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Exhibit 10.3(a)
$20,000,000 REVOLVING CREDIT FACILITY
CREDIT AGREEMENT
by and among
FREEMARKETS, INC.
and
THE BANKS PARTY HERETO
and
PNC BANK, NATIONAL ASSOCIATION, As Administrative Agent
and
SILICON VALLEY BANK, as Syndication Agent
Dated as of November 3, 2000
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TABLE OF CONTENTS
Section Page
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1. CERTAIN DEFINITIONS......................................................................................1
1.1 Certain Definitions.............................................................................1
1.2 Construction...................................................................................18
1.3 Accounting Principles..........................................................................19
2. REVOLVING CREDIT FACILITY...............................................................................19
2.1 Revolving Credit Commitments...................................................................19
2.2 Nature of Banks' Obligations with Respect to Revolving Credit Loans............................20
2.3 Commitment Fees................................................................................20
2.4 Revolving Credit Facility Fee..................................................................20
2.5 Revolving Credit Loan Requests.................................................................20
2.6 Making Revolving Credit Loans..................................................................21
2.7 Revolving Credit Notes.........................................................................21
2.8 Use of Proceeds................................................................................21
2.9 Letter of Credit Subfacility...................................................................21
2.10 Extension of Expiration Date...................................................................21
2.10.1 Requests; Approval by All Banks...................................................21
2.10.2 Approval by Required Banks........................................................22
2.11 Voluntary Reduction of Commitments.............................................................22
2.12 Option to Increase Commitments.................................................................22
3. [INTENTIONALLY OMITTED].................................................................................23
4. INTEREST RATES..........................................................................................23
4.1 Interest Rate..................................................................................23
4.1.1 Revolving Credit Base Rate........................................................23
4.1.2 Rate Quotations...................................................................23
4.2 Interest After Default.........................................................................23
4.2.1 Letter of Credit Fees, Interest Rate..............................................23
4.2.2 Other Obligations.................................................................23
4.2.3 Acknowledgment....................................................................24
5. PAYMENTS................................................................................................24
5.1 Payments.......................................................................................24
5.2 Pro Rata Treatment of Banks....................................................................24
5.3 Interest Payment Dates.........................................................................24
5.4 Voluntary Prepayments..........................................................................25
5.4.1 Right to Prepay...................................................................25
5.5 Mandatory Prepayments..........................................................................25
5.6 Additional Compensation in Certain Circumstances...............................................25
5.6.1 Increased Costs or Reduced Return Resulting from Taxes, Reserves, Capital
Adequacy Requirements, Expenses, Etc..............................................25
5.6.2 Indemnity.........................................................................26
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Section Page
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6. REPRESENTATIONS AND WARRANTIES..........................................................................27
6.1 Representations and Warranties.................................................................27
6.1.1 Organization and Qualification....................................................27
6.1.2 Capitalization and Ownership......................................................27
6.1.3 Subsidiaries......................................................................28
6.1.4 Power and Authority...............................................................28
6.1.5 Validity and Binding Effect.......................................................28
6.1.6 No Conflict.......................................................................28
6.1.7 Litigation........................................................................29
6.1.8 Title to Properties...............................................................29
6.1.9 Financial Statements..............................................................29
6.1.10 Use of Proceeds; Margin Stock; Section 20 Subsidiaries............................30
6.1.11 Full Disclosure...................................................................31
6.1.12 Taxes.............................................................................31
6.1.13 Consents and Approvals............................................................31
6.1.14 No Event of Default; Compliance with Instruments..................................31
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc....................................32
6.1.16 Security Interests................................................................32
6.1.17 [INTENTIONALLY OMITTED]...........................................................32
6.1.18 Status of the Pledged Collateral..................................................32
6.1.19 Insurance.........................................................................33
6.1.20 Compliance with Laws..............................................................33
6.1.21 Material Contracts; Burdensome Restrictions.......................................33
6.1.22 Investment Companies; Regulated Entities..........................................33
6.1.23 Plans and Benefit Arrangements....................................................34
6.1.24 Employment Matters................................................................34
6.1.25 Environmental Matters.............................................................34
6.1.26 Senior Debt Status................................................................35
7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT.................................................35
7.1 First Loans and Letters of Credit..............................................................35
7.1.1 Officer's Certificate.............................................................36
7.1.2 Secretary's Certificate...........................................................36
7.1.3 Delivery of Loan Documents........................................................36
7.1.4 Opinion of Counsel................................................................37
7.1.5 Legal Details.....................................................................37
7.1.6 Payment of Fees...................................................................37
7.1.7 Appraisals........................................................................37
7.1.8 Consents..........................................................................37
7.1.9 No Violation of Laws..............................................................37
7.1.10 No Actions or Proceedings.........................................................37
7.1.11 Insurance Policies; Certificates of Insurance; Endorsements.......................38
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Section Page
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7.1.12 Filing Receipts...................................................................38
7.1.13 Termination of SVB Facility.......................................................38
7.2 Each Additional Loan or Letter of Credit.......................................................38
8. COVENANTS...............................................................................................39
8.1 Affirmative Covenants..........................................................................39
8.1.1 Preservation of Existence, Etc....................................................39
8.1.2 Payment of Liabilities, Including Taxes, Etc......................................39
8.1.3 Maintenance of Insurance..........................................................39
8.1.4 Maintenance of Properties and Leases..............................................40
8.1.5 Maintenance of Patents, Trademarks, Etc...........................................40
8.1.6 Visitation Rights.................................................................40
8.1.7 Keeping of Records and Books of Account...........................................40
8.1.8 Benefit Arrangements..............................................................41
8.1.9 Compliance with Laws..............................................................41
8.1.10 Use of Proceeds...................................................................41
8.1.11 Further Assurances................................................................41
8.1.12 Subordination of Intercompany Loans...............................................41
8.1.13 Lockbox Account...................................................................42
8.2 Negative Covenants.............................................................................42
8.2.1 Indebtedness......................................................................42
8.2.2 Liens.............................................................................43
8.2.3 Guaranties........................................................................43
8.2.4 Loans and Investments.............................................................43
8.2.5 Dividends and Related Distributions...............................................45
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions...............................45
8.2.7 Dispositions of Assets or Subsidiaries............................................47
8.2.8 Affiliate Transactions............................................................48
8.2.9 Subsidiaries, Partnerships and Joint Ventures.....................................48
8.2.10 Continuation of or Change in Business.............................................49
8.2.11 Plans and Benefit Arrangements....................................................49
8.2.12 Fiscal Year.......................................................................49
8.2.13 Intentionally Omitted.............................................................49
8.2.14 Changes in Organizational Documents...............................................49
8.2.15 Capital Expenditures..............................................................49
8.2.16 Maximum Net Loss..................................................................50
8.2.17 Minimum Tangible Net Worth........................................................50
8.2.18 Minimum Quick Ratio...............................................................51
8.3 Reporting Requirements.........................................................................51
9. DEFAULT.................................................................................................51
9.1 Events of Default..............................................................................51
9.1.1 Payments Under Loan Documents.....................................................52
9.1.2 Breach of Warranty................................................................52
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Section Page
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9.1.3 Breach of Negative Covenants or Visitation Rights.................................52
9.1.4 Breach of Other Covenants.........................................................52
9.1.5 Defaults in Other Agreements or Indebtedness......................................52
9.1.6 Final Judgments or Orders.........................................................53
9.1.7 Loan Document Unenforceable.......................................................53
9.1.8 Uninsured Losses; Proceedings Against Assets......................................53
9.1.9 Notice of Lien or Assessment......................................................53
9.1.10 Insolvency........................................................................53
9.1.11 Intentionally Omitted.............................................................53
9.1.12 Cessation of Business.............................................................53
9.1.13 Change of Control.................................................................54
9.1.14 Involuntary Proceedings...........................................................54
9.1.15 Voluntary Proceedings.............................................................54
9.2 Consequences of Event of Default...............................................................55
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or Reorganization
Proceedings.......................................................................55
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings..............................55
9.2.3 Set-off...........................................................................55
9.2.4 Suits, Actions, Proceedings.......................................................56
9.2.5 Application of Proceeds...........................................................56
9.2.6 Other Rights and Remedies.........................................................56
9.3 Notice of Sale.................................................................................57
10. THE AGENT...............................................................................................57
11. MISCELLANEOUS...........................................................................................57
11.1 Modifications, Amendments or Waivers...........................................................57
11.1.1 Increase of Commitment; Extension of Expiration Date..............................57
11.1.2 Extension of Payment; Reduction of Principal Interest or Fees;
Modification of Terms of Payment..................................................57
11.1.3 Release of Collateral or Guarantor................................................58
11.1.4 Miscellaneous.....................................................................58
11.2 No Implied Waivers; Cumulative Remedies; Writing Required......................................58
11.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes..............................58
11.4 Holidays.......................................................................................59
11.5 Funding by Branch, Subsidiary or Affiliate.....................................................60
11.5.1 Actual Funding....................................................................60
11.6 Notices........................................................................................60
11.7 Severability...................................................................................60
11.8 Governing Law..................................................................................61
11.9 Prior Understanding............................................................................61
11.10 Duration; Survival.............................................................................61
11.11 Intentionally Omitted..........................................................................61
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Section Page
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11.12 Successors and Assigns.........................................................................61
11.13 Confidentiality................................................................................63
11.13.1 General...........................................................................63
11.13.2 Sharing Information With Affiliates of the Banks..................................63
11.14 Counterparts...................................................................................63
11.15 Agent's or Bank's Consent......................................................................63
11.16 Exceptions.....................................................................................64
11.17 CONSENT TO FORUM; WAIVER OF JURY TRIAL.........................................................64
11.18 Tax Withholding Clause.........................................................................64
11.19 Joinder of Guarantors; Pledge of Stock and Security Interest in Assets of Subsidiaries.........65
11.20 Release of Certain Collateral..................................................................66
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LIST OF SCHEDULES AND EXHIBITS
SCHEDULES
SCHEDULE 1.1(B) - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
SCHEDULE 6.1.1 - QUALIFICATIONS TO DO BUSINESS
SCHEDULE 6.1.2 - CAPITALIZATION
SCHEDULE 6.1.3 - SUBSIDIARIES
SCHEDULE 6.1.6 EXCEPTION TO NO CONFLICT REPRESENTATION
SCHEDULE 6.1.7 - PENDING LITIGATION
SCHEDULE 6.1.8 - OWNED AND CERTAIN LEASED REAL PROPERTY
SCHEDULE 6.1.13 - CONSENTS AND APPROVALS
SCHEDULE 6.1.18 - PARTNERSHIP AGREEMENTS; LLC AGREEMENTS
SCHEDULE 6.1.19 - INSURANCE POLICIES
SCHEDULE 6.1.21 - MATERIAL CONTRACTS
SCHEDULE 6.1.23 - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 6.1.25 - ENVIRONMENTAL DISCLOSURES
SCHEDULE 8.2.1 - PERMITTED INDEBTEDNESS
SCHEDULE 8.2.2 - PERMITTED LIENS
SCHEDULE 8.2.3 - EXISTING GUARANTIES
SCHEDULE 8.2.4 - CERTAIN EXISTING PERMITTED INVESTMENTS
SCHEDULE 8.2.5 - CERTAIN REDEMPTIONS OF CAPITAL STOCK
EXHIBITS
EXHIBIT 1.1(A) - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(B) - BORROWING BASE CERTIFICATE
EXHIBIT 1.1(G)(1) - GUARANTOR JOINDER
EXHIBIT 1.1(G)(2) - GUARANTY AGREEMENT
EXHIBIT 1.1(I)(1) - INTERCOMPANY SUBORDINATION AGREEMENT
EXHIBIT 1.1(I)(2) - INTERCOMPANY SUBORDINATION AGREEMENT JOINDER
EXHIBIT 1.1(L) - LOCKBOX AGREEMENT
EXHIBIT 1.1(N) - NOTE PLEDGE AGREEMENT
EXHIBIT 1.1(P) - PLEDGE AGREEMENT
EXHIBIT 1.1(R) - REVOLVING CREDIT NOTE
EXHIBIT 1.1(S) - SECURITY AGREEMENT
EXHIBIT 2.5 - LOAN REQUEST
EXHIBIT 2.9 - LETTERS OF CREDIT
EXHIBIT 7.1.4 - OPINION OF COUNSEL
EXHIBIT 8.2.6 - ACQUISITION COMPLIANCE CERTIFICATE
EXHIBIT 8.3 - REPORTING REQUIREMENTS
EXHIBIT 8.3.4 - QUARTERLY COMPLIANCE CERTIFICATE
EXHIBIT 10 - AGENT PROVISIONS
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of November 3, 2000 and is made by
and among FREEMARKETS, INC., a Delaware corporation (the "Borrower"), the BANKS
(as hereinafter defined), SILICON VALLEY BANK, as syndication agent (hereinafter
referred to in such capacity as the "Syndication Agent") and PNC BANK, NATIONAL
ASSOCIATION, in its capacity as administrative agent for the Banks under this
Agreement (hereinafter referred to in such capacity as the "Agent").
WITNESSETH:
WHEREAS, the Borrower has requested the Banks to provide a revolving
credit facility to the Borrower in an aggregate principal amount not to exceed
$20,000,000; and
WHEREAS, the revolving credit facility shall be used to refinance
indebtedness under the SVB Facility (as hereinafter defined), for working
capital and for general corporate purposes; and
WHEREAS, the Banks are willing to provide such credit upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:
1. CERTAIN DEFINITIONS
1.1 Certain Definitions.
In addition to words and terms defined elsewhere in this Agreement, the
following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
Account shall mean any account, contract right, general
intangible, chattel paper, instrument or document representing any right to
payment for goods sold or services rendered, whether or not earned by
performance and whether or not evidenced by a contract, instrument or document,
which is now owned or hereafter acquired by a Loan Party. All Accounts, whether
Eligible Accounts Receivable or not, shall be subject to the Banks' Prior
Security Interest.
Account Debtor shall mean any Person who is or who may become
obligated to a Loan Party under, with respect to, or on account of, an Account.
Adjustment Amount shall mean for any period commencing on the
Closing Date through the date of determination, the sum of (i) 75% of positive
net income from
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operations for such period, and (ii) 75% of the cash proceeds of any issuance of
equity securities by the Borrower during such period, with such proceeds net of
reasonable and customary expenses in connection therewith.
Affiliate as to any Person shall mean any other Person (i) which
directly or indirectly controls, is controlled by, or is under common control
with such Person, (ii) which beneficially owns or holds 10% or more of any class
of the voting or other equity interests of such Person, or (iii) 10% or more of
any class of voting interests or other equity interests of which is beneficially
owned or held, directly or indirectly, by such Person. Control, as used in this
definition, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise, including
the power to elect a majority of the directors or trustees of a corporation or
trust, as the case may be.
Agent shall mean PNC Bank, National Association, and its
successors and assigns.
Agreement shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time, including all schedules and exhibits.
Assignment and Assumption Agreement shall mean an Assignment and
Assumption Agreement by and among a Purchasing Bank, a Transferor Bank and the
Agent, as Agent and on behalf of the remaining Banks, substantially in the form
of Exhibit 1.1(A).
Banks shall mean the financial institutions named on Schedule
1.1(B) and their respective successors and assigns as permitted hereunder, each
of which is referred to herein as a Bank.
Base Rate shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office as its
then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Agent, or (ii) the Federal Funds Effective Rate plus
one half percent (1/2% ) per annum.
Benefit Arrangement shall mean at any time an "employee benefit
plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.
Borrower shall mean FREEMARKETS, INC., a corporation organized
and existing under the laws of the State of Delaware.
Borrowing Base shall mean, as of any date of determination, an
amount equal to the difference between (i) 80% of Eligible Accounts Receivable
as of such date, less (ii) the Interest Reserve Amount as of such date.
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Borrowing Base Certificate shall mean the Borrowing Base
Certificate given by the Borrower to the Agents and the Banks on the Closing
Date and from time to time thereafter in accordance with the terms hereof,
substantially in form of Exhibit 1.1(B).
Borrowing Date shall mean, with respect to any Loan, the date for
the making thereof, which shall be a Business Day.
Business Day shall mean any day other than a Saturday or Sunday
or a legal holiday on which commercial banks are authorized or required to be
closed for business in Pittsburgh, Pennsylvania.
Capital Lease Obligations shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under any lease of
property entered into on usual and customary terms in the ordinary course of
business, the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on the balance sheet of the lessee.
Closing Date shall mean the Business Day on which the first Loan
shall be made, which shall be November 3, 2000. The closing shall take place at
9:00 a.m., Pittsburgh time, on the Closing Date at the offices of Xxxxxxxx
Xxxxxxxxx Professional Corporation, or at such other time and place as the
parties agree.
Collateral shall mean the Pledged Collateral and the UCC
Collateral.
Commercial Letter of Credit shall mean any Letter of Credit which
is a commercial letter of credit issued in respect of the purchase of goods or
services by one or more of the Loan Parties in the ordinary course of their
business.
Commitment shall mean as to any Bank its Revolving Credit
Commitment, and Commitments shall mean the aggregate of the Revolving Credit
Commitments of all of the Banks.
Consideration shall mean with respect to any Permitted
Acquisition, the aggregate of (i) the cash paid by any of the Loan Parties,
directly or indirectly, to the seller in connection therewith, (ii) the
Indebtedness incurred or assumed by any of the Loan Parties, whether in favor of
the seller or otherwise and whether fixed or contingent, (iii) any Guaranty
given or incurred by any Loan Party in connection therewith, and (iv) any other
consideration given or obligation incurred by any of the Loan Parties in
connection therewith.
Consolidated Tangible Net Worth shall mean as of any date of
determination total stockholders' equity less intangible assets of the Borrower
and its Subsidiaries as of such date determined and consolidated in accordance
with GAAP.
Copyrights shall mean any and all copyright rights, copyright
applications, copyright registrations and like protections in each work or
authorship and derivative work thereof, whether published or unpublished and
whether or not the same also constitutes a trade secret, now or hereafter
existing, created, acquired or held.
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Dollar, Dollars, U.S. Dollars and the symbol $ shall mean lawful
money of the United States of America.
EBITDA Loss shall mean for any fiscal quarter, determined for the
Borrower and its Subsidiaries in accordance with GAAP on a consolidated basis,
the net loss for such quarter (as a negative number) adjusted as follows: (a)
reduced by adding back to such amount, the amount of each of the following
expenses actually deducted during such fiscal quarter in the determination of
such net loss: interest expense, income taxes, depreciation, amortization and
noncash items of expense; and (b) increased by subtracting from such amount the
amount of non-cash income actually included during such fiscal quarter in the
determination of such net loss.
Eligible Accounts Receivable shall mean, as of any date of
determination, any Account which meets all of the following minimum
requirements:
(i) The Account represents a complete bona fide transaction for
goods sold and delivered or services rendered (but excluding any amount in the
nature of a service charge added to the amount due on an invoice because the
invoice has not been paid when due) which requires no further act under any
circumstances on the part of the Loan Parties to make such Account payable by
the Account Debtor; and the Account arises from an arm's length transaction in
the ordinary course of the Loan Parties' business between a Loan Party and an
Account Debtor which is not an Affiliate, officer, or employer of a Loan Party,
or a member of the family of an Affiliate, officer, or employee of a Loan Party;
(ii) The Account shall not (a) be delinquent more than ninety
(90) days past the original invoice date and is not subject to "dating" terms or
(b) be payable by an Account Debtor more than fifty percent (50%) of whose
Accounts are delinquent more than ninety (90) days from the date of the original
invoice therefor;
(iii) The goods the sale of which or the services rendered which
gave rise to the Account were shipped or delivered or provided to the Account
Debtor on an absolute sale basis and not on a xxxx-and-hold sale basis, a
consignment sales basis, a guaranteed sale basis, a sale-or-return basis, or on
the basis of any other similar understanding, and no part of such goods has been
returned or rejected;
(iv) The Account is not evidenced by chattel paper or an
instrument of any kind;
(v) The Account Debtor with respect to the Account (a) is not
insolvent, (b) is not the subject of any bankruptcy or insolvency proceedings of
any kind or of any other proceeding or action, threatened or pending, which
might have a materially adverse effect on its business, and (c) is not, in the
sole discretion of the Agent, deemed ineligible for credit for other reasons
(including, without limitation, unsatisfactory past experience of a Loan Party
or the Banks with the Account Debtor or unsatisfactory reputation of the Account
Debtor);
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(vi) Other than Accounts at any time not exceeding in the
aggregate ten percent (10%) of the aggregate Eligible Accounts Receivable
payable by Eligible Foreign Account Debtors (so long as such Eligible Foreign
Account Debtors otherwise meet the requirements of this definition of Eligible
Accounts Receivable), the Account Debtor is not located outside of the United
States;
(vii) The Account Debtor is not a federal, state, or local
governmental entity or any department, agency, or instrumentality thereof,
unless the Borrower has taken all steps reasonably required by the Agent to
comply with the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C.
Section 3727 et seq.) and any comparable law with respect to state or local
government agencies;
(viii) The Account is a valid, legally enforceable obligation of
the Account Debtor with respect thereto and is not pursuant to any progress
billing arrangement or subject to any dispute, condition, contingency, offset,
recoupment, reduction, claim for credit, allowance, adjustment, counterclaim or
defense on the part of such Account Debtor, and no facts exist which would
reasonably be expected to provide a basis for any of the foregoing in the
present or future;
(ix) The Account is not subject to any Lien, claim, encumbrance
or security interest whatsoever other than Permitted Liens;
(x) The Account is evidenced by an invoice or other documentation
in form reasonably acceptable to the Agent and arises from a contract which is
in form and substance reasonably satisfactory to the Agent;
(xi) The Account does not arise out of a contract with, or order
from, an Account Debtor that contains any, provision prohibiting its assignment
or requiring notice of or consent to such assignment which notice or consent has
not been given or delivered in accordance with the terms of the contract or
order;
(xii) Any goods giving rise to the Account were not, at the time
of sale thereof, subject to any Lien or encumbrance except the Banks' Prior
Security Interest;
(xiii) The Account is payable: (a) in the case of an Eligible
Foreign Account Debtor, in Permitted Local Currency, and (b) in the case of all
Account Debtors (other than an Eligible Foreign Account Debtor), in freely
transferable United States Dollars;
(xiv) The Account is not, or should not be, disqualified for any
other reason generally accepted in the commercial finance business;
(xv) The Account is not owing by an Account Debtor, including
Affiliates, whose total obligations to the Loan Parties exceed (a) in the case
of an Account Debtor that is an Investment Grade Company, twenty percent (20%)
of the aggregate Eligible Accounts Receivable, as of any date of determination;
and (b) in the case of an Account Debtor
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that is other than an Investment Grade Company, ten percent (10%) of the
aggregate Eligible Accounts Receivable, as of any date of determination.
In addition to the foregoing requirements, Accounts of any Account Debtor which
are otherwise eligible shall be reduced to the extent of any "contra" accounts
or accounts payable (including, without limitation, the Agent's good faith
estimate of any contingent liabilities) by a Loan Party to such Account Debtor.
Eligible Foreign Account Debtor shall mean any Account Debtor
located outside of the United States which is an Investment Grade Company, and
"Eligible Foreign Account Debtors" shall mean, as of any date of determination,
all such persons, collectively.
Environmental Complaint shall mean any written complaint setting
forth a cause of action for personal injury (including but not limited to death)
or property damage, natural resource damage, contribution or indemnity for
response costs, civil penalties, criminal penalties or declaratory or equitable
relief arising under any Environmental Law or order, notice of violation,
citation, subpoena, request for information indicating that the recipient
thereof is or may be a responsible party or other written notice of any type
issued by an Official Body pursuant to any Environmental Law.
Environmental Laws shall mean all federal, state, local and
foreign Laws and any consent decrees, settlement agreements, permits, licenses,
bonds, consents, approvals or authorizations pertaining or relating to (i)
pollution or pollution control; (ii) protection of human health from exposure to
Regulated Substances; (iii) protection of the environment; (iv) employee safety
in the workplace; (v) the management, generation, processing, treatment,
recycling, labeling, collection, distribution, transport or disposal of
Regulated Substances; (vi) the notification, identification, investigation,
cleanup, removal, remediation, containment, control, closure, monitoring,
abatement or other response action to the presence or release or threat of
release of Regulated Substances; (vi) the protection of endangered or threatened
species and their habitats; and (vii) the protection of wetlands, coastal zones
or areas of historic or archeological significance.
ERISA shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
ERISA Group shall mean, at any time, the Borrower and all members
of a controlled group of corporations and all trades or businesses (whether or
not incorporated) under common control and all other entities which, together
with the Borrower, are treated as a single employer under Section 414 of the
Internal Revenue Code.
Event of Default shall mean any of the events described in
Section 9.1 and referred to therein as an "Event of Default."
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Expiration Date shall mean, with respect to the Revolving Credit
Commitments, October 31, 2001, as such date may be hereafter extended in
accordance with Section 2.10 hereof.
Existing Letters of Credit shall mean (a) that certain Letter of
Credit numbered SPA008192 issued by National City Bank of Pennsylvania on
December 16, 1999 and (b) that certain Letter of Credit numbered SPA008275
issued by National City Bank of Pennsylvania on June 13, 2000.
Facility Fees shall mean the fees referred to in Sections 2.4.
Federal Funds Effective Rate for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
FMIC shall mean FreeMarkets Investment Company, Inc., a Delaware
corporation and a wholly-owned Subsidiary of the Borrower.
Foreign Subsidiary shall mean any Subsidiary of the Borrower
which is organized under the laws other than of any jurisdiction within the
United States.
GAAP shall mean generally accepted accounting principles as are
in effect from time to time, subject to the provisions of Section 1.3, and
applied on a consistent basis both as to classification of items and amounts.
Guarantor shall mean, as of any date of determination, each
Significant Subsidiary of the Borrower.
Guarantor Joinder shall mean a joinder in the form of Exhibit
1.1(G)(1) by a Significant Subsidiary as a Guarantor under the Guaranty
Agreement, the Security Agreement and the Intercompany Subordination Agreement.
Guaranty of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement to
indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.
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Guaranty Agreement shall mean the Guaranty and Suretyship
Agreement in substantially the form of Exhibit 1.1(G)(2) executed and delivered
by each of the Guarantors to the Agent for the benefit of the Banks.
Indebtedness shall mean, as to any Person at any time, any and
all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate
swap, cap, collar or floor agreement or other interest rate management device,
(iv) any other transaction (including forward sale or purchase agreements,
capitalized leases and conditional sales agreements) having the commercial
effect of a borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade payables and accrued
expenses incurred in the ordinary course of business which are not represented
by a promissory note or other evidence of indebtedness and which are not more
than thirty (30) days past due), or (v) any Guaranty of Indebtedness for
borrowed money.
Ineligible Security shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
Insolvency Proceeding shall mean, with respect to any Person, (a)
a case, action or proceeding with respect to such Person (i) before any court or
any other Official Body under any bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, or (ii) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of such Person or otherwise relating to the liquidation,
dissolution, winding-up or relief of such Person, or (b) any general assignment
for the benefit of creditors, composition, marshaling of assets for creditors,
or other, similar arrangement in respect of such Person's creditors generally or
any substantial portion of its creditors; undertaken under any Law.
Intellectual Property shall mean:
(i) Copyrights, Trademarks, Patents and Mask Works;
(ii) Any and all trade secrets, and any and all intellectual
property rights in computer software and computer software products now or
hereafter existing, created, acquired or held;
(iii) Any and all design rights which may be available to the
Borrower now or hereafter existing, created, acquired or held;
(iv) Any and all claims for damages by way of past, present and
future infringement of any of the rights included above, with the right, but not
the obligations, to xxx for
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and collect such damages for said use or infringement of the intellectual
property rights identified above;
(v) All licenses or other rights to use any of the Copyrights,
Patents, Trademarks or Mask Works, and all license fees and royalties arising
from such use to the extent permitted by such license or rights;
(vi) All amendments, renewals and extensions of any of the
Copyrights, Trademarks, Patents or Mask Works; and
(vii) All proceeds and products of the foregoing, including
without limitation all payments under insurance or any indemnity or warranty
payable in respect of any of the foregoing.
Intercompany Subordination Agreement shall mean a Subordination
Agreement among the Loan Parties and any other Subsidiary of the Borrower
required to be a party thereto pursuant to Section 8.2.1 in the form attached
hereto as Exhibit 1.1(I).
Intercompany Subordination Agreement Joinder shall mean a joinder
to the Intercompany Subordination Agreement in the form of Exhibit 1.1(I)(2) by
each Subsidiary which is formed or acquired as a Significant Subsidiary or
becomes a Significant Subsidiary after the Closing Date and each other
Subsidiary of the Borrower required to be a party thereto pursuant to Section
8.2.1.
Interest Reserve Amount shall mean, as of any date of
determination, the amount which is the sum of the following (a) and (b): (a) the
product of (i) outstanding Loans as of such date (and, if such calculation is
being made for purposes of a Borrowing Base Certificate to be delivered under
Section 2.5, including as outstanding Loans, the Loan to be made as part of the
Loan Request for which the Borrowing Base Certificate is being delivered),
multiplied by, (ii) the rate of interest applicable to outstanding Loans under
this Agreement as of such date, assuming for purposes of this calculation that
the Loans will remain outstanding for a period of three hundred sixty-five (365)
days from such date of determination; and (b) the product of (i) Letters of
Credit Outstanding as of such date (and, if such calculation is being made for
purposes of a Borrowing Base Certificate to be delivered under item 1 of Exhibit
2.9, including in the Letters of Credit Outstanding the Letter of Credit being
requested and in connection with which the Borrowing Base Certificate is being
delivered), multiplied by, (ii) the Letter of Credit Fee, assuming for purposes
of this calculation that the Letters of Credit Outstanding will remain
outstanding for a period of three hundred sixty-five (365) days from such date
of determination.
Internal Revenue Code shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
Investment Grade Company shall mean any Person whose senior
unsecured long-term debt is rated BBB- or better by Standard & Poor's or Baa3 or
better by
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Xxxxx'x Investors Service, Inc., or equivalent rating by an equivalent rating
agency acceptable to Agent.
Labor Contracts shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among any Loan
Party or Subsidiary of a Loan Party and its employees.
Law shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree, consent decree, bond, judgment, authorization, lien or
award of any Official Body.
Letter of Credit shall have the meaning set forth in Exhibit 2.9.
Letter of Credit Borrowing shall mean an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made and shall not have been converted into a
Revolving Credit Loan under the terms of Exhibit 2.9.
Letters of Credit Outstanding shall mean at any time the sum of
(i) the aggregate undrawn face amount of outstanding Letters of Credit and (ii)
the aggregate amount of all unpaid and outstanding Reimbursement Obligations.
Lien shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
Line of Credit Facility shall mean a credit facility with a
principal amount of not more than $12,000,000, which is secured by cash in an
amount not to exceed the outstanding indebtedness thereunder, up to an aggregate
maximum of $12,000,000, all on terms and conditions reasonably satisfactory to
the Agent.
Loan Documents shall mean this Agreement, the Guaranty Agreement,
the Lockbox Agreement, the Note Pledge Agreement, the Intercompany Subordination
Agreement, the Notes, the Pledge Agreement, the Security Agreement and any other
instruments, certificates or documents delivered or contemplated to be delivered
hereunder or thereunder or in connection herewith or therewith, as the same may
be supplemented or amended from time to time in accordance herewith or
therewith, and Loan Document shall mean any of the Loan Documents.
Loan Parties shall mean the Borrower and the Guarantors.
Loans shall mean collectively and Loan shall mean separately all
Revolving Credit Loans or any Revolving Credit Loan.
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Lockbox Agreement shall mean the Lockbox Agreement between the
Loan Parties, their Subsidiaries and the Agent in substantially the form of
Exhibit 1.1(L), with modifications to such form as are acceptable to the Agent,
together with all amendments thereto.
Mask Works shall mean all mask work or similar rights available
for the protection of semiconductor chips, now owned or hereafter acquired.
Material Adverse Change shall mean any set of circumstances or
events which (a) has or would reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of this Agreement
or any other Loan Document, (b) is or would reasonably be expected to be
material and adverse to the business, properties, assets, financial condition or
results of operations of the Loan Parties taken as a whole, (c) impairs
materially or would reasonably be expected to impair materially the ability of
the Loan Parties taken as a whole to duly and punctually pay or perform its
Indebtedness, or (d) impairs materially or would reasonably be expected to
impair materially the ability of the Agent or any of the Banks, to the extent
permitted, to enforce their legal remedies pursuant to this Agreement or any
other Loan Document.
Material Contracts shall mean all contracts, agreements or other
instruments described in Regulation S-K, Item 601 promulgated pursuant to the
Securities Act of 1933, as amended, which the Borrower is required to file as an
exhibit to any annual, quarterly or other report required to be filed by the
Borrower under the Securities Act of 1933, as amended.
Multiemployer Plan shall mean any employee benefit plan which is
a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrower or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two or more
contributing sponsors (including the Borrower or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.
Note Pledge Agreement shall mean the Note Pledge Agreement in
substantially the form of Exhibit 1.1(N) executed and delivered by the Borrower
and Free Markets Investment Company, Inc., a Delaware corporation, to the Agent
for the benefit of the Banks.
Notes shall mean the Revolving Credit Notes.
Obligations shall mean any obligation or liability of any of the
Loan Parties to the Agent or any of the Banks, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with this Agreement,
the Notes, the Letters of Credit, the Agent's Fee Letter or any other Loan
Document.
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Official Body shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
Participation Advance shall mean, with respect to any Bank, such
Bank's payment in respect of its participation in a Letter of Credit Borrowing
according to its Ratable Share pursuant to Exhibit 2.9.
Partnership Interests shall have the meaning given to such term
in Section 6.1.3.
Patents shall mean all patents, patent applications and like
protections, including without limitation, improvements, divisions,
continuations, renewals, reissues, extensions and continuations-in-part of the
same.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) Pledges or deposits made in the ordinary course of
business to secure payment of workmen's compensation, or to participate in any
fund in connection with workmen's compensation, unemployment insurance, old-age
pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;
(iv) Good-faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders, contracts (other than
for the repayment of borrowed money) or leases, not in excess of the aggregate
amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
(v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;
(vi) Liens, security interests and mortgages in favor of the
Agent for the benefit of the Banks;
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(vii) Liens on property leased by the Borrower or any
Subsidiary of the Borrower under capital and operating leases permitted in
Section 8.2.1 securing obligations of the Borrower or such Subsidiary to the
lessor under such leases;
(viii) Any Lien existing on the date of this Agreement and
described on Schedule 8.2.2, provided that the principal amount secured thereby
is not hereafter increased, and no additional assets become subject to such
Lien;
(ix) Purchase Money Security Interests, provided that the
aggregate amount of loans and deferred payments secured by such Purchase Money
Security Interests shall not exceed $20,000,000 (excluding for the purpose of
this computation any loans or deferred payments secured by Liens described on
Schedule 8.2.2);
(x) Liens on cash of the Borrower and its Subsidiaries in an
amount not to exceed the lesser of (i) the outstanding principal amount under
the Line of Credit Facility, and (ii) $12,000,000;
(xi) Liens granted to a licensee of Intellectual Property of
the Borrower or any Subsidiary of the Borrower, which Lien is limited to the
Intellectual Property of the Borrower or such Subsidiary, as the case may be,
which is licensed to such licensee in order to secure such party's obligations
under such license to such licensee;
(xii) Liens on assets of any Person merged into or acquired
by the Borrower or any Subsidiary of the Borrower in accordance with Section
8.2.6; provided, that (A) such Liens existed at the time of such merger or
acquisition and were not created in anticipation thereof, (B) no such Lien is
spread to cover any property or assets of the Borrower or any Subsidiary of the
Borrower and (C) the principal amount of Indebtedness secured thereby is not
increased from the amount outstanding immediately prior to such merger or
acquisition;
(xiii) Other Liens on assets of the Borrower or any
Subsidiary (other than the Pledged Collateral and other than any Account) which
Liens are incidental to the conduct of the Borrower's or any Subsidiary's
business or the ownership of its property and assets and which were not incurred
in connection with the borrowing of money or the obtaining of advances or credit
and which do not (a) in the aggregate materially detract from the value of the
Borrower's or any Subsidiary's respective property or assets, (b) materially
impair the use thereof in the operation of the Borrower's or any Subsidiary's
respective business and (c) which do not encumber assets of the Borrower and its
Subsidiaries with a "fair value" in the aggregate of in excess of $2,000,000,
with "fair value" defined as the greater of the fair market value or the net
book value of the assets encumbered, as of any date of determination; and
(xiv) The following, (A) if the validity or amount thereof
is being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have been stayed and
continue to be stayed or (B) if a final judgment is entered and such judgment is
discharged within thirty (30) days of entry, and in either case
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they do not affect the Collateral or, in the aggregate, materially
impair the ability of any Loan Party to perform its Obligations
hereunder or under the other Loan Documents:
(1) Claims or Liens for taxes, assessments or charges
due and payable and subject to interest or penalty, provided
that the applicable Loan Party maintains such reserves or
other appropriate provisions as shall be required by GAAP and
pays all such taxes, assessments or charges forthwith upon the
commencement of proceedings to foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and defects
of title to, real or personal property other than the
Collateral, including any attachment of personal or real
property or other legal process prior to adjudication of a
dispute on the merits; or
(3) Claims or Liens of mechanics, materialmen,
warehousemen, carriers, or other statutory nonconsensual
Liens.
(4) Liens resulting from final judgments or orders
described in Section 9.1.6.
Permitted Local Currency any currency of any country, other than
the United States of America, which is actively traded in an established market.
Person shall mean any individual, corporation, partnership,
limited liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political subdivision
or agency thereof, or any other entity.
Plan shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been maintained by any
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.
Pledge Agreement shall mean the Pledge Agreement in substantially
the form of Exhibit 1.1(P) executed and delivered by Borrower and each
Subsidiary of the Borrower which owns equity interests of any Significant
Subsidiary to the Agent for the benefit of the Banks.
Pledged Collateral shall mean the property of the Borrower and
any Subsidiary of the Borrower in which security interests are to be granted
under the Pledge Agreement.
Pledged Note shall mean that certain Promissory Note in the
original principal amount of $100,000,000 dated February 23,2000, payable by the
Borrower, to FMIC,
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and pledged by FMIC to the Agent for the benefit of the Banks pursuant to the
Note Pledge Agreement.
PNC Bank shall mean PNC Bank, National Association, its
successors and assigns.
Potential Default shall mean any event or condition which with
notice, passage of time, or any combination of the foregoing, would constitute
an Event of Default.
Principal Office shall mean the main banking office of the Agent
in Pittsburgh, Pennsylvania.
Prior Security Interest shall mean a valid and enforceable
perfected first-priority security interest under the Uniform Commercial Code in
the UCC Collateral (subject to Permitted Liens) and the Pledged Collateral.
Prohibited Transaction shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.
Property shall mean all real property, both owned and leased, of
any Loan Party or Subsidiary of a Loan Party.
Purchase Money Security Interest shall mean Liens upon tangible
personal property securing loans to any Loan Party or Subsidiary of a Loan Party
or deferred payments by such Loan Party or Subsidiary for the purchase of such
tangible personal property.
Purchasing Bank shall mean a Bank which becomes a party to this
Agreement by executing an Assignment and Assumption Agreement.
Ratable Share shall mean the proportion that a Bank's Commitment
bears to the Commitments of all of the Banks.
Regulated Substances shall mean, without limitation, any
substance, material or waste, regardless of its form or nature, defined as a
"hazardous substance," "hazardous waste," "toxic substance," "extremely
hazardous substance," "toxic chemical," "toxic waste," "solid waste,"
"industrial waste," "residual waste," "municipal waste," "special handling
waste," "mixed waste," "infectious waste," "chemotherapeutic waste," "medical
waste," "regulated substance," "pollutant," or "contaminant" pursuant to
Environmental Laws or any other substance, material or waste, regardless of its
form or nature, which otherwise is regulated by or pursuant to Environmental
Laws, including but not limited to, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C. Sections 9601 et seq., the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq., the Hazardous
Materials Transportation Act, 49 U.S.C. Sections 1801 et seq., the Toxic
Substances Control Act, 15 U.S.C. Sections 2601 et seq., the Federal Water
Pollution Control Act, 33 U.S.C. Sections 1251 et seq., the Federal Safe
Drinking Water Act, 42 U.S.C. Sections 300f-300j, the Federal Air Pollution
Control Act, 00
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X.X.X. 0000 et seq., the Oil Pollution Act, 33 U.S.C. Sections 2701 et seq., the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Sections 136 to
136y, the Occupational Safety and Health Act, 29 U.S.C. Sections 651 et seq.,
each as amended, or any equivalent state or local Law, and any amendments
thereto.
Regulation U shall mean Regulation U, T, G or X as promulgated by
the Board of Governors of the Federal Reserve System, as amended from time to
time.
Reimbursement Obligations shall have the meaning set forth in
Section 3 of the Letter of Credit Provisions attached hereto as Exhibit 2.9.
Required Banks shall mean
(i) if there are no Loans, Reimbursement Obligations or
Letter of Credit Borrowings outstanding, Banks whose Commitments aggregate at
least 66 and 2/3% of the Commitments of all of the Banks, or
(ii) if there are Loans, Reimbursement Obligations, or
Letter of Credit Borrowings outstanding, any Bank or group of Banks if the sum
of the Loans, Reimbursement Obligations and Letter of Credit Borrowings of such
Banks then outstanding aggregates at least 66 and 2/3% of the total principal
amount of all of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings then outstanding. Reimbursement Obligations and Letter of Credit
Borrowings shall be deemed, for purposes of this definition, to be in favor of
the Agent and not a participating Bank if such Bank has not made its
Participation Advance in respect thereof and shall be deemed to be in favor of
such Bank to the extent of its Participation Advance if it has made its
Participation Advance in respect thereof.
Revolving Credit Commitment shall mean, as to any Bank at any
time, the amount initially set forth opposite its name on Schedule 1.1(B) in the
column labeled "Amount of Commitment for Revolving Credit Loans," and thereafter
on Schedule I to the most recent Assignment and Assumption Agreement, and
Revolving Credit Commitments shall mean the aggregate Revolving Credit
Commitments of all of the Banks.
Revolving Credit Loans shall mean collectively and Revolving
Credit Loan shall mean separately all Revolving Credit Loans or any Revolving
Credit Loan made by the Banks or one of the Banks to the Borrower pursuant to
Section 2.1 or Paragraph 3(b) of Exhibit 2.9.
Revolving Credit Notes shall mean collectively and Revolving
Credit Note shall mean separately all the Revolving Credit Notes of the Borrower
in the form of Exhibit 1.1(R) evidencing the Revolving Credit Loans together
with all amendments, extensions, renewals, replacements, refinancings or
refundings thereof in whole or in part.
Revolving Facility Usage shall mean at any time the sum of the
Revolving Credit Loans outstanding and the Letters of Credit Outstanding.
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Section 20 Subsidiary shall mean the Subsidiary of the bank
holding company controlling any Bank, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities.
Security Agreement shall mean the Security Agreement in
substantially the form of Exhibit 1.1(S) executed and delivered by each of the
Loan Parties to the Agent for the benefit of the Banks.
Significant Subsidiary shall mean any Subsidiary of Borrower
which: (a) is organized under the laws of any jurisdiction within the United
States, and (b) at any time has a Tangible Net Worth equal to or in excess of
five percent (5%) of Consolidated Tangible Net Worth.
Standard & Poor's shall mean Standard & Poor's Ratings Services,
a division of The XxXxxx-Xxxx Companies, Inc.
Standby Letter of Credit shall mean a Letter of Credit issued to
support obligations of one or more of the Loan Parties, contingent or otherwise,
which finance the working capital and business needs of the Loan Parties
incurred in the ordinary course of business.
Subsidiary of any Person at any time shall mean (i) any
corporation or trust of which 51% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person's Subsidiaries, (ii) any partnership of which such Person is
a general partner or of which 51% or more of the partnership interests is at the
time directly or indirectly owned by such Person or one or more of such Person's
Subsidiaries, (iii) any limited liability company of which such Person is a
member or of which 51% or more of the limited liability company interests is at
the time directly or indirectly owned by such Person or one or more of such
Person's Subsidiaries or (iv) any corporation, trust, partnership, limited
liability company or other entity which is controlled or capable of being
controlled by such Person or one or more of such Person's Subsidiaries.
Subsidiary Shares shall have the meaning assigned to that term in
Section 6.1.3.
SVB Facility shall mean the credit facilities under that certain
Loan and Security Agreement by and between Borrower and Silicon Valley Bank,
dated as of February 5, 1999, as amended.
Syndication Agent shall mean Silicon Valley Bank.
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Tangible Net Worth shall mean with respect to any Person, as of
any date of determination, total stockholders' equity less intangible assets of
such Person as determined and consolidated in accordance with GAAP.
Title IV Retirement Plan shall mean a Plan or Multiemployer Plan
(which, as such, is subject to certain provisions of Title IV of ERISA).
Trademarks shall mean any trademark and servicemark rights,
whether registered or not, applications to register and registrations of the
same and like protections, and the entire goodwill of the business of such Loan
Party connected with and symbolized by such trademark.
Transferor Bank shall mean the selling Bank pursuant to an
Assignment and Assumption Agreement.
UCC Collateral shall mean the property of the Loan Parties in
which security interests are to be granted under the Security Agreement.
Unrestricted Cash shall mean, as of any date of determination,
aggregate cash of the Borrower and its Subsidiaries, less the amount of cash
which is collateral security for the Line of Credit Facility.
In addition to the foregoing definitions, the following
capitalized terms have the meanings given to them in the referenced sections:
Annual Statements, 6.1.9(i); Commitment Fee, 2.3; Financial Projections,
6.1.9(ii); Governmental Acts, Exhibit 2.9; Historical Statements, 6.1.9(i);
Interim Statements, 6.1.9(i); 2.9.1; Letter of Credit, Exhibit 2.9; Letter of
Credit Fee, Exhibit 2.9; LLC Interests, 6.1.3; Loan Request, 2.5; Mandatory
Prepayment Date, 5.5.1; Mandatory Prepayment of Excess Cash Flow, 5.5.1;
Notices, 11.6; Partnership Interests, 6.1.3; Permitted Acquisitions, 8.2.6;
Reimbursement Obligation, Exhibit 2.9; Shares, 6.1.2; Subsidiary Shares, 6.1.3;
and Uniform Commercial Code, 6.1.16.
1.2 Construction.
Unless the context of this Agreement otherwise clearly requires,
the following rules of construction shall apply to this Agreement and each of
the other Loan Documents: (a) references to the plural include the singular, the
plural, the part and the whole; "or" has the inclusive meaning represented by
the phrase "and/or," and "including" has the meaning represented by the phrase
"including without limitation"; (b) references to "determination" of or by the
Agent or the Banks shall be deemed to include good-faith estimates by the Agent
or the Banks (in the case of quantitative determinations) and good-faith beliefs
by the Agent or the Banks (in the case of qualitative determinations) and such
determination shall be conclusive absent manifest error; (c) whenever the Agent
or the Banks are granted the right herein to act in its or their sole discretion
or to grant or withhold consent such right shall be exercised in good faith; (d)
the words "hereof," "herein," "hereunder," "hereto" and similar terms in this
Agreement or any other Loan Document refer to this Agreement or such other Loan
Document as a whole and not to any particular provision of this Agreement or
such other Loan Document; (e) the
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section and other headings contained in this Agreement or such other Loan
Document and the Table of Contents, preceding this Agreement or such other Loan
Document are for reference purposes only and shall not control or affect the
construction of this Agreement or such other Loan Document or the interpretation
thereof in any respect; (f) article, section, subsection, clause, schedule and
exhibit references are to this Agreement or other Loan Document, as the case may
be, unless otherwise specified; (g) reference to any Person includes such
Person's successors and assigns but, if applicable, only if such successors and
assigns are permitted by this Agreement or such other Loan Document, as the case
may be, and reference to a Person in a particular capacity excludes such Person
in any other capacity; (h) reference to any agreement (including this Agreement
and any other Loan Document together with the schedules and exhibits hereto or
thereto), document or instrument means such agreement, document or instrument as
amended, modified, replaced, substituted for, superseded or restated; (i)
relative to the determination of any period of time, "from" means "from and
including," "to" means "to but excluding," and "through" means "through and
including"; and (j) references to "shall" and "will" are intended to have the
same meaning.
1.3 Accounting Principles.
Except as otherwise provided in this Agreement, all
computations and determinations as to accounting or financial matters and all
financial statements to be delivered pursuant to this Agreement shall be made
and prepared in accordance with GAAP (including principles of consolidation
where appropriate), and all accounting or financial terms shall have the
meanings ascribed to such terms by GAAP; provided, however, that all accounting
terms used in Section 8.2 [Negative Covenants] (and all defined terms used in
the definition of any accounting term used in Section 8.2 shall have the meaning
given to such terms (and defined terms) under GAAP as in effect on the date
hereof applied on a basis consistent with those used in preparing the Annual
Statements referred to in Section 6.1.9((i)) [Historical Statements].
2. REVOLVING CREDIT FACILITY
2.1 Revolving Credit Commitments.
Subject to the terms and conditions hereof and relying upon
the representations and warranties herein set forth, each Bank severally agrees
to make Revolving Credit Loans to the Borrower at any time or from time to time
on or after the date hereof to the Expiration Date provided that after giving
effect to such Loan the aggregate amount of Revolving Credit Loans from such
Bank shall not exceed such Bank's Revolving Credit Commitment minus such Bank's
Ratable Share of the Letters of Credit Outstanding. Within such limits of time
and amount and subject to the other provisions of this Agreement, the Borrower
may borrow, repay and reborrow pursuant to this Section 2.1. Notwithstanding the
foregoing, at no time shall the sum of the aggregate outstanding Revolving
Credit Loans and the Letters of Credit Outstanding exceed the Borrowing Base.
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2.2 Nature of Banks' Obligations with Respect to Revolving
Credit Loans.
Each Bank shall be obligated to participate in each request
for Revolving Credit Loans pursuant to Section 2.5 [Revolving Credit Loan
Requests] in accordance with its Ratable Share. The aggregate of each Bank's
Revolving Credit Loans outstanding hereunder to the Borrower at any time shall
never exceed its Revolving Credit Commitment minus its Ratable Share of the
Letter of Credit Outstandings. The obligations of each Bank hereunder are
several. The failure of any Bank to perform its obligations hereunder shall not
affect the Obligations of the Borrower to any other party nor shall any other
party be liable for the failure of such Bank to perform its obligations
hereunder. The Banks shall have no obligation to make Revolving Credit Loans
hereunder on or after the Expiration Date.
2.3 Commitment Fees.
Accruing from the date hereof until the Expiration Date, the
Borrower agrees to pay to the Agent for the account of each Bank, as
consideration for such Bank's Revolving Credit Commitment hereunder, a
nonrefundable commitment fee (the "Commitment Fee") equal to .25% per annum
(computed on the basis of a year of 360 days, as the case may be, and actual
days elapsed) on the average daily difference between the amount of (i) such
Bank's Revolving Credit Commitment as the same may be constituted from time to
time and the (ii) the sum of such Bank's Revolving Credit Loans outstanding plus
its Ratable Share of Letters of Credit Outstanding . All Commitment Fees shall
be payable in arrears on the first Business Day of each January, April, July and
October after the date hereof and on the Expiration Date or upon acceleration of
the Notes.
2.4 Revolving Credit Facility Fee.
The Borrower agrees to pay to the Agent for the account of
each Bank, as consideration for such Bank's Revolving Credit Commitment, a
nonrefundable facility fee equal to .25% of such Bank's Revolving Credit
Commitment, payable on the Closing Date.
2.5 Revolving Credit Loan Requests.
Except as otherwise provided herein, the Borrower may from
time to time prior to the Expiration Date request the Banks to make Revolving
Credit Loans by delivering to the Agent, not later than 10:00 a.m., Pittsburgh
time, (i) one (1) Business Day prior to the proposed Borrowing Date with respect
to the making of a Revolving Credit Loan, of a duly completed request therefor
substantially in the form of Exhibit 2.5 or a request by telephone immediately
confirmed in writing by letter, facsimile or telex in such form (each, a "Loan
Request"), it being understood that the Agent may rely on the authority of any
individual making such a telephonic request without the necessity of receipt of
such written confirmation. Each Loan Request shall be irrevocable and shall
specify (i) the proposed Borrowing Date; and (ii) the aggregate amount of the
proposed Loans which shall be in integral multiples of $100,000 and not less
than $500,000. Each Loan Request shall be accompanied by a Borrowing Base
Certificate which certifies, in form and substance reasonably satisfactory to
the Agent, that after giving effect to the
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Loan being requested, the sum of the aggregate outstanding Loans and Letters of
Credit Outstanding shall not exceed the Borrowing Base.
2.6 Making Revolving Credit Loans.
The Agent shall, promptly after receipt by it of a Loan
Request pursuant to Section 2.5 [Revolving Credit Loan Requests], notify the
Banks of its receipt of such Loan Request specifying: (i) the proposed Borrowing
Date and the time and method of disbursement of the Revolving Credit Loans
requested thereby; and (ii) the apportionment among the Banks of such Revolving
Credit Loans as determined by the Agent in accordance with Section 2.2 [Nature
of Banks' Obligations]. Each Bank shall remit its Ratable Share of the principal
amount of each Revolving Credit Loan to the Agent such that the Agent is able
to, and the Agent shall, to the extent the Banks have made funds available to it
for such purpose and subject to Section 7.2 [Each Additional Loan], fund such
Revolving Credit Loans to the Borrower in U.S. Dollars and immediately available
funds at the Principal Office prior to 2:00 p.m., Pittsburgh time, on the
applicable Borrowing Date, provided that if any Bank fails to remit such funds
to the Agent in a timely manner, the Agent may elect in its sole discretion to
fund with its own funds the Revolving Credit Loans of such Bank on such
Borrowing Date, and such Bank shall be subject to the repayment obligation in
Paragraph 16 of Exhibit 10.
2.7 Revolving Credit Notes.
The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Bank, together
with interest thereon, shall be evidenced by a Revolving Credit Note dated the
Closing Date payable to the order of such Bank in a face amount equal to the
Revolving Credit Commitment of such Bank.
2.8 Use of Proceeds.
The proceeds of the Revolving Credit Loans shall be used to
refinance outstanding indebtedness of the Loan Parties and for working capital
of the Loan Parties and for general corporate purposes of the Loan Parties, all
in accordance with Section 8.1.10 [Use of Proceeds].
2.9 Letter of Credit Subfacility.
At the request of the Borrower, the Agent shall issue on
behalf of the Borrower, on the terms and conditions set forth in Exhibit 2.9,
one or more Letters of Credit; provided, that the aggregate amount of Letters of
Credit Outstanding at any one time shall not exceed $5,000,000.
2.10 Extension of Expiration Date.
2.10.1 Requests; Approval by All Banks.
No sooner than ninety (90) but not less than sixty
(60) days prior to the Expiration Date, the Borrower may request a 364-day
extension of the Expiration Date by
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written notice to the Agent and the Banks, and the Banks agree to respond to the
Borrower's request for an extension by the later of forty-five (45) days
following receipt of the request or September 30, 2001; provided, however, that
the failure of any Bank to respond within such time period shall not in any
manner constitute an agreement by such Bank to extend the Expiration Date. If
all Banks elect to extend, the Expiration Date shall be extended for a period of
364 days. If one or more Banks decline to extend or do not respond to Borrower's
request, the provisions of Section 2.10.2 shall apply.
2.10.2 Approval by Required Banks.
In the event that one or more Banks do not agree to
extend the Expiration Date or do not respond to Borrower's request for an
extension within the time required under Section 2.10.1 (each a "Bank to be
Terminated"), but the Required Banks agree to such extension within such time
then, on or before the existing Expiration Date, the Banks which have agreed to
such extension within the time required under Section 2.10.1 (each an "Extending
Bank") may, with the prior written approval of the Borrower and the Agent,
arrange to have one or more other banks (each an "Assignee Bank") purchase all
of the outstanding Loans, if any, of the Bank to be Terminated and succeed to
and assume the Commitments and all other rights, interests and obligations of
the Bank to be Terminated under this Agreement and the other Loan Documents. Any
such purchase and assumption shall be (1) pursuant to an Assignment and
Assumption Agreement, and (2) subject to and in accordance with Section 11.12.
The Borrower shall pay all amounts due and payable to the Bank to be Terminated
on the effective date of such Assignment and Assumption Agreement (but only to
the extent the rights to such amounts have not been assigned by the Bank to be
Terminated pursuant to such Assignment and Assumption Agreement). In the event
that the Agent shall become a Bank to be Terminated, the provisions of this
Section 2.10 shall be subject to item 14 of Exhibit 10. In the event that the
Loans and Commitments of a Bank to be Terminated are not fully assigned and
assumed pursuant to Section 2.10.2 on or before the existing Expiration Date,
then the Expiration Date shall not be extended for any Bank.
2.11 Voluntary Reduction of Commitments.
The Borrower shall have the right, upon not less than five (5)
Business Days written irrevocable notice to the Agent, to terminate the
Revolving Credit Commitments or, from time to time, to reduce the amount of the
Revolving Credit Commitments, which notice shall specify the date and amount of
any such reduction. Any such reduction shall be in a minimum amount equal to
$1,000,000 or an integral multiple of $500,000 in excess thereof, provided, that
the Revolving Credit Commitments may not be reduced below the sum of the
aggregate principal amount of all Revolving Facility Usage. Each reduction of
Revolving Credit Commitments shall ratably reduce the Revolving Credit
Commitments of the Banks.
2.12 Option to Increase Commitments.
As of the Closing Date, the aggregate amount of the Revolving
Credit Commitments is $20,000,000. Each Bank expressly agrees that so long as no
Event of Default exists, with the consent of the Agent and the Borrower, but
without further consent of any Bank
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(except for a Bank agreeing to increase its Revolving Credit Commitment in
accordance with clause (ii) of this Section 2.12), the aggregate Revolving
Credit Commitments may increase to $25,000,000 (i) by the addition of one or
more lenders as a Bank hereunder (without any increase in the Revolving Credit
Commitment of any Bank party hereto as of such date unless pursuant to the
following clause (ii)) upon execution and delivery to the Agent of a joinder to
this Agreement and any other applicable Loan Document to which a Bank is
required to be a party to, with such joinders to be in form and substance
satisfactory to the Agent and the Borrower, and/or (ii) with the written consent
of a lender that is a Bank hereunder, to an increase in such Bank's Revolving
Credit Commitment.
3. [INTENTIONALLY OMITTED]
4. INTEREST RATES
4.1 Interest Rate.
4.1.1 Revolving Credit Base Rate.
The Loans shall bear interest at a fluctuating rate per annum
(computed on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed) equal to the Base Rate, such interest rate to change
automatically from time to time effective as of the effective date of each
change in the Base Rate.
4.1.2 Rate Quotations.
The Borrower may call the Agent on or before the date on
which a Loan Request is to be delivered to receive an indication of the rates
then in effect, but it is acknowledged that such projection shall not be binding
on the Agent or the Banks nor affect the rate of interest which thereafter is
actually in effect when the election is made.
4.2 Interest After Default.
To the extent permitted by Law, upon the occurrence of an Event of
Default and until such time such Event of Default shall have been cured or
waived:
4.2.1 Letter of Credit Fees, Interest Rate.
the Letter of Credit Fees and the rate of interest for each
Loan otherwise applicable pursuant to Exhibit 2.9 or Section 4.1 [Interest
Rate], respectively, shall be increased by two percent (2%) per annum; and
4.2.2 Other Obligations.
each other Obligation hereunder if not paid when due shall
bear interest at a rate per annum equal to the sum of the applicable Base Rate
plus an additional two percent
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(2%) per annum from the time such Obligation becomes due and payable and until
it is paid in full.
4.2.3 Acknowledgment.
The Borrower acknowledges that the increase in rates referred
to in this Section 4.2 reflects, among other things, the fact that such Loans or
other amounts have become a substantially greater risk given their default
status and that the Banks are entitled to additional compensation for such risk;
and all such interest shall be payable by Borrower upon demand by Agent.
5. PAYMENTS
5.1 Payments.
All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Facility Fees, Letter of Credit Fees, Agent's Fee or
other fees or amounts due from the Borrower hereunder shall be payable prior to
11:00 a.m., Pittsburgh time, on the date when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrower, and without set-off, counterclaim or other deduction of any nature,
and an action therefor shall immediately accrue. Such payments shall be made to
the Agent at the Principal Office for the ratable accounts of the Banks with
respect to the Loans in U.S. Dollars and in immediately available funds, and the
Agent shall promptly distribute such amounts to the Banks in immediately
available funds, provided that in the event payments are received by 11:00 a.m.,
Pittsburgh time, by the Agent with respect to the Loans and such payments are
not distributed to the Banks on the same day received by the Agent, the Agent
shall pay the Banks the Federal Funds Effective Rate with respect to the amount
of such payments for each day held by the Agent and not distributed to the
Banks. The Agent's and each Bank's statement of account, ledger or other
relevant record shall, in the absence of manifest error, be conclusive as the
statement of the amount of principal of and interest on the Loans and other
amounts owing under this Agreement and shall be deemed an "account stated."
5.2 Pro Rata Treatment of Banks.
Each borrowing shall be allocated to each Bank according to its
Ratable Share, and each payment or prepayment by the Borrower with respect to
principal, interest, Commitment Fees, Facility Fees, Letter of Credit Fees, or
other fees (except for the Agent's Fee) or amounts due from the Borrower
hereunder to the Banks with respect to the Loans, shall (except as provided in
Section 5.6 [Additional Compensation in Certain Circumstances]) be made in
proportion to the applicable Loans outstanding from each Bank and, if no such
Loans are then outstanding, in proportion to the Ratable Share of each Bank.
5.3 Interest Payment Dates.
Interest on Loans shall be due and payable in arrears on the first
Business Day of each month, commencing on January 1, 2001 and on the Expiration
Date or upon acceleration of
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the Notes. Interest on mandatory prepayments of principal under Section 5.5
[Mandatory Prepayments] shall be due on the date such mandatory prepayment is
due. Interest on the principal amount of each Loan or other monetary Obligation
shall be due and payable on demand after such principal amount or other monetary
Obligation becomes due and payable (whether on the stated maturity date, upon
acceleration or otherwise).
5.4 Voluntary Prepayments.
5.4.1 Right to Prepay.
The Borrower shall have the right at its option from time to
time to prepay the Loans in whole or part without premium or penalty (except as
provided in Section 5.6 [Additional Compensation in Certain Circumstances]) at
any time with respect to any Loan.
Whenever the Borrower desires to prepay any part of the
Loans, it shall provide a prepayment notice to the Agent by 1:00 p.m. at least
one (1) Business Day prior to the date of prepayment of Loans setting forth the
following information:
(y) the date, which shall be a Business Day, on which the
proposed prepayment is to be made; and
(z) the total principal amount of such prepayment, which
shall not be less than $500,000.
All prepayment notices shall be irrevocable. The principal
amount of the Loans for which a prepayment notice is given, together with
interest on such principal amount shall be due and payable on the date specified
in such prepayment notice as the date on which the proposed prepayment is to be
made. Any prepayment hereunder shall be subject to the Borrower's Obligation to
indemnify the Banks under Section 5.6.2 [Indemnity].
5.5 Mandatory Prepayments.
If at any time the Revolving Facility Usage exceeds the Borrowing
Base, the Borrower shall make, immediately upon the Borrower learning of such
excess and whether or not the Agent has given notice to such effect, a mandatory
prepayment of principal equal to the excess of the Revolving Facility Usage over
the Borrowing Base, together with accrued interest on such principal.
5.6 Additional Compensation in Certain Circumstances.
5.6.1 Increased Costs or Reduced Return Resulting from Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc.
If any Law, guideline or interpretation or any change in any
Law, guideline or interpretation or application thereof by any Official Body
charged with the interpretation or administration thereof or compliance with any
request or directive (whether or not having the force of Law) of any central
bank or other Official Body:
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(i) subjects any Bank to any tax or changes the basis of
taxation with respect to this Agreement, the Notes, the Loans or payments by the
Borrower of principal, interest, Commitment Fees, or other amounts due from the
Borrower hereunder or under the Notes (except for taxes on the overall net
income of such Bank),
(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with or for
the account of, or other acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or contingent) of, or
letters of credit, other credits or commitments to extend credit extended by,
any Bank, or (B) otherwise applicable to the obligations of any Bank under this
Agreement,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank with respect to this Agreement, the Notes or the making, maintenance or
funding of any part of the Loans (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the rate of return on any
Bank's capital, taking into consideration such Bank's customary policies with
respect to capital adequacy) by an amount which such Bank in its sole discretion
deems to be material, such Bank shall from time to time notify the Borrower and
the Agent of the amount determined in good faith (using any averaging and
attribution methods employed in good faith) by such Bank to be necessary to
compensate such Bank for such increase in cost, reduction of income, additional
expense or reduced rate of return. Such notice shall set forth in reasonable
detail the basis for such determination. With respect to amounts due and payable
with respect to which a Bank gives notice at least ten (10) Business Days prior
to the end of a fiscal quarter, such amount shall be due and payable by the
Borrower to such Bank on the last Business Day of the fiscal quarter during
which such notice is given, and with respect to amounts due and payable with
respect to which a Bank gives notice ten (10) Business Days or less prior to the
end of a fiscal quarter, such amount shall be due and payable by the Borrower to
such Bank ten (10) Business Days after such notice is given
5.6.2 Indemnity.
In addition to the compensation required by Section 5.6.1
[Increased Costs, Etc.], the Borrower shall indemnify each Bank against all
liabilities, losses or expenses (including loss of margin and any loss or
expense incurred in liquidating or employing deposits from third parties) which
such Bank sustains or incurs as a consequence of any
(i) attempt by the Borrower to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any Loan Requests under
Section 2.5 [Revolving Credit Loan Requests] or Section 4.2 or notice relating
to prepayments under Section 5.4 [Voluntary Prepayments], or
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(ii) default by the Borrower in the performance or observance of
any covenant or condition contained in this Agreement or any other Loan
Document, including any failure of the Borrower to pay when due (by acceleration
or otherwise) any principal, interest, Commitment Fee or any other amount due
hereunder.
If any Bank sustains or incurs any such loss or expense, it shall
from time to time notify the Borrower of the amount determined in good faith by
such Bank (which determination may include such assumptions, allocations of
costs and expenses and averaging or attribution methods as such Bank shall deem
reasonable) to be necessary to indemnify such Bank for such loss or expense.
Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrower to such Bank
on the last Business Day of the fiscal quarter during which such notice is
given.
6. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties.
The Borrower represents and warrants to the Agent and each of the
Banks as follows:
6.1.1 Organization and Qualification.
Each Loan Party and each Subsidiary of each Loan Party is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Loan Party and each Subsidiary of each Loan Party has the
lawful power to own or lease its properties and to engage in the business it
presently conducts or proposes to conduct. Each Loan Party and each Subsidiary
of each Loan Party is duly licensed or qualified and in good standing in each
jurisdiction listed on Schedule 6.1.1 and in all other jurisdictions where the
property owned or leased by it or the nature of the business transacted by it or
both makes such licensing or qualification necessary, except where the failure
to be so qualified or licensed would not reasonably be expected to result in a
Material Adverse Change.
6.1.2 Capitalization and Ownership.
The authorized capital stock of the Borrower, as of the
Closing Date, consists of (a) 500,000,000 shares of Common Stock, par value $.01
per share (referred to herein as the "Common Shares") are issued and
outstanding; and (b) 5,000,000 shares of Preferred Stock, par value $.01 per
share, none of which are issued and outstanding. All of the Common Shares have
been validly issued and are fully paid and nonassessable. As of the Closing
Date, there are no options, warrants or other rights outstanding to purchase any
shares of capital stock of the Borrower except as indicated on Schedule 6.1.2.
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6.1.3 Subsidiaries.
Schedule 6.1.3 states, as of the Closing Date, the name of
each of the Borrower's Significant Subsidiaries, its jurisdiction of
incorporation, its authorized capital stock, the issued and outstanding shares
(referred to herein as the "Subsidiary Shares") and the owners thereof if it is
a corporation, its outstanding partnership interests (the "Partnership
Interests") if it is a partnership and its outstanding limited liability company
interests, interests assigned to managers thereof and the voting rights
associated therewith (the "LLC Interests") if it is a limited liability company.
The Borrower and each Subsidiary of the Borrower has good and valid title to all
of the Subsidiary Shares, Partnership Interests and LLC Interests it purports to
own, free and clear in each case of any Lien. All Subsidiary Shares, Partnership
Interests and LLC Interests have been validly issued, and all Subsidiary Shares
are fully paid and nonassessable. All capital contributions and other
consideration required to be made or paid in connection with the issuance of the
Partnership Interests and LLC Interests have been made or paid, as the case may
be. As of the Closing Date, there are no options, warrants or other rights
outstanding to purchase any such Subsidiary Shares, Partnership Interests or LLC
Interests except as indicated on Schedule 6.1.3.
6.1.4 Power and Authority.
Each Loan Party has full power to enter into, execute,
deliver and carry out this Agreement and the other Loan Documents to which it is
a party, to incur the Indebtedness contemplated by the Loan Documents and to
perform its Obligations under the Loan Documents to which it is a party, and all
such actions have been duly authorized by all necessary proceedings on its part.
6.1.5 Validity and Binding Effect.
This Agreement has been duly and validly executed and
delivered by each Loan Party, and each other Loan Document which any Loan Party
is required to execute and deliver on or after the date hereof will have been
duly executed and delivered by such Loan Party on the required date of delivery
of such Loan Document. This Agreement and each other Loan Document constitutes,
or will constitute, legal, valid and binding obligations of each Loan Party
which is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.
6.1.6 No Conflict.
Neither the execution and delivery of this Agreement or the
other Loan Documents by any Loan Party nor the consummation of the transactions
herein or therein contemplated or compliance with the terms and provisions
hereof or thereof by any of them will conflict with, constitute a default under
or result in any breach of (i) the terms and conditions of the certificate of
incorporation, bylaws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents
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of any Loan Party or (ii) except as set forth on Schedule 6.1.6, any Law or any
material agreement or instrument or order, writ, judgment, injunction or decree
to which any Loan Party or any of its Subsidiaries is a party or by which it or
any of its Subsidiaries is bound or to which it is subject, or result in the
creation or enforcement of any Lien, charge or encumbrance whatsoever upon any
property (now or hereafter acquired) of any Loan Party or any of its
Subsidiaries (other than Liens granted under the Loan Documents).
6.1.7 Litigation.
Except as set forth on Schedule 6.1.7, there are no actions,
suits, proceedings or investigations pending or, to the knowledge of the
Borrower, threatened against such Loan Party or any Subsidiary of such Loan
Party at law or equity before any Official Body which, if determined adversely
to any Loan Party would reasonably be expected, individually or in the
aggregate, to result in any Material Adverse Change. None of the Loan Parties or
any Subsidiaries of any Loan Party is in violation of any order, writ,
injunction or any decree of any Official Body which may result in any Material
Adverse Change.
6.1.8 Title to Properties.
The real property owned or leased pursuant to a lease with
aggregate annual rental payments thereunder in excess of $1,000,000 by each Loan
Party and each Subsidiary of each Loan Party as of the Closing Date is described
on Schedule 6.1.8. Each Loan Party and each Subsidiary of each Loan Party has
good and marketable title to or valid leasehold interest in all properties,
assets and other rights which it purports to own or lease or which are reflected
as owned or leased on its books and records, free and clear of all Liens and
encumbrances except Permitted Liens, and subject to the terms and conditions of
the applicable leases. All leases of property are in full force and effect
without the necessity for any consent which has not previously been obtained
upon consummation of the transactions contemplated hereby.
6.1.9 Financial Statements.
(i) Historical Statements. The Borrower has delivered to the
Agent copies of its audited consolidated year-end financial statements for and
as of the end of the fiscal year ended December 31, 1999 (the "Annual
Statements"). In addition, the Borrower has delivered to the Agent copies of its
unaudited consolidated interim financial statements for the fiscal year to date
and as of the end of the fiscal quarter ended June 30, 2000 (the "Interim
Statements") (the Annual and Interim Statements being collectively referred to
as the "Historical Statements"). The Historical Statements were compiled from
the books and records maintained by the Borrower's management, are correct and
complete in all material respects and fairly represent the consolidated
financial condition of the Borrower and its Subsidiaries as of their dates and
the results of operations for the fiscal periods then ended and have been
prepared in accordance with GAAP consistently applied, subject (in the case of
the Interim Statements) to normal year-end audit adjustments.
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(ii) Financial Projections. The Borrower has delivered to the Agent financial
projections of the Borrower and its Subsidiaries for the period September 30,
2000 through December 31, 2001 derived from various assumptions of the
Borrower's management (the "Financial Projections"). In the good faith judgment
of the Borrower's management as of the Closing Date, the Financial Projections
represent a reasonable range of possible results in light of the history of the
business, present and foreseeable conditions and the intentions of the
Borrower's management. The Financial Projections accurately reflect the
liabilities of the Borrower and its Subsidiaries upon consummation of the
transactions contemplated hereby as of the Closing Date.
(iii) Accuracy of Financial Statements. Neither the Borrower nor
any Subsidiary of the Borrower has any liabilities, contingent or otherwise, or
forward or long-term commitments that would be required to be disclosed in
accordance with GAAP and are not disclosed in the Historical Statements or in
the notes thereto (except liabilities incurred in the ordinary course of
business since the date of the Historical Statements). Since December 31, 1999,
no Material Adverse Change has occurred.
6.1.10 Use of Proceeds; Margin Stock; Section 20 Subsidiaries.
6.1.10.1 General.
The Loan Parties intend to use the proceeds of the Loans
in accordance with Sections 2.8, and 8.1.10.
6.1.10.2 Margin Stock.
None of the Loan Parties or any Subsidiaries of any Loan
Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U). No part of the proceeds of any Loan has been or will
be used, immediately, incidentally or ultimately, to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock or to refund Indebtedness originally incurred for such
purpose, or for any purpose which entails a violation of or which is
inconsistent with the provisions of the regulations of the Board of Governors of
the Federal Reserve System. None of the Loan Parties or any Subsidiary of any
Loan Party holds or intends to hold margin stock in such amounts that more than
25% of the reasonable value of the assets of any Loan Party or Subsidiary of any
Loan Party are or will be represented by margin stock.
6.1.10.3 Section 20 Subsidiaries.
The Loan Parties do not intend to use and shall not use
any portion of the proceeds of the Loans, directly or indirectly, to purchase
during the underwriting period, or for thirty (30) days thereafter, Ineligible
Securities being underwritten by a Section 20 Subsidiary.
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6.1.11 Full Disclosure.
Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other documents furnished by any Loan Party
to the Agent or any Bank in connection herewith or therewith, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein and therein, in light of the
circumstances under which they were made, not misleading.
6.1.12 Taxes.
All federal, state, local and other tax returns required to
have been filed with respect to each Loan Party and each Subsidiary of each Loan
Party have been filed, and payment or adequate provision has been made for the
payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received,
except to the extent that such taxes, fees, assessments and other charges are
being contested in good faith by appropriate proceedings diligently conducted
and for which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made. There are no agreements or waivers
extending the statutory period of limitations applicable to any federal income
tax return of any Loan Party or Subsidiary of any Loan Party for any period.
6.1.13 Consents and Approvals.
Except for the filing of financing statements in the state
and county filing offices, no consent, approval, exemption, order or
authorization of, or a registration or filing with, any Official Body or any
other Person is required by any Law or any agreement in connection with the
execution, delivery and carrying out of this Agreement and the other Loan
Documents by any Loan Party, except as listed on Schedule 6.1.13, all of which
shall have been obtained or made on or prior to the Closing Date except as
otherwise indicated on Schedule 6.1.13.
6.1.14 No Event of Default; Compliance with Instruments.
No event has occurred and is continuing and no condition
exists or will exist after giving effect to the borrowings or other extensions
of credit to be made on the Closing Date under or pursuant to the Loan Documents
which constitutes an Event of Default or Potential Default. None of the Loan
Parties or any Subsidiaries of any Loan Party is in violation of (i) any term of
its certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents or (ii) any material agreement or
instrument to which it is a party or by which it or any of its properties may be
subject or bound where such violation would constitute a Material Adverse
Change.
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6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.
Each Loan Party and each Subsidiary of each Loan Party is
licensed to use, owns or possesses all the material patents, trademarks, service
marks, trade names, copyrights, licenses, registrations, franchises, permits and
rights necessary to own and operate its properties and to carry on its business
as presently conducted and planned to be conducted by such Loan Party or
Subsidiary, without, to the Borrower's knowledge, any material infringement of
or possible, alleged or actual material conflict with, the rights of others.
6.1.16 Security Interests.
The Liens and security interests granted to the Agent for
the benefit of the Banks pursuant to the Note Pledge Agreement, Pledge Agreement
and the Security Agreement (subject to the filing of all requisite financing
statements in the case of the Liens and security interests granted pursuant to
the Security Agreement) in the Collateral constitute and will continue to
constitute Prior Security Interests under the Uniform Commercial Code as in
effect in each applicable jurisdiction (the "Uniform Commercial Code") or other
applicable Law entitled to all the rights, benefits and priorities provided by
the Uniform Commercial Code or such Law. Upon the filing of financing statements
relating to said security interests in each office and in each jurisdiction
where required in order to perfect the security interests described above,
taking possession of the Pledged Note, and taking possession of any stock
certificates or other certificates evidencing the Pledged Collateral, as
applicable, all such action as is necessary or advisable to establish such
rights of the Agent will have been taken, and there will be upon execution and
delivery of the Pledge Agreement and the Security Agreement, such filings and
such taking of possession, no necessity for any further action in order to
preserve, protect and continue such rights, except the filing of continuation
statements with respect to such financing statements within six months prior to
each five-year anniversary of the filing of such financing statements. All
filing fees and other expenses in connection with each such action have been or
will be paid by the Borrower.
6.1.17 [INTENTIONALLY OMITTED]
6.1.18 Status of the Pledged Collateral.
All the shares of capital stock, Partnership Interests or
LLC Interests included in the Pledged Collateral to be pledged pursuant to the
Pledge Agreement are or will be upon issuance validly issued and nonassessable
and owned beneficially and of record by the pledgor free and clear of any Lien
or restriction on transfer, except as otherwise provided by the Pledge Agreement
and except as the right of the Banks to dispose of the Shares, Partnership
Interests or LLC Interests may be limited by the Securities Act of 1933, as
amended, and the regulations promulgated by the Securities and Exchange
Commission thereunder and by applicable state securities laws. There are no
shareholder, partnership, limited liability company or other agreements or
understandings with respect to the shares of capital stock, Partnership
Interests or LLC Interests included in the Pledged Collateral except for the
partnership agreements and limited liability company agreements described on
Schedule 6.1.18. The Loan
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Parties have delivered true and correct copies of such partnership agreements
and limited liability company agreements to the Agent.
6.1.19 Insurance.
Schedule 6.1.19 lists all insurance policies and other bonds
to which any Loan Party or Subsidiary of any Loan Party is a party as of the
Closing Date, all of which are valid and in full force and effect. No notice has
been given or claim made and no grounds exist to cancel or avoid any of such
policies or bonds or to reduce the coverage provided thereby. Such policies and
bonds provide adequate coverage from reputable and financially sound insurers in
amounts sufficient to insure the assets and risks of each Loan Party and each
Subsidiary of each Loan Party in accordance with prudent business practice in
the industry of the Loan Parties and their Subsidiaries.
6.1.20 Compliance with Laws.
The Loan Parties and their Subsidiaries are in compliance in
all material respects with all applicable Laws (other than Environmental Laws
which are specifically addressed in Section 6.1.25 [Environmental Matters]) in
all jurisdictions in which any Loan Party or Subsidiary of any Loan Party is
presently or will be doing business except where the failure to do so would not
constitute a Material Adverse Change.
6.1.21 Material Contracts; Burdensome Restrictions.
Schedule 6.1.21 lists, as of the Closing Date, all Material
Contracts relating to the business operations of each Loan Party and each
Subsidiary of any Loan Party, including all employee benefit plans and Labor
Contracts. All such Material Contracts are valid, binding and enforceable upon
such Loan Party or Subsidiary and each of the other parties thereto in
accordance with their respective terms, and there is no default thereunder, to
the Loan Parties' knowledge, with respect to parties other than such Loan Party
or Subsidiary. None of the Loan Parties or their Subsidiaries is bound by any
contractual obligation, or subject to any restriction in any organization
document, or any requirement of Law which could result in a Material Adverse
Change.
6.1.22 Investment Companies; Regulated Entities.
None of the Loan Parties or any Subsidiaries of any Loan
Party is an "investment company" registered or required to be registered under
the Investment Company Act of 1940 or under the "control" of an "investment
company" as such terms are defined in the Investment Company Act of 1940 and
shall not become such an "investment company" or under such "control." None of
the Loan Parties or any Subsidiaries of any Loan Party is subject to any other
Federal state statute or regulation limiting its ability to incur Indebtedness
for borrowed money.
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6.1.23 Plans and Benefit Arrangements.
Except as set forth on Schedule 6.1.23:
(i) The Borrower and each other member of the ERISA Group
are in compliance in all material respects with any applicable provisions of
ERISA with respect to all Benefit Arrangements. There has been no Prohibited
Transaction with respect to any Benefit Arrangement which would reasonably be
expected to result in any material liability of the Borrower or any other member
of the ERISA Group.
(ii) With respect to Title IV Retirement Plans, neither the
Borrower nor any other member of the ERISA Group (a) sponsors, maintains, or
contributes to, or (b) has at any time in the preceding five years sponsored,
maintained, or contributed to; any Title IV Retirement Plan.
(iii) To the extent that any Benefit Arrangement is insured,
the Borrower and all other members of the ERISA Group have paid when due all
premiums required to be paid for all periods through the Closing Date. To the
extent that any Benefit Arrangement is funded other than with insurance, the
Borrower and all other members of the ERISA Group have made when due all
contributions required to be paid for all periods through the Closing Date.
(iv) All Benefit Arrangements have been administered in
accordance with their terms and applicable Law.
6.1.24 Employment Matters.
Each of the Loan Parties and each of their Subsidiaries is
in compliance with the Labor Contracts and all applicable federal, state and
local labor and employment Laws including those related to equal employment
opportunity and affirmative action, labor relations, minimum wage, overtime,
child labor, medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment compensation, where
the failure to comply would constitute a Material Adverse Change. There are no
outstanding grievances, arbitration awards or appeals therefrom arising out of
the Labor Contracts or current or threatened strikes, picketing, handbilling or
other work stoppages or slowdowns at facilities of any of the Loan Parties or
any of their Subsidiaries which in any case would constitute a Material Adverse
Change.
6.1.25 Environmental Matters.
Except as disclosed on Schedule 6.1.25:
(i) None of the Loan Parties nor any Subsidiary of any Loan
Party has received any Environmental Complaint and has no reason to believe that
it might receive an Environmental Complaint.
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(ii) No activity of the Loan Parties nor any Subsidiary of
any Loan Party is being or has been conducted in violation of any Environmental
Law.
(iii) There are no Regulated Substances present on, in,
under, or emanating from, or to Loan Parties' knowledge emanating to, the
Property or any portion thereof in violation of applicable Environmental Laws.
(iv) To the knowledge of Loan Parties, no facility or site
to which Borrower, either directly or indirectly by a third party, has sent
Regulated Substances for storage, treatment, disposal or other management has
been or is being operated in violation of Environmental Laws or pursuant to
Environmental Laws is identified or proposed to be identified on any list of
contaminated properties or other properties which pursuant to Environmental Laws
are the subject of an investigation, cleanup, removal, remediation or other
response action by an Official Body.
(v) No portion of the Property is identified or to the Loan
Parties' knowledge proposed to be identified on any list of contaminated
properties or other properties which pursuant to Environmental Laws are the
subject of an investigation, cleanup, removal, remediation, or other response
action by an Official Body.
(vi) No lien or other encumbrance authorized by
Environmental Laws exists against the Property, and the Loan Parties have no
reason to believe that such a lien or encumbrance may be imposed.
6.1.26 Senior Debt Status.
The Obligations of each Loan Party under this Agreement, the
Notes, the Guaranty Agreement and each of the other Loan Documents to which it
is a party do rank and will rank at least pari passu in priority of payment with
all other Indebtedness of such Loan Party except Indebtedness of such Loan Party
to the extent secured by Permitted Liens. There is no Lien upon or with respect
to any of the properties or income of any Loan Party or Subsidiary of any Loan
Party which secures indebtedness or other obligations of any Person except for
Permitted Liens.
7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
The obligation of each Bank to make Loans and of the Agent to issue
Letters of Credit hereunder is subject to the performance by each of the Loan
Parties of its Obligations to be performed hereunder at or prior to the making
of any such Loans or issuance of such Letters of Credit and to the satisfaction
of the following further conditions:
7.1 First Loans and Letters of Credit.
On the Closing Date:
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7.1.1 Officer's Certificate.
The representations and warranties of the Borrower contained
in Section 6 and the representations and warranties of the Loan Parties
contained in each of the other Loan Documents shall be true and accurate on and
as of the Closing Date with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which relate solely to an earlier date or time, which representations
and warranties shall be true and correct on and as of the specific dates or
times referred to therein), and each of the Loan Parties shall have performed
and complied with all covenants and conditions of the Loan Documents to which
they are a party; no Event of Default or Potential Default shall have occurred
and be continuing or shall exist; and there shall be delivered to the Agent for
the benefit of each Bank a certificate of each of the Loan Parties, dated the
Closing Date and signed by the Chief Executive Officer, President or Chief
Financial Officer of each of the Loan Parties, to each such effect.
7.1.2 Secretary's Certificate.
There shall be delivered to the Agent for the benefit of each
Bank a certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each of the Loan Parties, certifying as appropriate as
to:
(i) all action taken by each Loan Party in connection with
the Loan Documents to which it is a party;
(ii) the names of the officer or officers authorized to sign
the Loan Documents and to which it is a party and the true signatures of such
officer or officers and specifying the officers authorized to act on behalf of
each Loan Party for purposes of the Loan Documents and the true signatures of
such officers, on which the Agent and each Bank may conclusively rely; and
(iii) copies of its organizational documents, including its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, and limited liability company
agreement as in effect on the Closing Date certified by the appropriate state
official where such documents are filed in a state office together with
certificates from the appropriate state officials as to the continued existence
and good standing of each Loan Party in each state where organized or qualified
to do business.
7.1.3 Delivery of Loan Documents.
The Guaranty Agreement, Notes, Pledge Agreement, Note Pledge
Agreement Intercompany Subordination Agreement, Lockbox Agreement, and Security
Agreement shall have been duly executed and delivered to the Agent for the
benefit of the Banks, together with all appropriate financing statements and
appropriate stock powers and certificates evidencing the Pledged Collateral.
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7.1.4 Opinion of Counsel.
There shall be delivered to the Agent for the benefit of each
Bank a written opinion of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the Loan
Parties (who may rely on the opinions of such other counsel as may be acceptable
to the Agent), dated the Closing Date and in form and substance satisfactory to
the Agent and its counsel:
(i) as to the matters set forth in Exhibit 7.1.4.
7.1.5 Legal Details.
All legal details and proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be in form and substance satisfactory to the Agent and counsel for the Agent,
and the Agent shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance satisfactory to the Agent and said
counsel, as the Agent or said counsel may reasonably request.
7.1.6 Payment of Fees.
The Borrower shall have paid or caused to be paid to the
Agent for itself and for the account of the Banks to the extent not previously
paid the Facility Fees, all other commitment and other fees accrued through the
Closing Date and the costs and expenses for which the Agent and the Banks are
entitled to be reimbursed.
7.1.7 Appraisals.
The Agent shall have received a satisfactory audit of the
Loan Parties' and their Subsidiaries' accounts receivable and accounts payable
as the Agent may require in form and substance satisfactory to the Agent in all
respects.
7.1.8 Consents.
All material consents required to effectuate the transactions
contemplated hereby as set forth on Schedule 6.1.13 shall have been obtained.
7.1.9 No Violation of Laws.
The making of the Loans and the issuance of the Letters of
Credit shall not contravene any Law applicable to any Loan Party or any of the
Banks.
7.1.10 No Actions or Proceedings.
No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby or
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which, in the Agent's sole discretion, would make it inadvisable to consummate
the transactions contemplated by this Agreement or any of the other Loan
Documents.
7.1.11 Insurance Policies; Certificates of Insurance; Endorsements.
The Loan Parties shall have delivered evidence reasonably
acceptable in form and substance to the Agent that adequate insurance in
compliance with Section 8.1.3 [Maintenance of Insurance] is in full force and
effect, that all premiums then due thereon have been paid and that such coverage
includes an endorsement naming the Agent as additional insured and lender loss
payee.]
7.1.12 Filing Receipts.
The Agent shall have received executed financing statements
(Form UCC-1), on or prior to the Closing Date, naming the Borrower as debtor and
the Agent for the benefit of the Agent and the Banks as the secured party, in
form and substance satisfactory to the Agent.
7.1.13 Termination of SVB Facility.
All outstanding indebtedness and other obligations under the
SVB Facility shall have been repaid, the commitment to lend thereunder shall
have been terminated, and the Agent shall have received executed termination
statements (Form UCC-3) terminating all liens and security interests securing
the SVB Facility, all to the satisfaction of the Agent in its reasonable
discretion.
7.2 Each Additional Loan or Letter of Credit.
At the time of making any Loans or issuing any Letters of Credit
other than Loans made or Letters of Credit issued on the Closing Date and after
giving effect to the proposed extensions of credit: the representations and
warranties of the Borrower contained in Section 6 and of each other Loan Party
in the other Loan Documents to which it is a party shall be true on and as of
the date of such additional Loan or Letter of Credit with the same effect as
though such representations and warranties had been made on and as of such date
(except representations and warranties which expressly relate solely to an
earlier date or time, which representations and warranties shall be true and
correct on and as of the specific dates or times referred to therein) and the
Loan Parties shall have performed and complied with all covenants and conditions
hereof; no Event of Default or Potential Default shall have occurred and be
continuing or shall exist; the making of the Loans or issuance of such Letter of
Credit shall not contravene any Law applicable to any Loan Party or Subsidiary
of any Loan Party or any of the Banks; and the Borrower shall have delivered to
the Agent a duly executed and completed Loan Request or application for a Letter
of Credit as the case may be, together with a Borrowing Base Certificate.
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8. COVENANTS
8.1 Affirmative Covenants.
The Borrower covenants and agrees that until payment in full of the
Loans, Reimbursement Obligations and Letter of Credit Borrowings, and interest
thereon, expiration or termination of all Letters of Credit, satisfaction of all
of the Loan Parties' other Obligations under the Loan Documents and termination
of the Commitments, the Borrower shall comply at all times with the following
affirmative covenants:
8.1.1 Preservation of Existence, Etc.
The Borrower shall, and shall cause each of its Subsidiaries
to, maintain its legal existence as a corporation, limited partnership or
limited liability company and its license or qualification and good standing in
each jurisdiction in which its ownership or lease of property or the nature of
its business makes such license or qualification necessary, except as otherwise
expressly permitted in Section 8.2.6 [Liquidations, Mergers, Etc.] and except
where the failure to be so qualified or licensed would not reasonably be
expected to result in a Material Adverse Change.
8.1.2 Payment of Liabilities, Including Taxes, Etc.
The Borrower shall, and shall cause each of its Subsidiaries
to, duly pay and discharge all liabilities to which it is subject or which are
asserted against it, promptly as and when the same shall become due and payable,
including all taxes, assessments and governmental charges upon it or any of its
properties, assets, income or profits, prior to the date on which penalties
attach thereto, except to the extent that such liabilities, including taxes,
assessments or charges, are being contested in good faith and by appropriate and
lawful proceedings diligently conducted and for which such reserve or other
appropriate provisions, if any, as shall be required by GAAP shall have been
made, but only to the extent that failure to discharge any such liabilities
would not result in any additional liability which would adversely affect to a
material extent the financial condition of the Borrower or Subsidiary of the
Borrower or which would affect the Collateral, provided that the Borrower and
its Subsidiaries will pay all such liabilities forthwith upon the commencement
of proceedings to foreclose any Lien which may have attached as security
therefor.
8.1.3 Maintenance of Insurance.
The Borrower will maintain or cause to be maintained, with
financially sound and reputable insurers, public liability and property damage
insurance with respect to its business and properties and the business and
properties of its Subsidiaries against loss or damage of the kinds customarily
carried or maintained by Persons of established reputation engaged in similar
businesses and in amounts reasonably acceptable to Agent and will deliver
evidence thereof to Agent. The Borrower shall cause, pursuant to endorsements
and assignments in form and substance reasonably satisfactory to Agent, the
Agent, for the benefit of Agent
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and Banks, to be named as lender's loss payee in the case of casualty insurance,
Agent, for the benefit of Agent and Banks, to be named as additional insured in
the case of all liability insurance and Agent, for the benefit of Agent and
Banks, to be named as assignee in the case of all business interruption
insurance; provided, that notwithstanding the foregoing, in the absence of a
Potential Default or an Event of Default, the Borrower may receive and retain
proceeds from such casualty policies to the extent that the aggregate of such
proceeds for the period from the Closing Date through and including the
Expiration Date are less than or equal to $2,000,000. At the request of the
Agent, the Borrower shall provide to the Agent a certified copy of each
insurance policy providing the coverage to the Borrower and its Subsidiaries
required by the provisions of this Section 8.1.3, including the special
endorsements and lender loss payee provisions required by this Section.
8.1.4 Maintenance of Properties and Leases.
The Borrower shall, and shall cause each of its
Subsidiaries to, maintain in good repair, working order and condition (ordinary
wear and tear excepted) in accordance with the general practice of other
businesses of similar character and size, all of those properties used in its
business, and from time to time, the Borrower will make or cause to be made all
reasonably appropriate repairs, renewals or replacements thereof.
8.1.5 Maintenance of Patents, Trademarks, Etc.
The Borrower shall, and shall cause each of its
Subsidiaries to, maintain in full force and effect all patents, trademarks,
service marks, trade names, copyrights, licenses, franchises, permits and other
authorizations necessary for the ownership and operation of its properties and
business if the failure so to maintain the same would constitute a Material
Adverse Change.
8.1.6 Visitation Rights.
The Borrower shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Agent or, following the occurrence of an Event of
Default, any of the Banks, to visit and inspect any of its properties and to
examine and make excerpts from its books and records and discuss its business
affairs, finances and accounts with its officers, all in such detail and at such
times and as often as the Agent or any of the Banks may reasonably request,
provided that each Bank shall provide the Borrower and the Agent with reasonable
notice prior to any visit or inspection and prior to an Event of Default the
Agent shall provide the Borrower with reasonable notice prior to any visit or
inspection (with no prior notice being required on or after the occurrence of an
Event of Default), and provided further, that prior to an Event of Default, the
number of such visits and inspections shall not exceed two (2) during any
twelve-month period. In the event any Bank desires to visit and inspect any Loan
Party, such Bank shall make a reasonable effort to conduct such visit and
inspection contemporaneously with any visit and inspection to be performed by
the Agent.
8.1.7 Keeping of Records and Books of Account.
The Borrower shall, and shall cause each Subsidiary
of the Borrower to, maintain and keep proper books of record and account which
enable the Borrower and its
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Subsidiaries to issue financial statements in accordance with GAAP and as
otherwise required by applicable Laws of any Official Body having jurisdiction
over the Borrower or any Subsidiary of the Borrower, and in which full, true and
correct entries shall be made in all material respects of all its dealings and
business and financial affairs.
8.1.8 Benefit Arrangements.
The Borrower shall, and shall cause each other member of
the ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Benefit Arrangements except where such failure,
alone or in conjunction with any other failure, would not result in a Material
Adverse Change.
8.1.9 Compliance with Laws.
The Borrower shall, and shall cause each of its
Subsidiaries to, comply with all applicable Laws, including all Environmental
Laws, in all respects, provided that it shall not be deemed to be a violation of
this Section 8.1.9 if any failure to comply with any Law would not result in
fines, penalties, remediation costs, other similar liabilities or injunctive
relief which in the aggregate would constitute a Material Adverse Change.
8.1.10 Use of Proceeds.
The Borrower shall and shall cause each other Loan
Party to use the Letters of Credit and the proceeds of the Loans only for lawful
purposes in accordance with Section 2.8. The Borrower shall not and shall not
permit any other Loan Party to use the Letters of Credit and the proceeds of the
Loans for any purpose which contravenes any applicable Law or any provision
hereof.
8.1.11 Further Assurances.
The Borrower shall, from time to time, at its expense,
faithfully preserve and protect the Agent's Lien on and Prior Security Interest
in the Collateral as a continuing first priority perfected Lien, subject only to
Permitted Liens, and shall do such other acts and things as the Agent in its
sole discretion may deem necessary or advisable from time to time in order to
preserve, perfect and protect the Liens granted under the Loan Documents and to
exercise and enforce its rights and remedies thereunder with respect to the
Collateral.
8.1.12 Subordination of Intercompany Loans.
The Borrower shall cause any intercompany Indebtedness,
loans or advances owed by any Loan Party to any other Loan Party or payable by
any Loan Party to any Subsidiary of the Borrower which is not a Loan Party to be
subordinated pursuant to the terms of the Intercompany Subordination Agreement.
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8.1.13 Lockbox Account.
The Borrower shall and shall cause the Significant
Subsidiaries to maintain their respective lockbox accounts with the Agent, and
no later than one hundred twenty (120) days following the Closing Date, the Loan
Parties shall establish such lockboxes at the Principal Office of the Agent and
execute and deliver to the Agent the Lockbox Agreement in the form of Exhibit
1.1(L).
8.2 Negative Covenants.
The Borrower covenants and agrees that until payment in full of the
Loans, Reimbursement Obligations and Letter of Credit Borrowings and interest
thereon, expiration or termination of all Letters of Credit, satisfaction of all
of the Loan Parties' other Obligations hereunder and termination of the
Commitments, the Borrower shall comply with the following negative covenants:
8.2.1 Indebtedness.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on Schedule
8.2.1 (including any extensions or renewals thereof, provided there is no
increase in the amount thereof or other significant change in the terms thereof
unless otherwise specified on Schedule 8.2.1);
(iii) Indebtedness, at any time outstanding not
exceeding in the aggregate $20,000,000 secured by Purchase Money Security
Interests and in respect of Capital Lease Obligations;
(iv) Indebtedness, at any time outstanding not to exceed
$12,000,000, under the Line of Credit Facility;
(v) Other Indebtedness not covered by the other clauses
of this Section 8.2.1, at any time outstanding not to exceed $10,000,000;
(vi) reimbursement obligations in respect of the
Existing Letters of Credit;
(vii) Indebtedness of a Loan Party to another Loan Party
which is subordinated in accordance with the provisions of Section 8.1.12
[Subordination of Intercompany Loans];
(viii) other Indebtedness, at any time outstanding not
to exceed $5,000,000 in the aggregate, of the Loan Parties payable to
Subsidiaries of the Borrower which are not a Loan Parties, so long as all such
Indebtedness permitted by this clause (viii) is
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subordinated in accordance with the provisions of Section 8.1.12 [Subordination
of Intercompany Loans] and the Subsidiary which is the payee of such
Indebtedness is a party to the Intercompany Subordination Agreement;
(ix) Subject to the limitations of Section 8.2.4,
Indebtedness of any Subsidiary of the Borrower which is not a Loan Party payable
to any Loan Party;
(x) Indebtedness of any Subsidiary of the Borrower which
is not a Loan Party payable to another Subsidiary of the Borrower which also is
not a Loan Party; and
(xi) Indebtedness, at any time outstanding not to exceed
in the aggregate $10,000,000, with respect to all Persons merged into or
acquired by the Borrower or any Subsidiary of the Borrower pursuant to a
transaction permitted by Section 8.2.6; provided, that, the principal amount of
such Indebtedness is not increased from the amount outstanding immediately prior
to such merger or acquisition.
8.2.2 Liens.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, at any time (i) create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except Permitted Liens,
and (ii) directly or indirectly enter into any agreement, understanding or other
arrangement which purports to restrict in any manner the ability of any Loan
Party to grant security interests or Liens to the Agent for the benefit of the
Agent and the Banks with respect to any asset or assets constituting
Intellectual Property of any Loan Party.
8.2.3 Guaranties.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, at any time, directly or indirectly, become or be liable in
respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for those
Guaranties by the Borrower existing on the Closing Date set forth on Schedule
8.2.3 and Guaranties of Indebtedness of the Loan Parties permitted hereunder,
including Guaranties permitted under Section 8.2.1 by the Borrower of
Indebtedness of its Subsidiaries permitted under Section 8.2.1.
8.2.4 Loans and Investments.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, at any time make or suffer to remain outstanding any loan or
advance to, or purchase, acquire or own any stock, bonds, notes or securities
of, or any partnership interest (whether general or limited) or limited
liability company interest in, or any other investment or interest in, or make
any capital contribution to, any other Person, or agree, become or remain liable
to do any of the foregoing, except:
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(i) trade credit extended on usual and customary
terms in the ordinary course of business;
(ii) advances to employees and consultants to meet
expenses incurred by such employees and consultants in the ordinary course of
business and loans and advances to employees in the ordinary course of business
for relocation expenses;
(iii) loans, advances and investments in other Loan
Parties;
(iv) the following permitted investments: (a)
marketable direct obligations issued or unconditionally guaranteed by the United
States of America or any agency, state or instrumentality thereof; (b) bank
obligations, including certificates of deposit, bank notes and bankers
acceptances when issued by banks whose long-term debt is rated "A" or higher by
Moody's or Standard & Poor's and whose short-term obligations are rated "P1" or
higher or "A1" or higher by Moody's or Standard & Poor's, respectively; (c)
corporate obligations, including notes rated "A" or higher by Moody's or
Standard & Poor's and commercial paper rated "P1" or higher or "A1" or higher by
Moody's or Standard & Poor's, respectively; (d) repurchase agreements
collateralized at a minimum of 102% with U.S. Treasury securities or other
securities rated "AAA" or equivalent; and (e) money market funds over $1 billion
in assets, with a historically constant dollar net asset value, substantially
consisting of acceptable securities as stated above in this clause (iv); and (f)
adjustable rate preferred stock rated "Aa2" or higher or "AA" or higher by
Moody's or Standard & Poor's, respectively; provided, that the maximum effective
maturity of individual securities may not exceed 24 months, and the average
maturity of all securities purchased may not exceed 12 months; provided,
further, that not more than $50,000,000 or 25% of the total amount of investable
cash, whichever is less, may be invested at any one time in adjustable rate
preferred stock;
(v) investments permitted under Section 8.2.6;
(vi) loans, advances and investments in Subsidiaries
(other than Significant Subsidiaries) in an aggregate amount not to exceed
$5,000,000 (a "Maximum Investment") in "fair value" of the cash or other
property loaned, advanced or contributed, subject to the last sentence of this
Section 8.2.4, during the period commencing on the Closing Date through and
including the Expiration Date, so long as after giving effect to each such loan,
advance or investment: (a) the Borrower is in pro-forma compliance with the
covenants contained in Sections 8.2.16, 8.2.17, and 8.2.18, and (b) no Potential
Default or Event of Default shall exist;
(vii) investments existing on the Closing Date set
forth on Schedule 8.2.4; and
(viii) loans, advances and investments in Persons
which are not Subsidiaries in an aggregate amount not to exceed $5,000,000 (a
"Maximum Investment") in "fair value" of the cash or other property loaned,
advanced or contributed, subject to the last sentence of this Section 8.2.4,
during the period commencing on the Closing Date through and including the
Expiration Date, so long as after giving effect to each such loan, advance or
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investment: (a) the Borrower is in pro-forma compliance with the covenants
contained in Sections 8.2.16, 8.2.17, and 8.2.18, and (b) no Potential Default
or Event of Default shall exist.
For purposed of this Section 8.2.4, "fair value" of property loaned, advanced or
contributed shall be determined as of the date of such loan, advance or
contribution and shall be the greater of the fair market value or the net book
value of the asset loaned, advanced or contributed. Notwithstanding the
provisions of clauses (vi) and (viii) above, in the event the Borrower issues
its capital stock for purposes of making an investment of the type described in
such clause (vi) or (viii), so long as after giving effect to each such
investment: (a) the Borrower is in pro-forma compliance with the covenants
contained in Sections 8.2.16, 8.2.17, and 8.2.18, and (b) no Event of Default
shall exist, issuance of its capital stock by the Borrower for purposes of
making any such investment shall not be subject to the respective Maximum
Investment limitation specified in each such clause.
8.2.5 Dividends and Related Distributions.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, make or pay, or agree to become or remain liable to make or
pay, any dividend or other distribution of any nature (whether in cash,
property, securities or otherwise) on account of or in respect of its shares of
capital stock, partnership interests or limited liability company interests on
account of the purchase, redemption, retirement or acquisition of its shares of
capital stock (or warrants, options or rights therefor), partnership interests
or limited liability company interests, except dividends or other distributions
payable to another Loan Party and so long as no Event of Default exists after
giving effect thereto, except for the repurchases of stock identified on
Schedule 8.2.5.
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a party
to any merger or consolidation, or acquire by purchase, lease or otherwise all
or substantially all of the assets or capital stock of any other Person,
provided that
(1) any Loan Party other than the Borrower may
consolidate or merge into another Loan Party which is wholly-owned by one or
more of the other Loan Parties,
(2) any Subsidiary of the Borrower which is not a Loan
Party may merge into the Borrower or any other Subsidiary of the Borrower;
(3) any Subsidiary of the Borrower which is not a
Significant Subsidiary may dissolve, liquidate or wind-up its affairs, and
(4) the Borrower or any Subsidiary of the Borrower may
acquire, whether by purchase or by merger, (A) all of the ownership interests of
another Person or
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(B) substantially all of assets of another Person or of a business or division
of another Person (each a "Permitted Acquisition"), provided that each of the
following requirements is met:
(i) if the Loan Parties are acquiring the ownership
interests in such Person, such Person shall execute a Guarantor Joinder if
required pursuant to Section 11.19 [Joinder of Guarantors] within ten (10)
Business Days of such Permitted Acquisition;
(ii) the Loan Parties, such Person and its owners, as
applicable, shall grant Liens in the assets of or acquired from such Person and
the stock or other ownership interests in such Person if required pursuant to
Section 11.19 [Joinder of Guarantors] within ten (10) Business Days of the date
of such Permitted Acquisition.
(iii) the board of directors or other equivalent
governing body of such Person shall have approved such Permitted Acquisition
and, if the Loan Parties shall use any portion of the Loans to fund such
Permitted Acquisition, the Loan Parties also shall have delivered to the Banks,
at the time of delivery of the related agreements documenting such acquisition
as provided in clause (vi) below, written evidence of the approval of the board
of directors (or equivalent body) of such Person for such Permitted Acquisition,
(iv) the business acquired, or the business conducted
by the Person whose ownership interests are being acquired, as applicable, shall
be engaged in business to business electronic commerce,
(v) no Potential Default or Event of Default shall
exist immediately prior to and after giving effect to such Permitted
Acquisition,
(vi) the Loan Parties shall deliver to the Agent
within ten (10) Business Days following such Permitted Acquisition if such
acquisition is of a person that will become a Significant Subsidiary or if as a
result of such acquisition a Subsidiary of the Borrower becomes a Significant
Subsidiary copies of any agreements entered into or proposed to be entered into
by such Loan Parties in connection with such Permitted Acquisition and shall
deliver to the Agent such other information about such Person or its assets as
any Loan Party may reasonably require; and
(vii) the Borrower shall be in proforma compliance,
after giving effect to the Permitted Acquisition, with the following covenants
and shall deliver to the Agent within thirty (30) days following the
announcement by the Borrower of such Permitted Acquisition a certificate in the
form of Exhibit 8.2.6 (the " Acquisition Compliance Certificate") evidencing
such compliance:
(1) the covenant contained in Section 8.2.16,
with compliance tested as of the last day of the fiscal quarter of the Borrower
for which a Compliance Certificate was most recently delivered pursuant to
Exhibit 8.3 item 4 (the "EBITDA Test Period") (determined based upon combining
(a) the EBITDA Loss for the EBITDA Test Period, and (b) the EBITDA Loss,
calculated for the Person or business acquired, in lieu of the Borrower and its
Subsidiaries, for the EBITDA Test Period; provided that in determining the
combined, proforma
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EBITDA Loss, there shall be excluded from such computation any reduction or
projected reduction of the EBITDA Loss in connection with or arising out of the
Person, business or assets acquired);
(2) the covenant contained in Section
8.2.17, with compliance tested as of the date of the Permitted Acquisition
(determined based upon combining as of the date of the Permitted Acquisition (a)
Consolidated Tangible Net Worth, and (b) Consolidated Tangible Net Worth
calculated for the Person or business acquired, in lieu of the Borrower and its
Subsidiaries, as of such date), and
(3) the covenant contained in Section
8.2.18, with compliance tested as of the date of the Permitted Acquisition
(determined based upon combining as of the date of the Permitted Acquisition, in
the case of the numerator of such ratio (a) the Unrestricted Cash plus accounts
receivable (net of any allowance for doubtful accounts) of the Borrower and its
Subsidiaries, determined and consolidated in accordance with GAAP, and (b) the
cash plus accounts receivable (net of any allowance for doubtful accounts) of
the Person or business acquired, and in the case of the denominator of such
ratio (a) consolidated current liabilities less deferred revenues of the
Borrower and its Subsidiaries determined in accordance with GAAP plus Revolving
Facility Usage (after giving effect to any Indebtedness or other liabilities
assumed or incurred in connection with such Permitted Acquisition and any
Revolving Credit Loans made or Letters of Credit issued in connection with the
Permitted Acquisition), and (b) current liabilities less deferred revenues of
the Person or business acquired determined in accordance with GAAP as of such
date).
(viii) To the extent that any material adjustment to any
historical item of income, expense, asset or liability of the Person or business
acquired is required in calculating the combined proforma compliance with the
financial covenants described above, then, prior to delivery by the Borrower of
the Acquisition Compliance Certificate with respect to such Permitted
Acquisition, the Borrower shall deliver to the Agent the financial statements or
other historic financial information of the Person or business acquired utilized
in such proforma calculation, which financial statements or other historic
financial information shall be reasonably satisfactory to the Agent.
8.2.7 Dispositions of Assets or Subsidiaries.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer or
dispose of, voluntarily or involuntarily, any of its properties or assets,
tangible or intangible (including sale, assignment, discount or other
disposition of accounts, contract rights, chattel paper, equipment or general
intangibles with or without recourse or of capital stock, shares of beneficial
interest, partnership interests or limited liability company interests of a
Subsidiary of the Borrower), except:
(i) transactions involving the sale of inventory in the
ordinary course of business or the grant of licenses with respect to
Intellectual Property of the Borrower or any Subsidiary of the Borrower in the
ordinary course of business;
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(ii) any sale, transfer or lease of assets in the
ordinary course of business which are no longer necessary or required in the
conduct of the Borrower's or a Subsidiary's business;
(iii) any sale, transfer or lease of assets by any Loan
Party to another Loan Party or by a Subsidiary which is not a Loan Party to a
Loan Party or to another Subsidiary which is not a Loan Party;
(iv) any sale, transfer or lease of assets in the
ordinary course of business which are replaced by substitute assets acquired or
leased within the parameters of Section 8.2.15 [Capital Expenditures], provided
such substitute assets are subject to the Banks' Prior Security Interest; or
(v) any sale, transfer or lease of assets, other than
those specifically excepted pursuant to clauses (i) through (iv) above, so long
as the aggregate "value" of the assets so sold, transferred or leased does not
exceed $5,000,000 during the period commencing on the Closing Date through and
including the Expiration Date, with "value" for purposes of this Section 8.2.7
clause (v) to be the greater of the fair market value or the net book value of
the asset sold, transferred or leased determined as of the date of sale,
transfer or lease.
8.2.8 Affiliate Transactions.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into or carry out any transaction with any Affiliate
(including purchasing property or services from or selling property or services
to any Affiliate ) unless such transaction is not otherwise prohibited by this
Agreement, is entered into in the ordinary course of business upon fair and
reasonable arm's-length terms and conditions which are fully disclosed to the
Agent and is in accordance with all applicable Law.
8.2.9 Subsidiaries, Partnerships and Joint Ventures.
Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, own or create, directly or indirectly, any
Subsidiary other than (i) Subsidiaries existing on the Closing Date which have
complied with the provisions of Section 11.19 and (ii) any Subsidiaries formed
or acquired after the Closing Date either in a transaction permitted by Section
8.2.4 or Section 8.2.6 or consented to by the Required Banks so long as such
Subsidiary has complied with Section 11.19. Each of the Loan Parties shall not
become or agree to (1) become a general or limited partner in any general or
limited partnership, except that the Loan Parties may be general or limited
partners in other Loan Parties, (2) become a member or manager of, or hold a
limited liability company interest in, a limited liability company, except that
the Loan Parties may be members or managers of, or hold limited liability
company interests in, other Loan Parties, or (3) become a joint venturer or hold
a joint venture interest in any joint venture except that the Loan Parties may
become a joint venturer or hold a joint venture interest in any joint venture
formed or acquired in a transaction permitted by Section 8.2.4 or Section 8.2.6
or consented to by the Required Banks. The Borrower may become a general partner
in Subsidiaries of the Borrower.
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8.2.10 Continuation of or Change in Business.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, engage in any business other than business to business
electronic commerce, and the Borrower shall not permit any material change in
such business.
8.2.11 Plans and Benefit Arrangements.
The Borrower shall not, and shall not permit any member
of the ERISA Group to:
(i) adopt, sponsor, maintain, or contribute to any
Title IV Retirement Plan;
(ii) engage in a Prohibited Transaction with any
Benefit Arrangement which, alone or in conjunction with any other circumstances
or set of circumstances resulting in liability under ERISA, would constitute a
Material Adverse Change;
(iii) fail to give any and all notices and make all
disclosures and governmental filings required under ERISA or the Internal
Revenue Code, where such failure is likely to result in a Material Adverse
Change.
8.2.12 Fiscal Year.
The Borrower shall not, and shall not permit any
Subsidiary of the Borrower to, change its fiscal year from the twelve-month
period beginning January 1 and ending December 31.
8.2.13 Intentionally Omitted.
8.2.14 Changes in Organizational Documents.
The Borrower shall not, and shall not permit any of its
Subsidiaries to amend in any respect its certificate of incorporation (including
any provisions or resolutions relating to capital stock), by-laws, certificate
of limited partnership, partnership agreement, certificate of formation, limited
liability company agreement or other organizational documents without obtaining
the prior written consent of the Required Banks, in the event such change would
be adverse to the Banks as determined by the Agent in its reasonable discretion.
8.2.15 Capital Expenditures.
The Borrower shall not, and shall not permit any of its
Subsidiaries to, make any payments exceeding $15,000,000 in the aggregate during
the fiscal quarter ended December 31, 2000 or exceeding $40,000,000 in the
aggregate in the fiscal year ended December 31, 2001 on account of the purchase
of any assets which would constitute fixed assets, and all such capital
expenditures shall be made under usual and customary terms and in the ordinary
course of business.
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8.2.16 Maximum Net Loss.
The Borrower shall not permit the EBITDA Loss to be
greater than the following amount for the following periods:
Period Amount
------ ------
Fiscal quarter $22,000,000
ended 12/31/2000
Fiscal quarter $20,000,000
ended 3/31/2001
Fiscal quarter $18,000,000
ended 6/30/2001
Fiscal quarter $15,000,000
ended 9/30/2001
8.2.17 Minimum Tangible Net Worth.
The Borrower shall not at any time permit Consolidated
Tangible Net Worth to be less than the following amounts during the following
periods:
Period Amount
------ ------
Closing Date through and including 12/31/2000 $100,000,000 plus the
Adjustment Amount
calculated for the period
of Closing Date through
and including 12/31/2000
1/1/2001 throughout including 3/31/2001 $90,000,000 plus the
Adjustment Amount
calculated for the period
of the Closing Date
through and including
3/31/2001
4/1/2001 through and including 6/30/2001 $80,000,000 plus the
Adjustment Amount
calculated for the period
of the Closing Date
through and including
6/30/2001
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Period Amount
------ ------
7/1/2001 and thereafter $70,000,000 plus the
Adjustment Amount
calculated for the period
of the Closing Date
through and including each
date of determination of
the Adjustment Amount
thereafter
8.2.18 Minimum Quick Ratio.
The Borrower shall not at any time permit the ratio of
(i) Unrestricted Cash plus accounts receivable (net of any allowance for
doubtful accounts) of the Borrower and its Subsidiaries, determined and
consolidated in accordance with GAAP, to (ii) consolidated current liabilities
less deferred revenues of the Borrower and its Subsidiaries plus Revolving
Facility Usage, to be less than the following amounts during the following
periods:
Period Ratio
------ -----
Closing Date through and including 12/31/2000 2.75 to 1.00
1/1/2001 throughout including 3/31/2001 2.50 to 1.00
4/1/2001 through and including 6/30/2001 2.00 to 1.00
7/1/2001 and thereafter 1.75 to 1.00
8.3 Reporting Requirements.
The Borrower covenants and agrees that until payment in full of the
Loans, Reimbursement Obligations and Letter of Credit Borrowings and interest
thereon, expiration or termination of all Letters of Credit, satisfaction of all
of the Loan Parties' other Obligations hereunder and under the other Loan
Documents and termination of the Commitments, the Borrower will furnish or cause
to be furnished to the Agent and each of the Banks the financial reports and
other information set forth on Exhibit 8.3.
9. DEFAULT
9.1 Events of Default.
An Event of Default shall mean the occurrence or existence of any
one or more of the following events or conditions (whatever the reason therefor
and whether voluntary, involuntary or effected by operation of Law):
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9.1.1 Payments Under Loan Documents.
The Borrower shall fail to pay any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity), Reimbursement Obligation or Letter of Credit Borrowing when such
principal, Reimbursement Obligation or Letter of Credit Borrowing is due in
accordance with the terms hereof, shall fail to pay within three (3) days of the
due date for payment thereof in accordance with the terms hereof any interest on
any Loan, Reimbursement Obligation or Letter of Credit Borrowing, or shall fail
to pay within three (3) days of the date when due any other amount owing
hereunder or under the other Loan Documents in accordance with the terms hereof
or thereof;
9.1.2 Breach of Warranty.
Any representation or warranty made at any time by any
of the Loan Parties herein or by any of the Loan Parties in any other Loan
Document, or in any certificate, other instrument or statement furnished
pursuant to the provisions hereof or thereof, shall prove to have been false or
misleading in any material respect as of the time it was made or furnished;
9.1.3 Breach of Negative Covenants or Visitation Rights.
Any of the Loan Parties shall default in the observance
or performance of any covenant contained in Section 8.1.6 [Visitation Rights] or
Section 8.2 [Negative Covenants];
9.1.4 Breach of Other Covenants.
Any of the Loan Parties shall default, in any material
respect, in the observance or performance of any other covenant, condition or
provision hereof or of any other Loan Document and such default shall continue
unremedied for a period of thirty (30) Business Days after any officer of any
Loan Party becomes aware of the occurrence thereof (such grace period to be
applicable only in the event such default can be remedied by corrective action
of the Loan Parties as determined by the Agent in its sole discretion);
9.1.5 Defaults in Other Agreements or Indebtedness.
A default or event of default shall occur at any time
under the terms of any other agreement involving borrowed money or the extension
of credit or any other Indebtedness under which any Loan Party or Subsidiary of
any Loan Party may be obligated as a borrower or guarantor in excess of
$1,000,000 in the aggregate, and such breach, default or event of default
consists of the failure to pay (beyond any period of grace permitted with
respect thereto, whether waived or not) any indebtedness when due (whether at
stated maturity, by acceleration or otherwise) or if such breach or default
permits or causes the acceleration of any indebtedness (whether or not such
right shall have been waived) or the termination of any commitment to lend;
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9.1.6 Final Judgments or Orders.
Any final judgments or orders for the payment of money
in excess of $1,000,000 in the aggregate shall be entered against any Loan Party
by a court having jurisdiction in the premises, which judgment is not
discharged, vacated, bonded or stayed pending appeal within a period of thirty
(30) days from the date of entry;
9.1.7 Loan Document Unenforceable.
Any of the Loan Documents shall cease to be legal, valid
and binding agreements enforceable against the party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative or shall in any way be challenged or contested or cease to give or
provide the respective Liens, security interests, rights, titles, interests,
remedies, powers or privileges intended to be created thereby;
9.1.8 Uninsured Losses; Proceedings Against Assets.
There shall occur any material uninsured damage to or
loss, theft or destruction of any of the Collateral, individually or in the
aggregate, in excess of $1,000,000 or the Collateral or any other of the Loan
Parties' or any of their Subsidiaries' assets are attached, seized, levied upon
or subjected to a writ or distress warrant; or such come within the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors and
the same is not cured within thirty (30) days thereafter;
9.1.9 Notice of Lien or Assessment.
A notice of Lien or assessment in excess of $1,000,000
which is not a Permitted Lien is filed of record with respect to all or any part
of any of the Loan Parties' or any of their Subsidiaries' assets by the United
States, or any department, agency or instrumentality thereof, or by any state,
county, municipal or other governmental agency, or any taxes or debts owing at
any time or times hereafter to any one of these becomes payable and the same is
not paid within thirty (30) days after the same becomes payable;
9.1.10 Insolvency.
Any Loan Party or any Subsidiary of a Loan Party ceases
to be solvent or admits in writing its inability to pay its debts as they
mature;
9.1.11 Intentionally Omitted.
9.1.12 Cessation of Business.
Any Loan Party or Subsidiary of a Loan Party ceases to
conduct its business as contemplated, except as expressly permitted under
Section 8.2.6 [Liquidations, Mergers, Etc.] or Section 8.2.7, or any Loan Party
or Subsidiary of a Loan Party is enjoined,
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restrained or in any way prevented by court order from conducting all or any
material part of its business and such injunction, restraint or other preventive
order is not dismissed within thirty (30) days after the entry thereof;
9.1.13 Change of Control.
(i) Any person or group of persons (within the meaning
of Sections 13(d) or 14(a) of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership of (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) 35% or
more of the voting capital stock of the Borrower; or (ii) individuals who were
directors of the Borrower on the Closing Date (the "Incumbent Board") shall
cease to constitute a majority of the board of directors of the Borrower;
provided, that any individual becoming a director subsequent to such date whose
election or nomination for election by the Borrower's stockholders was approved
by a vote of the majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board
9.1.14 Involuntary Proceedings.
A proceeding shall have been instituted in a court
having jurisdiction in the premises seeking a decree or order for relief in
respect of the Borrower or any Subsidiary of the Borrower in an involuntary case
under any applicable bankruptcy, insolvency, reorganization or other similar law
now or hereafter in effect, or for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator (or similar official) of
the Borrower or any Subsidiary of a Loan Party for any substantial part of its
property, or for the winding-up or liquidation of its affairs, and such
proceeding shall remain undismissed or unstayed and in effect for a period of
thirty (30) consecutive days or such court shall enter a decree or order
granting any of the relief sought in such proceeding; or
9.1.15 Voluntary Proceedings.
The Borrower or any Subsidiary of the Borrower shall
commence a voluntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any such law, or
shall consent to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator (or other similar
official) of itself or for any substantial part of its property or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any action in furtherance of any of
the foregoing.
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9.2 Consequences of Event of Default.
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings.
If an Event of Default specified under Sections 9.1.1 through
9.1.13 shall occur and be continuing, the Banks and the Agent shall be under no
further obligation to make Loans or issue Letters of Credit, as the case may be,
and the Agent may, and upon the request of the Required Banks, shall (i) by
written notice to the Borrower, declare the unpaid principal amount of the Notes
then outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Banks hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Agent for the benefit of each Bank without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, and (ii) require the Borrower to, and the Borrower
shall thereupon, deposit in a non-interest-bearing account with the Agent, as
cash collateral for its Obligations under the Loan Documents, an amount equal to
the maximum amount currently or at any time thereafter available to be drawn on
all outstanding Letters of Credit, and the Borrower hereby pledges to the Agent
and the Banks, and grants to the Agent and the Banks a security interest in, all
such cash as security for such Obligations. Upon the curing of all existing
Events of Default to the satisfaction of the Required Banks, the Agent shall
return such cash collateral to the Borrower; and
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings.
If an Event of Default specified under Section 9.1.14
[Involuntary Proceedings] or 9.1.15 [Voluntary Proceedings] shall occur, the
Banks shall be under no further obligations to make Loans hereunder and the
unpaid principal amount of the Loans then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of the Borrower to the Banks
hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and
9.2.3 Set-off.
If an Event of Default shall occur and be continuing, any
Bank to whom any Obligation is owed by any Loan Party hereunder or under any
other Loan Document or any participant of such Bank which has agreed in writing
to be bound by the provisions of Exhibit 10 and any branch, Subsidiary or
Affiliate of such Bank or participant anywhere in the world shall have the
right, in addition to all other rights and remedies available to it, without
notice to such Loan Party, to set-off against and apply to the then unpaid
balance of all the Loans and all other Obligations of the Borrower and the other
Loan Parties hereunder or under any other Loan Document, any debt owing to, and
any other funds held in any manner for the account of, the Borrower or such
other Loan Party by such Bank or participant or by such branch, Subsidiary or
Affiliate, including all funds in all deposit accounts (whether time or demand,
general or special, provisionally credited or finally credited, or otherwise)
now or hereafter maintained by the Borrower or such other Loan Party for its own
account (but not including funds held in custodian
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or trust accounts) with such Bank or participant or such branch, Subsidiary or
Affiliate. Such right shall exist whether or not any Bank or the Agent shall
have made any demand under this Agreement or any other Loan Document, whether or
not such debt owing to or funds held for the account of the Borrower or such
other Loan Party is or are matured or unmatured and regardless of the existence
or adequacy of any Collateral, Guaranty or any other security, right or remedy
available to any Bank or the Agent; and
9.2.4 Suits, Actions, Proceedings.
If an Event of Default shall occur and be continuing,
and whether or not the Agent shall have accelerated the maturity of Loans
pursuant to any of the foregoing provisions of this Section 9.2, the Agent or
any Bank, if owed any amount with respect to the Loans, may proceed to protect
and enforce its rights by suit in equity, action at law and/or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement or the other Loan Documents, including as permitted
by applicable Law the obtaining of the ex parte appointment of a receiver, and,
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of the Agent
or such Bank; and
9.2.5 Application of Proceeds.
From and after the date on which the Agent has taken any
action pursuant to this Section 9.2 and until all Obligations of the Loan
Parties have been paid in full, any and all proceeds received by the Agent from
any sale or other disposition of the Collateral, or any part thereof, or the
exercise of any other remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the Banks for
out-of-pocket costs, expenses and disbursements, including reasonable attorneys'
and paralegals' fees and legal expenses, incurred by the Agent or the Banks in
connection with realizing on the Collateral or collection of any Obligations of
any of the Loan Parties under any of the Loan Documents, including advances made
by the Banks or any one of them or the Agent for the reasonable maintenance,
preservation, protection or enforcement of, or realization upon, the Collateral,
including advances for taxes, insurance, repairs and the like and reasonable
expenses incurred to sell or otherwise realize on, or prepare for sale or other
realization on, any of the Collateral;
(ii) second, to the repayment of all Indebtedness then
due and unpaid of the Loan Parties to the Banks incurred under this Agreement or
any of the other Loan Documents, whether of principal, interest, fees, expenses
or otherwise, in such manner as the Agent may determine in its discretion; and
(iii) the balance, if any, as required by Law.
9.2.6 Other Rights and Remedies.
In addition to all of the rights and remedies contained
in this Agreement or in any of the other Loan Documents, the Agent shall have
all of the rights and remedies of a
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secured party under the Uniform Commercial Code or other applicable Law, all of
which rights and remedies shall be cumulative and non-exclusive, to the extent
permitted by Law. The Agent may, and upon the request of the Required Banks
shall, exercise all post-default rights granted to the Agent and the Banks under
the Loan Documents or applicable Law.
9.3 Notice of Sale.
Any notice required to be given by the Agent of a sale, lease, or
other disposition of the Collateral or any other intended action by the Agent,
if given ten (10) days prior to such proposed action, shall constitute
commercially reasonable and fair notice thereof to the Borrower.
10. THE AGENT
In addition to the other provisions set forth in this Agreement,
the Agent's rights and obligations are described in and governed by the
provisions of Exhibit 10.
11. MISCELLANEOUS
11.1 Modifications, Amendments or Waivers.
With the written consent of the Required Banks, the Agent, acting
on behalf of all the Banks, and the Borrower, on behalf of the Loan Parties, may
from time to time enter into written agreements amending or changing any
provision of this Agreement or any other Loan Document or the rights of the
Banks or the Loan Parties hereunder or thereunder, or may grant written waivers
or consents to a departure from the due performance of the Obligations of the
Loan Parties hereunder or thereunder. Any such agreement, waiver or consent made
with such written consent shall be effective to bind all the Banks and the Loan
Parties; provided, that, without the written consent of all the Banks, no such
agreement, waiver or consent may be made which will:
11.1.1 Increase of Commitment; Extension of Expiration Date.
Increase the amount of the Revolving Credit Commitment
of any Bank hereunder (other than any increases of the Revolving Credit
Commitment of a Bank pursuant to Section 2.12 which each Bank expressly agrees
shall not require the consent of any Person other than the Borrower, the Agent
and the Bank increasing its Revolving Credit Commitment in accordance with
Section 2.12) or extend the Expiration Date;
11.1.2 Extension of Payment; Reduction of Principal Interest
or Fees; Modification of Terms of Payment.
Whether or not any Loans are outstanding, extend the
time for payment of principal or interest of any Loan (excluding the due date of
any mandatory prepayment of a Loan or any mandatory Commitment reduction in
connection with such a mandatory prepayment hereunder except for mandatory
reductions of the Commitments on the Expiration Date), the
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Commitment Fee or any other fee payable to any Bank, or reduce the principal
amount of or the rate of interest borne by any Loan or reduce the Commitment Fee
or any other fee payable to any Bank;
11.1.3 Release of Collateral or Guarantor.
Except for sales of assets permitted by Section 8.2.7
[Disposition of Assets or Subsidiaries] and except for the release of liens in
accordance with the Security Agreement on cash securing the Line of Credit
Facility (which releases are permitted in accordance with Section 11.20 without
consent of any Bank), release any Pledged Collateral or Collateral consisting of
substantially all of the assets of any Loan Party, any Guarantor from its
Obligations under the Guaranty Agreement or any other security for any of the
Loan Parties' Obligations; or
11.1.4 Miscellaneous.
Amend Section 5.2 [Pro Rata Treatment of Banks],
Paragraphs 6 or 13 of Exhibit 10 [Exculpatory Provisions, Etc.; Equalization of
Banks] or this Section 11.1, alter any provision regarding the pro rata
treatment of the Banks, change the definition of Required Banks, or change any
requirement providing for the Banks or the Required Banks to authorize the
taking of any action hereunder;
provided, further, that no agreement, waiver or consent which would modify the
interests, rights or obligations of the Agent in its capacity as Agent or as the
issuer of Letters of Credit shall be effective without the written consent of
the Agent.
11.2 No Implied Waivers; Cumulative Remedies; Writing Required.
No course of dealing and no delay or failure of the Agent or any
Bank in exercising any right, power, remedy or privilege under this Agreement or
any other Loan Document shall affect any other or future exercise thereof or
operate as a waiver thereof, nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power,
remedy or privilege preclude any further exercise thereof or of any other right,
power, remedy or privilege. The rights and remedies of the Agent and the Banks
under this Agreement and any other Loan Documents are cumulative and not
exclusive of any rights or remedies which they would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of any Bank of
any breach or default under this Agreement or any such waiver of any provision
or condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.
11.3 Reimbursement and Indemnification of Banks by the Borrower; Taxes.
The Borrower agrees unconditionally upon demand to pay or
reimburse to each Bank (other than the Agent, as to which the Borrower's
Obligations are set forth in Paragraph 5 of Exhibit 10 [Reimbursement of Agent
By Borrower, Etc.]) and to save such Bank harmless against (i) liability for the
payment of all reasonable out-of-pocket costs, expenses and disbursements
(including fees and expenses of counsel (including allocated costs of staff
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counsel) for each Bank except with respect to (a) and (b) below), incurred by
such Bank (a) in connection with the administration and interpretation of this
Agreement, and other instruments and documents to be delivered hereunder, (b)
relating to any amendments, waivers or consents pursuant to the provisions
hereof, (c) in connection with the enforcement of this Agreement or any other
Loan Document, or collection of amounts due hereunder or thereunder or the proof
and allowability of any claim arising under this Agreement or any other Loan
Document, whether in bankruptcy or receivership proceedings or otherwise, and
(d) in any workout or restructuring or in connection with the protection,
preservation, exercise or enforcement of any of the terms hereof or of any
rights hereunder or under any other Loan Document or in connection with any
foreclosure, collection or bankruptcy proceedings, or (ii) all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against such Bank, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by such Bank hereunder or thereunder, provided that
the Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (A) if the same results from such Bank's gross
negligence or willful misconduct, or (B) if the Borrower was not given notice of
the subject claim and the opportunity to participate in the defense thereof, at
its expense (except that the Borrower shall remain liable to the extent such
failure to give notice does not result in a loss to the Borrower), or (C) if the
same results from a compromise or settlement agreement entered into without the
consent of the Borrower, which shall not be unreasonably withheld. The Banks
will attempt to minimize the fees and expenses of legal counsel for the Banks
which are subject to reimbursement by the Borrower hereunder by considering the
usage of one law firm to represent the Banks and the Agent if appropriate under
the circumstances. The Borrower agrees unconditionally to pay all stamp,
document, transfer, recording or filing taxes or fees and similar impositions
now or hereafter determined by the Agent or any Bank to be payable in connection
with this Agreement or any other Loan Document, and the Borrower agrees
unconditionally to save the Agent and the Banks harmless from and against any
and all present or future claims, liabilities or losses with respect to or
resulting from any omission to pay or delay in paying any such taxes, fees or
impositions.
11.4 Holidays.
Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on the next
Business Day and such extension of time shall be included in computing interest
and fees, except that the Loans shall be due on the Business Day preceding the
Expiration Date if the Expiration Date is not a Business Day. Whenever any
payment or action to be made or taken hereunder (other than payment of the
Loans) shall be stated to be due on a day which is not a Business Day, such
payment or action shall be made or taken on the next following Business Day, and
such extension of time shall not be included in computing interest or fees, if
any, in connection with such payment or action.
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11.5 Funding by Branch, Subsidiary or Affiliate.
11.5.1 Actual Funding.
Each Bank shall have the right from time to time to make or
maintain any Loan by arranging for a branch, Subsidiary or Affiliate of such
Bank to make or maintain such Loan subject to the last sentence of this Section
11.5.1. If any Bank causes a branch, Subsidiary or Affiliate to make or maintain
any part of the Loans hereunder, all terms and conditions of this Agreement
shall, except where the context clearly requires otherwise, be applicable to
such part of the Loans to the same extent as if such Loans were made or
maintained by such Bank, but in no event shall any Bank's use of such a branch,
Subsidiary or Affiliate to make or maintain any part of the Loans hereunder
cause such Bank or such branch, Subsidiary or Affiliate to incur any cost or
expenses payable by the Borrower hereunder or require the Borrower to pay any
other compensation to any Bank (including any expenses incurred or payable
pursuant to Section 5.6 [Additional Compensation in Certain Circumstances])
which would otherwise not be incurred; provided, further, that no Bank shall be
relieved of its obligations as a result of any arrangement permitted by this
Section 11.5.1.
11.6 Notices.
All notices, requests, demands, directions and other
communications (as used in this Section 11.6, collectively referred to as
"notices") given to or made upon any party hereto under the provisions of this
Agreement shall be by telephone or in writing (including telex or facsimile
communication) unless otherwise expressly permitted hereunder and shall be
delivered or sent by telex or facsimile to the respective parties at the
addresses and numbers set forth under their respective names on Schedule 1.1(B)
hereof or in accordance with any subsequent unrevoked written direction from any
party to the others. All notices shall, except as otherwise expressly herein
provided, be effective (a) in the case of telex or facsimile, when received, (b)
in the case of hand-delivered notice, when hand-delivered, (c) in the case of
telephone, when telephoned, provided, however, that in order to be effective,
telephonic notices must be confirmed in writing no later than the next day by
letter, facsimile or telex, (d) if given by mail, four (4) days after such
communication is deposited in the mail with first-class postage prepaid, return
receipt requested, and (e) if given by any other means (including by air
courier), when delivered; provided, that notices to the Agent shall not be
effective until received. Any Bank giving any notice to any Loan Party shall
simultaneously send a copy thereof to the Agent, and the Agent shall promptly
notify the other Banks of the receipt by it of any such notice.
11.7 Severability.
The provisions of this Agreement are intended to be severable. If
any provision of this Agreement shall be held invalid or unenforceable in whole
or in part in any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without in
any manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
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11.8 Governing Law.
Each Letter of Credit, Section 2.9 [Letter of Credit Subfacility]
and Exhibit 2.9 shall be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be revised or amended from time to time,
and to the extent not inconsistent therewith, the internal laws of the
Commonwealth of Pennsylvania without regard to its conflict of laws principles
and the balance of this Agreement shall be deemed to be a contract under the
Laws of the Commonwealth of Pennsylvania and for all purposes shall be governed
by and construed and enforced in accordance with the internal laws of the
Commonwealth of Pennsylvania without regard to its conflict of laws principles.
11.9 Prior Understanding.
This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the transactions provided for herein and therein,
including any prior confidentiality agreements and commitments.
11.10 Duration; Survival.
All representations and warranties of the Borrower contained
herein or made in connection herewith shall survive the making of Loans and
issuance of Letters of Credit and shall not be waived by the execution and
delivery of this Agreement, any investigation by the Agent or the Banks, the
making of Loans, issuance of Letters of Credit, or payment in full of the Loans.
All covenants and agreements of the Borrower contained in Sections 8.1
[Affirmative Covenants], 8.2 [Negative Covenants] and 8.3 [Reporting
Requirements] and Exhibit 8.3 herein shall continue in full force and effect
from and after the date hereof so long as the Borrower may borrow or request
Letters of Credit hereunder and until termination of the Commitments and payment
in full of the Loans and expiration or termination of all Letters of Credit. All
covenants and agreements of the Borrower contained herein relating to the
payment of principal, interest, premiums, additional compensation or expenses
and indemnification, including those set forth in the Notes, Section 5
[Payments], Paragraphs 5 and 7 of Exhibit 10 [Reimbursement of Agent by
Borrower, Etc.; Reimbursement of Agent by Banks, Etc.] and 11.3 [Reimbursement
of Banks by Borrower; Etc.], shall survive payment in full of the Loans,
expiration or termination of the Letters of Credit and termination of the
Commitments.
11.11 Intentionally Omitted.
11.12 Successors and Assigns.
(i) This Agreement shall be binding upon and shall inure to
the benefit of the Banks, the Agent, the Borrower and its Subsidiaries and their
respective successors and assigns, except that the Borrower may not may assign
or transfer any of its rights and Obligations hereunder or any interest herein.
Each Bank may, at its own cost, make assignments of or sell participations in
all or any part of its Commitments and the Loans made by it to one or more banks
or other entities, subject to the consent of the Borrower and the Agent with
respect to any
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assignee, such consent not to be unreasonably withheld, provided that (1) no
consent of the Borrower shall be required (A) if an Event of Default exists and
is continuing, or (B) in the case of an assignment by a Bank to an Affiliate of
such Bank, and (2) any assignment by a Bank to a Person other than an Affiliate
of such Bank may not be made in amounts less than the lesser of $2,500,000 or
the amount of the assigning Bank's Commitment. In the case of an assignment,
upon receipt by the Agent of the Assignment and Assumption Agreement, the
assignee shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights, benefits and obligations as it would have if it had
been a signatory Bank hereunder, the Commitments shall be adjusted accordingly,
and upon surrender of any Note subject to such assignment, the Borrower shall
execute and deliver a new Note to the assignee in an amount equal to the amount
of the Revolving Credit Commitment assumed by it and a new Revolving Credit Note
to the assigning Bank in an amount equal to the Revolving Credit Commitment
retained by it hereunder. Any Bank which assigns any or all of its Commitment or
Loans to a Person other than an Affiliate of such Bank shall pay to the Agent a
service fee in the amount of $3,500 for each assignment. In the case of a
participation, the participant shall only have the rights specified in Section
9.2.3 [Set-off] (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto and not to include any voting rights
except with respect to changes of the type referenced in Sections 11.1.1
[Increase of Commitment, Etc.], 11.1.2 [Extension of Payment, Etc.], or 11.1.3
[Release of Collateral or Guarantor]), all of such Bank's obligations under this
Agreement or any other Loan Document shall remain unchanged, and all amounts
payable by any Loan Party hereunder or thereunder shall be determined as if such
Bank had not sold such participation.
(ii) Any assignee or participant which is not incorporated
under the Laws of the United States of America or a state thereof shall deliver
to the Borrower and the Agent the form of certificate described in Section 11.18
[Tax Withholding Clause] relating to federal income tax withholding. Each Bank
may furnish any publicly available information concerning any Loan Party or its
Subsidiaries and any other information concerning any Loan Party or its
Subsidiaries in the possession of such Bank from time to time to assignees and
participants (including prospective assignees or participants), provided that
such assignees and participants agree to be bound by the provisions of Section
11.13 [Confidentiality].
(iii) Notwithstanding any other provision in this Agreement,
any Bank may at any time pledge or grant a security interest in all or any
portion of its rights under this Agreement, its Note and the other Loan
Documents to any Federal Reserve Bank in accordance with Regulation A of the FRB
or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to or consent
of the Borrower or the Agent. No such pledge or grant of a security interest
shall release the Transferor Bank of its obligations hereunder or under any
other Loan Document.
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11.13 Confidentiality.
11.13.1 General.
The Agent and the Banks each agree to keep confidential
all information obtained from any Loan Party or its Subsidiaries which is
nonpublic and confidential or proprietary in nature (including any information
the Borrower specifically designates as confidential), except as provided below,
and to use such information only in connection with their respective capacities
under this Agreement and for the purposes contemplated hereby. The Agent and the
Banks shall be permitted to disclose such information (i) to outside legal
counsel, accountants and other professional advisors who need to know such
information in connection with the administration and enforcement of this
Agreement, subject to agreement of such Persons to maintain the confidentiality,
(ii) to assignees and participants as contemplated by Section 11.12, (iii) to
the extent requested by any bank regulatory authority or, with notice to the
Borrower, as otherwise required by applicable Law or by any subpoena or similar
legal process, or in connection with any investigation or proceeding arising out
of the transactions contemplated by this Agreement, (iv) if it becomes publicly
available other than as a result of a breach of this Agreement or becomes
available from a source not known to be subject to confidentiality restrictions,
or (v) if the Borrower shall have consented to such disclosure.
11.13.2 Sharing Information With Affiliates of the Banks.
The Borrower, on its own behalf and on behalf of each
other Loan Party, acknowledges that from time to time financial advisory,
investment banking and other services may be offered or provided to the Borrower
or one or more of its Affiliates (in connection with this Agreement or
otherwise) by any Bank or by one or more Subsidiaries or Affiliates of such Bank
and the Borrower, on its own behalf and on behalf of each other Loan Party,
hereby authorizes each Bank to share any information delivered to such Bank by
such Loan Party and its Subsidiaries pursuant to this Agreement, or in
connection with the decision of such Bank to enter into this Agreement, to any
such Subsidiary or Affiliate of such Bank, it being understood that any such
Subsidiary or Affiliate of any Bank receiving such information shall be bound by
the provisions of Section 11.13.1 as if it were a Bank hereunder. Such
authorization shall survive the repayment of the Loans and other Obligations and
the termination of the Commitments.
11.14 Counterparts.
This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.
11.15 Agent's or Bank's Consent.
Whenever the Agent's or any Bank's consent is required to be
obtained under this Agreement or any of the other Loan Documents as a condition
to any action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole
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and absolute discretion and to condition its consent upon the giving of
additional collateral, the payment of money or any other matter.
11.16 Exceptions.
The representations, warranties and covenants contained herein
shall be independent of each other, and no exception to any representation,
warranty or covenant shall be deemed to be an exception to any other
representation, warranty or covenant contained herein unless expressly provided,
nor shall any such exceptions be deemed to permit any action or omission that
would be in contravention of applicable Law.
11.17 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
THE BORROWER HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURT OF COMMON PLEAS OF ALLEGHENY COUNTY AND THE UNITED
STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO THE
BORROWER AT THE ADDRESSES PROVIDED FOR IN SECTION 11.6 AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. THE BORROWER WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS
PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE. THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT
OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE COLLATERAL TO
THE FULL EXTENT PERMITTED BY LAW.
11.18 Tax Withholding Clause.
Each Bank or assignee or participant of a Bank that is not
incorporated under the Laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower and the Agent two (2) duly
completed copies of the following: (i) Internal Revenue Service Form W-9, 4224
or 1001, or other applicable form prescribed by the Internal Revenue Service,
certifying that such Bank, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes, or is subject to such tax
at a reduced rate under an applicable tax treaty, or (ii) Internal Revenue
Service Form W-8 or other applicable form or a certificate of such Bank,
assignee or participant indicating that no such exemption or reduced rate is
allowable with respect to such payments. Each Bank, assignee or participant
required to deliver to the Borrower and the Agent a form or certificate pursuant
to the preceding sentence shall deliver such form or certificate as follows: (A)
each Bank which is a party hereto on the Closing Date shall deliver such form or
certificate at least five (5) Business Days prior to the first date on which any
interest or fees are payable by the Borrower hereunder for the account of such
Bank; (B) each assignee or
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participant shall deliver such form or certificate at least five (5) Business
Days before the effective date of such assignment or participation (unless the
Agent in its sole discretion shall permit such assignee or participant to
deliver such form or certificate less than five (5) Business Days before such
date in which case it shall be due on the date specified by the Agent). Each
Bank, assignee or participant which so delivers a Form W-8, W-9, 4224 or 1001
further undertakes to deliver to each of the Borrower and the Agent two (2)
additional copies of such form (or a successor form) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Agent, either certifying that such Bank,
assignee or participant is entitled to receive payments under this Agreement and
the other Loan Documents without deduction or withholding of any United States
federal income taxes or is subject to such tax at a reduced rate under an
applicable tax treaty or stating that no such exemption or reduced rate is
allowable. The Agent shall be entitled to withhold United States federal income
taxes at the full withholding rate unless the Bank, assignee or participant
establishes an exemption or that it is subject to a reduced rate as established
pursuant to the above provisions.
11.19 Joinder of Guarantors; Pledge of Stock and Security Interest in
Assets of Subsidiaries.
The Borrower shall cause:
(1) each Significant Subsidiary of the Borrower to
execute and deliver to the Agent a Guarantor Joinder in substantially the form
attached hereto as Exhibit 1.1(G)(1) pursuant to which it shall join as a
Guarantor each of the documents (including the Intercompany Subordination
Agreement and the Security Agreement) to which the Guarantors are parties;
(2) each Significant Subsidiary to execute and deliver
the Lockbox Agreement and all other documents necessary to grant and perfect
Prior Security Interests to the Agent for the benefit of the Banks in all
Collateral held by such Subsidiary;
(3) the equity interests of each Significant Subsidiary
to be pledged on a first priority perfected basis to the Agent for the benefit
of the Banks;
(4) each Subsidiary, if required by Section 8.2.1., to execute
and deliver the Intercompany Subordination Agreement and
(5) the Borrower shall cause each Subsidiary to execute
and deliver documents in the forms described in Section 7.1 [First Loans],
modified as appropriate to relate to the matters described in clauses (1), (2),
(3) and (4) of this Section, and if requested by the Agent, shall cause
Borrower's counsel to deliver an opinion in substantially the form required by
Section 7.1.4. The Borrower shall cause the delivery of such Guarantor Joinder,
Pledge Agreement Lockbox Agreement, other Loan Documents and related documents
to the Agent within ten (10) Business Days after a Subsidiary becomes a
Significant Subsidiary or after such Significant Subsidiary is otherwise formed
or acquired in accordance with a transaction permitted by this Agreement. The
Borrower shall cause a Subsidiary (other than a Significant
-65-
73
Subsidiary) to execute a Joinder to Intercompany Subordination Agreement prior
to such Subsidiary making a loan to a Loan Party permitted by this Agreement.
11.20 Release of Certain Collateral.
Each Bank expressly authorizes the Agent (without any consent of
or notice to any Bank) to release from Collateral: (a) assets sold, leased,
transferred or disposed of as permitted, by Section 8.2.7 [Disposition of Assets
or Subsidiaries] and, (b) in accordance with and as permitted by the Security
Agreement, cash securing the Line of Credit Facility.
[SIGNATURE PAGES FOLLOW]
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74
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto
duly authorized, have executed this Agreement as of the day and year first above
written.
ATTEST: FREEMARKETS, INC.
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
---------------------------------- ---------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxx X. Xxxxxx
----------------------------- -------------------------------
Title Senior V.P. and CFO Title: President and Chief
---------------------------- Operating Officer
------------------------------
[Seal]
PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Title: Vice President
------------------------------
SILICON VALLEY BANK, individually
and as Syndication Agent
By: /s/ X. X. Xxxxxxxx
---------------------------------
Title: Vice President
------------------------------
75
SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Page 1 of 2
PART 1 - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES TO BANKS
AMOUNT OF
COMMITMENT FOR
REVOLVING
BANK CREDIT LOANS RATABLE SHARE
---- ------------- -------------
Name: PNC Bank, National Association
Address: c/o VentureBank@PNC
USX Tower
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Telephone (000) 000-0000
Telecopy: (000) 000-0000 $10,000,000 50%
Name: Silicon Valley Bank
Address: 5 Radnor Corporate Center,
Xxxxx 000
000 Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attention: Ash Lilani
Telephone: (000) 000-0000
Telecopy: (000) 000-0000 $10,000,000 50%
----------- ----
TOTAL $20,000,000 100%
----- ----------- ----
76
SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Page 2 of 2
AGENT
Name: PNC Bank, National Association
Address: c/o VentureBank@PNC
USX Tower
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
PART 2 - ADDRESSES FOR NOTICES TO BORROWER AND GUARANTOR:
BORROWER:
Name: FreeMarkets, Inc.
Address: FreeMarkets Center, 000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: X.X. Xxxxxxx, Treasury Manager
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
GUARANTOR:
Name: FreeMarkets Investment Company, Inc.
Address: 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: X. X. Xxxxxxx, Vice President & Secretary
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
