and reports of Borrower and its Subsidiaries required to be
filed by any of them have been timely filed, and all taxes, assessments, fees
and other governmental charges upon Borrower and its Subsidiaries and upon
their respective properties, assets, income, businesses and franchises which
are due and payable have been paid when due and payable. None of the Loan
Parties knows of any proposed tax assessment against Borrower or any of its
Subsidiaries which is not being actively contested by Borrower or such
Subsidiary (as the case may be) in good faith and by appropriate proceedings;
PROVIDED that such reserves or other appropriate provisions, if any, as shall
be required in conformity with GAAP shall have been made or provided therefor.
4.8 REAL PROPERTY. As of the Closing Date, SCHEDULE 4.8 annexed hereto
contains a true, accurate and complete list of (a) leases, subleases or
assignments, of leases, or any agreements similar to the foregoing (together
with all amendments, modifications, supplements, renewals or extensions of
any thereof), affecting each parcel of real property leased by each Loan
Party, regardless of whether such Loan Party is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such
lease, sublease, assignment or similar assignment and (b) real property owned
in fee by each Loan Party. Except as specified in SCHEDULE 4.8 annexed
hereto, each agreement listed in clause (a) above is in full force and effect
with respect to each Loan Party that is a party thereto and no Loan party has
any knowledge of a default that has occurred and is continuing thereunder and
each constitutes the legally valid and binding obligation of each Loan Party
that is a party thereto, enforceable against such Loan Party, in accordance
with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by equitable principles.
4.9 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
4.9(a) None of the Loan Parties is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any of its Contractual Obligations, and no condition exists that,
with the giving of notice or the lapse of time or both, would constitute such a
default.
4.9(b) None of the Loan Parties is a party to or is otherwise subject
to any agreements or instruments or any charter or other internal restrictions
which, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.
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4.10 GOVERNMENTAL REGULATION.
None of the Loan Parties is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act or the Investment Company Act of 1940 or under any other federal or
state statute or regulation which may limit its ability to incur Indebtedness or
which may otherwise render all or any portion of the Obligations unenforceable.
4.11 SECURITIES ACTIVITIES.
4.11(a) None of the Loan Parties is engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
4.11(b) Following application of the proceeds of each Loan, not more
than 25% of the value of the assets of any Loan Party, or of such Loan Party and
its Subsidiaries on a consolidated basis, will be Margin Stock.
4.12 EMPLOYEE BENEFIT PLANS; NO NON-EXEMPT PROHIBITED TRANSACTION.
4.12(a) Borrower and each of its ERISA Affiliates are in compliance in
all material respects with all applicable provisions and requirements of ERISA
and the regulations and published interpretations thereunder with respect to
each Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan.
4.12(b) There has been no ERISA Event which is continuing or in respect
of which there is any outstanding liability of Borrower or any of its ERISA
Affiliates, and no ERISA Event is reasonably expected to occur.
4.12(c) As of the most recent valuation date for any Pension Plan, the
actuarial present value (determined on the basis of reasonable assumptions
employed by the independent actuary for such Pension Plan for purposes of
Section 412 of the Internal Revenue Code or Section 302 of ERISA) of benefit
liabilities (as defined in Section 4001(a)(16) of ERISA) does not exceed the
fair market value of the assets of such Pension Plan, individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit liabilities).
4.13 CERTAIN FEES. Except for a fee payable to Pro Finance Associates in an
amount not to exceed $250,000, no broker's or finder's fee or commission will be
payable with respect to this Agreement or any of the transactions contemplated
hereby, and each Loan Party hereby indemnifies Lender against, and agrees that
it will hold Lender harmless from, any claim, demand or liability for any such
broker's or finder's fees alleged to have been incurred in connection herewith
or therewith and any expenses (including
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reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
4.14 ENVIRONMENTAL PROTECTION. Except as set forth on SCHEDULE 4.14:
4.14(a) The operations of Borrower and each of its Subsidiaries
(including, without limitation, all operations and conditions at or in the
Facilities) comply in all material respects with all Environmental Laws.
4.14(b) Borrower and each of its Subsidiaries have obtained all
Governmental Authorizations under Environmental Laws necessary to their
respective operations, and all such Governmental Authorizations are in good
standing, and Borrower and each of its Subsidiaries are in compliance with all
terms and conditions of such Governmental Authorizations.
4.14(c) Neither Borrower nor any of its Subsidiaries has received (a)
any notice or claim to the effect that it is or may be liable to any Person as a
result of or in connection with any Hazardous Materials or (b) any letter or
request for information under Section 104 of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. Section 9604) or comparable
state laws, and none of the operations of Borrower or any of its Subsidiaries is
the subject of any federal or state investigation relating to or in connection
with any Hazardous Materials at any Facility or at any other location.
4.14(d) None of the operations of Borrower of any of its Subsidiaries
is subject to any judicial or administrative proceeding alleging the violation
of or liability under any Environmental Laws.
4.14(e) Neither Borrower nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written order
or settlement agreement or consent decree with any governmental authority or
private party relating to (i) any Environmental Laws or (ii) any Environmental
Claims.
4.14(f) Neither Borrower nor any of its Subsidiaries has any contingent
liability in connection with any Release of any Hazardous Materials.
4.14(g) No Hazardous Materials exist on, under or about any Facility,
other than Hazardous Materials listed on Schedule 4.14 hereto that are used in
the ordinary course of business in compliance with all Environmental Laws and
neither Borrower nor any of its Subsidiaries has filed any notice or report of a
Release of any Hazardous Materials.
4.14(h) Neither Borrower nor any of its Subsidiaries nor, to the best
knowledge of Borrower, any of its predecessors has disposed of any Hazardous
Materials in a manner that has a reasonable possibility of giving rise to an
Environmental Claim.
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4.14(i) No underground storage tanks or surface impoundments are on or
at any Facility.
4.14(j) No Lien in favor of any Person relating to or in connection
with any Environmental Claim has been filed or has been attached to any
Facility.
4.15 EMPLOYEE MATTERS. Neither Borrower nor any of its Subsidiaries nor any of
their respective employees is subject to any collective bargaining agreement. No
petition for certification or union election is pending with respect to the
employees of any such Person and no union or collective bargaining unit has
sought such certification or recognition with respect to the employees of any
such Person. There are no strikes, slowdowns, work stoppages or controversies
pending or, to the best knowledge of Borrower after due inquiry, threatened
between any such Person and its respective employees, and no labor controversy
exists or is threatened that would reasonably be expected to result in any of
the foregoing. Neither Borrower nor any of its Subsidiaries is subject to any
employment agreement except for the employment agreements set forth on SCHEDULE
4.15 annexed hereto.
4.16 SOLVENCY. Each of the Loan Parties is and, upon the incurrence of any
Obligations by Borrower on any date on which this representation is made, will
be, Solvent.
4.17 DISCLOSURE. No representation or warranty of any Loan Party contained in
any Loan Document or in any other document, certificate or written statement
furnished to Lender by or on behalf of any Loan Party for use in connection with
the transactions contemplated by this Agreement contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading, as of the date and in
light of the circumstances in which the same were made. Any projections and PRO
FORMA financial information contained in such materials are based upon good
faith estimates and assumptions believed by any Loan Party to be reasonable at
the time made. There are no facts known (or which should upon the reasonable
exercise of diligence be known) to any Loan Party that, individually or in the
aggregate, could reasonably be expected to result in a Material Adverse Effect
and that have not been disclosed herein or in such other documents, certificates
and statements furnished to Lender for use in connection with the transactions
contemplated hereby.
4.18 NO JOINT VENTURES OR PARTNERSHIPS. Except as set forth on SCHEDULE 4.18, as
of the date hereof, no Loan Party is engaged in any Joint Venture or partnership
with any other Person.
4.19 NO ASSUMED NAMES OR TRADE NAMES. Except as set forth on SCHEDULE 4.19,
during the five years prior to the execution of this Agreement, no Loan Party
has been known under, or transacted business using, any name except those set
forth above at the beginning of this Agreement or in Section 1.1 of this
Agreement. If any Loan Party
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becomes aware of the prior use of any trade or fictitious name, such Loan
Party shall promptly notify the Lender of the same.
4.20 NO ACTUAL OR PENDING MATERIAL MODIFICATION OF BUSINESS. As of the date
hereof, there exists no actual or threatened, termination, cancellation or
limitation of, or any modification or change in, the business relationship of
any Loan Party, with any customer or group of customers whose purchases
individually or in the aggregate are material to the operations of any Loan
Party's business, or with any material supplier (other than in the ordinary
course of business where one supplier is replaced by another offering terms
which are no less favorable to such Loan Party).
4.21 INTELLECTUAL PROPERTY. Borrower and each of its Subsidiaries possesses all
trademarks, service marks, trade names, trade service styles, copyrights and
patents and all licenses, permits and authorizations that are necessary to own
its property and to conduct its business as it is presently conducted or as
Borrower and each such Subsidiary intends to conduct its business hereafter
without any infringement or conflict with the rights of any other Person or any
violation of law, which infringement, conflict or violation would have a
Material Adverse Effect. Except as set forth on Schedule 4.21, as of the date
hereof, neither Borrower nor any of its Subsidiaries has any interest in any
unexpired patents or currently pending patent applications, any U.S. trademark
registrations or currently pending trademark applications, any foreign trademark
registrations or currently pending trademark applications or any copyright
registrations or currently pending copyright applications; Borrower will notify
Lender, and will cause each Subsidiary to notify Lender, prior to obtaining an
interest in any of the foregoing and will grant Lender a security interest, and
will cause each Subsidiary to grant a security interest, therein, pursuant to a
security agreement, notice of security interest and other documents requested by
Lender, all in form and substance acceptable to Lender, immediately upon
acquiring any such interest.
4.22 INDEBTEDNESS. As of the date hereof, no Loan Party has any existing
Indebtedness except the Indebtedness, if any, which is described in SCHEDULE
6.1. As of the date hereof, no Loan Party has assumed, guarantied or endorsed,
or otherwise become directly or contingently liable in connection with, any
material liability of any other Person except for the endorsement of checks and
other negotiable instruments for collection in the ordinary course of business,
Indebtedness or guaranties in favor of Lender, and Indebtedness described on
SCHEDULE 6.1.
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4.23 INVESTMENTS. As of the date hereof, no Loan Party (i) has committed to make
any Investment, and has no Investment in any Person other than as permitted
under subsection 6.3; (ii) is a party to any indenture, agreement, contract,
instrument or lease or subject to any partnership agreement provision or other
partnership restriction or any injunction, order, restriction or decree, which
would reasonably be expected to materially and adversely affect its business,
prospects, operations, assets or financial condition; (iii) is a party to any
material "take or pay" contract as to which it is the purchaser; and (iv) has
any material contingent or long-term liability or commitment, including
management contracts (excluding employment contracts of full-time individual
officers or employees disclosed to Lender) which would materially and adversely
affect its business, operations, assets or financial condition, in each case
that has not been disclosed to the Lender in writing.
4.24 COMPLIANCE WITH LAWS. Each Loan Party is in compliance with all applicable
laws, rules, orders and regulations, the violation of which would have a
material adverse effect on such Loan Party's condition, financial or otherwise,
or its ability to perform and comply punctually and fully with the terms and
provisions hereof. Each Loan Party (a) has filed in a timely manner all reports,
documents and other materials required to be filed by it with any governmental
bureau, agency or instrumentality (and the information contained in each of such
filings is true, correct and complete in all respects), and (b) has retained all
records and documents required to be retained by it pursuant to any law,
ordinance, rule, regulation, order, policy, guideline or other requirement of
any governmental authority.
4.25 LENDER'S SECURITY INTEREST. When the Term Loan is made, Lender will have a
valid and (subject to the filing of UCC financing statements) perfected first
security interest and lien in and to the Collateral, prior and superior to all
other existing and future liens except Permitted Encumbrances, and in each case
enforceable against all third parties in all relevant jurisdictions and securing
the payment of all Obligations purported to be secured by such collateral. No
consents, filings or recordings are required in order to perfect (or maintain
the perfection or priority of) the security interests purported to be created by
any of the Loan Documents, other than such as have been obtained and which
remain in full force and effect, Uniform Commercial Code financing statements to
be filed, or delivered to the Lender for filing, on the Closing Date, periodic
Uniform Commercial Code continuation filings, and Notices of Security Interest
to be recorded, or delivered to Lender for recording, on the Closing Date, with
the United States Patent and Trademark Office.
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4.26 EMPLOYMENT, PRODUCT RECALLS AND OTHER REGULATIONS. Borrower and its
Subsidiaries are in material compliance with all federal, state or local laws
and regulations including laws and regulations relating to deceptive trade
practices, unfair labor practices, equal employment opportunity, employee safety
and other administrative controls over, and operating and testing procedures
with respect to, the substances handled and/or the products manufactured by
Borrower and its Subsidiaries, as in effect in all jurisdictions in which
Borrower or any of its Subsidiaries are presently doing business. Neither
Borrower nor any of its Subsidiaries has made any political contribution for the
purpose of maintaining or furthering its business or any payment, direct or
indirect, in the nature of bribes, kickbacks or similar payments. No material
condemnations, eminent domain or expropriation proceeding has been commenced, or
to the best knowledge of Borrower after due inquiry, threatened against the
assets of Borrower or the assets of its Subsidiaries.
4.27 INSURANCE. SCHEDULE 4.27 sets forth a complete and accurate descriptions of
all policies of insurance that will be in effect as of the Closing Date for
Borrower and its Subsidiaries. Borrower and its Subsidiaries are adequately
insured under such policies, no notice of cancellation has been received with
respect to such policies and Borrower and its Subsidiaries are in compliance
with all conditions contained in such policies.
4.28 BANK ACCOUNTS. SCHEDULE 4.28 sets forth the account numbers and locations
of all bank accounts of Borrower and its Subsidiaries. Except with respect to
accounts established with Lender, Borrower shall give Lender at least five (5)
days prior written notice of the establishment of any new accounts by Borrower
or any of its Subsidiaries and no such new account shall be established other
than in compliance with the provisions of Section 7 of the Security Agreement.
4.29 YEAR 2000. Borrower has reviewed its operations and those of its
Subsidiaries with a view to assessing whether it or its Subsidiaries' respective
business will, in the receipt, transmission, processing, manipulation, storage,
retrieval, retransmission or other utilization of data, be vulnerable to a Year
2000 Problem. Based on such review, the Borrower has no reason to believe that a
Materially Adverse Effect will occur with respect to its or its Subsidiaries'
businesses or operations resulting from a Year 2000 Problem. Borrower has
developed feasible contingency plans adequately to ensure uninterrupted and
unimpaired business operation in the event of failure of its own or a third
party's systems or equipment due to the Year 2000 Problem, including those of
vendors, customers and suppliers, as well as a general failure of or
interruption in its communications and delivery infrastructure. Except for any
reprogramming referred to above, the computer systems of Borrower and its
Subsidiaries are and, with ordinary course upgrading and maintenance, will
continue for the term of this Agreement to be, sufficient for the conduct of
their business as currently conducted.
4.30 CAPITALIZATION. The authorized capital stock of all classes of each
Guarantor are issued and outstanding and are held by the persons and in the
amounts set forth on
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SCHEDULE 4.30. All such outstanding shares have been duly and validly issued
and are fully paid and non-assessable. As of the date hereof, except as set
forth on SCHEDULE 4.30, (a) no Guarantor has outstanding any other securities
convertible into or exchangeable for its capital stock or outstanding any
subscriptions, options, warrants, calls, commitments, claims, preemptive
rights or agreements of any kind (including any stockholders' or voting trust
agreements) for the issuance or sale of, or otherwise relating to, any shares
of capital stock of any Guarantor, and (b) there are no outstanding
obligations of Borrower or any of its Subsidiaries to repurchase, redeem, or
otherwise acquire any shares of capital stock of other ownership interest of
Borrower or any of its Subsidiaries nor are there any outstanding obligations
of Borrower or any of its Subsidiaries to make payments to any person, such
as "phantom stock" payments, where the amount thereof is calculated with
reference to the fair market value or equity value of Borrower or any of its
Subsidiaries.
4.31 SEC FILINGS. Since January 1, 1996, Borrower has timely filed with the
Securities and Exchange Commission all forms, reports, registration statements
and documents required to be filed by it (collectively, "BORROWER'S SEC
REPORTS"). As of their respective dates, Borrower's SEC Reports complied in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act and all rules and regulations promulgated thereunder, and did not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. None
of Borrower's SEC Reports is required to be amended or supplemented as of the
date hereof.
4.32 MANAGEMENT STRUCTURE. The management structure of Borrower and its
Subsidiaries is as set forth on SCHEDULE 4.32 annexed hereto.
SECTION 5.
AFFIRMATIVE COVENANTS
Each of the Loan Parties covenants and agrees that, so long as the
Commitment hereunder shall remain in effect and until payment in full of all of
the Loans and other Obligations, unless Lender shall otherwise give prior
written consent, it shall perform, or cause the performance of, all covenants in
this Section 5.
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS. Borrower will maintain, and cause
each of its Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP. Borrower will deliver to
Lender:
5.1(i) MONTHLY FINANCIALS: as soon as available and in any event within
30 days after the end of June 1999, and within 30 days after the end of each
month thereafter, (a) the consolidated and consolidating balance sheet of
Borrower and its Subsidiaries as at the end of such month and the related
consolidated and consolidating statements of
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income and cash flows of Borrower and its Subsidiaries for such month and for
the period from the beginning of the then current Fiscal Year to the end of
such month, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year (in the
case of June 1999 and each following month) and the corresponding figures
from the consolidated plan and financial forecast for the current Fiscal Year
delivered pursuant to subsection 5.1(iv), to the extent prepared on a monthly
basis, all in reasonable detail and certified by the chief financial officer
of Borrower that they fairly present the financial condition of Borrower and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, and (b) a narrative
report describing the operations of Borrower and its Subsidiaries for such
month and for the period from the beginning of the then current Fiscal Year
to the end of such month, discussing the operations and cash flows for those
periods and, to the extent such information is available for the
corresponding periods in the prior Fiscal Year, comparing the performance
during such period to the corresponding periods in the prior Fiscal Year and
to the forecasts for such periods.
5.1(ii) QUARTERLY FINANCIALS: as soon as available and in any event
within 45 days after the end of September 1999, and within 45 days after the end
of each fiscal quarter thereafter, (a) the consolidated and consolidating
balance sheet of Borrower and its Subsidiaries as at the end of such fiscal
quarter and the related consolidated and consolidating statements of income and
cash flows of Borrower and its Subsidiaries for such fiscal quarter and for the
period from the beginning of the then current Fiscal Year to the end of such
fiscal quarter, setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year (in the case
of September 1999 and each following fiscal quarter) and the corresponding
figures from the consolidated plan and financial forecast for the current Fiscal
Year delivered pursuant to subsection 5.1(iv), to the extent prepared on a
monthly basis, all in reasonable detail and certified by the chief financial
officer of Borrower that they fairly present the financial condition of Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to changes
resulting from audit and normal year-end adjustments, and (b) a narrative report
describing the operations of Borrower and its Subsidiaries for such fiscal
quarter and for the period from the beginning of the then current Fiscal Year to
the end of such fiscal quarter, discussing the operations and cash flows for
those periods and, to the extent such information is available for the
corresponding periods in the prior Fiscal Year, comparing the performance during
such period to the corresponding periods in the prior Fiscal Year and to the
forecasts for such periods.
5.1(iii) YEAR-END FINANCIALS: as soon as available and in any event
within 120 days after the end of each Fiscal Year, (a) the audited consolidated
and consolidating balance sheets of Borrower and its Subsidiaries as at the end
of such Fiscal Year and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows of Borrower and its Subsidiaries for
such Fiscal Year, setting forth, to the extent that they differ materially from
such consolidated statements, in comparative form
72
the corresponding figures for the previous Fiscal Year and the corresponding
figures from the consolidated plan and financial forecast delivered pursuant
to subsection 5.1(iv) for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by the chief financial
officer of Borrower that they fairly present the financial condition of
Borrower and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated, (b) a
narrative report describing the operations of Borrower and its Subsidiaries
for such Fiscal Year and comparing the performance during such Fiscal Year to
the prior Fiscal Year and the forecasts for such Fiscal Year, and (c) in the
case of such consolidated financial statements, a report thereon of
independent certified public accountants of recognized national standing
selected by Borrower and satisfactory to Lender, which report shall be
unqualified, shall express no doubts about the ability of Borrower and its
Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present the consolidated financial
position of Borrower and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated in
conformity with GAAP, and if GAAP has not been applied on a basis consistent
with prior years, shall so note, and that the examination by such accountants
in connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards;
5.1(iv) FINANCIAL PLANS: as soon as available and in any event no later
than 60 days after the beginning of each Fiscal Year, a consolidated plan and
financial forecast for such Fiscal Year, including without limitation (a)
forecasted consolidated balance sheets and forecasted consolidated statements of
income and cash flows of Borrower and its Subsidiaries for each such Fiscal
Year, together with PRO FORMA Compliance Certificates for each such Fiscal Year
and an explanation of the assumptions on which such forecasts are based, (b)
forecasted consolidated statements of income and cash flows of Borrower and its
Subsidiaries for each month of each such Fiscal Year, together with an
explanation of the assumptions on which such forecasts are based, and (c) such
other information and projections as Lender may reasonably request;
5.1(v) EXCESS CASH FLOW CERTIFICATE: as soon as available, but in any
event within 120 days following the end of each Fiscal Year commencing with the
Fiscal Year ending in December 1999, an Officers' Certificate, signed by the
chief financial officer of Borrower, setting forth the calculation of
Consolidated Excess Cash Flow for such Fiscal Year in reasonable detail;
5.1(vi) BORROWING BASE CERTIFICATE: on the Closing Date and within 20
days after the last day of each fiscal month, a Borrowing Base Certificate
demonstrating the Borrowing Base as of the last day of such fiscal month and
certified by the chief financial officer of Borrower;
5.1(vii) OFFICERS' AND COMPLIANCE CERTIFICATES: together with each
delivery of financial statements of Borrower and its Subsidiaries pursuant to
subdivisions (i), (ii) and (iii) above, (a) an Officers' Certificate of Borrower
stating that the signers have reviewed
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the terms of this Agreement and have made, or caused to be made under their
supervision, a review in detail of the transactions and condition of Borrower
and its Subsidiaries during the accounting period covered by such financial
statements and that such review has not disclosed the existence during or at
the end of such accounting period, and that the signers do not have knowledge
of the existence as at the date of such Officers' Certificate, of any
condition or event that constitutes an Event of Default or Potential Event of
Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action Borrower has taken, is
taking and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in detail compliance during and at the end of the
applicable accounting periods with the restrictions contained in Section 6;
5.1(viii) RECONCILIATION STATEMENTS: (a) if, as a result of any
material change in accounting principles and policies from those used in the
preparation of the audited financial statements referred to in subsection 4.3,
the consolidated financial statements of Borrower and its Subsidiaries delivered
pursuant to subdivisions (i), (ii), (iii) or (iv) of this subsection 5.1 will
differ in any material respect from the consolidated financial statements that
would have been delivered pursuant to such subdivisions had no such change in
accounting principles and policies been made, then, at the reasonable request of
Lender, consolidated financial statements of Borrower and its Subsidiaries for
(y) the current Fiscal Year to the effective date of such change and (z) the one
full Fiscal Year immediately preceding the Fiscal Year in which such change is
made, in each case prepared on a PRO FORMA basis as if such change had been in
effect during such periods, and a written statement of the chief accounting
officer or chief financial officer of Borrower setting forth the differences
which would have resulted if such financial statements had been prepared without
giving effect to such change and (b) if, as a result of the application of GAAP
or any other change in practices or procedures, the presentation of information
with respect to Accounts Receivable would differ in any material respect from
the presentation of such information contained in any Borrowing Base Certificate
delivered on the Closing Date or subsequent thereto pursuant to subdivision (vi)
of this subsection 5.1, at the request of Lender, a written statement of the
chief accounting officer or chief financial officer of Borrower setting forth
the differences that would have resulted if such Borrowing Base Certificate had
been prepared without giving effect to such change;
5.1(ix) ACCOUNTANTS' CERTIFICATION: together with each delivery of
consolidated financial statements of Borrower and its Subsidiaries pursuant to
subdivision (iii) above, written statement by the independent certified public
accountants giving the report thereon stating that based on their audit
examination nothing has come to their attention that causes them to believe that
Borrower or its Subsidiaries failed to comply with the terms, covenants,
provisions or conditions of subsections 6.1, 6.2(a), 6.2(c), 6.2(d), 6.3, 6.4,
6.6, 6.7, 6.8, 6.9 and 6.10 of this Agreement, which are objectively
determinable of compliance and that relate to accounting matters;
74
5.1(x) ACCOUNTANTS' REPORTS: promptly upon receipt thereof, copies of
all reports submitted to any Loan Parties by independent certified public
accountants in connection with such annual, interim or special audit of the
financial statements of Borrower and its Subsidiaries made by such accountants,
including, without limitation, any comment letter submitted by such accountants
to management in connection with their annual audit;
5.1(xi) SEC FILINGS AND PRESS RELEASES: simultaneously with their
becoming publicly available, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available generally by any Loan Party
to its security holders, (b) all regular, periodic and interim reports and all
registration statements and prospectuses, if any, filed by any of the Loan
Parties with any securities exchange or with the Securities and Exchange
Commission or governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by any Loan Party to the
public concerning material developments in the business of any Loan Party;
5.1(xii) EVENTS OF DEFAULT, ETC.: promptly upon any officer of any Loan
Party obtaining knowledge (a) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that Lender
has given notice or taken any other action with respect to a claimed statement
of any Event of Default or Potential Event of Default, (b) that any Person has
given any notice to any Loan Party or taken any other action with respect to a
claimed default or event or condition of the type referred to in subsection 7.2,
(c) of any condition or event that would be required to be disclosed in a
current report filed by any Loan Party with the Securities and Exchange
Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the
date hereof) if such Loan Party were required to file such reports under the
Exchange Act, (d) to the extent not covered by clause (c) above, any violation
of the rules or regulations of the United States Securities and Exchange
Commission or the NASDAQ or other applicable securities exchange, or other
applicable law, rule or regulation of any governmental authority, or (e) of the
occurrence of any event or change that has caused or evidences, either in any
case or in the aggregate, a Material Adverse Effect, an Officers' Certificate
specifying the nature and period of existence of such condition, event or
change, or specifying the notice given or action taken by any such Person and
the nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Borrower has taken, is taking and
proposes to take with respect thereto;
5.1(xiii) LITIGATION OR OTHER PROCEEDINGS: (a) promptly upon any
officer of any Loan Party obtaining knowledge of (x) the institution of, or
threat of, any action, suit, proceeding (whether administrative, judicial or
otherwise), governmental or NASDAQ (or other securities exchange) investigation
or arbitration against or affecting Borrower or any of its Subsidiaries or any
property of Borrower or any of its Subsidiaries (collectively, "PROCEEDINGS")
not previously disclosed in writing by Borrower to Lender or (y) any material
development in any Proceeding that:
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5.1(xiii)(1) if adversely determined, has a reasonable
possibility of giving rise to a Material Adverse Effect; or
5.1(xiii)(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be reasonably
available to any Loan Party to enable Lender and its counsel to evaluate such
matters, and (b) within twenty days after the end of each fiscal quarter of
Borrower, a schedule of all Proceedings involving an alleged liability of, or
claims against or affecting, any Loan Party equal to or greater than $100,000,
and promptly after request by Lender such other information as may be reasonably
requested by Lender to enable Lender and its counsel to evaluate any of such
Proceedings;
5.1(xiv) ERISA EVENTS: promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Borrower or any of its ERISA Affiliates has taken,
is taking or proposes to take with respect thereto and, when known, any action
taken or threatened by the Internal Revenue Service, the Department of Labor or
the PBGC with respect thereto;
5.1(xv) ERISA NOTICES: with reasonable promptness, copies of (a) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed
by Borrower or any of its ERISA Affiliates with the Internal Revenue Services
with respect to each Pension Plan; (b) all notices received by Borrower or any
of its ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA
Event; and (c) such other documents or governmental reports or filings relating
to any Employee Benefit Plan maintained or contributed to by Borrower or its
ERISA Affiliates as Lender shall reasonably request;
5.1(xvi) INSURANCE: as soon as practicable and in any event by the last
day of each Fiscal Year, a report in form and substance reasonably satisfactory
to Lender outlining all material insurance coverage maintained as of the date of
such report by Borrower and its Subsidiaries and all insurance coverage planned
to be maintained by Borrower and its Subsidiaries in the immediately succeeding
Fiscal Year;
5.1(xvii) ENVIRONMENTAL AUDITS AND REPORTS: promptly following receipt
thereof, copies of all environmental audits and reports, whether prepared by
personnel of Borrower or any of its Subsidiaries or by independent consultants,
with respect to significant environmental matters at any Facility of Borrower or
any of its Subsidiaries or which relate to an Environmental Claim;
5.1(xviii) BOARD OF DIRECTORS: with reasonable promptness, written
notice of any change in the Board of Directors of Borrower or any of its
Subsidiaries;
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5.1(xix) UCC SEARCH REPORT: as promptly as practicable after the
Closing Date, Borrower shall furnish to Lender the results of completed requests
for information listing the financing statements referred to in subsection
3.1(f)(iii) and all other effective financing statements that name any Loan
Party as debtor, together with copies of all such other financing statements;
and
5.1(xx) NEW SUBSIDIARIES: promptly upon any Person becoming a
Subsidiary of Borrower (a) a written notice setting forth with respect to such
Person (1) the date on which such Person became a Subsidiary of Borrower and (2)
all of the data required to be set forth in SCHEDULE 4.1 annexed hereto with
respect to all Subsidiaries of Borrower (it being understood that such written
notice shall be deemed to supplement SCHEDULE 4.1 annexed hereto for all
purposes of this Agreement), and (b) a Supplement and a Joinder Agreement
executed by such new Subsidiary;
5.1(xxi) BORROWING BASE AUDIT: At the request of Lender, an annual
report containing the results of an audit of the Accounts Receivable of
Borrower, performed by a Person reasonably satisfactory to the Lender, the
expense of such audit to be borne by Borrower; and
5.1(xxii) OTHER INFORMATION: with reasonable promptness, such other
information and data with respect to Borrower or any of its Subsidiaries as from
time to time may be reasonably requested by Lender.
5.2 CORPORATE EXISTENCE, ETC. Except as permitted under subsection 6.7, each
Loan Party will at all times preserve and keep in full force and effect its
corporate, limited liability company or partnership existence (as the case may
be) and all rights and franchises material to its business.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
5.3(a) Each Loan Party will pay all taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any penalty
accrues thereon, and all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums that have become due and
payable and that by law have or may become a Lien upon any of its properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto; PROVIDED that no such charge or claim need be paid if being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and if such reserve or other appropriate provision, if any,
as shall be required in conformity with GAAP shall have been made therefor.
5.3(b) No Loan Party will file or consent to the filing of any
consolidated income tax return with any Person (other than a Subsidiary of such
Loan Party).
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5.4 MAINTENANCE OF PROPERTIES; INSURANCE.
5.4(a) GENERAL. Each Loan Party will maintain or cause to be maintained
in good repair, working order and condition, ordinary wear and tear excepted,
all material properties used or useful in the business of Borrower and its
Subsidiaries (including, without limitation, Intellectual Property) and from
time to time will make or cause to be made all appropriate repairs, renewals and
replacements thereof. Each Loan Party will maintain or cause to be maintained,
with financially sound and reputable insurers, insurance with respect to its
properties and business and the properties and businesses of Borrower and its
Subsidiaries against loss or damage (including, without limitation, flood
insurance, if necessary or advisable) of the kinds customarily carried or
maintained under similar circumstances by corporations of established reputation
engaged in similar businesses, including, without limitation, public liability
(bodily injury and property damage), fidelity, business interruption, and
workers' compensation with deductibles which are customary for companies engaged
in similar businesses, and which, in the case of property insurance, shall be
(i) in amounts sufficient to prevent Borrower or such Subsidiary from becoming a
co-insurer, and (ii) against all risks; and file with Lender within ten days
after request therefor originals or duplicate originals of all such policies of
insurance and a detailed list of such insurance then in effect, stating the
names of the carriers thereof, the policy numbers, the insureds thereunder, the
amounts of insurance, dates of expiration thereof, and the property and risks
covered thereby, together with an Officers' Certificate of Borrower certifying
that such insurance is adequate in nature and amount, complies with the
obligations of Borrower under this subsection, and is in full force and effect.
5.4(b) INSURANCE COVERING COLLATERAL. All such insurance policies in
respect of property insurance and business interruption insurance shall contain
a standard loss payable clause and shall be endorsed to provide that, in respect
of the interests of Lender: (i) Lender shall be an additional insured, (ii) 30
days' prior written notice of any cancellation, reduction of amounts payable, or
any changes and amendments shall be given to Lender, and (iii) Lender shall have
the right, but not the obligation, to pay any premiums due or to acquire other
such insurance upon the failure of Borrower or such Subsidiary to pay the same
or to so insure. All property insurance policies shall name Lender as sole loss
payee. All other insurance policies shall name Lender as additional insured.
Provided that no Event of Default or Potential Event of Default shall exist,
Lender agrees, promptly upon its receipt thereof, to pay over to Borrower the
proceeds of such payment to enable Borrower to repair, restore or replace the
property subject to such claim. To the extent that Borrower elects not to
repair, restore or replace such property, an amount equal to such proceeds shall
be immediately applied as a Mandatory Prepayment pursuant to and in accordance
with subsections 2.4(c)(iii)(C) and 2.4(c)(iv) hereof. If an Event of Default or
Potential Event of Default shall then exist, Lender shall (A) hold the proceeds
of such payment as Collateral until such Event of Default or Potential Event of
Default shall no longer exist and then pay over the same to Borrower to enable
Borrower to repair, restore or replace or cause to be repaired, restored or
replaced the property subject to the claim which resulted in such payment or (B)
hold
78
such proceeds as Collateral and apply the same to the obligations of Borrower
under the Loan Documents in such order, in such amounts and at such times as
Lender shall elect.
5.4(c) CONCURRENT INSURANCE. Neither Borrower nor any of its
Subsidiaries shall take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained pursuant
to subsections (a) and (b) above unless Lender has approved the carrier and the
form and content of the insurance policy, including, without limitation, naming
Lender as an additional insured and sole loss payee thereunder.
5.5 INSPECTION; LENDER MEETING; ACCESS TO ACCOUNTANTS.
5.5(a) Each Loan Party will permit any authorized representatives
designated by Lender to visit and inspect any of the properties of Borrower or
any of its Subsidiaries, including its and their financial and accounting
records, and to make copies and take extracts therefrom, and to discuss its and
their affairs, finances and accounts with its and their officers and independent
public accountants (provided that Borrower may, if it so chooses, be present at
or participate in any such discussion), all upon reasonable notice and at such
reasonable times and as often as may be reasonably requested. Without in any way
limiting the foregoing, Borrower will, upon the request of Lender, (i)
participate in a meeting of Lender once during each Fiscal Year to be held at
Borrower's corporate offices (or such other location as may be agreed to by
Borrower and Lender) at such time as may be agreed to by Borrower and Lender and
(ii) permit Lender's employees and internal auditors to have access to its
properties, books and records in order to confirm the amount and eligibility of
the Accounts Receivable and Inventory constituting the Borrowing Base, all at
Borrower's expense.
5.5(b) Borrower authorizes the Lender, upon reasonable prior notice to
Borrower, to communicate directly with Borrower's independent certified public
accountants and authorizes such accountants to disclose to Lender any and all
financial statements and other supporting financial documents and schedules
including copies of any management letter with respect to the business,
financial condition and other affairs of Borrower or any of its Subsidiaries. At
the request of Lender, Borrower shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this Section
5.5(b).
5.6 COMPLIANCE WITH LAWS, ETC. Each Loan Party will comply with the requirements
of all applicable laws, rules, regulations and orders of any governmental
authority and any securities exchange with which such Loan Party's stock shall
be listed from time to time, and shall take such action as may be necessary to
remain in good standing with such securities exchange.
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5.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
5.7(a) Each Loan Party will exercise all due diligence in order to
comply and cause Borrower, its Subsidiaries, and all Persons on or occupying any
portion of the Facilities owned, leased, used or operated by Borrower or its
Subsidiaries to comply with all Environmental Laws.
5.7(b) Borrower agrees that Lender may (but shall have no obligation
to), from time to time and in its reasonable discretion, retain, at Borrower's
expense, an independent professional consultant to review any report relating to
Hazardous Materials prepared by or for Borrower and to conduct its own
investigation of any Facility currently owned, leased, operated or used by
Borrower or any of its Subsidiaries and Borrower agrees to use its commercially
reasonable efforts to obtain permission for Lender's professional consultant to
conduct its own investigation of any Facility previously owned, leased, operated
or used by Borrower or any of its Subsidiaries. Borrower hereby grants to Lender
and its agents, employees, consultants and contractors the right to enter into
or on to the Facilities currently owned, leased, operated or used by Borrower or
any of its Subsidiaries to perform such tests on such property as are reasonably
necessary to conduct such a review and/or investigation. Borrower and Lender
hereby acknowledge and agree that any report of any investigation conducted at
the request of Lender pursuant to this subsection 5.7(b) will be obtained and
shall be used by Lender for the purposes of Lender's internal credit decisions,
to monitor and police the Loans and to protect Lender's security interests, if
any, created by the Loan Documents.
5.7(c) Borrower will promptly advise Lender in writing and in
reasonable detail of (i) any Release of any Hazardous Materials required to be
reported to any federal, state or local governmental or regulatory agency under
any applicable Environmental Laws, (ii) any and all written communications with
respect to any Environmental Claims or with respect to any Release of Hazardous
Materials required to be reported to any federal, state or local governmental or
regulatory agency, (iii) any remedial action taken by Borrower or any other
Person in response to (x) any Hazardous Materials on, under or about any
Facility, the existence of which has a reasonable possibility of resulting in an
Environmental Claim, or (y) any Environmental Claim, (iv) Borrower's discovery
of any occurrence or condition on any real property adjoining or in the vicinity
of any Facility that is reasonably likely to cause such Facility or any part
thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use thereof under any Environmental Laws, and (v) any request
for information from any governmental agency that suggests such agency is
investigating whether Borrower or any of its Subsidiaries may be potentially
responsible for a Release of Hazardous Materials.
5.7(d) Borrower will promptly notify Lender of (i) any proposed
acquisition of stock, assets, or property by Borrower or any of its Subsidiaries
that could reasonably be expected to expose Borrower or any of its Subsidiaries
to, or result in, Environmental Claims and (ii) any proposed action to be taken
by Borrower to commence manufacturing, industrial or other operations that could
reasonably be expected to subject
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Borrower to additional Environmental Laws including, without limitation,
Environmental Laws requiring additional environmental permits or licenses.
5.7(e) Borrower will, at its own expense, provide copies of such
documents or information as Lender may reasonably request in relation to any
matters disclosed pursuant to this subsection 5.7.
5.8 BORROWER'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS. Borrower will
take, in a timely fashion, and will cause each of its Subsidiaries to take in a
timely fashion, any and all necessary remedial action in connection with the
presence, storage, use, disposal, transportation or Release of any Hazardous
Materials on, under or about any Facility in order to comply with all applicable
Environmental Laws and Governmental Authorizations applicable to Borrower or its
Subsidiaries in respect of such Facility. In the event Borrower or any of its
Subsidiaries undertakes any remedial action with respect to any Hazardous
Materials on, under or about any Facility, Borrower or such Subsidiary will
conduct and complete such remedial action in compliance with all applicable
Environmental Laws, and in accordance with the applicable policies, orders and
directives of all federal, state and local governmental authorities.
5.9 INTEREST RATE PROTECTION. Borrower shall maintain in effect one or more
Interest Rate Agreements with respect to the Loans, in an aggregate notional
principal amount equal to, on the Closing Date and at all times thereafter, (a)
not less than 50% of the Term Loan then outstanding, PLUS, on the Acquisition
Loan Termination Date and at all times thereafter, (b) an amount equal to not
less than 50% of the Acquisition Loans then outstanding, each such Interest Rate
Agreement to be in form and substance reasonably satisfactory to Lender and with
a term of not less than three (3) years.
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5.10 FURTHER ASSURANCES; NEW SUBSIDIARIES. At any time or from time to time upon
the request of Lender, the Loan Parties will, at their own expense, promptly
execute, acknowledge and deliver such further documents, make such payments and
do such other acts and things as Lender may reasonably request in order to
effect fully the purposes of the Loan Documents and to provide for payment of
the Obligations in accordance with the terms of this Agreement, the Notes and
the other Loan Documents. In furtherance and not in limitation of the foregoing,
each Loan Party will take and will cause each of its respective Subsidiaries to
take, such actions as Lender may reasonably request from time to time
(including, without limitation, the execution and delivery of guaranties,
security agreements, pledge agreements, mortgages, deeds of trust, stock powers,
financing statements and other documents, the filing or recording of any of the
foregoing, title insurance with respect to any of the foregoing that relates to
an interest in real property, and the delivery of stock certificates and other
collateral with respect to which perfection is obtained by possession) to ensure
that (a) the Obligations are guarantied by any Subsidiaries of Borrower now
existing or created or acquired after the Closing Date and are secured by
substantially all of the assets of Borrower and its Subsidiaries, and (b) all of
the Capital Stock of the Guarantors is pledged to Lender. In the event that any
new Subsidiary of Borrower is created or acquired, all of the capital stock of
such new Subsidiary shall be duly and validly pledged to Lender pursuant to the
Collateral Documents, subject to no other Liens, and such Subsidiary shall
execute and deliver to Lender its Supplement and its Joinder Agreement.
5.11 AFTER-ACQUIRED REAL PROPERTY; PLEDGE OF ADDITIONAL COLLATERAL.
5.11(a) In the event that Borrower or any Subsidiary purchases or
otherwise acquires any interest in real property after the Closing Date, or any
interests arising under a lease, then Borrower or such Subsidiary shall,
concurrently with such purchase or other acquisition, execute and deliver all
Collateral Documents and take all other action that Lender may request to grant
to Lender, as security for the Obligations, a first priority Lien (subject to
Liens permitted hereunder) on all such real property interests and, in the case
of leasehold interests, at the request of Lender cause to be delivered to Lender
fully executed and acknowledged estoppel and consent letters from the landlord
of such property in form and substance satisfactory to Lender, together with, in
the case of any Related Party Lease, fully executed subordination,
non-disturbance and attornment agreements in form and substance satisfactory to
Lender from the mortgagee(s), if any, of the underlying fee interest; PROVIDED
that this subsection 5.11 shall not be construed to permit any transaction
otherwise prohibited by the terms of this Agreement.
5.11(b) Promptly, and in any event within 30 days after the acquisition
of assets (other than interests in real property) of the type that would have
constituted Collateral pursuant to the appropriate Collateral Document at the
Closing Date (the "ADDITIONAL COLLATERAL"), Borrower will, and will cause each
appropriate Loan Party or its respective Subsidiaries to, take all necessary
action, including but not limited to the filing of appropriate financing
statements under the provisions of the UCC, applicable foreign, domestic or
local laws, rules or regulations in each of the offices where such
82
filing is necessary or appropriate, or entering into or amending Collateral
Documents, to grant to Lender a perfected first priority lien in such
Collateral (or comparable interest under foreign law in the case of foreign
Collateral) pursuant to and to the full extent required by the Collateral
Documents and this Agreement.
5.11(c) At the request of Lender, Borrower and its Subsidiaries shall
use their best efforts to promptly deliver to Lender (A) fully executed and
acknowledged counterparts of mortgages with respect to all interests of Borrower
and its Subsidiaries in real property leases identified in SCHEDULE 4.8 hereof
(the "Leases"), together with a landlord's consent and agreement in form and
substance reasonably satisfactory to Lender with respect to each such Mortgage,
and evidence that counterparts of each Lease and each Mortgage will have been
recorded in all places necessary or desirable, in the reasonable judgment of
Lender, to create a valid and enforceable first priority lien in favor of Lender
in all such leasehold interests; (B) a title report with respect to each such
lease, in form and substance reasonably satisfactory to Lender; (C) an opinion
of local counsel admitted to practice in each state in which any such lease is
located, addressed to Lender, in form and substance reasonably satisfactory to
Lender; (D) ALTA lender's extended coverage title insurance policies (with
endorsements for any matter Lender may reasonably request) issued by a
nationally recognized title insurance company acceptable to Lender in its
reasonable discretion, in amounts reasonably satisfactory to Lender, ensuring
that as of the date of recording thereof the Mortgages will be valid and create
an enforceable first priority mortgage Lien on the property encumbered thereby,
free and clear of all Liens, except such as Lender may approve (which shall
include such of the Permitted Encumbrances as may be restrictions on Company's
leasehold interest), in form and substance reasonably satisfactory to Lender. At
lender's request, Borrower will promptly deliver to Lender's title insurer such
certificates and affidavits as the title insurer may reasonably require in
connection with the issuance of title insurance policy described in clause (D)
hereof. In addition, promptly following a request of Lender, Borrower and its
Subsidiaries shall use their best efforts to provide Lender with evidence
reasonably satisfactory to Lender that each landlord of a Lease either has not
entered into a mortgage of the fee interest underlying such Lease and each such
landlord shall make representations and warranties to Lender to such effect or
has caused the mortgagee of such interest to execute and deliver a
non-disturbance and attornment agreement in form and substance reasonably
acceptable to Lender.
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5.12 YEAR 2000 COMPLIANCE. On or before September 30, 1999, Borrower and its
Subsidiaries will take all action necessary to assure that their computer-based
systems are able to effectively process data, including dates on or after
January 1, 2000. At the request of Lender, Borrower shall provide Lender from
time to time with assurance reasonably acceptable to Lender of the year 2000
capability of Borrower and its Subsidiaries and such other updated information
or documentation as is requested regarding the status of Borrower's efforts to
address the Year 2000 Problem.
5.13 DETERMINATION OF BORROWING BASE.
5.13(a) Borrower will deliver a Borrowing Base Certificate to Lender
sufficiently in advance of the Closing Date to permit Lender to determine the
Borrowing Base to be in effect on the Closing Date and thereafter, will deliver
Borrowing Base Certificates on a monthly basis, no later than 20 days after the
end of each month, all as required by subdivision (v) of subsection 5.1. Each
such Borrowing Base Certificate shall be dated as of the last day of the
applicable reporting period or such date as may be requested by Lender from time
to time. Promptly following its receipt of each such Borrowing Base Certificate,
Lender shall determine or, as the case may be, redetermine the Borrowing Base
using the information contained in such Borrowing Base Certificate. Each
Borrowing Base so determined or redetermined by Lender shall remain in effect
until notice of a redetermined Borrowing Base shall have been given by Lender in
accordance with the provisions of this subsection 5.13.
5.13(b) Each Eligible Account Receivable shown on each Borrowing Base
Certificate shall conform to the requirements set forth in the definition of
Eligible Accounts Receivable and be based upon an actual and BONA FIDE sale and
shipment or delivery of goods or rendition of services to customers, made by
Borrower in the ordinary course of business; the goods being sold and the
accounts thereby created shall be Borrower's exclusive property and shall not be
subject to any Lien (other than Liens created by the Collateral Documents); and
except as Borrower may otherwise advise Lender pursuant to this subsection 5.13,
Borrower's customers shall have accepted such goods or services, and shall owe
and shall be obligated to pay the full amount stated in the invoices according
to their terms (less normal trade discounts), without dispute, offset defense,
counterclaim or other right to reduce or avoid the liability represented by such
Accounts Receivable.
5.13(c) Borrower will keep proper books of record and account in which
full, true and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities (including,
without limitation, all dealings and transactions with respect to the Collateral
covered by the Collateral Documents and Accounts Receivable). Borrower shall
conduct, or shall cause to be conducted, at Borrower's expense, and upon request
of Lender, and present to Lender for approval, such appraisals, investigations
or reviews as Lender shall reasonably request for the purpose of determining the
Borrowing Base, all upon reasonable notice and at such reasonable times during
normal business hours and as often as may be reasonably
84
requested. Borrower agrees to furnish to Lender, any information which it may
reasonably request regarding the determination and calculation of the
Borrowing Base including, without limitation, correct and complete copies of
any invoices, underlying agreements, instruments, or other documents and the
identity of all obligers.
5.13(d) Lender may, at any time, and as often as Lender may reasonably
elect, require Borrower to submit an updated Borrowing Base Certificate and/or
reevaluate the value of any item included in the Borrowing Base in accordance
with the definition of such item as set forth in subsection 1.1, including,
without limitation, the creditworthiness of any obligor relating to any item
included in the Borrowing Base. Lender may determine, as a result of any such
reevaluation, to reduce the amount which such item contributes to the Borrowing
Base or exclude such item from the Borrowing Base, which determination shall be
final, binding and conclusive upon all parties hereto. Without limiting the
foregoing, Lender shall be entitled to monitor daily any and all Accounts
Receivable of Borrower. In furtherance of the foregoing, Borrower agrees that
Lender shall have the right from time to time to require Borrower's independent
accountants to verify with any account debtor, by telephone, teletransmission,
mail or other communication, the outstanding principal balance owing by such
account debtor to Borrower and any other matter relating to any Account
Receivable of Borrower. In addition, upon the occurrence and during the
continuance of an Event of Default, Lender shall have the right to so verify
such information or other matter with any account debtor as Lender shall
determine. If Lender determines that the Borrowing Base shall be reduced
pursuant to this subsection 5.13, Lender shall give written notice to Borrower
and Lenders stating the amount of such reduction and the nature of the action
taken by Lender, which reduction shall be effective upon receipt of such notice
by Borrower.
5.13(e) Borrower shall promptly notify Lender in writing of any
material information that Borrower receives or otherwise gains knowledge of
relating to any item included in the Borrowing Base that materially and
adversely affects the value of such item or would cause such item to be excluded
in whole or in part from the Borrowing Base. Lender shall give Borrower three
days' notice prior to the implementation of any material change in the types
(but not amounts) of reserves required to be maintained by Borrower as
reasonably determined by Lender.
5.14 LANDLORDS' WAIVERS. Promptly, but in any event no later than the
60th day immediately following the Closing Date, Borrower shall deliver to
Lender fully executed and acknowledged landlord's estoppel and consent
letters in form and substance reasonably satisfactory to Lender from the
landlords of such of the properties identified on SCHEDULE 4.8 hereto.
5.15 OPINION OF NEW YORK COUNSEL. Promptly, but in any event no later
than the tenth (10th) Business Day immediately following the Closing Date,
Borrower shall deliver to Lender, at Borrower's expense, a favorable written
opinion of New York counsel acceptable to Lender with respect to the
enforceability of the Loan Documents under New York law and such other
matters as Lender may request, in form and substance satisfactory to Lender.
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SECTION 6.
NEGATIVE COVENANTS
Each of Borrower, VISTA Environmental, E/Risk, GeoSure, GeoSure, Inc.,
NRC, NRCIS, Ensite, EcoSearch Acquisition and EcoSearch covenants and agrees
that so long as any of the Commitments hereunder shall remain in effect and
until payment in full of all of the Loans and other Obligations, each of
Borrower,VISTA Environmental, E/Risk, GeoSure, GeoSure, Inc., NRC, NRCIS,
Ensite, EcoSearch Acquisition and EcoSearch shall perform, and shall cause each
of its respective Subsidiaries to perform, all of the covenants in this Section
6.
6.1 INDEBTEDNESS. No Loan Party shall, directly or indirectly, create, incur,
assume or guaranty, or otherwise become or remain directly or indirectly liable
with respect to, any Indebtedness, except,
6.1(a) Borrower may become and remain liable with respect to the
Obligations;
6.1(b) the Loan Parties may become and remain liable with respect to
Indebtedness in respect of Capital Leases; PROVIDED that such Capital Leases are
not otherwise prohibited by this Agreement;
6.1(c) the Loan Parties may become and remain liable with respect to
Contingent Obligations permitted by subsection 6.4 and, upon any matured
obligations actually arising pursuant thereto, the Indebtedness corresponding to
the Contingent Obligations so extinguished; and
6.1(d) the Loan Parties may become and remain liable with respect to
Indebtedness existing on the date of this Agreement and disclosed on SCHEDULE
6.1 annexed hereto.
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6.2 LIENS AND RELATED MATTERS.
6.2(a) PROHIBITION ON LIENS. No Loan Party shall, directly or
indirectly, create, incur, assume or permit to exist any Lien on or with respect
to any property or asset of any kind (including, but not limited to, (x) any
document or instrument in respect of goods or accounts receivable and (y) any
interest in any Material Contract, partnership or joint venture) of such Loan
Party or any of its Subsidiaries, whether now owned or hereafter acquired, or
any income or profits therefrom, or file or permit the filing of, or permit to
remain in effect, any financing statement or other similar notice of any Lien
with respect to any such property, asset, income or profits under the Uniform
Commercial Code of any state or under any similar recording or notice statute,
except:
6.2(a)(i) Permitted Encumbrances;
6.2(a)(ii) Liens granted pursuant to the Collateral Documents; and
6.2(a)(iii) Liens described in SCHEDULE 6.2 annexed hereto.
6.2(b) EQUITABLE LIEN IN FAVOR OF LENDER. If Borrower or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 6.2(a), it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; PROVIDED that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Lender to the creation or
assumption of any such Lien not permitted by the provisions of subsection
6.2(a).
6.2(c) NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, no Loan Party
shall enter into any agreement prohibiting the creation or assumption of any
Lien upon any of its properties or assets, whether now owned or hereafter
acquired.
6.2(d) NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS. Except as provided
herein, no Loan Party will create or otherwise cause or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of any such Loan Party to (i) pay dividends or make any other
distributions on any of such Loan Party's capital stock owned by any other Loan
Party, (ii) repay or prepay any Indebtedness owed by such Loan Party, (iii) make
loans or advances to any other Loan Party, or (iv) transfer any of its property
or assets to any other Loan Party.
6.3 INVESTMENTS; JOINT VENTURES. No Loan Party shall, directly or indirectly,
make or own any Investment in any Person, including any Joint Venture, except:
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(i) the Loan Parties may make and own Investments in Cash
Equivalents, provided they are not subject to set-off rights in favor
of the issuing bank arising from any banking relationship of Borrower
or any of its Subsidiaries;
(ii) Each Loan Party may continue to own the Investments
(including but not limited to Investments in its Subsidiaries) owned by
it and described in SCHEDULE 4.18 annexed hereto;
(iii) Borrower may make Permitted Acquisitions and
Investments in Subsidiaries as required in connection therewith;
PROVIDED, HOWEVER, that, without limiting the provisions of Section 4.1 relating
to new Subsidiaries, such Investments will be considered Investments permitted
by this Section 6.3 only if all actions have been taken to the satisfaction of
Lender to provide to Lender a first priority perfected security interest in all
of such Investments free of all encumbrances other than Permitted Liens and only
if Borrower shall have provided to Lender all information necessary to update
SCHEDULE 4.1 hereto as to any new Subsidiaries, Joint Ventures or partnerships
constituting any such Investment (Lender being hereby authorized to so update
and amend SCHEDULE 4.1 as necessary in connection with any such Investment).
6.4 CONTINGENT OBLIGATIONS. No Loan Party shall, directly or indirectly, create
or become or remain liable with respect to any Contingent Obligation, except:
(i) Any Subsidiary Guarantor may become and remain liable
with respect to Contingent Obligations arising under their guaranties
of the Obligations;
(ii) Borrower may become and remain liable with respect to
Contingent Obligations under Interest Rate Agreements required under
subsection 5.9; and
(iii) Borrower may become and remain liable with respect to
Contingent Obligations in respect of customary indemnification and
purchase price adjustment obligations incurred in connection with Asset
Sales or other sales of assets.
6.5 RESTRICTED JUNIOR PAYMENTS. Neither Borrower nor any Subsidiary of Borrower
shall, directly or indirectly, declare, order, pay, make or set apart any sum
for any Restricted Junior Payment.
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6.6 FINANCIAL COVENANTS.
6.6(a) MINIMUM CONSOLIDATED ADJUSTED EBITDA. For the four-fiscal
quarter period ending on or about June 30, 1999, and for any four-fiscal quarter
period thereafter ending as of the last day of any fiscal quarter of Borrower,
Borrower shall not permit Consolidated Adjusted EBITDA for such period to be
less than the correlative amount indicated for such period below:
-----------------------------------------------------------------------------------------------------------
Period Ending as of the Last Day of Fiscal
Quarter Ending in Minimum Consolidated Adjusted EBITDA
-----------------------------------------------------------------------------------------------------------
June 1999 $ 2,250,000
-----------------------------------------------------------------------------------------------------------
September 1999 $ 4,175,000
-----------------------------------------------------------------------------------------------------------
December 1999 $ 7,050,000
-----------------------------------------------------------------------------------------------------------
March 2000 $ 10,400,000
-----------------------------------------------------------------------------------------------------------
June 2000 $ 13,400,000
-----------------------------------------------------------------------------------------------------------
September 2000 $ 15,750,000
-----------------------------------------------------------------------------------------------------------
December 2000 and each March, June, September and $ 20,000,000
December thereafter
-----------------------------------------------------------------------------------------------------------
6.6(b) MINIMUM FIXED CHARGE COVERAGE RATIO. For the period from the
Closing Date to (and including) the last day of the fiscal quarters of Borrower
ending in September 1999, December 1999 and March 2000, and thereafter for any
four-fiscal quarter period thereafter ending as of the last day of any fiscal
quarter of Borrower, Borrower shall not permit the ratio of (i) (x) Consolidated
Adjusted EBITDA for such period MINUS (y) Consolidated Capital Expenditures for
such period to (ii) Consolidated Fixed Charges for such period to be less than
the correlative ratio indicated for such period below:
-----------------------------------------------------------------------------------------------
Period Ending as of the Last Day of Fiscal
Quarter Ending in Minimum Fixed Charge Coverage Ratio
-----------------------------------------------------------------------------------------------
September 1999 and each December, March, June and
September thereafter 1.50:1.00
-----------------------------------------------------------------------------------------------
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6.6(c) MAXIMUM LEVERAGE RATIO. Borrower shall not permit the ratio of (i)
Consolidated Total Debt to (ii) Consolidated Adjusted EBITDA for any four-fiscal
quarter period ending as of the last day of any fiscal quarter of Borrower
beginning with the fiscal quarter ending in September 1999 to exceed the
correlative ratio indicated for such period below:
-----------------------------------------------------------------------------------------
Period Ending as of the Last Day of Fiscal
Quarter Ending in Maximum Leverage Ratio
-----------------------------------------------------------------------------------------
September 1999 3.50:1.00
-----------------------------------------------------------------------------------------
December 1999 3.50:1.00
-----------------------------------------------------------------------------------------
March 2000 3.00:1.00
-----------------------------------------------------------------------------------------
June 2000 2.50:1.00
-----------------------------------------------------------------------------------------
September 2000 2.00:1.00
-----------------------------------------------------------------------------------------
December 2000 and each March, June, September and 1.50:1.00
December thereafter
-----------------------------------------------------------------------------------------
6.6(d) MAXIMUM SENIOR LEVERAGE RATIO. Borrower shall not permit the
ratio of (i) Consolidated Total Senior Debt to (ii) Consolidated Adjusted EBITDA
(the "SENIOR LEVERAGE RATIO") for any four-fiscal quarter period ending as of
the last day of any fiscal quarter of Borrower beginning with the fiscal quarter
ending in September 1999 to exceed the correlative ratio indicated for such
period below:
-----------------------------------------------------------------------------------------
Period Ending as of the Last Day of Fiscal
Quarter Ending in Maximum Senior Leverage Ratio
-----------------------------------------------------------------------------------------
September 1999 3.00:1.00
-----------------------------------------------------------------------------------------
December 1999 3.00:1.00
-----------------------------------------------------------------------------------------
March 2000 2.50:1.00
-----------------------------------------------------------------------------------------
June 2000 2.00:1.00
-----------------------------------------------------------------------------------------
September 2000 1.50:1.00
-----------------------------------------------------------------------------------------
December 2000 and each March, June, September and 1.00:1.00
December thereafter
-----------------------------------------------------------------------------------------
6.6(e) MINIMUM INTEREST COVERAGE RATIO. For the period from the Closing
Date to (and including) the last day of the fiscal quarter of Borrower ending in
September 1999, December 1999 and March 2000 and thereafter for any four-fiscal
quarter period ending as of the last day of any fiscal quarter of Borrower,
Borrower shall not permit the ratio of (i) Consolidated Adjusted EBITDA to (ii)
the portion of Consolidated Interest Expense actually paid in cash to be less
than the correlative ratio indicated for such period below:
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Period Ending as of the Last Day of Fiscal
Quarter Ending in Minimum Interest Coverage Ratio
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September 1999 and each December, March, June and 3.00:1.00
September thereafter
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6.6(f) MAXIMUM CAPITAL EXPENDITURES. Borrower shall not permit the
aggregate amount of all Consolidated Capital Expenditures made by Borrower and
its Subsidiaries during any fiscal year of Borrower to exceed the correlative
amount for such fiscal year indicated below:
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Maximum Consolidated
Fiscal Year Capital Expenditures
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Closing Date through December 31, 1999 $ 1,000,000
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Each fiscal year thereafter $ 2,000,000
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6.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS; NEW
SUBSIDIARIES. No Loan Party shall alter its corporate, capital or legal
structure or that of any of its Subsidiaries, create or acquire any new
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, sub-lease, transfer or otherwise dispose
of, in one transaction or a series of transactions, all or any part of its
business, property or fixed assets (except obsolete or worn out property
disposed of in the ordinary course of business, provided that the Net Cash
Proceeds of each such transaction are applied to the prepayment of the Loans as
provided in subsection 2.4(c)(iii)) whether now owned or hereafter acquired, or
acquire by purchase any portion of the business, property or fixed assets of, or
stock or other evidence of beneficial ownership of, any Person or any division
or line of business of any Person, or enter into any management contract
permitting third-party management rights with respect to Borrower's business,
except:
6.7(i) subject to the requirements of subsection 5.10, Borrower may
create new Subsidiaries;
6.7(ii) Borrower may make Consolidated Capital Expenditures; and
6.7(iii) Subject to the requirements of subsection 6.3 regarding
Permitted Investments, Borrower may make Permitted Acquisitions.
6.8 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES; MANAGEMENT FEES.
6.8(a) No Loan Party shall, directly or indirectly, enter into or
permit to exist any transaction (including, without limitation, the purchase,
sale, lease or exchange of any property or the rendering of any service) with
any holder of 5% or more of any class of
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equity Securities of any Loan Party or with any Affiliate of any Loan Party
or of any such holder, on terms that are less favorable to such Loan Party
than those that might be obtained at the time from Persons who are not such a
holder or Affiliate; PROVIDED that the foregoing restriction shall not apply
to (i) reasonable and customary fees paid and expenses reimbursed to members
of the Boards of Directors of Borrower and its Subsidiaries, or (ii) the
Investments permitted under subsection 6.3.
6.8(b) Borrower will not, and will not permit any of its Subsidiaries
to, directly or indirectly, pay any management, consulting or similar fees to
any Affiliate of Borrower.
6.9 DISPOSAL OF SUBSIDIARY STOCK. No Loan Party shall:
6.9(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity Securities of
any of its Subsidiaries except pursuant to the Collateral Documents; or
6.9(ii) permit any of its Subsidiaries directly or indirectly to sell,
assign, pledge or otherwise encumber or dispose of any shares of capital stock
or other equity Securities of any of its Subsidiaries (including such
Subsidiary), except as required hereunder or otherwise required by Lender.
6.10 CONDUCT OF BUSINESS. From and after the Closing Date, (i) Borrower shall
not, and shall not permit any of its Subsidiaries to engage in any business
other than the businesses engaged in by Borrower on the Closing Date or other
businesses substantially the same as or complementary to such businesses.
6.11 CHANGES IN OWNERSHIP. No Loan Party shall suffer or permit any Person other
than Borrower to own, directly or indirectly, beneficially and of record, 100%
of the issued and outstanding capital stock of any Guarantor, or suffer or
permit less than 100% of the issued and outstanding capital stock of any
Guarantor to be duly and validly pledged to and held by Lender at all times as
security for the Obligations pursuant to pledge agreements and other documents
acceptable in form and substance to Lender, or suffer or permit any other
material change in the control or ownership, beneficial or of record, of any
Guarantor.
6.12. DEFAULTS UNDER OTHER AGREEMENTS. No Loan Party shall default or permit a
default under any Material Contract, any partnership agreement, joint venture
agreement, limited liability company operating agreement or any similar
agreement to which it is a party, or any material lease, mortgage, deed of trust
or lien instrument on real estate owned or leased by such Loan Party.
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6.13 FISCAL YEAR. Borrower shall not change its fiscal year from that of a year
ending December 31.
6.14. BROKERS OR FINDERS FEES. Except as set forth in subsection 4.13, no Loan
Party shall pay any brokers or finders fee in connection with this Agreement.
6.15. COMPENSATION. No Loan Party shall make any loans or other advances of
money (other than salary and travel advances) to stockholders, officers,
directors, employees or Affiliates.
6.16. MAXIMUM AMOUNT. No Loan Party shall request any Loan which, after giving
effect to the making of such Loan, would cause at any time the aggregate
principal amounts outstanding under this Agreement to exceed the maximum amount
of the Commitments or, after giving effect to all applicable reserves, would
exceed availability under the Revolving Loans or the Acquisition Loans.
6.17. LEASING TRANSACTIONS. No Loan Party shall enter into any lease of real
property, personal property or equipment or any similar agreement or arrangement
with respect thereto, except for Capital Leases.
6.18. SALES AND LEASE-BACKS. Borrower will not, and will not permit any of its
Subsidiaries to, directly or indirectly, become or remain liable as lessee or as
guarantor or other surety with respect to any lease of any property whether real
or personal or mixed or whether now owned or hereafter acquired which Borrower
or any of its Subsidiaries has sold or transferred or intends to sell or
transfer to any other Person.
6.19 INCONSISTENT AGREEMENTS. Borrower shall not and shall not permit any of its
Subsidiaries to enter into any indenture, agreement, instrument or other
arrangement which (a) directly or indirectly, prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse condition
upon the incurrence of the Obligations, or (b) contains any provision which
would be violated or breached by the making of Loans or by the performance by
Borrower or any of its Subsidiaries of its obligations under any Loan Document.
SECTION 7
EVENTS OF DEFAULT
If any of the following conditions or events ("EVENTS OF DEFAULT")
shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE. Failure by Borrower to pay any
installment of principal of or any interest on any Loan when due, whether at
stated maturity, by acceleration, by notice of voluntary prepayment, by
mandatory prepayment or otherwise or failure by Borrower to pay any fee or any
other amount due under this Agreement when due; or
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7.2 DEFAULT IN OTHER AGREEMENTS.
(a) Failure of any Loan Party or any direct or indirect Subsidiary of
any Loan Party to pay when due (i) any principal of or interest on any
Indebtedness (other than Indebtedness referred to in subsection 7.1) or (ii) any
Contingent Obligation in an individual principal amount of $100,000 or more or
any Contingent Obligations in an aggregate principal amount of $250,000 or more,
in each case beyond the end of any grace period provided therefor; or (b) breach
or default by any Loan Party or any direct or indirect Subsidiary of any Loan
Party with respect to any other material term of (i) any evidence of any
Indebtedness or any Contingent Obligation, (ii) any loan agreement, mortgage,
indenture or other agreement relating to such Indebtedness or Contingent
Obligation(s), or (iii) any joint venture agreement, partnership agreement, or
Material Contract.
7.3 BREACH OF CERTAIN COVENANTS. Failure of any Loan Party to perform or comply
with any term or condition contained in subsection 2.5, 5.1(xii), 5.2, 5.4(b),
5.7, 5.8 or Section 6 of this Agreement; or
7.4 BREACH OF WARRANTY. Any representation, warranty, certification or other
statement made by any Loan Party in any Loan Document or in any statement or
certificate at any time given by any Loan Party in writing pursuant hereto or
thereto or in connection herewith or therewith shall be false in any material
respect on the date as of which made; or
7.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS. Any Loan Party shall default in the
performance of or compliance with any term contained in this Agreement or any of
the other Loan Documents, other than any such term referred to in any other
subsection of this Section 7, and such default shall not have been remedied or
waived within 20 days after receipt by Borrower of notice from Lender of such
default; or
7.6 INVOLUNTARY BANKRUPTCY: APPOINTMENT OF RECEIVER, ETC. (i) A court having
jurisdiction in the premises shall enter a decree or order for relief in respect
of any Loan Party or any of its Subsidiaries in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed within 60
days following the entry thereof; or any other similar relief shall be granted
under any applicable federal or state law; or (ii) an involuntary case shall be
commenced against any Loan Party or any of its Subsidiaries under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over any Loan Party or any of
its Subsidiaries, or over all or a substantial part of
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its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
any Loan Party or any of its Subsidiaries for all or a substantial part of
its property; or a warrant of attachment, execution or similar process shall
have been issued against any substantial part of the property of any Loan
Party or any of its Subsidiaries, and any such event described in this clause
(ii) shall continue for 60 days unless dismissed, bonded or discharged; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) Any Loan Party or
any of its Subsidiaries shall have an order for relief entered with respect to
it or commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or any
Loan Party or any of its Subsidiaries shall make any assignment for the benefit
of creditors; or (ii) any Loan Party or any of its Subsidiaries shall be unable,
or shall fail generally, or shall admit in writing its inability, to pay its
debts as such debts become due; or the Board of Directors of any Loan Party or
any of its Subsidiaries (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clause (i) above or this clause (ii); or
7.8 JUDGMENTS AND ATTACHMENTS. Any money judgment, writ or warrant of attachment
or similar process involving in any individual case in the aggregate at any time
an amount in excess of $100,000 shall be entered or filed against any Loan Party
or any direct or indirect Subsidiary of any Loan Party or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 30 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
7.9 DISSOLUTION. Any order, judgment or decree shall be entered against Borrower
or any of its Subsidiaries decreeing the dissolution or split up of Borrower or
any of its Subsidiaries and such order shall remain undischarged or unstayed for
a period in excess of 60 days; or
7.10 EMPLOYEE BENEFIT PLANS. There shall occur one or more ERISA Events; or
there shall exist, as of any valuation date for a Pension Plan, an excess of the
actuarial present value (determined on the basis of reasonable assumptions
employed by the independent actuary for such Pension Plan for purposes of
Section 412 of the Internal Revenue Code or Section 302 of ERISA) of benefit
liabilities (as defined in Section 4001(a)(16) of ERISA) over the fair market
value of the assets of such Pension Plan, individually or in the aggregate for
all Pension Plans (excluding for purposes of such computation any Pension Plans
with respect to which assets exceed benefit liabilities).
7.11 INVALIDITY OF LOAN DOCUMENTS. Any of the Loan Documents for any reason,
other than a partial or full release in accordance with the terms thereof,
ceases to be in full force and effect or is declared to be null and void, or any
Loan Party denies that it has any further liability under any Loan Documents to
which it is party, or gives notice to such effect, including without limitation
with respect to future advances by Lender; or
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7.12 FAILURE OF SECURITY. Upon execution and delivery thereof, any Collateral
Document shall, at any time, cease to be in full force and effect (other than by
reason of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any other termination
of such Collateral Document in accordance with the terms hereof or thereof) or
shall be declared null and void, or the validity or enforceability thereof shall
be contested in writing by any Loan Party, or Lender shall not have or shall
cease to have a valid security interest in any Collateral purported to be
covered thereby, perfected and with the priority required by the relevant
Collateral Document, for any reason other than the failure of Lender to take any
action within its control, subject only to Liens permitted under the applicable
Collateral Documents; or
7.13 MATERIAL ADVERSE CHANGE. There shall occur and continue any condition
which, in Lender's reasonable opinion, has or is likely to have a Material
Adverse Effect or would jeopardize in excess of $100,000; or
7.14 FAILURE TO PLEDGE. Less than 100% of the capital stock of any Subsidiary of
Borrower shall at any time not be duly and validly pledged to and held by Lender
pursuant to the Pledge Agreement and other documents acceptable in form and
substance to Lender; or
7.15 DAMAGE, STRIKE, CASUALTY. Any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God or public enemy, or other
casualty occurs which causes, for more than five (5) Business Days, the
cessation or substantial curtailment of revenue producing activities at any
facility of Borrower or any of its Subsidiaries if any such event or
circumstance could have a Material Adverse Effect; or
7.16 LICENSES AND PERMITS. The loss, suspension or revocation of, or failure to
renew, any license or permit now held or hereafter acquired by Borrower or any
of its Subsidiaries, if such loss, suspension, revocation or failure to renew
could have a Material Adverse Effect; or
THEN (i) upon the occurrence of any Event of Default described in subsection 7.6
or 7.7, each of (a) the unpaid principal amount of and accrued and unpaid
interest on the Loans, and (b) all other Obligations, shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby expressly waived by Borrower,
and the obligation of Lender to make any Loan shall thereupon terminate, and
(ii) upon the occurrence and during the continuation of any other Event of
Default, Lender may (but shall not be obligated to) declare all or any portion
of the amounts described in clauses (a) and (b) above to be, and the same shall
forthwith become, immediately due and payable, and the Commitments and the
obligation of Lender to make any Loan shall terminate. Lender's rights and
remedies set forth above shall be cumulative and non-exclusive of any other
rights or remedies which
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it may have under this Agreement, any other agreement or instrument, by
operation of law or otherwise.
SECTION 8
GUARANTY
8.1. THE GUARANTY.
8.1(a) In order to induce Lender to enter into this Agreement and to
induce Lender to extend credit to Borrower hereunder, each Guarantor hereby
jointly and severally, irrevocably and unconditionally guarantee, as primary
obligors and not merely as surety, the full and prompt payment when due, upon
maturity, acceleration or otherwise, of any and all Obligations of Borrower to
Lender. Each Guarantor understands, agrees and confirms that Lender may enforce
this Guaranty up to the full amount of the Obligations against either Guarantor
without proceeding against the other Guarantor, Borrower or other guarantor,
against any security for the Obligations or under any other guaranty covering
the Obligations.
8.1(b) Each Guarantor agrees that this Guarantee constitutes a
guarantee of payment when due and not of collection and waives any right to
require that any resort be had by Lender to any of the security held for payment
of any of the Obligations or to any balance of any deposit account or credit on
the books of Lender in favor of Borrower or any other Person.
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8.1(c) Notwithstanding any other provisions of this Agreement, the
maximum aggregate amount of Obligations that each Guarantor agrees to guaranty
pursuant to this Agreement shall equal the lesser of (i) the excess of the fair
saleable value of the property of such Guarantor over the total liabilities of
such Guarantor (including the maximum amount reasonably expected to become due
in respect of contingent liabilities, other than any such contingent liabilities
under this Agreement and the other Loan Documents), such excess to be determined
on the date of this Agreement or the date on which, from time to time, such
enforcement or realization is effected, whichever is higher and (ii) that amount
of Obligations that does not result in a violation of applicable laws relating
to fraudulent conveyance, after giving effect to the value of any rights to
subrogation, reimbursement, indemnification or contribution (including without
limitation rights to contribution from any other Guarantor) whether by agreement
or under applicable law. Subject to the preceding two sentences, each Guarantor
understands, agrees and confirms that this is a guaranty of payment when due and
not of collection and that Lender may, from time to time, enforce this Guaranty
against Guarantor up to the full amount of the Obligations owed to Lender
without proceeding against any other party, against any security for the
Obligations, against any other guarantor or under any other guaranty covering
the Obligations.
8.2 WAIVER OF NOTICE. Each Guarantor, to the extent permitted by applicable law,
hereby waives notice of acceptance of this Guaranty and notice of any liability
to which it may apply, and waives promptness, diligence, presentment, demand of
payment protest notice of dishonor or nonpayment of any such liabilities, suit
or taking of other action by Lender against, and any other notice to, any party
liable thereon (including each Guarantor or any other guarantor).
8.3 LENDER'S RIGHTS. Each Guarantor hereby agrees that Lender may, without
demand and at any time and from time to time without the consent of, or notice
to such Guarantor, without incurring responsibility to such Guarantor and
without impairing or releasing the obligations of such Guarantor hereunder, upon
or without any terms or conditions and in whole or in part:
8.3(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew, increase, accelerate or alter, any of
the Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the Guaranty herein made shall apply to the
Obligations as so changed, extended, renewed or altered;
8.3(b) take and hold security for the payment of the Obligations and
sell, exchange, release, surrender, realize upon or otherwise deal with in any
manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the Obligations or any liabilities
(including any of those hereunder) incurred directly or indirectly in respect
thereof or hereof, and/or any offset thereagainst;
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8.3(c) exercise or refrain from exercising any rights against Borrower
or others or otherwise act or refrain from acting;
8.3(d) release or substitute any one or more endorsers, guarantors, or
other obligors;
8.3(e) settle or compromise any of the Obligations, any security
therefor or any liability (including any of those hereunder) incurred directly
or indirectly in respect thereof or hereof, and may subordinate the payment of
all or any part thereof to the payment of any liability (whether due or not) of
Borrower to its creditors other than Lender;
8.3(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of Borrower to Lender regardless of what liability or
liabilities of Lender remain unpaid; and/or
8.3(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement or any of the instruments or agreements referred
to herein, or otherwise amend, modify or supplement this Agreement or any of
such other instruments or agreements.
8.4 GUARANTY ABSOLUTE. No invalidity, irregularity or unenforceability of all or
any part of the Obligations or of any security therefor shall affect impair or
be a defense to this Guaranty, and this Guaranty shall be primary, absolute and
unconditional notwithstanding the occurrence of any event or the existence of
any other circumstances which might constitute a legal or equitable discharge of
a surety or guarantor except payment in full of the Obligations.
8.5 INDEPENDENT OBLIGATION. All obligations of the Guarantors hereunder are
independent of the obligations of each other and of the obligations of Borrower,
and a separate action or actions may be brought and prosecuted against either
Guarantor whether or not action is brought against the other Guarantor,
Borrower, or any other guarantor and whether or not the other Guarantor,
Borrower or any other guarantor is joined in any such action or actions.
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8.6 RELIANCE. Neither Lender nor Lender shall be required to inquire into the
capacity or powers of any of the Loan Parties or of the officers, directors,
partners or Lender acting or purporting to act on their behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
8.7 GUARANTY CONTINUING. This Guaranty is a continuing one and all liabilities
to which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of Lender or of any holder of any Note in exercising any right, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which Lender or any subsequent holders of a Note would otherwise have. No notice
to or demand on either Guarantor in any case shall entitle either Guarantor to
any other further notice or demand in similar or other circumstances or
constitute a waiver of the rights of Lender or any subsequent holder of a Note
to any other or further action in any circumstances without notice or demand.
8.8 BINDING NATURE OF GUARANTY. This Guaranty shall be binding upon each
Guarantor and their successors and assigns and shall inure to the benefit of
Lender and its successors and assigns.
8.9 JUDGMENTS BINDING. If claim is ever made upon Lender or any subsequent
holder of a Note for repayment or recovery of any amount or amounts received in
payment or on account of any of the Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (a) any judgment, decree or order
of any court or administrative body having jurisdiction over such payee or any
of its property, or (b) any settlement or compromise of any such claim effected
by such payee with any such claimant (including Borrower) then and in such event
each Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding upon each Guarantor, notwithstanding any revocation
hereof or the cancellation of any Note or other instrument evidencing any
liability of Borrower, and each Guarantor shall be and remain liable to the
aforesaid payees hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by any such payee.
8.10 STATUTE OF LIMITATIONS. Each Guarantor waives, to the fullest extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any acknowledgment or new
promise, whether by payment of principal or interest or otherwise and whether by
Borrower or any other Person liable in respect of the Obligations, with respect
to any of the Obligations shall, if the statute of limitations in favor of
either Guarantor against Lender or any subsequent holder of a Note shall have
commenced to run, toll the running of such statute of limitations, and if the
period of such statute of limitations shall have expired, prevent the operation
of such statute of limitations.
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8.11 SUBORDINATION. Subject to subsection 8.12, any indebtedness of Borrower now
or hereafter held by either Guarantor is hereby subordinated to the indebtedness
of Borrower to Lender; and such indebtedness of Borrower to either Guarantor, if
Lender, after an Event of Default has occurred and is continuing, so requests,
shall be collected, enforced and received by either Guarantor, as trustee for
Lender and be paid over to Lender on account of the indebtedness of Borrower to
Lender, but without affecting or impairing in any manner the liability of such
Guarantor under the other provisions of this Guaranty. Prior to the transfer by
either Guarantor of any note or negotiable instrument evidencing any
indebtedness of Borrower to such Guarantor, such Guarantor shall xxxx such note
or negotiable instrument with a legend that the same is subject to this
subordination.
8.12 NO SUBROGATION, ETC. Each Guarantor hereby agrees not to exercise any
rights of subrogation which it may at any time otherwise have as a result of
this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code, or
otherwise) to the claims of Lender against Borrower, the other Guarantor or any
other guarantor of the Obligations (collectively, the "OTHER PARTIES") and all
contractual, statutory or common law rights of reimbursement, contribution or
indemnity from any Other Party which it may at any time otherwise have as a
result of this Guaranty, until the Obligations have been indefeasibly paid in
full and the Commitments have terminated. Each Guarantor hereby further agrees
not to exercise until such time any right to enforce any other remedy which
Lender now have or may hereafter have against any Other Party, any endorser or
any other guarantor of all or any part of the indebtedness of Borrower and any
benefit of, and any right to participate in, any security or collateral given to
or for the benefit of Lender to secure payment of the indebtedness of Borrower.
Each Guarantor also waives all claims (as such term is defined in the Bankruptcy
Code) it may at any time otherwise have against any Other Party arising from any
transaction whatsoever, including without limitation its right to assert or
enforce any such claims.
8.13 CONTRIBUTION. Each Loan Party agrees that in the event a payment shall be
made by any Loan Party (the "CLAIMING LOAN PARTY") under this Agreement or any
other Loan Document or assets of such Claiming Loan Party shall be sold pursuant
to any mortgage, security agreement or similar instrument or agreement to
satisfy a claim of Lender, each other Loan Party (a "CONTRIBUTING LOAN PARTY")
shall indemnify the Claiming Loan Party in an amount equal to the amount of such
payment or the greater of the book value or the fair market value of such
assets, as the case may be, multiplied by a fraction of which the numerator
shall be the net worth of the Contributing Loan Party on the date hereof and the
denominator shall be the aggregate net worth of all the Loan Parties on the date
hereof.
8.14 GUARANTEE SECURED. Payment under this Guarantee is secured by pledges,
encumbrances and mortgages of Collateral pursuant to applicable Collateral
Documents in accordance with this Agreement. Reference is hereby made to the
applicable Collateral Documents for a description of the Collateral pledged and
the right of the respective parties to such property, to secure all the
obligations of any Guarantor hereunder which may be party to such documents.
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8.15 EFFECTIVENESS; REINSTATEMENT. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of any Loan Party, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, any Loan Party or any substantial part of its property, or
otherwise, all as though such payments had not been made.
8.16 MERGER. If any Guarantor shall merge into or consolidate with another
Person, or liquidate, wind up or dissolve itself in a transaction not prohibited
by this Agreement, or if all of the stock of, or other equity interest in, any
Guarantor shall be sold or otherwise disposed of in a manner not prohibited by
the Credit Agreement, such Guarantor hereby covenants and agrees, that upon any
such merger, consolidation, liquidation, or dissolution, the guarantee given in
this Guarantee and the due and punctual performance and observance of all of the
covenants and conditions of this Agreement to be performed by such Guarantor,
shall be expressly assumed (in the event that such Guarantor is not the
surviving corporation or other entity in the merger) by supplemental agreements
satisfactory in form and substance to Lender, by the corporation or corporations
or other entity or entities formed by such consolidation, or into which such
Guarantor shall have been merged, or by the corporation or corporations or other
entity which shall have acquired such property. In addition, such Guarantor
shall deliver to Lender, an Officers' Certificate and an opinion of counsel,
each stating that such merger, consolidation or transfer and such supplemental
agreements comply with this Agreement and that all conditions precedent herein
provided relating to such transaction have been complied with. In case of any
such consolidation, merger, sale or conveyance and upon the assumption by the
successor corporation or corporations or other entity, by supplemental
agreements executed and delivered to Lender, and satisfactory in form and
substance to Lender, of the guarantee given in this Agreement and the due and
punctual performance of all of the covenants and conditions of this Agreement to
be performed by such Guarantor, such successor corporation or corporations or
other entity or entities shall succeed to and be substituted for such Guarantor,
with the same effect as if it or they had been named herein as a Guarantor.
8.17. ADDITIONAL GUARANTORS. Upon execution and delivery after the date hereof
by Lender and a Subsidiary of Borrower of an instrument in the form of EXHIBIT
XI, such Subsidiary shall become a Guarantor hereunder with the same force and
effect as if originally named as a Guarantor herein. The execution and delivery
of any such instrument shall not require the consent of any other Guarantor
hereunder. The rights and obligations of each Guarantor hereunder shall remain
in full force and effect notwithstanding the addition of any new Guarantor as a
party to this Agreement.
8.18. INTEGRATION. This Section is the sole and exclusive expression of the
parties' understandings covering the subject matter hereof. No party is relying
on any statement or representation, written or oral, not embodied herein. In
particular, and not by way of
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limitation, this Guaranty contains the sole expression of the rights and
remedies of Lender as against the Guarantors, and the limitations thereon.
The Guarantors expressly acknowledge that no such representations have been
made. The Guarantors expressly disclaim any defense to the validity,
regularity or enforceability of this Guaranty or any other circumstance which
might otherwise constitute a defense to this Guaranty and affirm their intent
to perform their obligations under this Guaranty according to its terms.
SECTION 9
MISCELLANEOUS
9.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
9.1(a) GENERAL. Lender may, with the prior written consent of Borrower,
assign or sell a participation to one or more banks or financial institutions
all or a portion of its interests, rights and obligations under this Agreement,
including but not limited to its Commitments, any Loan or Loans or any other
Obligations owed to it. Borrower acknowledges and agrees that neither Lender nor
any participant or assignee shall be under any obligation whatsoever to make
Loans and to provide financial accommodations to Borrower in excess of their
respective commitments, and that, in the case of an assignment of all or the
remaining portion of Lender's obligations under this Agreement, Lender shall
cease to be a party hereto. The failure of any participant or assignee to
provide its PRO RATA portion of any Loan on the date specified therefor shall
not relieve any other participant or assignee or Lender of its obligation to
provide its PRO RATA portion of such Loan, but neither Lender nor any
participant or assignee shall be responsible for the failure of any defaulting
participant or assignee to provide its PRO RATA portion of any Loan to be
provided by such defaulting participant or assignee. In the event that any
participant or assignee shall notify Lender that such participant or assignee
will be unable to continue to provide its PRO RATA portion of any Loan to be
made under this Agreement or shall fail to provide the same, Lender will
promptly notify Borrower of the same and, on the date specified therefor, in the
notice to Borrower from Lender (the "Commitment Reduction Date") the amount of
the Commitments shall be automatically reduced by the amount of the unfunded
commitment of the terminated participant or assignee. Until such participant or
assignee resumes its obligations pursuant to its participation agreement or
assignment agreement with Lender, Lender will not advance to such participant or
assignee its PRO RATA share of interest and principal payments by Borrower,
unless Lender is ordered to do so by a court of competent jurisdiction.
Notwithstanding the foregoing, Borrower may, with the prior written consent of
Lender, seek to replace the terminated participant or assignee with another
participant or assignee provided that (i) the commitment of such proposed
replacement participant or assignee is equal to the commitment of the terminated
participant or assignee, (ii) such replacement participant or assignee is
acceptable to Lender, (iii) such replacement participant or assignee executes a
participation agreement with Lender in form and substance satisfactory to Lender
and (iv) such participation is in place and has been fully funded prior to the
Commitment Reduction Date. The Commitments hereunder shall be modified to
reflect the Commitment of such assignee and any remaining Commitment of Lender
and, if any such
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assignment occurs after the issuance of the Notes hereunder, Lender shall,
upon the effectiveness of such assignment or as promptly thereafter as
practicable, cancel its Notes, and thereupon new Notes shall be issued to the
assignee and to Lender, substantially in the form of EXHIBIT III, EXHIBIT IV
or EXHIBIT V annexed hereto, as the case may be, with appropriate insertions,
to reflect the new Commitments and/or outstanding Term Loan (or portion
thereof), as the case may be, of the assignee and Lender, and the assignee
shall be deemed a "Lender" for the purposes of the Agreement. In connection
with any such assignment or participation hereunder, Borrower agrees to enter
into any amendments of this Agreement and the other Loan Documents that may
be requested by Lender in order to provide that Lender shall act as agent for
such assignee(s) or participant(s) and in order to define the respective
rights and obligations of Lender and such assignee(s) or participant(s)
hereunder.
9.1(b) RIGHTS OF PARTICIPANTS. Borrower understands and agrees that
copies of all financial statements, notices and other communications to be given
by Borrower to Lender under this Agreement shall be promptly delivered by
Borrower to each participant or assignee at the addresses provided to Borrower
by Lender. Borrower further agrees that it will communicate with the
participants and/or assignees in regard to their business, financial and other
affairs and that the participants and/or assignees have the identical rights as
Lender in regard to such information.
9.1(c) CONFIDENTIALITY. Lender may, in connection with any assignment
or participation or proposed assignment or participation pursuant to this
Section 9.1, disclose to the assignee or participant or proposed assignee or
participant, any information relating to Borrower and any Guarantor or any
Affiliates of Borrower, furnished to Lender by or on behalf of Borrower or any
Guarantor if such assignee or participant or proposed assignee or participant
agrees to keep such information confidential. Except for the foregoing Lender
will keep such information confidential.
9.1(d) ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
subsection 9.1, Lender may assign and pledge all or any portion of its Loans,
the other Obligations owed to Lender, and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; PROVIDED that (i) Lender shall not, as between Borrower and Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require Lender to take or omit to take any
action hereunder.
9.2 EXPENSES. Whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents; (ii) all the costs of
furnishing all opinions by counsel for Borrower (including without limitation
any opinions requested by Lender as to any legal matters arising hereunder) and
of Borrower's performance of and
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compliance with all agreements and conditions on its part to be performed or
complied with under this Agreement and the other Loan Documents including,
without limitation, with respect to monitoring, inspecting and testing the
Borrowing Base and confirming compliance with environmental and insurance
requirements; (iii) the reasonable fees, expenses and disbursements of
counsel to Lender (including reasonable invoiced allocated costs of internal
counsel determined in good faith) in connection with the negotiation,
preparation, execution and administration of the Loan Documents and the Loans
and any consents, amendments, waivers or other modifications hereto or
thereto and any other documents or matters requested by Borrower; (iv) all
the costs and expenses of creating and perfecting the Liens in favor of
Lender pursuant to the Loan Documents, including filing and recording fees
and expenses, title insurance, UCC search fees and filing fees, reasonable
fees and expenses of counsel for providing such opinions as Lender may
reasonably request and reasonable fees and expenses of legal counsel to
Lender (including local counsel); (v) all other actual and reasonable costs
and expenses incurred by Lender in connection with the negotiation,
preparation and execution of the Loan Documents and the transactions
contemplated hereby and thereby; and (vi) after the occurrence of an Event of
Default, all costs and expenses, including reasonable attorneys' fees
(including reasonable invoiced allocated costs of internal counsel determined
in good faith) and costs of settlement, incurred by Lender in enforcing any
Obligations of or in collecting any payments due from Borrower hereunder or
under the other Loan Documents by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to
any insolvency or bankruptcy proceedings.
9.3 INDEMNITY; RELEASE.
9.3(a) In addition to the payment of expenses pursuant to subsection
9.2, whether or not the transactions contemplated hereby shall be consummated,
Borrower agrees to defend, indemnify, pay and hold harmless Lender, and the
officers, directors, employees, agents and affiliates of Lender (collectively
called the "INDEMNITEES") from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including
without limitation the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
action or proceeding commenced or threatened by any Person (including but not
limited to any Loan Party, any Indemnitee and any third party), whether or not
any such Indemnitee shall be designated as a party or a potential party thereto,
it being understood that such fees and disbursements include those incurred to
enforce the provisions of this Agreement), whether direct, indirect or
consequential and whether based on any federal, state or foreign laws, statutes,
rules or regulations (including without limitation securities and commercial
laws, statutes, rules or regulations and Environmental Laws), on any
Environmental Claim, on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee at any time (including, without limitation, at any time following the
payment of the Obligations), in any manner relating to or arising out of this
Agreement or the other Loan Documents or
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the transactions contemplated hereby or thereby (including without limitation
Lender's agreement to make the Loans hereunder or the use or intended use of
the proceeds of any of the Loans) or the statements contained in the
commitment letter delivered by Lender to Borrower with respect thereto
(collectively called the "INDEMNIFIED LIABILITIES"); PROVIDED that Borrower
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise
solely from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction. To the
extent that the undertaking to defend, indemnify, pay and hold harmless set
forth in the preceding sentence or as set forth in subsection 9.3(c) below
may be unenforceable because it is violative of any law or public policy,
Borrower shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them. All
amounts due under this Section 9.3 shall be payable promptly after written
demand therefor. The agreements in this Section 9.3 shall survive repayment
of the Revolving Loans and all other amounts payable hereunder.
9.3(b) Without limiting the provisions of Subsection 9.3(a), and in
further consideration of Lender's execution of this Agreement, Borrower,
individually and on behalf of its successors (including, without limitation, any
trustees acting on behalf of Borrower and any debtor-in-possession with respect
to Borrower), assigns, Subsidiaries and Affiliates, hereby forever releases each
of Lender, any holder of any of the Notes and its respective successors,
assigns, parent, Subsidiaries, Affiliates, officers, employees, directors,
agents and attorneys (collectively, the "RELEASEES") from any and all debts,
claims, demands, liabilities, responsibilities, disputes, actions and causes of
action (whether at law or in equity) and obligations of every nature whatsoever,
whether liquidated or unliquidated, whether known or unknown, matured or
unmatured, fixed or contingent (collectively, the "CLAIMS") that Borrower may
have against the Releasees or any of them which arise from or relate to any
actions which the Releasees or any of them may have taken or omitted to take
prior to the date hereof with respect to the Obligations, any Collateral, this
Agreement, the Loan Documents, and any third parties liable in whole or in part
for the Obligations.
9.3(c) As used in subsection 9.3(a) above, and without limiting the
provisions of such subsection, "Indemnified Liabilities" as used therein shall
include, and Borrower agrees to defend, indemnify, pay and hold harmless the
Indemnitees from and against, all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including without limitation the reasonable
fees and disbursements of counsel for the Indemnities in connection with any
investigative, administrative or judicial action or proceeding commenced or
threatened by any Person (including but not limited to any Loan Party, any
Indemnitee and any third party), whether or not any such Indemnitee shall be
designated as a party or a potential party thereto, it being understood that
such fees and disbursements include those incurred to enforce the provisions of
this Agreement) which at any time may be asserted against or imposed upon the
Indemnitees, or any of them,
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arising out of or in connection with (i) requirements of any Environmental
Law with respect to all or any of the Facilities, (ii) Environmental Claims,
(iii) material noncompliance with any environmental permit, license, approval
or other authorization with respect to any activities, operations or
businesses conducted on or in relation to the Facilities or any of them
required by any Environmental Law, and (iv) the presence, existence or threat
of Release of Hazardous Materials at, on, about, under, within or in
connection with the Facilities or any of them; PROVIDED that Borrower shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise
solely from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction. Without
limiting the foregoing, and to the extent permitted by applicable law, the
Borrower agrees not to assert and to cause its Subsidiaries not to assert,
and hereby waives and agrees to cause its Subsidiaries to so waive, all
rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs
and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
Indemnitee.
9.4 SET-OFF. In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of any Event of Default, Lender is hereby authorized by
Borrower at any time or from time to time, without notice to Borrower or to any
other Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, Indebtedness evidenced by certificates of deposit, whether
matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by Lender to or for the credit or the
account of Borrower against and on account of the obligations and liabilities of
Borrower to Lender under this Agreement, the Notes and the other Loan Documents,
including, but not limited to, all claims of any nature or description arising
out of or connected with this Agreement, the Notes or any other Loan Document,
irrespective of whether or not (i) Lender shall have made any demand hereunder
or (ii) the principal of or the interest on the Loans or any other amounts due
hereunder shall have become due and payable pursuant to Section 7 and although
said obligations and liabilities, or any of them, may be contingent or
unmatured.
9.5 AMENDMENTS AND WAIVERS. No amendment, modification, termination or waiver of
any provision of this Agreement or of the Notes, or consent to any departure by
Borrower therefrom shall in any event be effective without the written
concurrence of Lender. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on Borrower in any case shall entitle Borrower to any other or
further notice or demand in similar or other circumstances.
9.6 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of
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such covenants, the fact that it would be permitted by an exception to, or
would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of an Event of Default or Potential Event of Default if
such action is taken or condition exists.
9.7 NOTICES. Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by telefacsimile or United States mail
(certified, return receipt requested) or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile or telex, or three Business Days after depositing it in the United
States mail with postage prepaid and properly addressed; PROVIDED that notices
to Lender shall not be effective until received. For the purposes hereof, the
address of each party hereto shall be the address set forth below or (i) as to
Borrower and Lender, such other address as shall be designated by such Person in
a written notice delivered to the other parties hereto and (ii) as to each other
party, such other address as shall be designated by such party in a written
notice delivered to Lender.
If to Lender:
IBJ Whitehall Bank & Trust Company
Xxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xx. Xxxxxxxxx X. Xxxxxx
Director
with a copy to:
Xxxxxx, Xxxxxxx & Xxxxxxx
Xxx Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Macculloch X. Xxxxxx, Esq.
If to Borrower or any Guarantor:
VISTA Information Solutions, Inc.
0000 Xxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xx. X. Xxxxxxx Xxxxxxxx
Chief Financial Officer
with a copy to:
Xxxx, Xxxx, Xxxx & Freidenrich LLP
108
4365 Executive Drive, 00xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
Lender need not delay action on instructions transmitted orally or by telex or
telegram until receipt of the written confirmation. In the event that a
discrepancy exists between the instructions received by Lender by telex or
telefax and the confirming letter, or in the absence of a confirming letter, the
oral notice, telex or telefax as understood by Lender will be deemed the
controlling and proper instruction.
Notwithstanding the foregoing, notices regarding administration of the
Loans may be given to the Lender at the address set forth above, but to the
attention of Xx. Xxxxx Xxxxxxx (fax no. 000-000-0000).
9.8. NO FIDUCIARY RELATIONSHIP. No provision in this Agreement or in any of the
other Loan Documents and no course of dealing between the parties shall be
deemed to create any fiduciary duty by Lender to Borrower.
9.9 COMPLETE AGREEMENT. This Agreement and the other Loan Documents constitute
the complete agreement between the parties with respect to the subject matter
hereof and thereof. This Agreement replaces any and all proposals, commitments
and promises with respect to the affording by Lender to Borrower of any loans,
advances or financial accommodations, all of which are merged herein and
replaced hereby.
THIS WRITTEN CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS REPRESENT
THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
9.10 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
9.10(a) All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
9.10(b) Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of Borrower set forth in subsections 2.6(d), 2.7,
9.2, 9.3 and 9.4 shall survive the payment of the Loans and the termination of
this Agreement.
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9.11 FAILURE OR INDULGENCE NO WAIVER: REMEDIES CUMULATIVE. No failure or delay
on the part of Lender in the exercise of any power, right or privilege hereunder
or under any other Loan Document shall impair such power, right or privilege or
be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege. All
rights and remedies existing under this Agreement and the other Loan Documents
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
9.12 MARSHALLING; PAYMENTS SET ASIDE. Lender shall not be under any obligation
to marshal any assets in favor of Borrower or any other party or against or in
payment of any or all of the Obligations. To the extent that Borrower makes a
payment or payments to Lender, or Lender enforces any security interests or
exercises its rights of set off, and such payment or payments or the proceeds of
such enforcement or set off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or set off had not occurred.
9.13 SEVERABILITY. In case any provision in or obligation under this Agreement
or any Note or any of the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
9.14 HEADINGS. Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.
9.15 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF NEW YORK,
WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
9.16 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lender. Neither
Borrower's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Borrower without the prior written consent of Lender.
110
9.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST BORROWER OR ANY OTHER LOAN PARTY ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK,
AND SHALL, IF LENDER SO ELECTS, BE BROUGHT AND ENFORCED IN THE SUPREME COURT OF
THE STATE OF NEW YORK FOR NEW YORK COUNTY OR THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK. BY EXECUTION AND DELIVERY OF THIS
AGREEMENT BORROWER IRREVOCABLY CONSENTS TO AND ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS AGREEMENT, SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION.
Borrower hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Borrower at its address provided in subsection 9.7, such service
being hereby acknowledged by Borrower to be sufficient for personal jurisdiction
in any action against Borrower in any such court and to be otherwise effective
and binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Lender to bring proceedings against Borrower in the courts of any other
jurisdiction.
9.18 WAIVER OF JURY TRIAL; CONSEQUENTIAL DAMAGES.
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9.18(a) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES AND AGREES
TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/BORROWER AND/OR THE LENDER/GUARANTOR RELATIONSHIP THAT
IS BEING ESTABLISHED. The scope of this waiver is intended to be
all-encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other common law and
statutory claims. Each party hereto acknowledges that this waiver is a material
inducement to enter into a business relationship, that each has already relied
on this waiver in entering into this Agreement, and that each will continue to
rely on this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal counsel
and that it knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS) RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
9.18(b) NEITHER BORROWER, LENDER, ANY GUARANTOR, NOR ANY EMPLOYEE,
AGENT OR ATTORNEY OF ANY OF THEM SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES, ARISING FROM ANY BREACH OF CONTRACT, TORT OR OTHER
WRONG RELATING TO THIS AGREEMENT, ANY NOTE, OR ANY OF THE OTHER LOAN DOCUMENTS
OR THE ESTABLISHMENT, ADMINISTRATION OR COLLECTION OF THE LOANS.
9.19 COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendments, waivers,
consents or supplements hereto or in connection herewith may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Borrower and
Lender of written or telephonic notification of such execution and authorization
of delivery thereof.
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[SIGNATURE PAGES TO FOLLOW]
113
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER:
VISTA INFORMATION SOLUTIONS, INC.
BY:
-------------------------------
Name: X. Xxxxxxx Xxxxxxxx
Title: Vice President
GUARANTORS:
VISTA ENVIRONMENTAL INFORMATION, INC.
By:
-------------------------------
Name: X. Xxxxxxx Xxxxxxxx
Title: Vice President
E/RISK INFORMATION SERVICES
By:
-------------------------------
Name: X. Xxxxxxx Xxxxxxxx
Title: Vice President
GEOSURE, L.P.
By: Geosure, Inc., its General Partner
By:
-------------------------------
Name: X. Xxxxxxx Xxxxxxxx
Title: Vice President
GEOSURE, INC.
114
By:
-------------------------------
Name: X. Xxxxxxx Xxxxxxxx
Title: Vice President
NRC ACQUISITION, LLC
By: Geosure, L.P., its Managing Member
By: Geosure, Inc., its General Partner
By:
-------------------------------
Name: X. Xxxxxxx Xxxxxxxx
Title: Vice President
NRC INSURANCE SERVICES, INC.
By:
-------------------------------
Name: X. Xxxxxxx Xxxxxxxx
Title: Vice President
ENSITE CORPORATION OF DENVER d/b/a
ENTRAC
By:
-------------------------------
Name: X. Xxxxxxx Xxxxxxxx
Title: Vice President
ECOSEARCH ACQUISITION, INC.
By:
-------------------------------
Name: X. Xxxxxxx Xxxxxxxx
Title: Vice President
ECOSEARCH ENVIRONMENTAL RESOURCES, INC.
115
By:
-------------------------------
Name: X. Xxxxxxx Xxxxxxxx
Title: Vice President
LENDER:
IBJ WHITEHALL BANK & TRUST COMPANY
By:
-------------------------------
Xxxxx X. Xxxxx
Director
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