XXXXXXX NAVIGATION LIMITED
EXHIBIT 10.58
LOAN AGREEMENT
BY AND BETWEEN
XXXXXXX NAVIGATION LIMITED
AND
FLEET NATIONAL BANK, AS AGENT AND A LENDER
AND
BANKBOSTON, N.A., AS SYNDICATION AGENT AND A LENDER
AND
SANWA BANK CALIFORNIA AS A LENDER
AND
ABN AMRO BANK N.V. AS A LENDER
AND
THE OTHER FINANCIAL INSTITUTIONS
HEREAFTER PARTIES HERETO
$50,000,000 UNSECURED REVOLVING CREDIT LOAN
August 27, 1997
20
INDEX TO
LOAN AGREEMENT
Page
ARTICLE 1. DEFINITIONS AND ACCOUNTING AND OTHER TERMS.........................26
Section 1.1. Certain Defined Terms............................................26
Section 1.2. Accounting Terms.................................................36
Section 1.3. Other Terms......................................................36
ARTICLE 2. AMOUNT AND TERMS OF THE LOANS......................................37
Section 2.1. The Revolving Credit Loans.......................................37
Section 2.2. Interest and Fees on the Loans...................................37
Section 2.2.1. Interest.......................................................38
Section 2.2.2. Fees ........................................................38
Section 2.2.2.1. Up-Front Fees................................................38
Section 2.2.2.2. Unused Fees..................................................38
Section 2.2.2.3. Other Fees...................................................39
Section 2.2.3. Increased Costs - Capital......................................39
Section 2.3. Notations........................................................40
Section 2.4. Computation of Interest..........................................40
Section 2.5. Time of Payments and Prepayments in Immediately Available Funds..40
Section 2.5.1. Time ........................................................40
Section 2.5.2. Setoff, etc....................................................41
Section 2.5.3. Unconditional Obligations and No Deductions....................42
Section 2.6. Prepayment and Certain Payments..................................42
Section 2.6.1. Mandatory Payments.............................................42
Section 2.6.2. Voluntary Prepayments..........................................42
Section 2.6.3. Prepayment of Libor Loans......................................42
Section 2.6.4. Permanent Reduction of Commitment..............................42
Section 2.7. Payment on Non-Business Days.....................................42
Section 2.8. Use of Proceeds..................................................42
Section 2.9. Special Libor Loan Provisions....................................42
Section 2.9.1. Requests.......................................................43
Section 2.9.2. Libor Loans Unavailable........................................43
Section 2.9.3. Libor Lending Unlawful.........................................43
21
Section 2.9.4. Additional Costs on Libor Loans................................44
Section 2.9.5. Libor Funding Losses...........................................45
Section 2.9.6. Banking Practices..............................................46
Section 2.9.7. Borrower's Options on Unavailability or Increased Cost of
Libor Loans....................................................46
Section 2.9.8. Assumptions Concerning Funding of Libor Loans..................47
ARTICLE 3. CONDITIONS OF LENDING..............................................47
Section 3.1. Conditions Precedent to the Commitment and to all Loans..........47
Section 3.1.1. The Commitment and Initial Loans...............................47
Section 3.1.2. The Commitment and the Loans...................................49
ARTICLE 4. REPRESENTATIONS AND WARRANTIES.....................................49
Section 4.1. Representations and Warranties of the Borrower...................49
Section 4.1.1. Organization and Existence.....................................50
Section 4.1.2. Authorization and Absence of Defaults..........................50
Section 4.1.3. Acquisition of Consents........................................50
Section 4.1.4. Validity and Enforceability....................................50
Section 4.1.5. Financial Information..........................................50
Section 4.1.6. No Litigation..................................................51
Section 4.1.7. Regulation U...................................................51
Section 4.1.8. [Intentionally omitted.].......................................51
Section 4.1.9. Taxes ........................................................51
Section 4.1.10. ERISA 52
Section 4.1.11. Ownership of Properties......................................52
Section 4.1.12. Accuracy of Representations and Warranties....................52
Section 4.1.13. No Investment Company.........................................52
Section 4.1.14. Solvency, etc.................................................52
Section 4.1.15. Approvals.....................................................53
Section 4.1.16. [Intentionally omitted.]......................................53
Section 4.1.17. Compliance with Laws, etc.....................................53
Section 4.1.18. Principal Place of Business; Books and Records................53
Section 4.1.19. Subsidiaries..................................................53
Section 4.1.20. [Intentionally omitted.]......................................53
Section 4.1.21. Environmental Compliance......................................53
Section 4.1.22. Material Agreements, etc......................................54
Section 4.1.23. Patents, Trademarks and Other Property Rights.................55
ARTICLE 5. COVENANTS OF THE BORROWER..........................................55
Section 5.1. Affirmative Covenants of the Borrower Other than
Reporting Requirements...........................................55
Section 5.1.1. Payment of Taxes, etc..........................................55
Section 5.1.2. Insurance......................................................55
Section 5.1.3. Preservation of Existence, etc.................................55
Section 5.1.4. Compliance with Laws, etc......................................56
Section 5.1.5. Visitation Rights..............................................56
Section 5.1.6. Keeping of Records and Books of Account........................56
Section 5.1.7. Maintenance of Properties, etc.................................56
Section 5.1.8. Post-Closing Items.............................................56
Section 5.1.9. Other Documents, etc...........................................56
22
Section 5.1.10. Minimum Fixed Coverage Ratio..................................56
Section 5.1.11. Minimum Consolidated Tangible Net Worth.......................56
Section 5.1.12. Maximum Ratio of Total Indebtedness for Borrowed Money
to EBITDA.....................................................57
Section 5.1.13. Minimum Quick Ratio...........................................57
Section 5.1.14. Officer's Certificates and Requests...........................57
Section 5.1.15. Depository....................................................57
Section 5.1.16. Additional Assurances.........................................57
Section 5.1.17. Environmental Compliance......................................57
Section 5.1.18. Remediation...................................................58
Section 5.1.19. Site Assessments..............................................58
Section 5.1.20. Indemnity.....................................................58
Section 5.2. Negative Covenants of the Borrower...............................58
Section 5.2.1. Liens, etc.....................................................58
Section 5.2.2. Assumptions, Guaranties, etc. of Indebtedness of Other
Persons.......................................................60
Section 5.2.3. Acquisitions, Dissolution, etc.................................60
Section 5.2.4. Disposition of Assets..........................................61
Section 5.2.5. Change in Nature of Business...................................61
Section 5.2.6. Sale and Leaseback.............................................61
Section 5.2.7. Indebtedness...................................................61
Section 5.2.8. Overall Aggregate Cap..........................................62
Section 5.2.9. Minimum Net Income.............................................62
Section 5.2.10. Dividends, Payments and Distributions.........................63
Section 5.2.11. Investments in or to Other Persons............................63
Section 5.2.12. Transactions with Affiliates..................................63
Section 5.2.13. Change of Fiscal Year.........................................63
Section 5.2.14. [Intentionally omitted.]......................................63
Section 5.2.15. Compliance with ERISA.........................................63
Section 5.2.16. Hazardous Waste...............................................64
Section 5.2.17 Other Restrictions on Liens....................................64
Section 5.3. Reporting Requirements...........................................64
ARTICLE 6. EVENTS OF DEFAULT..................................................66
Section 6.1. Events of Default................................................66
ARTICLE 7. REMEDIES OF LENDERS................................................68
ARTICLE 8. AGENT 69
Section 8.1. Appointment......................................................69
Section 8.2. Powers; General Immunity.........................................69
Section 8.2.1. Duties Specified...............................................69
Section 8.2.2. No Responsibility For Certain Matters..........................69
Section 8.2.3. Exculpatory Provisions.........................................70
Section 8.2.4. Agent Entitled to Act as Lender................................70
Section 8.3. Representations and Warranties; No Responsibility for
Appraisal of Creditworthiness...................................70
Section 8.4. Right to Indemnity...............................................70
Section 8.5. Payee of Note Treated as Owner...................................71
23
Section 8.6. Resignation by Agent.............................................71
Section 8.7. Successor Agent..................................................72
Section 8.8. Syndication Agent................................................72
ARTICLE 9. MISCELLANEOUS......................................................72
Section 9.1. Consent to Jurisdiction and Service of Process...................72
Section 9.2. Rights and Remedies Cumulative...................................73
Section 9.3. Delay or Omission not Waiver.....................................73
Section 9.4. [Intentionally omitted.].........................................73
Section 9.5. Amendments, etc..................................................73
Section 9.6. Addresses for Notices, etc.......................................74
Section 9.7. Costs, Expenses and Taxes........................................75
Section 9.8. Participations...................................................75
Section 9.9. Binding Effect; Assignment.......................................75
Section 9.10. Actual Knowledge................................................76
Section 9.11. Substitutions and Assignments...................................76
Section 9.12. Payments Pro Rata...............................................78
Section 9.13. Indemnification.................................................78
Section 9.14. Governing Law...................................................79
Section 9.15. Severability of Provisions......................................79
Section 9.16. Headings........................................................79
Section 9.17. Counterparts....................................................79
24
SCHEDULE OF EXHIBITS
EXHIBIT 1.1 - SUBSIDIARIES
EXHIBIT 1.4 - FORM OF INTEREST RATE ELECTION AND REQUEST
EXHIBIT 1.5 - FORM OF REVOLVING CREDIT NOTE
EXHIBIT 1.8 - PERMITTED ENCUMBRANCES
EXHIBIT 1.9 - PRO RATA SHARES
EXHIBIT 3.1.1.8 - PERMITTED INDEBTEDNESS AND CAPITALIZED LEASES
EXHIBIT 3.1.1.10 - FORM OF COMPLIANCE CERTIFICATE
EXHIBIT 4.1.2 - AUTHORIZATIONS
EXHIBIT 4.1.3 - CONSENTS
EXHIBIT 4.1.6 - LITIGATION
EXHIBIT 4.1.11 - PROPERTY EXCEPTIONS
EXHIBIT 4.1.21 - HAZARDOUS WASTE
EXHIBIT 4.1.22 - MATERIAL CONTRACTS
EXHIBIT 5.2.2 - GUARANTIES
EXHIBIT 5.2.12 - TRANSACTIONS WITH AFFILIATES
EXHIBIT 9.11.1 - FORM OF SUBSTITUTION AGREEMENT
25
LOAN AGREEMENT
XXXXXXX NAVIGATION LIMITED, a California corporation with a principal
place of business at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000
(hereinafter the "Borrower"), FLEET NATIONAL BANK, a national banking
association organized under the laws of the United States and having an office
at 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter sometimes the
"Agent", sometimes "Fleet" and sometimes a "Lender") as Agent for itself and
each of the other Lenders who now and/or hereafter become parties to this
Agreement pursuant to the terms of Section 9.11 hereof, and a Lender,
BANKBOSTON, N.A., a national banking association, organized under the laws of
the United States and having a head office at Xxx Xxxxxxx Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter sometimes the "Syndication Agent",
sometimes "BankBoston" and sometimes a "Lender"), SANWA BANK CALIFORNIA, a
banking corporation organized under the laws of the State of California and
having an office at 000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxxxxxxxxx 00000
(hereinafter sometimes "Sanwa" and sometimes a "Lender") and ABN AMRO BANK N.V.,
a Netherlands banking corporation and having an office at 000 Xxxxxxxxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 (hereinafter sometimes "ABN" and
sometimes a "Lender") as Lenders, hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND ACCOUNTING AND OTHER TERMS
Section 1.1. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Adjusted Libor Rate" means, with respect to any Libor Loan to be made
by the Lenders for the Interest Period applicable to such Libor Loan, the
interest rate per annum determined by the Agent (fixed throughout such Interest
Period (subject to adjustments for the Libor Rate Reserve Percentage)) and
rounded upwards, if necessary, to the next 1/16 of 1%) which is equal to the
quotient of (i) the rate of interest determined by the Agent to be the average
of the interest rates per annum at which Dollar deposits in immediately
available funds are offered to each Reference Lender by first-class banks in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the Business Day on which such Interest Period begins, in an
amount approximately equal to the principal amount of such Libor Loan, for a
period of time equal to such Interest Period and (ii) a number equal to the
number one minus the Libor Rate Reserve Percentage. The "Libor Rate Reserve
Percentage" applicable to any Interest Period means the average of the maximum
effective rates (expressed as a decimal) of the statutory reserve requirements
(without duplication, but including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to each Reference Lender during such
Interest Period under regulations of the Board of Governors of the Federal
Reserve System (or any successor), including without limitation Regulation D or
any other regulation dealing with maximum reserve requirements which are
applicable to each Reference Lender with respect to its "Eurocurrency
Liabilities", as that term may be defined from time to time by the Board of
Governors of the Federal Reserve System (or any successor) or are otherwise
imposed by the Board of Governors of the Federal Reserve System (or any
successor) and which in any other respect relate directly to the funding of
loans bearing interest at rates based on the interest rates at which Dollar
deposits in immediately available funds are offered to banks by first-class
banks in the London interbank market. If any Reference Lender fails to provide
26
its offered quotation to the Agent, the Adjusted Libor Rate shall be determined
on the basis of the offered quotation of the other Reference Lender. The
Adjusted Libor Rate shall be adjusted automatically on and as of the effective
date of any change in the Libor Rate Reserve Percentage.
"Advance" and "Advances" means the funding by any Lender of all or a
portion of the Loans in accordance with this Agreement.
"Affiliate" means any Person (other than a Subsidiary) which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, the Borrower. For purposes of this definition, a Person shall be deemed to
be "controlled by" the Borrower if the Borrower possesses, directly or
indirectly, power either to (i) vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or (ii)
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise, and the legal representative, successor or
assign of any such Person.
"Agent" means Fleet or any other Person which is at the time in question
serving as the agent under the terms of Article 8 hereof and the other Financing
Documents.
"Agreement" means this loan agreement, as the same may from time to time be
amended.
"A.M." means a time from and including 12 o'clock midnight to and excluding
12 o'clock noon on any Business Day using
Eastern Standard (or Daylight Savings) time.
"Applicable Margin" means for each Libor Loan, one and one-quarter percent
(1.25%) per annum; provided, however, that if, at any time on or after the
receipt by the Agent of the quarterly financial statements for the Borrower's
September 30, 1997 fiscal quarter and each subsequent Borrower fiscal quarter
provided to the Agent by the Borrower pursuant to Section 5.3.3 hereof, the
ratio of (a) total Indebtedness for Borrowed Money of the Borrower and its
Subsidiaries on a consolidated basis as of the last day of the most recently
ended fiscal quarter of the Borrower to (b) EBITDA for such fiscal quarter and
for the three immediately preceding Borrower fiscal quarters, (i) is greater
than 2.0:1.0 and if and so long as no Event of Default or Default exists and is
continuing, the Applicable Margin shall be one and three-quarters percent
(1.75%), or (ii) is less than less than or equal to 1.0:1.0 and if and so long
as no Event of Default or Default exists and is continuing, the Applicable
Margin shall, subject to the last sentence of this definition, be one percent
(1%); provided further, however, that if on any date the Borrower would be
entitled to an Applicable Margin other than 1.75% except for the fact that a
Default exists, the Applicable Margin shall not change until the first to occur
of (a) such Default becoming an Event of Default and (b) waiver or cure of such
Default, at which time the Applicable Margin shall be adjusted or remain the
same in accordance with the provisions of this definition preceding this further
proviso.
Any change in the Applicable Margin required pursuant to the foregoing
shall become effective on the fifth Business Day after the Agent receives the
Borrower's financial statement for the Borrower's fiscal quarter or year-end, as
the case may be, in question; provided, however, that each of the
above-referenced interest rates shall remain in effect only so long as Borrower
qualifies therefor and provided further, however, that interest rate reductions
shall become final only on the basis of Borrower's annual audited financial
statements and in the event that such annual audited financial statements
establish that the Borrower was not entitled to a rate reduction which was
previously granted, the Borrower shall, upon written demand by the Agent, repay
27
to the Agent for the account of each Lender an amount equal to the excess of
interest at the rate which should have been charged based on such annual audited
financial statements and the rate actually charged on the basis of Borrower's
quarterly financial statement(s) (provided that in the event of a dispute as to
the appropriate fiscal quarter as to which any adjustment should be allocated,
the decision of the independent accountants of the Borrower shall be made in
accordance with GAAP and shall be binding upon the Agent, the Lenders and the
Borrower absent manifest error); and provided further, however, that in the
event that Borrower fails to provide any financial statement on a timely basis
in accordance with Section 5.3.3, any interest rate increase payable as a result
thereof shall be retroactively effective to the date on which the financial
statement in question should have been received by the Agent in accordance with
Section 5.3.3, and the Borrower shall pay any amount due as a result thereof
upon written demand from the Agent. The Agent shall send the Borrower written
acknowledgment of each change in the Applicable Margin in accordance with the
Agent's customary procedures as in effect from time to time, but the failure to
send such acknowledgment shall have no effect on the effectiveness or
applicability of the foregoing provisions of this definition or Borrower's
obligations with respect to payment and calculation of interest on Libor Loans.
"Authorized Representative" means such senior personnel of the Borrower as
shall be duly authorized and designated in writing by the Borrower to execute
documents, instruments and agreements on its behalf and to perform the functions
of Authorized Representative under any of the Financing Documents.
"Borrowed Money" means any obligation to repay funded Indebtedness, any
Indebtedness evidenced by notes, bonds, debentures, guaranties or similar
obligations including without limitation the Loans and any obligation to pay
money under a conditional sale or other title retention agreement, the
capitalized amount of any Capitalized Lease Obligation, any reimbursement
obligation due and owing with respect to any letter of credit.
"Borrower" has the meaning assigned in the first paragraph of this
Agreement.
"Budget" has the meaning assigned to such term in Section 5.3.6.
"Business Condition" means the financial condition and condition of the
business and condition of the assets of a Person.
"Business Day" means (i) for all purposes other than as covered by clause
(ii) below, any day on which banks in Boston, Massachusetts, Chicago, Illinois
or New York, New York are not authorized or required by applicable law to close;
and (ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Libor Loans, any day which is a Business
Day described in clause (i) and which is also a day for trading by and between
banks in Dollar deposits in the London interbank market.
"Capital Expenditures" means all expenditures paid or incurred by the
Borrower or any Subsidiary in respect of (i) the acquisition, construction,
improvement or replacement of land, buildings, machinery, equipment, any other
fixed assets or leaseholds and (ii) to the extent related to and not included in
(i) above, materials, contract labor and direct labor, which expenditures have
been or should be, in accordance with GAAP, capitalized on the books of the
Borrower or such Subsidiary. Where a fixed asset is acquired by a lease which is
required to be capitalized pursuant to Statement of Financial Accounting
Standards number 13 or any successor thereto, the amount required to be
28
capitalized in accordance therewith shall be considered to be an expenditure in
the year such asset is first leased.
"Capitalized Lease Obligations" means all lease obligations which have been
or should be, in accordance with GAAP, capitalized on the books of the lessee.
"Cash Equivalent Investments" means any Investment in (i) direct
obligations of the United States or any agency, authority or instrumentality
thereof, or obligations guaranteed by the United States or any agency, authority
or instrumentality thereof, whether or not supported by the full faith and
credit of, a right to borrow from or the ability to be purchased by the United
States; (ii) commercial paper rated in the highest grade by a nationally
recognized statistical rating agency or which, if not rated, is issued or
guaranteed by any issuer with outstanding long-term debt rated A or better by
any nationally recognized statistical rating agency; (iii) demand and time
deposits with, and certificates of deposit and bankers acceptances issued by,
any office of the Agent, any Lender or any other bank or trust company which is
organized under the laws of the United States or any state thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000, the
outstanding long-term debt of which or of the holding company of which it is a
subsidiary is rated A or better by any nationally recognized statistical rating
agency; (iv) any short-term note which has a rating of MIG-2 or better by
Xxxxx'x Investors Service Inc. or a comparable rating from any other nationally
recognized statistical rating agency; (v) any municipal bond or other
governmental obligation (including without limitation any industrial revenue
bond or project note) which is rated A or better by any nationally recognized
statistical rating agency; (vi) any other obligation of any issuer, the
outstanding long-term debt of which is rated A or better by any nationally
recognized statistical rating agency; (vii) any repurchase agreement with any
financial institution described in clause (iii) above, relating to any of the
foregoing instruments and fully collateralized by such instruments; (viii)
shares of any open-end diversified investment company that has its assets
invested only in investments of the types described in clause (i) through (vii)
above at the time of purchase and which maintains a constant net asset value per
share; (ix) shares of any open-end diversified investment company registered
under the Investment Company Act of 1940, as amended, which maintains a constant
net asset value per share in accordance with regulations of the Securities &
Exchange Commission, has aggregate net assets of not less than $50,000,000 on
the date of purchase and either derives at least 95% of its gross income from
interest on or gains from the sale of investments of the type described in
clauses (i) through (vii), above or has at least 85% of the weighted average
value of its assets invested in investments of such types; provided that the
purchase of any shares in any particular investment company shall be limited to
an aggregate amount owned at any one time of $500,000. Each Cash Equivalent
Investment shall have a maturity of less than one year at the time of purchase;
provided that the maturity of any repurchase agreement shall be deemed to be the
repurchase date and not the maturity of the subject security and that the
maturity of any variable or floating rate note subject to prepayment at the
option of the holder shall be the period remaining (including any notice period
remaining) before the holder is entitled to prepayment; and (x) other
Investments property classified as "cash" or "cash equivalents" under GAAP and
made in accordance with the Borrower's investment policy approved by Borrower's
Board of Directors from time to time.
"Closing Date" means the date on which all of the conditions precedent set
forth in Section 3.1 of this Agreement have been satisfied and the initial
Advance is made under the Revolving Credit Loan in accordance with this
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
29
"Commitment" means the Lenders' several commitments to make or maintain the
Loans as set forth in Section 2.1 hereof in the maximum outstanding amount of
each Lender's Pro Rata Share of $50,000,000, as such amount may be reduced
pursuant to Section 2.6.4.
"Commonly Controlled Entity" means a Person, whether or not incorporated,
which is under common control with the Borrower within the meaning of section
414(b) or (c) of the Code.
"Consolidated Tangible Net Worth" means the excess of the total assets of
the Borrower and the Subsidiaries over Consolidated Total Liabilities,
excluding, however, from the determination of total assets the total book value
of all assets which would be classified as intangible assets under GAAP,
including, without limitation, goodwill, patents, trademarks, trade names,
copyrights and franchises, all determined on a consolidated basis in accordance
with GAAP.
"Consolidated Total Liabilities" means all liabilities of the Borrower and
the Subsidiaries which would, in accordance with GAAP on a consolidated basis,
be classified as liabilities of a corporation conducting a business the same as
or similar to that of the Borrower and any of the Subsidiaries, including,
without limitation, the capitalized amount of Capitalized Lease Obligations and
fixed prepayments of, and sinking fund payment and reserves with respect to,
Indebtedness.
"Current Liabilities" means all liabilities of the Borrower and the
Subsidiaries which would, in accordance with GAAP on a consolidated basis, be
classified as current liabilities of corporations conducting a business the same
as or similar to that of the Borrower and any Subsidiaries, including without
limitation, the capitalized amount of Capitalized Lease Obligations and fixed
prepayments of, and sinking fund payments and reserves with respect to,
Indebtedness, in each case required to be made within one year from the date of
determination.
"Default" means an event or condition which with the giving of notice or
lapse of time or both would become an Event of Default.
"Discharged Rights and Obligations" shall have the meaning assigned to such
term in Section 9.11.4.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means, for any fiscal period, Net Income plus, to the extent
accounted for in Net Income, Interest Expense, taxes, depreciation and
amortization for such period determined on an accrual and consolidated basis in
accordance with GAAP.
"ERISA" means the Employee Retirement Income Security Act of 1974 as
amended from time to time.
"Events of Default" has the meaning assigned to that term in Section 6.1 of
this Agreement.
"Exhibit" means, when followed by a letter, the exhibit attached to this
Agreement bearing that letter and by such reference fully incorporated in this
Agreement.
30
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/16th of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York, plus, one half of one percent (.50%);
provided that (i) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next succeeding Business
Day as so published, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Agent on such day on such transactions as determined
by the Agent in its discretion exercised in good faith.
"Financing Documents" means, collectively, this Agreement, each Note, the
Side Letter, the Post-Closing Letter, if any, any agreement with any Lender
providing any interest rate protection arrangement and each other agreement,
instrument or document now or hereafter executed in connection herewith or
therewith.
"Fixed Charge Coverage Ratio" means the ratio of (i) EBITDA to (ii) Total
Debt Service.
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States of America and consistently applied with past
financial statements of the Borrower adopting the same principles.
"Hazardous Substances " has the meaning set forth in Section 4.1.21.
"Indebtedness" means, without duplication for any Person, (i) all
indebtedness or other obligations of said Person for Borrowed Money or for the
deferred purchase price of property or services, including, without limitation,
all reimbursement obligations of said Person that are due and payable with
respect to standby and/or documentary letters of credit (ii) all indebtedness or
other obligations of any other Person ("Other Person") for Borrowed Money or for
the deferred purchase price of property or services, the payment or collection
of which said Person has guaranteed (except by reason of endorsement for deposit
or collection in the ordinary course of business) or in respect of which said
Person is liable, contingently or otherwise, including, without limitation,
liable by way of agreement to purchase or lease, to provide funds for payment,
to supply funds to purchase, sell or lease property or services primarily to
assure a creditor of such Other Person against loss or otherwise to invest in or
make a loan to the Other Person, or otherwise to assure a creditor of such Other
Person against loss, (iii) all indebtedness or other obligations of any Person
for Borrowed Money or for the deferred purchase price of property or services
secured by (or for which the holder of such indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in any property
owned by said Person, whether or not said Person has assumed or become liable
for the payment of such indebtedness or obligations, (iv) Capitalized Lease
Obligations of said Person and (v) obligations of such Person under contracts
pursuant to which such Person has agreed to purchase interest rate protection or
swap interest rate obligations.
"Interest Adjustment Date" means (i) as to any Prime Rate Loan to be
converted to a Libor Loan the Business Day elected by the Borrower in its
applicable Interest Rate Election, but being not less than three (3) Business
Days after the receipt by the Agent before 2:00 o'clock P.M. on a Business Day
of an Interest Rate Election electing the Libor Rate as the interest rate on
such Loan; and (ii) as to any Libor Loan, the last Business Day of the Interest
Period pertaining to such Libor Loan.
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"Interest Expense" means, with respect to any fiscal quarter, the aggregate
amount required to be accrued by the Borrower and any Subsidiaries in such
fiscal quarter for interest, fees (excluding, however, the Up-Front Fee being
paid to the Agent for the accounts of Fleet and the other Lenders in accordance
with their Pro Rata Shares on the Closing Date), charges and expenses, however
characterized, on its Indebtedness, including, without limitation, all such
interest, fees, charges and expenses required to be accrued with respect to
Indebtedness under the Financing Documents, all determined in accordance with
GAAP.
"Interest Period" means:
With respect to each Libor Loan:
(i) initially, the period commencing on the date of such Libor Loan and
ending one, three or six months thereafter as the Borrower may elect in the
applicable Interest Rate Election and subject to Section 2.9; and
(ii) thereafter, each period commencing on the last day of the immediately
preceding Interest Period applicable to such Libor Loan and ending one, three or
six months thereafter as the Borrower may elect in the applicable Interest Rate
Election and subject to Section 2.9;
provided that clauses (i) and (ii) of this definition are subject to the
following:
(A) any Interest Period (other than an Interest Period determined pursuant
to clause (C) below) which would otherwise end on a day which is not a Business
Day shall be extended to the next succeeding Business Day unless such Business
Day falls in another calendar month, in which case such Interest Period shall
end on the immediately preceding Business Day;
(B) any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall, subject to clause (C)
below, end on the last Business Day of a calendar month; and
(C) no Interest Period shall end after the Revolving Credit Repayment Date;
and
(D) with respect to all Libor Loans, no more than three (3) Interest
Periods may be in effect at any time.
"Interest Rate Election" means the Borrower's irrevocable telecopied or
telephonic notice of election, which shall be promptly confirmed by a written
notice of election that Prime Rate or the Libor Rate shall apply to all or any
portion of the Loans, which shall, subject to this Agreement, be effective on
the next Interest Adjustment Date, such telecopied or telephonic notice and
written confirmation thereof to be in the form of Exhibit 1.4 and to be received
by the Agent prior to 2:00 o'clock P.M. on a Business Day and at least three (3)
Business Days prior to an Interest Adjustment Date in the case of a Libor Loan,
and by 2:00 p.m. on the Business Day immediately preceding an Interest
Adjustment Date in the case of a Prime Rate Loan, each such Interest Rate
Election, subject to the terms of this Agreement, to apply to the Advance or the
Loan referred to in such Interest Rate Election or to effect a change in the
interest rate on the applicable portion of the Loans then outstanding, as
applicable, with respect to which such Interest Rate Election was made, such
change to occur on the Interest Adjustment Date next succeeding receipt of such
32
Interest Rate Election by the Agent. Any Interest Rate Election received by the
Agent after 2 o'clock P.M. on a Business Day shall be deemed, for all purposes
of this Agreement to have been received prior to 2 o'clock P.M. on the next
succeeding Business Day.
"Investment" means any investment in any Person whether by means of a
purchase of capital stock, notes, bonds, debentures or other evidences of
Indebtedness and/or by means of a capital or partnership contribution, loan,
deposit, advance or other means.
"Lender" means Fleet, BankBoston, Sanwa or any financial institution which
hereafter becomes a party hereto pursuant to the terms of Section 9.11, each in
their individual capacity, and "Lenders" means Fleet, BankBoston, Sanwa and each
of such financial institutions.
"Libor Loan" means any portion of any Loan bearing interest at the Libor
Rate.
"Libor Rate" means, for any Interest Period, the Adjusted Libor Rate in
effect on the first day of such Interest Period (subject to adjustment as
provided in the definition of Adjusted Libor Rate) plus the Applicable Margin
for Libor Loans from time to time in effect.
"Lien" means any mortgage, pledge, hypothecation, assignment for security
purposes, deposit arrangement, encumbrance, lien (statutory or other) or other
security agreement of any kind or nature whatsoever (including without
limitation any conditional sale or other title retention agreement and any
Capitalized Lease Obligation) having substantially the same economic effect as
any of the foregoing.
"Loans" and "Loan" means at any time the outstanding principal amount of
Indebtedness owed to the Lenders or to any lender, as the context may require
pursuant to this Agreement.
"Majority Lenders" means Lenders holding an aggregate Pro Rata Share of the
outstanding principal balance of the Loans in an amount equal to or in excess of
51% of the total outstanding principal balance of the Loans and if there is no
outstanding principal balance of the Loans, Lenders having at least 51% of the
Commitment.
"Material Adverse Effect" means material adverse effect on (i) the
ability of the Borrower and its Subsidiaries taken as a whole to fulfill their
obligations under any of the Financing Documents or (ii) the Business Condition
of the Borrower and its Subsidiaries taken as a whole.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Income" means, for any fiscal period, the net after tax income
(loss) of the Borrower and any Subsidiaries for such period determined on an
accrual and consolidated basis in accordance with GAAP.
"Note" means each revolving credit note of the Borrower payable to the
order of a Lender and substantially in the form of Exhibit 1.5 and evidencing
all or a portion of the Loan and "Notes" means all of the Notes, collectively.
"Obligations" mean any and all Indebtedness, obligations and liabilities of
the Borrower and/or any Subsidiaries under any of the Financing Documents to any
33
one or more of the Lenders and/or the Agent of every kind and description,
absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising, including, without limitation,
all Loans, interest, taxes, fees, charges, and expenses under the Financing
Documents and attorneys' fees chargeable to the Borrower and/or any Subsidiaries
or incurred by any of the Lenders and/or the Agent under any of the Financing
Documents.
"Officer's Certificate" means a certificate signed by an Authorized
Representative and delivered to the Agent on behalf of the Lenders.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to subtitle A of Title IV of ERISA.
"P.M." means a time from and including 12 o'clock noon on any Business Day
to the end of such Business Day using Eastern Standard (or Daylight Savings)
time.
"Permitted Encumbrances" means those Liens, security interests and defects
in title permitted under Section 5.2.1 and those Liens listed on Exhibit 1.8
hereto.
"Person" means an individual, corporation, partnership, limited liability
company, joint venture, trust, or unincorporated organization, or a government
or any agency or political subdivision thereof.
"Plan" means an employee benefit plan as defined in Section 3(3) of
ERISA maintained for employees of the Borrower or any Commonly Controlled
Entity.
"Post-Closing Letter" means that certain letter agreement between the
Borrower and the Agent dated the Closing Date and listing certain post-closing
actions to be completed by the Borrower.
"Premises" has the meaning assigned to such term in Section 4.1.22.1.
"Prime Rate" means the higher of (i) the floating rate of interest per
annum designated from time to time by the Agent as being its "prime rate" of
interest, such interest rate to be adjusted on the effective date of any change
thereof by the Agent, it being understood that such rate of interest may not be
the lowest rate of interest from time to time charged by the Agent and (ii) the
Federal Funds Rate, such interest rate to be adjusted on the effective date of
any change thereof by the Federal Reserve Bank of New York.
"Prime Rate Loan(s)" means any portion of the Loans bearing interest at
Prime Rate.
"Projections" means the Borrower's written projections of Borrower's future
performance over the period ending August 31, 2000 on a consolidated basis
delivered to the Agent prior to the Closing.
"Pro Rata Share" means (i) with respect to the Commitment, each Lender's
percentage share of the Commitment as set forth immediately opposite such
Lender's name on Exhibit 1.9, and (ii) with respect to the Loans, each Lender's
percentage share of the aggregate outstanding principal balance of the Loans and
"Pro Rata Shares" means such percentage shares of the Lenders.
"Real Estate" has the meaning set forth in Section 4.1.21.
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"Reference Lender(s)" means the Agent unless the Agent resigns said
responsibility, at which time and thereafter such term means one or two Lenders
selected by the Agent in its discretion from time to time as a reference lender
for purposes of determining the Adjusted Libor Rate.
"Reportable Event" shall have the meaning assigned to that term in Section
4043 of ERISA for which the requirement of 30 days' notice to the PBGC has not
been waived by the PBGC.
"Request" means a written request for the Loans in the form of Exhibit
1.14, received by the Agent on behalf of the Lenders from the Borrower in
accordance with this Agreement, specifying the date on which the Borrower
desires such Loans and the disbursement instructions of the Borrower with
respect thereto.
"Revolving Credit Loan" means the revolving credit loans to be made by
the Lenders to the Borrower from time to time in the maximum outstanding
principal amount of Commitment, all subject and pursuant to Section 2.1.
"Revolving Credit Repayment Date" means the earlier to occur of (i) August
27, 2000 and (ii) such earlier date on which the Revolving Credit Loan becomes
due and payable pursuant to the terms hereof.
"Section" means, when followed by a number, the section or subsection of
this Agreement bearing that number.
"Selling Lender" shall have the meaning assigned to such term in Section
9.11.1.
"Side Letter" means that certain side letter of even date with this
Agreement between the Borrower and the Agent regarding certain fees payable by
the Borrower.
"Single Employer Plan" means any Plan as defined in Section 4001(a)(15) of
ERISA.
"Subordinated Debt" means (a) unsecured Indebtedness of the Borrower or any
of its Subsidiaries that is expressly subordinated and made junior to the
payment and performance in full of the Obligations, and evidenced as such by (i)
the Subordination Documents or (ii) within 24 months after termination or
expiration of the facility evidenced by the Subordination Documents (the
"Xxxxxxx Facility"), a replacement subordinated debt facility, provided that the
aggregate principal amount thereof shall not exceed $30,000,000 at any time, the
terms and provisions thereof shall be no less favorable to the Borrower, the
Agent and the Lenders as the terms and provisions of the Xxxxxxx Facility, and
the Lenders shall have received a certificate from an authorized officer of the
Borrower as to compliance with the foregoing and (b) any other Indebtedness of
Borrower or any of its Subsidiaries subordinated to the Obligations of the
Borrower to the Agent and the Lenders on terms reasonably satisfactory to the
Majority Lenders.
"Subordination Documents" means the Note Purchase Agreement, dated as of
June 13, 1994, among the Borrower, Xxxx Xxxxxxx Mutual Life Insurance Company
and Xxxx Xxxxxxx Life Insurance Company of America (as amended and in effect)
and the documents and instruments executed and/or delivered in connection
therewith.
35
"Subsidiary" means any corporation or entity other than the Borrower of
which more than 50% of the outstanding capital stock or voting interests or
rights having ordinary voting power to elect a majority of the board of
directors or other managers of such entity (irrespective of whether or not at
the time capital stock or voting interests or rights of any other class or
classes of such Person shall or might have voting power upon the occurrence of
any contingency) is at the time directly or indirectly owned by the Borrower or
by the Borrower and/or one or more Subsidiaries or the management of which
corporation or entity is under control of the Borrower and/or any other
Subsidiary, directly or indirectly through one or more Persons and any other
Person which, under GAAP, should at any time for financial reporting purposes be
consolidated or combined with the Borrower and/or any other Subsidiary.
"Substituted Lender" has the meaning set forth in Section 9.11 hereof.
"Substitution Agreement" has the meaning assigned to such term in Section
9.11.1.
"Syndication Agent" means BankBoston or any other Person which is at the
time in question serving as the syndication agent under the terms of Section 8.8
hereof.
"Total Debt Service" means, at any date of determination, the sum of (i)
Interest Expense and (ii) scheduled and mandatory principal payments for the
fiscal period in question due on account of any Indebtedness of the Borrower.
"Unused Fees" has the meaning assigned to such term in Section 2.2.2.
"Up-Front Fee" means, the fee payable by the Borrower in accordance with
Section 2.2.2 in an amount equal to .075% of the Commitment ($37,500).
Section 1.2. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, calculations of
amounts for the purposes of calculating any financial covenants or ratios
hereunder shall be made in accordance with GAAP applied on a basis consistent
with those used in the Borrower's financial statements referred to in Section
4.1.5 (other than departures therefrom not material in their impact), and all
financial data submitted pursuant to this Agreement shall be prepared in
accordance with GAAP (except, in the case of unaudited financial statements, the
absence of footnotes and that such statements are subject to changes resulting
from year-end adjustments made in accordance with GAAP).
Section 1.3. Other Terms. References to "Articles", "Sections",
"subsections" and "Exhibits" shall be to Sections, subsections and Exhibits and
of this Agreement unless otherwise specifically provided. In this Agreement,
"hereof," "herein," "hereto," "hereunder" and the like mean and refer to this
Agreement as a whole and not merely to the specific section, paragraph or clause
in which the respective word appears; words importing any gender include the
other genders; references to "writing" include printing, typing, lithography and
other means of reproducing words in a tangible visible form; the words
"including," "includes" and "include" shall be deemed to be followed by the
words "without limitation"; references to agreements and other contractual
instruments shall be deemed to include subsequent amendments, assignments, and
other modifications thereto, but only to the extent such amendments, assignments
and other modifications are not prohibited by the terms of this Agreement or any
other Financing Document; references to Persons include their respective
36
permitted successors and assigns or, in the case of governmental Persons,
Persons succeeding to the relevant functions of such Persons; and all references
to statutes and related regulations shall include any amendments of same and any
successor statutes and regulations.
ARTICLE 2.
AMOUNT AND TERMS OF THE LOANS
Section 2.1. The Revolving Credit Loans. Each of the Lenders severally
agrees, subject to the terms and conditions of this Agreement, to make Advances
of Revolving Credit Loans to the Borrower from time to time after receipt by the
Agent from time to time before the Revolving Credit Repayment Date of, and at
the times provided for in, a Request and an Interest Rate Election from the
Borrower in accordance with this Agreement, during the period commencing on the
Closing Date and ending on the Business Day immediately preceding the Revolving
Credit Repayment Date, in an aggregate principal amount at any one time
outstanding not to exceed such Lender's Pro Rata Share of the Commitment.
Promptly after receipt of a Request and Interest Rate Election, Agent shall
notify each Lender by telephone, telex or telecopy of the proposed borrowing.
Subject to the immediately preceding paragraph, each Lender agrees that after
its receipt of notification from Agent of Agent's receipt of a Request and
Interest Rate Election, such Lender shall send its Pro Rata Share (or such
portion thereof as may be necessary to provide Agent with such Pro Rata Share in
Dollars and in immediately available funds, without consideration or use of any
contra accounts of any Lender) of the requested Loan by wire transfer to Agent
so that Agent receives such Pro Rata Share in Dollars and in immediately
available funds not later than 12:00 P.M. (Boston, Massachusetts time) on the
first day of the Interest Period for any such requested Libor Loan and on the
Business Day for such Advance set forth in Borrower's Request for any such
requested Prime Rate Loan which Request for a Prime Rate Loan must be received
by the Agent prior to 2:00 P.M. on the Business Day immediately preceding the
Business Day for such Advance and which Request for a Libor Loan must be
received on the date of receipt of the Interest Rate Election for such Libor
Loan, and Agent shall advance funds to the Borrower by depositing such funds in
Borrower's account with the Agent upon Agent's receipt of such Pro Rata Shares
in the amount of the Pro Rata Shares of such Loan in Agent's possession. Unless
Agent shall have been notified by any Lender (which notice may be telephonic if
confirmed promptly in writing) prior to the first day of the Interest Period in
respect of any Loan which such Lender is obligated to make under this Agreement,
that such Lender does not intend to make available to Agent such Lender's Pro
Rata Share of such Loan on such date, Agent may assume that such Lender has made
such amount available to Agent on such date and Agent in its sole discretion
may, but shall not be obligated to, make available to the Borrower a
corresponding amount on such date. If such corresponding amount is not in fact
made available to Agent by such Lender, Agent shall be entitled to recover such
corresponding amount from such Lender promptly upon demand by Agent together
with interest thereon, for each day from such date until the date such amount is
paid to Agent, at the Federal Funds Rate for three (3) Business Days and
thereafter at the interest rate on the Loan in question. If such Lender does not
pay such corresponding amount forthwith upon Agent's demand therefor, Agent
shall promptly notify the Borrower and the Borrower shall promptly pay such
corresponding amount to Agent. Nothing contained in this Section shall be deemed
to relieve any Lender from its obligation to fulfill its obligations hereunder
or to prejudice any rights which the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
Section 2.2. Interest and Fees on the Loans.
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Section 2.2.1. Interest. Interest shall accrue and be paid currently on the
Loans at the Prime Rate or the Libor Rate for each of the Loans' Interest
Periods in accordance with the Borrower's Interest Rate Elections for the Loans
subject to and in accordance with the terms and conditions of this Agreement and
the Note(s); provided that if a Default or an Event of Default exists and is
continuing, no Interest Rate Election electing the Libor Rate shall be effective
and if a Default exists which is not an Event of Default, no Interest Rate
Election electing the Libor Rate for an Interest Period in excess of one month
shall be effective and, in any such case any Loan or portion thereof with
respect to which any such Interest Rate Election would otherwise have been
effective shall bear interest at the Prime Rate plus, so long as an Event of
Default exists and is continuing, two percent (2%); all of the foregoing being
applicable until such Default or Event of Default is cured or waived and an
Interest Rate Election electing the Libor Rate for such Loan or portion thereof
which is effective in accordance with this Agreement is submitted to the Agent.
The Borrower shall pay such interest to the Agent for the pro rata account of
each Lender in arrears on the Loans (including without limitation Libor Loans)
outstanding from time to time after the Closing Date, in accordance with the
following: (a) if any portion of the Loans is a Prime Rate Loan, such payments
shall be made quarterly on the last Business Day of each March, June, September
and December of each year commencing September 30, 1997; and (b) if any portion
of the Loans is a Libor Loan such payments shall be made on the first to occur
of the Interest Adjustment Date for such Libor Loan and the 90th day after the
first day of the Interest Period for such Libor Loan. All provisions of each
Note and any other agreements between the Borrower and the Lenders are expressly
subject to the condition that in no event, whether by reason of acceleration of
maturity of the Indebtedness evidenced by any Note or otherwise, shall the
amount paid or agreed to be paid to the Lenders which is deemed interest under
applicable law exceed the maximum permitted rate of interest under applicable
law (the "Maximum Permitted Rate"), which shall mean the law in effect on the
date of this Agreement, except that if there is a change in such law which
results in a higher Maximum Permitted Rate, then each Note shall be governed by
such amended law from and after its effective date. In the event that
fulfillment of any provision of any Note, or this Agreement results in the rate
of interest charged under any Note being in excess of the Maximum Permitted
Rate, the obligation to be fulfilled shall automatically be reduced to eliminate
such excess. If, notwithstanding the foregoing, any Lender receives an amount
which under applicable law would cause the interest rate under any Note to
exceed the Maximum Permitted Rate, the portion thereof which would be excessive
shall automatically be deemed a prepayment of and be applied to the unpaid
principal balance of such Note to the extent of then outstanding Prime Rate
Loans and not a payment of interest and to the extent said excessive portion
exceeds the outstanding principal amount of Prime Rate Loans, said excessive
portion shall be repaid to the Borrower.
Section 2.2.2. Fees.
2.2.2.1. Up-Front Fees. Fleet acknowledges receipt of its Pro Rata Share of
the Up-Front Fee in the amount of $22,500. On the Closing Date the Borrower
shall pay the balance of the Up-Front Fee in the amount of $15,000 to the Agent
for the accounts of the Lenders other than Fleet in accordance with their Pro
Rata Shares.
2.2.2.2. Unused Fees. On the last Business Day of each March, June,
September and December commencing September 30, 1997 and continuing through the
Revolving Credit Repayment Date, the Borrower shall pay to the Agent for the pro
rata account of each Lender, a fee in an amount equal to .30% per annum of the
amount, if any, by which the average actual daily amount of the Commitment for
the quarterly period just ended (or in the case of the first such payment, the
38
period from the Closing Date to the date such payment is due) exceeds the
average of the actual daily outstanding principal balances of the Revolving
Credit Loans; provided, however, that if, at any time on or after the receipt by
the Agent of the quarterly financial statements for the Borrower's September 30,
1997 fiscal quarter and each subsequent Borrower fiscal quarter provided to the
Agent by the Borrower pursuant to Section 5.3.3 hereof, the ratio of (a) total
Indebtedness for Borrowed Money of the Borrower and its Subsidiaries on a
consolidated basis as of the last day of the most recently ended fiscal quarter
of the Borrower to (b) EBITDA for such fiscal quarter and for the three
immediately preceding Borrower fiscal quarters, (i) is greater than 2.0:1.0 and
if and so long as no Event of Default or Default exists and is continuing, the
Borrower shall pay to the Agent for the pro rata account of each Lender, a fee
in an amount equal to .40% per annum of the amount, if any, by which the average
actual daily amount of the Commitment for the quarterly period just ended
exceeds the average of the actual daily outstanding principal balances of the
Revolving Credit Loans, or (ii) is less than less than or equal to 1.0:1.0 and
if and so long as no Event of Default or Default exists and is continuing, the
Borrower shall pay to the Agent for the pro rata account of each Lender, a fee
in an amount equal to .25% per annum of the amount, if any, by which the average
actual daily amount of the Commitment for the quarterly period just ended
exceeds the average of the actual daily outstanding principal balances of the
Revolving Credit Loans (the "Unused Fees").
2.2.2.3. Other Fees. In addition, to the extent not duplicative with
the fees set forth herein, the Borrower shall pay to the Agent for its own
account certain fees as specified in the Side Letter.
Section 2.2.3. Increased Costs - Capital. If, after the date hereof, any
Lender shall have reasonably determined that the adoption after the date hereof
of any applicable law, governmental rule, regulation or order regarding capital
adequacy of banks or bank holding companies, or any change therein, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Lender or such Lender's holding
company with any policy, guideline, directive or request regarding capital
adequacy (whether or not having the force of law and whether or not failure to
comply therewith would be unlawful) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Lender or such Lender's holding company as a consequence
of the obligations hereunder of such Lender to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking
into consideration the policies of such Lender or such Lender's holding company
with respect to capital adequacy immediately before such adoption, change or
compliance and assuming that the capital of such Lender or such Lender's holding
company was fully utilized prior to such adoption, change or compliance) by an
amount reasonably deemed by such Lender to be material, then such Lender shall
notify the Agent and the Borrower thereof and the Borrower shall pay to the
Agent for the account of such Lender from time to time as specified by such
Lender such additional amounts as shall be sufficient to compensate such Lender
for such reduced return, each such payment to be made by the Borrower within
five (5) Business Days after each demand by such Lender; provided that the
liability of the Borrower to pay such costs shall only accrue with respect to
costs accruing from and after the 180th day prior to the date of each such
demand. A certificate in reasonable detail of one of the officers of such Lender
describing the event giving rise to such reduction and setting forth the amount
to be paid to such Lender hereunder and a computation of such amount shall
accompany any such demand and shall, in the absence of manifest error, be and
shall be submitted within 180 days of the occurrence of such event. In
determining such amount, such Lender shall act reasonably and will use any
reasonable averaging and attribution methods. If the Borrower shall, as a result
of the requirements of this Section 2.2.3 above, be required to pay any Lender
the additional costs referred to above and the Borrower, in its sole discretion,
shall have the right to substitute another bank satisfactory to the Agent for
39
such Lender which has certified the additional costs to the Borrower, and the
Agent shall use reasonable efforts at no cost to the Agent to assist the
Borrower to locate such substitute bank. Any such substitution shall take place
in accordance with Section 9.11 and shall otherwise be on terms and conditions
reasonably satisfactory to the Agent, and until such time as such substitution
shall be consummated, the Borrower shall continue to pay such additional costs.
Upon any such substitution, the Borrower shall pay or cause to be paid to the
Lender that is being replaced, all principal, interest (to the date of such
substitution) and other amounts owing hereunder to such Lender and such Lender
will be released from liability hereunder.
Section 2.3. Notations. At the time of (i) the making of each Advance
evidenced by any Note, (ii) each change in the interest rate under any Note
effected as a result of an Interest Rate Election; and (iii) each payment or
prepayment of any Note, each Lender may enter upon its records an appropriate
notation evidencing (a) such Lender's Pro Rata Share of the Loans and (b) the
interest rate and Interest Adjustment Date applicable thereto or (c) such
payment or prepayment (voluntary or involuntary) of principal and (d) in the
case of payments or prepayments (voluntary or involuntary) of principal, the
portion of the applicable Loan which was paid or prepaid. No failure to make any
such notation shall affect the Borrower's unconditional obligations to repay the
Loans and all interest, fees and other sums due in connection with this
Agreement and/or any Note in full, nor shall any such failure, standing alone,
constitute grounds for disproving a payment of principal by the Borrower.
However, in the absence of manifest error, such notations and each Lender's
records containing such notations shall constitute presumptive evidence of the
facts stated therein, including, without limitation, the outstanding amount of
such Lender's Pro Rata Share of the Loans and all amounts due and owing to such
Lender at any time. Any such notations and such Lender's records containing such
notations may be introduced in evidence in any judicial or administrative
proceeding relating to this Agreement, the Loans or any Note.
Section 2.4. Computation of Interest. Interest due under this Agreement and
any Note shall be computed, on the basis of a year of 360 days with respect to
any Libor Loan and with respect to any Prime Rate Loan on the basis of a year of
365 days, each for the actual number of days elapsed.
Section 2.5. Time of Payments and Prepayments in Immediately Available
Funds.
Section 2.5.1. Time. All payments and prepayments of principal, fees,
interest and any other amounts owed from time to time under this Agreement
and/or under each Note shall be made to the Agent for the pro rata account of
each Lender at the address referred to in Section 9.6 in Dollars and in
immediately available funds prior to 2:00 o'clock P.M. on the Business Day that
such payment is due, provided that the Borrower hereby authorizes and instructs
the Agent to charge against the Borrower's accounts with the Agent on each date
on which a payment is due hereunder and/or under any Note and on any subsequent
date if and to the extent any such payment is not made when due an amount up to
the principal, interest and fees due and payable to the Lenders, the Agent or
any Lender hereunder and/or under any Note and such charge shall be deemed
payment hereunder and under the Note(s) in question to the extent that
immediately available funds are then in such accounts. The Agent shall use
reasonable efforts in accordance with the Agent's customary procedures to give
notice of any such charge to the Borrower on the date on which such charge was
made, but the failure to give such notice shall not affect the validity of any
such charge. To the extent that immediately available funds are then in such
accounts, the failure of the Agent to charge any such account or the failure of
the Agent to charge any such account prior to 2 o'clock P.M. shall not be basis
for an Event of Default under Section 6.1.1 and any amount due on the Loans on
such date shall be deemed paid; provided that the Agent shall have the right to
charge any such account on any subsequent date for such unpaid payment and an
40
Event of Default shall exist if sufficient immediately available funds are not
in such accounts on the date the Agent so charges such account after the
expiration of any applicable cure period. In the event of any charge against the
Borrower's accounts by the Agent pursuant to the immediately preceding sentence,
the Agent shall use reasonable efforts to provide notice to the Borrower of such
charge on the date on which such charge was made in accordance with the Agent's
customary procedures, but the failure to provide such notice shall not in any
way be a basis for any liability of the Agent nor shall such failure adversely
affect the validity and effectiveness of any such action by the Agent. Any such
payment or prepayment which is received by the Agent in Dollars and in
immediately available funds after 2 o'clock P.M. on a Business Day shall be
deemed received for all purposes of this Agreement on the next succeeding
Business Day unless the failure by Agent to receive such funds prior to 2
o'clock P.M. is due to Agent's failure to charge the account of Borrower prior
to 2 o'clock P.M., except that solely for the purpose of determining whether a
Default or Event of Default has occurred under Section 6.1.1, any such payment
or prepayment, if received by the Agent prior to the close of the Agent's
business on a Business Day, shall be deemed received on such Business Day. All
payments of principal, interest, fees and any other amounts which are owing to
any or all of the Lenders or the Agent hereunder and/or under any of the Notes
that are received by the Agent in immediately available Dollars prior to 2:00
o'clock P.M. on any Business Day shall, to the extent owing to the Lenders other
than the Agent, be sent by wire transfer by the Agent to any such other Lenders
(in each case, without deduction for any claim, defense or offset of any type)
before 4:00 o'clock P.M. on the same Business Day. Each such wire transfer shall
be addressed to each Lender in accordance with the wire instructions set forth
in Exhibit 1.9 hereto. The amount of each payment wired by the Agent to each
such Lender shall be such amount as shall be necessary to provide such Lender
with its Pro Rata Share of such payment (without consideration or use of any
contra accounts of any Lender), or with such other amount as may be owing to
such Lender in accordance with this Agreement (in each case, without deduction
for any claim, defense or offset of any type). Each such wire transfer shall be
sent by the Agent only after the Agent has received immediately available
Dollars from or on behalf of the Borrower and each such wire transfer shall
provide each Lender receiving same with immediately available Dollars on receipt
by such Lender. Any such payments of immediately available Dollars received by
the Agent after 2:00 o'clock P.M. and before 4:00 o'clock P.M. on any Business
Day shall be forwarded in the same manner by the Agent to such Lender(s) as soon
as practicable on said Business Day, and if any such payments of immediately
available Dollars are received by the Agent after 4:00 o'clock P.M. on a
Business Day, the Agent shall so forward same to such Lender(s) before 10:00
o'clock A.M. on the immediately succeeding Business Day.
Section 2.5.2. Setoff, etc.. Upon the occurrence and during the continuance
of any Event of Default, each Lender is hereby authorized at any time and from
time to time, without notice to the Borrower (any such notice being expressly
waived by the Borrower), to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and any other
Indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the Obligations of the Borrower
irrespective of whether or not such Lender shall have made any demand under this
Agreement or any Note and although such obligations may be unmatured. Each such
Lender agrees to promptly notify the Borrower and the Agent after any such
setoff and application; provided that the failure to give such notice shall not
affect the validity of such setoff and application. Promptly following any
notice of setoff received by the Agent from a Lender pursuant to the foregoing,
the Agent shall notify each other Lender thereof. The rights of each Lender
under this Section 2.5.2 are in addition to all other rights and remedies
(including, without limitation, other rights of setoff) which such Lender may
have and are subject to Section 9.12.
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Section 2.5.3. Unconditional Obligations and No Deductions. The Borrower's
obligation to make all payments provided for in this Agreement and the other
Financing Documents shall be unconditional. Each such payment shall be made
without deduction for any claim, defense or offset of any type, including
without limitation any withholdings and other deductions on account of income or
other taxes, and regardless of whether any claims, defenses or offsets of any
type exist.
Section 2.6. Prepayment and Certain Payments.
Section 2.6.1. Mandatory Payments. In addition to each other
principal payment required hereunder, the outstanding principal balances of the
Revolving Credit Loans shall be repaid on the Revolving Credit Repayment Date.
Section 2.6.2. Voluntary Prepayments. All or any portion of the unpaid
principal balance of the Loans (other than portions of any Loans constituting
Libor Loans) may be prepaid at any time, without premium or penalty, by giving
the Agent at least 3 days' prior written notice of such prepayment and by a
payment to the Agent for the accounts of the Lenders in accordance with their
Pro Rata Shares of such prepayment in immediately available Dollars by the
Borrower; provided that each such partial payment or prepayment of principal of
the Loans shall be in a principal amount of at least $100,000 or an integral
multiple of $50,000 in excess thereof.
Section 2.6.3. Prepayment of Libor Loans.Notwithstanding anything to the
contrary contained in any Note or in any other agreement executed in connection
herewith or therewith, the Borrower shall be permitted to prepay any portion of
the Loans constituting Libor Loans only in accordance with Section 2.9 hereof.
Section 2.6.4. Permanent Reduction of Commitment. At the
Borrower's option the Commitment may be permanently and irrevocably reduced in
whole or in part by an amount of at least $500,000 and to the extent in excess
thereof in integral multiples of $100,000 at any time; provided that (i) the
Borrower gives the Agent written notice of the exercise of such option at least
three (3) Business Days prior to the effective date thereof, (ii) the aggregate
outstanding balance of the Loans, if any, does not exceed the Commitment , as so
reduced in any such case on the effective date of such reduction and (iii) the
Borrower is not, and after giving effect to such reduction, would not be in
violation of Section 2.6.3. Any such reduction shall concurrently reduce the
Dollar amount of each Lender's Pro Rata Share of the Commitment.
Section 2.7. Payment on Non-Business Days. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day other than a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
payment of fees, if any, and interest under this Agreement and under such Note.
Section 2.8. Use of Proceeds. The Borrower shall use the proceeds of the
Loans for the Borrower's working capital needs and for Borrower's general
corporate purposes.
Section 2.9. Special Libor Loan Provisions. The Libor Loans shall be
subject to and governed by the following terms and conditions:
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Section 2.9.1. Requests. Each Request and Interest Rate Election selecting
the Libor Rate must be received by the Agent in accordance with the definition
of Interest Rate Election.
Section 2.9.2. Libor Loans Unavailable. Notwithstanding any other provision
of this Agreement, if, prior to or on the date on which all or any portion of
the Loans is to be made as or converted into a Libor Loan, any of the Lenders
(or the Agent with respect to (ii) below) shall reasonably determine (which
determination shall be conclusive and binding on the Borrower), that
(i) Dollar deposits in the relevant amounts and for the relevant
Interest Period are not offered to such Lender in the London interbank
market,
(ii) by reason of circumstances affecting the London interbank market,
adequate and reasonable means do not exist for ascertaining the Adjusted
Libor Rate, or
(iii) the Adjusted Libor Rate shall no longer represent the effective
cost to such Lender for Dollar deposits in the London interbank market
for reasons other than the fact, standing alone, that the Adjusted Libor
Rate is based on an averaging of rates determined by the Agent and that
such Lender's rate may exceed such average,
such Lender may elect not to accept any Interest Rate Election electing a Libor
Loan and such Lender shall notify the Agent by telephone or telex thereof,
stating the reasons therefor, not later than the close of business on the second
Business Day prior to the date on which such Libor Loan is to be made. The Agent
shall promptly give notice of such determination and the reason therefor to the
Borrower, and all or such portion of the Loans, as the case may be, which are
subject to any of Section 2.9.2 (i), (ii) through (iii) as a result of such
Lender's determination shall be made as or converted into, as the case may be,
Prime Rate Loans and such Lender shall have no further obligation to make Libor
Loans, until further written notice to the contrary is given by the Agent to the
Borrower. If such circumstances subsequently change so that such Lender shall no
longer be so affected, such Lender's obligation to make or maintain its Pro Rata
Share of all or any portion of the Loans as Libor Loans shall be reinstated when
such Lender obtains actual knowledge of such change of circumstances and
promptly after obtaining such actual knowledge such Lender shall forward written
notice thereof to the Agent. After receipt of such notice, the Agent shall
promptly forward written notice thereof to the Borrower. Upon or after receipt
by the Borrower of such written notice, the Borrower may submit an Interest Rate
Election in accordance with this Agreement electing an Interest Period ending no
later than the Interest Adjustment Date for the then current Interest Period for
the other Lenders' Pro Rata Shares of Libor Loans and electing the Libor Rate
for such Lenders' or Lender's Pro Rata Share(s) of the Loans as to which such
Lender's or Lenders' obligation(s) to make or maintain its or their Pro Rata
Share(s) of the Loans as Libor Loans was suspended and such Pro Rata Share(s)
shall be converted to Libor Loans in accordance with this Agreement. During any
period throughout which any of the Lenders has or have no obligation to make or
maintain its or their Pro Rata Share(s) of the Loans as Libor Loans, no Interest
Rate Elections electing the Libor Rate shall be effective with regard to the
Loans to the extent of the Pro Rata Share(s) of such Lender(s), but shall be
effective as to the other Lenders.
Section 2.9.3. Libor Lending Unlawful. In the event that any change in
applicable laws or regulations (including the introduction of any new applicable
law or regulation) or in the interpretation thereof (whether or not having the
43
force of law) by any governmental or other regulatory authority charged with the
administration thereof, shall make it unlawful for any of the Lenders to make or
continue to maintain its Pro Rata Share of all or any portion of the Loans as
Libor Loans, each such Lender shall promptly notify the Agent by telephone or
telex thereof, and of the reasons therefor, and the obligation of such Lender to
make or maintain its Pro Rata Share of the Loans or such portion thereof as
Libor Loans shall, upon the happening of such event, terminate and the Agent
shall, by telephonic notice to the Borrower, declare that such obligation has so
terminated with respect to such Lender, and such Pro Rata Share of the Loans or
any portion thereof to the extent then maintained as Libor Loans, shall, on the
last day on which such Lender can lawfully continue to maintain such Pro Rata
Share of the Loans or any portion thereof as Libor Loans, automatically convert
into Prime Rate Loans without additional cost to the Borrower. If circumstances
subsequently change so that such Lender shall no longer be so affected, such
Lender's obligation to make or maintain its Pro Rata Share of all or any portion
of the Loans as Libor Loans shall be reinstated when such Lender obtains actual
knowledge of such change of circumstances, and promptly after obtaining such
actual knowledge such Lender shall forward written notice thereof to the Agent.
After receipt of such notice, the Agent shall promptly forward written notice
thereof the Borrower. Upon or after receipt by the Borrower of such written
notice, the Borrower may submit an Interest Rate Election in accordance with
this Agreement electing an Interest Period ending no later than the Interest
Adjustment Date for the then current Interest Period for the other Lenders' Pro
Rata Shares of Libor Loans and electing the Libor Rate for such Lenders' or
Lender's Pro Rata Share(s) of the Loans as to which such Lender's or Lenders'
obligation(s) to make or maintain its or their Pro Rata Share(s) of the Loans as
Libor Loans was suspended and such Pro Rata Share(s) shall be converted to Libor
Loans in accordance with this Agreement. During any period throughout which any
of the Lenders has or have no obligation to make or maintain its or their Pro
Rata Share(s) of the Loans as Libor Loans, no Interest Rate Elections electing
the Libor Rate shall be effective with regard to the Loans to the extent of the
Pro Rata Share(s) of such Lender(s), but shall be effective as to the other
Lenders.
Section 2.9.4. Additional Costs on Libor Loans. The Borrower further agrees
to pay to the Agent for the account of the applicable Lender or Lenders such
amounts as will compensate any of the Lenders for any increase in the cost to
such Lender of making or maintaining (or of its obligation to make or maintain)
all or any portion of its Pro Rata Share of the Loans as Libor Loans and for any
reduction in the amount of any sum receivable by such Lender under this
Agreement in respect of making or maintaining all or any portion of such
Lender's Pro Rata Share of the Loans as Libor Loans, in either case, from time
to time by reason of:
(i) any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by, such
Lender, under or pursuant to any law, treaty, rule, regulation
(including, without limitation, any Regulations of the Board of
Governors of the Federal Reserve System) or requirement in effect on or
after the date hereof, any interpretation thereof by any governmental
authority charged with administration thereof or by any central bank or
other fiscal or monetary authority or other authority, or any
requirement imposed by any central bank or such other authority whether
or not having the force of law; or
(ii) any change in (including the introduction of any new) applicable
law, treaty, rule, regulation or requirement or in the interpretation
thereof by any official authority, or the imposition of any requirement
of any central bank, whether or not having the force of law, which shall
subject such Lender to any tax (other than taxes on net income imposed
on such Lender), levy, impost, charge, fee, duty, deduction or
withholding of any kind whatsoever or change the taxation of such Lender
with respect to making or maintaining all or any portion of its Pro Rata
Share of the Loans as Libor Loans and the interest thereon (other than
44
any change which affects, and to the extent that it affects, the
taxation of net income of such Lender); provided, that with respect to
any withholding the foregoing shall not apply to any withholding tax
described in sections 1441, 1442 or 3406 of the Code, or any succeeding
provision of any legislation that amends, supplements or replaces any
such section, or to any tax, levy, impost, duty, charge, fee, deduction
or withholding that results from any noncompliance by a Lender with any
federal, state or foreign law or from any failure by a Lender to file or
furnish any report, return, statement or form the filing or furnishing
of which would not have an adverse effect on such Lender and would
eliminate such tax, impost, duty, deduction or withholding;
In any such event, such Lender shall promptly notify the Agent thereof, and of
the reasons therefor, and the Agent shall promptly notify the Borrower thereof
in writing stating the reasons provided to the Agent by such Lender therefor and
the additional amounts required to fully compensate such Lender for such
increased or new cost or reduced amount as reasonably determined by such Lender.
Such additional amounts shall be payable on each date on which interest is to be
paid hereunder or, if there is no outstanding principal amount under any of the
Notes, within 10 Business Days after the Borrower's receipt of said notice. Such
Lender's certificate as to any such increased or new cost or reduced amount
(including calculations, in reasonable detail, showing how such Lender computed
such cost or reduction) shall be submitted by the Agent to the Borrower and
shall, in the absence of manifest error, be conclusive. In determining any such
amount, the Lender(s) may use any reasonable averaging and attribution methods.
Notwithstanding anything to the contrary set forth above or Section 2.2.3, the
Borrower shall not be obligated to pay any amounts pursuant to this Section
2.9.4 or Section 2.2.3 as a result of any requirement or change referenced above
with respect to any period prior to the one hundred and eightieth (180th) day
prior to the date on which the Borrower is first notified thereof (other than
any amounts which relate to any such requirement or change which is adopted with
retroactive effect in which case the Borrower shall be obligated to pay all such
amounts accrued from the date as of which such requirement or change is
retroactively effective) unless the failure to give such notice within such one
hundred and eighty (180) day period resulted from reasonable circumstances
beyond such Lender's reasonable control.
Section 2.9.5. Libor Funding Losses. In the event any of the Lenders shall
incur any loss or expense (including, without limitation, any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain all or any portion of the Loans as
Libor Loans) as a result of:
(i) payment or prepayment by the Borrower of all or any portion of any
Libor Loan on a date other than the Interest Adjustment Date for such
Libor Loan, for any reason; provided, however that this clause shall not
be deemed to grant the Borrower any right to convert a Libor Loan to a
Prime Rate Loan prior to the end of any Interest Period or to imply such
right;
(ii) conversion of all or any portion of any Libor Loan on a day other
than the last day of an Interest Period applicable to such Loan to a
Prime Rate Loan for any reason including, without limitation,
acceleration of the Loans upon or after an Event of Default, any
Interest Rate Election or any other cause whether voluntary or
involuntary and whether or not referred to or described in this
Agreement, other than any such conversion resulting solely from
application of Sections 2.9.2 or 2.9.3 by any Lender; or
45
(iii) any failure by the Borrower to borrow the Loans as Libor Loans on
the date specified in any Interest Rate Election selecting the Libor
Rate, other than any such failure resulting solely from application of
Sections 2.9.2 or 2.9.3 by any Lender;
such Lender shall promptly notify the Agent thereof, and of the reasons
therefor. Upon the request of the Agent, the Borrower shall pay directly to the
Agent for the account of such Lender such amount as will (in the reasonable
determination of such Lender, which shall be correct in the absence of manifest
error) reimburse such Lender for such loss or expense. Each Lender shall furnish
to the Borrower, upon written request from the Borrower received by the Agent, a
written statement setting forth the computation of any such amounts payable to
such Lender under this Section 2.9.5.
Section 2.9.6. Banking Practices. Each Lender agrees that upon the
occurrence of any of the events described in Sections 2.2.3 and/or 2.9.2, 2.9.4
or 2.9.5, such Lender will exercise all reasonable efforts to take such
reasonable actions at no expense to such Lender (other than reasonable expenses
which are covered by the Borrower's advance deposit of funds with such Lender
for such purpose, or if such Lender agrees, which the Borrower has agreed to pay
or reimburse to such Lender in full upon demand), in accordance with such
Lender's usual banking practices in such situations and subject to any statutory
or regulatory requirements applicable to such Lender, as such Lender may take
without the consent or participation of any other Person to, in the case of an
event described in Sections 2.2.3 and/or 2.9.4 or 2.9.5, mitigate the cost of
such events to the Borrower and, in the case of an event described in Sections
2.9.2(i), (ii) or (iii), to seek Dollar deposits in any other interbank Libor
market in which such Lender regularly participates and in which the applicable
determination(s) described in Sections 2.9.2(i), (ii) or (iii), as the case may
be, does not apply.
Section 2.9.7. Borrower's Options on Unavailability or Increased Cost of
Libor Loans. In the event of any conversion of all or any portion of any
Lender's Pro Rata Share of any Libor Loans to a Prime Rate Loan for reasons
beyond the Borrower's control or in the event that any Lender's Pro Rata Share
of all or any portion of the Libor Loans becomes subject, under Sections 2.2.3,
2.9.4 or 2.9.5, to additional costs, the Borrower shall have the option, subject
to the other terms and conditions of this Agreement, to convert such Lender's
Pro Rata Share to a Prime Rate Loan by making Interest Rate Elections for
Interest Periods which (i) end on the Interest Adjustment Date for such Libor
Loan or (ii) end on Business Days occurring prior to such Interest Adjustment
Date, in which case, at the end of the last of such Interest Periods any such
Libor Rate Loan shall automatically convert to a Prime Rate Loan and the
Borrower shall have no further right to make an Interest Rate Election with
respect to such Prime Rate Loan other than an Interest Rate Election which is
effective on the Interest Adjustment Date for such Libor Loan. The Borrower's
options set forth in this Section 2.9.7 may be exercised, if and only if the
Borrower pays, concurrently with delivery to the Agent of each such Interest
Rate Election and thereafter in accordance with Sections 2.9.4, 2.9.5 and 2.9.6
all amounts provided for therein to the Agent in accordance with this Agreement.
If the Borrower shall, as a result of the requirements of Section 2.9.4
above, be required to pay any Lender the additional costs referred to therein,
but not be required to pay such additional costs to the other Lender or Lenders
and the Borrower, in its sole discretion, shall deem such additional amounts to
be material or in the event that Libor Loans from a Lender are unavailable to
the Borrower as a result solely of the provisions of Sections 2.9.2, 2.9.3 or
2.9.4, but are available from the other Lender or Lenders, the Borrower shall
have the right to substitute another bank satisfactory to the Agent for such
Lender which is entitled to such additional costs or which is relieved from
making Libor Loans and the Agent shall use reasonable efforts (with all
46
reasonable costs of such efforts by the Agent to be borne by the Borrower) to
assist the Borrower to locate such substitute bank. Any such substitution shall
take place in accordance with Section 9.11 and otherwise be on terms and
conditions reasonably satisfactory to the Agent, and until such time as such
substitution shall be consummated, the Borrower shall continue to pay such
additional costs and comply with the above-referenced Sections. Upon any such
substitution, the Borrower shall pay or cause to be paid to the Lender that is
being replaced, all principal, interest (to the date of such substitution) and
other amounts owing hereunder to such Lender and such Lender will be released
from liability hereunder.
Section 2.9.8. Assumptions Concerning Funding of Libor Loans. The
calculation of all amounts payable to the Lenders under this Section 2.9 shall
be made as though each Lender actually funded its relevant Libor Loans through
the purchase of a deposit in the London interbank market bearing interest at the
Libor Rate in an amount equal to that Libor Loan and having a maturity
comparable to the relevant Interest Period and through the transfer of such
deposit from an offshore office of such Lender to a domestic office of such
Lender in the United States of America; provided, however, that each Lender may
fund each of its Libor Loans in any manner it sees fit and the foregoing
assumption shall be utilized solely for the calculation of amounts payable under
this Section 2.9.
ARTICLE 3.
CONDITIONS OF LENDING
Section 3.1. Conditions Precedent to the Commitment and to all Loans.
Section 3.1.1. The Commitment and Initial Loans. The Commitment and the
obligation of the Lenders to make the initial Advances of the Loans are subject
to performance by the Borrower of all of its obligations under this Agreement
and to the satisfaction of the conditions precedent that all legal matters
incident to the transactions contemplated hereby or incidental to the Loans
shall be reasonably satisfactory to counsel for the Agent and that the Lenders
shall have received on or before the Closing Date all of the following, each
dated the Closing Date or another date acceptable to the Lenders and each to be
in form and substance reasonably satisfactory to the Agent and the Lenders or if
any of the following is not a deliverable, the satisfaction of such condition in
form and substance reasonably satisfactory to the Agent:
Section 3.1.1.1. The Financing Documents, including, without limitation,
those hereinafter set forth and the Borrower's and any Subsidiary's certificate
of incorporation or other organizational documents.
Section 3.1.1.2. Certificate of the secretary or assistant secretary of the
Borrower and each Subsidiary certifying as to the resolutions of the
shareholders or board of directors of the Borrower and each Subsidiary
authorizing and approving each of the Financing Documents to which the Borrower
and each Subsidiary is a party and other matters contemplated hereby and
certifying as to the names and signatures of the Authorized Representative(s) of
the Borrower and each Subsidiary authorized to sign each Financing Document to
be executed and delivered by or on behalf of the Borrower and each Subsidiary.
The Agent and the Lenders may conclusively rely on each such certificate until
the Agent shall receive a further certificate canceling or amending the prior
certificate and submitting the signatures of the Authorized Representative(s)
named in such further certificate.
47
Section 3.1.1.3. Favorable opinions of Wilson, Sonsini, Xxxxxxxx & Xxxxxx,
counsel for the Borrower, in form and substance reasonably satisfactory to the
Agent.
Section 3.1.1.4. An Officer's Certificate stating that:
Section 3.1.1.4.1. The representations and warranties contained in Section
4.1 and contained in any of the other Financing Documents are correct in all
material respects (provided that any representation or warranty which contains a
materiality qualification shall be correct in all respects)on and as of the
Closing Date as though made on and as of such date; and
Section 3.1.1.4.2. No Default or Event of Default has occurred and is
continuing, or would result from the making of the Loans.
Section 3.1.1.5. Certificates of good standing or legal existence of the
secretaries of state of the states of organization and covering the Borrower and
any Subsidiaries dated reasonably near the Closing Date.
Section 3.1.1.6. Evidence that (i) the ownership interests in the Borrower
are as set forth in Exhibit 1.1.
Section 3.1.1.7. A Request and Interest Rate Election if an Advance is
sought on the Closing Date.
Section 3.1.1.8. All documents, instruments and agreements necessary to
terminate, cancel and discharge the documents, instruments and agreements
evidencing or securing any and all existing Indebtedness of the Borrower and any
Subsidiary and Liens securing such Indebtedness other than those listed in
Exhibit 3.1.1.8.
Section 3.1.1.9. Payment to the Agent and the Lenders of the fees specified
in this Agreement and/or in the Side Letter as being payable on the Closing Date
and all reasonable out-of-pocket costs and expenses incurred by the Agent in
connection with the transactions contemplated hereby, including, but not limited
to, reasonable outside legal expenses have been paid in full.
Section 3.1.1.10. An Officer's Certificate in the form of Exhibit 3.1.1.10,
duly completed and reflecting, inter alia, compliance by the Borrower as of the
opening of business on the first Business Day after the Closing Date but based
on the Borrower's financial information as of the last day of the Borrower's
most recent fiscal quarter, adjusted to give effect to the Loans made on the
Closing Date, with the financial covenants provided for herein.
Section 3.1.1.11. Such other information about the Borrower and/or its
Business Condition as the Lenders may reasonably request.
Section 3.1.1.12. True copies of, and/or true copies of any revisions to,
the financial statements and other information provided pursuant to Section
4.1.5 and certification by the Borrower of the Projections.
48
Section 3.1.1.14. Evidence that any necessary material third party consents
have been obtained.
Section 3.1.1.15. The financial statements described in Section 4.1.5. Such
financial statements shall be accompanied by an Officer's Certificate of the
chief financial officer of the Borrower to the effect that (i) the
representations of the Borrower set forth in Section 4.1.14 are accurate as of
the Closing Date and (ii) that no Material Adverse Effect has occurred since the
date of the Borrower's most recent audited financial statements delivered to the
Lenders except as set forth or reflected in the financial statements described
in Section 4.1.5 or otherwise disclosed in writing and acceptable to the Agent.
Section 3.1.1.16. That there has been no enactment of any law by any
governmental authority having jurisdiction over the Agent or any Lender which
would make it unlawful in any respect for such Lender to make the Loans and no
Material Adverse Effect has occurred.
Section 3.1.2. The Commitment and the Loans. The Commitment and the
obligation of each Lender to make its Pro Rata Share of any Advance or Loan are
subject to performance by the Borrower of all its obligations under this
Agreement and to the satisfaction of the following further conditions precedent:
(a) The fact that, immediately prior to and upon the making of each Loan,
no Event of Default or Default shall have occurred and be continuing;
(b) The fact that the representations and warranties of the
Borrower contained in Article 4, infra and in each of the other Financing
Documents, are true and correct in all material respects on and as of the date
of each Advance or Loan except as altered hereafter by actions consented to or
not prohibited hereunder. The Borrower's delivery of the Notes to the Lenders
and of each Request to the Agent shall be deemed to be a representation and
warranty by the Borrower as of the date of such Advance or Loan as to the facts
specified in Sections 3.1.2(a) and (b);
(c) Receipt by Agent on or prior to the Business Day specified in the
definition of Interest Rate Election of a written Request stating the amount
requested for the Loan or Advance in question and an Interest Rate Election for
such Loan or Advance, all signed by a duly authorized officer of the Borrower on
behalf of the Borrower;
(d) That there exists no law or regulation by any governmental authority
having jurisdiction over the Agent or any of the Lenders which would make it
unlawful in any respect for such Lender to make its Pro Rata Share of the Loan
or Advance, including, without limitation, Regulations U, T, G and X of the
Board of Governors of the Federal Reserve System and no Material Adverse Effect
has occurred.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Borrower. The Borrower
represents and warrants to the Agent and the Lenders that, after giving effect
to the Loans and the application of the proceeds thereof (which representations
and warranties shall survive the making of the Loans) as follows:
49
Section 4.1.1. Organization and Existence. The Borrower and any Subsidiary
is a corporation, duly organized, validly existing and in good standing under
the laws of the state of its incorporation or organization and is duly qualified
to do business in all jurisdictions in which such qualification is required,
except where failure to so qualify would not have a Material Adverse Effect, and
has all requisite power and authority to conduct its business, to own its
properties and to execute and deliver, and to perform all of its obligations
under the Financing Documents.
Section 4.1.2. Authorization and Absence of Defaults. Except as described
on Exhibit 4.1.2, the execution, delivery to the Agent and/or the Lenders and
performance by the Borrower and any Subsidiary of the Financing Documents have
been duly authorized by all necessary corporate and governmental action and do
not and will not (i) require any consent or approval of the shareholders or
board of directors of the Borrower or any Subsidiary which has not been
obtained, (ii) violate any provision of any law, rule, regulation (including,
without limitation, Regulations U and X of the board of governors of the federal
reserve system), order, writ, judgment, injunction, decree, determination or
award presently in effect having applicability to the Borrower and/or any
Subsidiary and/or the articles of organization or by-laws, as applicable, of the
Borrower and/or any Subsidiary, (iii) result in a material breach of or
constitute a material default under any indenture or loan or credit agreement or
any other agreement, lease or instrument to which the Borrower and/or any
Subsidiary is or are a party or parties or by which it or they or its or their
properties may be bound or affected; or (iv) result in, or require, the creation
or imposition of any Lien on any of the Borrower's and/or any Subsidiary's
respective properties or revenues other than Liens granted to the Agent by any
of the Financing Documents securing the Obligations. The Borrower and any
Subsidiary are in compliance with any such applicable law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, other agreement, lease or instrument, except where the failure to be
in compliance would not be reasonably expected to have a Material Adverse
Effect.
Section 4.1.3. Acquisition of Consents. Except as noted on
Exhibit 4.1.3, no authorization, consent, approval, license, exemption of or
filing or registration with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, other than those
which have been obtained, is or will be necessary to the valid execution and
delivery to the Agent and/or the Lenders or performance by the Borrower or any
Subsidiary of any Financing Documents and each of the foregoing which has been
obtained is in full force and effect.
Section 4.1.4. Validity and Enforceability. Each of the Financing Documents
when delivered hereunder will constitute the legal, valid and binding
obligations of each of the Borrower and any Subsidiary which is or are a party
thereto enforceable against the Borrower, and any Subsidiary which is or are a
party thereto in accordance with their respective terms except as the
enforceability thereof may be limited by the effect of general principles of
equity and bankruptcy and similar laws affecting the rights and remedies of
creditors generally.
Section 4.1.5. Financial Information. The following information with
respect to the Borrower has heretofore been furnished to the Agent:
Section 4.1.5.1. Audited annual financial statements of the Borrower for
the periods ended December 31, 1995 and December 31, 1996; and
50
Section 4.1.5.2. The Projections.
Section 4.1.5.3. The pro forma financial statements of the Borrower as of
the Closing Date provided pursuant to Section 3.1.1.12.
Each of the financial statements referred to above in Section 4.1.5.1 was
prepared in accordance with GAAP (subject, in the case of interim statements, to
the absence of footnotes and normal year-end adjustments) applied on a
consistent basis, except as stated therein. To the best of the Borrower's
knowledge, each of the financial statements referred to above in Sections
4.1.5.1 and 4.1.5.3 fairly presents the financial condition or pro forma
financial condition, as the case may be, of the Person being reported on at such
dates and is complete and correct in all material respects and no Material
Adverse Effect has occurred since the date thereof (it being recognized by the
Agent and the Lenders that the Projections are not to be viewed as facts and
that actual results during the period or periods covered by any Projections may
differ from the projected or forecasted results).
Section 4.1.6. No Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower and/or any Subsidiary or any of their properties before
any court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which if determined adversely to the
Borrower and/or any Subsidiary would draw into question the legal existence of
the Borrower and/or any such Subsidiary and/or the validity, authorization
and/or enforceability of any of the Financing Documents and/or any provision
thereof and/or would be reasonably expected to have a Material Adverse Effect
except those matters, if any, described on Exhibit 4.1.6 none of which, in
Borrower's good faith opinion, will (i) have such Material Adverse Effect or
(ii) draw into question (a) the legal existence of the Borrower and/or any such
Subsidiary or (b) the validity, authorization and/or enforceability of any of
the Financing Documents and/or any provision thereof.
Section 4.1.7. Regulation U. The Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying "margin stock" within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System (12 CFR Part 221), does not own and has no present intention of acquiring
any such margin stock or a "margin security" within the meaning of Regulation G
of the Board of Governors of the Federal Reserve System (12 CFR, Part 207). None
of the proceeds of the Loans will be used directly or indirectly by the Borrower
for the purpose of purchasing or carrying, or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry,
any such margin security or margin stock or for any other purpose which might
constitute the transaction contemplated hereby a "purpose credit" within the
meaning of said Regulation G or Regulation U, or cause this Agreement to violate
any other regulation of the Board of Governors of the Federal Reserve System or
the Securities and Exchange Act of 1934, as amended, or any rules or regulations
promulgated under either said statute.
Section 4.1.8. [Intentionally omitted.].
Section 4.1.9. Taxes. The Borrower and each Subsidiary has filed all tax
returns (federal, state and local) required to be filed and paid all taxes shown
thereon to be due, including interest and penalties, except for those taxes, if
any, which are being contested in good faith and by appropriate proceedings, and
for which proper reserve or other provision has been made in accordance with
51
GAAP and except where any failure to file or pay would not be reasonably
expected to have a Material Adverse Effect on the Borrower or any Subsidiary.
Section 4.1.10. ERISA. Neither Borrower nor any Commonly Controlled Entity
maintain, contributes to, or is required to make or accrue a contribution or has
within any of the six preceding years maintained, contributed to or been
required to make or accrue a contribution to any Plan subject to regulation
under Title IV of ERISA, any Plan that is subject to the minimum funding
requirements of Section 412 of the Code or Section 302 of ERISA, or any
Multiemployer Plan.
Section 4.1.11. Ownership of Properties.
Section 4.1.11.1. Except for Permitted Encumbrances, Borrower and any
Subsidiary has good title to all of its properties and assets free and clear of
all restrictions and Liens of any kind other than those which could not be
reasonably expected to have a Material Adverse Effect or a material adverse
effect on the validity, authorization and/or enforceability of the Financing
Documents and/or any provision thereof.
Section 4.1.11.2. Borrower and each Subsidiary enjoys quiet possession
under all material leases of real property to which it is a party as a lessee,
and all of such leases are valid, subsisting and, to Borrower's knowledge, in
full force and effect.
Section 4.1.11.3. Except as set forth in Exhibit 4.1.11, all of the
material properties used in the conduct of the Borrower's and each Subsidiary's
business (i) are in good repair, working order and condition (reasonable wear
and tear excepted) and reasonably suitable for use in the operation of
Borrower's, and each Subsidiary's business; and (ii) to Borrower's knowledge are
currently operated and maintained, in all material respects, in accordance with
the requirements of applicable governmental authorities.
Section 4.1.12. Accuracy of Representations and Warranties. The Borrower's
representations or warranties set forth in this Agreement or in any document or
certificate furnished pursuant to this Agreement or in connection with the
transactions contemplated hereby taken as a whole do not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
any statement of fact contained herein or therein, in light of the circumstances
under which it was made, not misleading.
Section 4.1.13. No Investment Company. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company" as such terms are defined in the Investment Company Act of
1940, as amended, which is required to register thereunder.
Section 4.1.14. Solvency, etc. After giving effect to the consummation of
each Loan outstanding and to be made under this Agreement as of the date hereof
and as of the date of each Advance, the Borrower (a) will be able to pay its
debts as they become due, (b) will have funds and capital or access to funds and
capital, sufficient to carry on its business and all businesses in which it is
about to engage, and (c) will own property in the aggregate having a value both
at fair valuation and at fair saleable value in the ordinary course of the
Borrower's business greater than the amount required to pay its Indebtedness and
any other indebtedness of the Borrower, including for this purpose unliquidated
and disputed claims. The Borrower will not be rendered insolvent by the
execution and delivery of this Agreement and the consummation of any
transactions contemplated herein.
52
Section 4.1.15. Approvals. Except as set forth in Exhibit
4.1.3, all approvals required from all Persons including without limitation all
governmental authorities with respect to the Financing Documents have been
obtained.
Section 4.1.16. [Intentionally omitted.].
Section 4.1.17. Compliance with Laws, etc. Borrower and its Subsidiaries
have all permits, governmental licenses, registrations and approvals, material
to carrying out of Borrower's and each of the Subsidiaries' businesses as
presently conducted and as required by law or the rules and regulations of any
federal, foreign governmental, state, county or local association, corporation
or governmental agency, body, instrumentality or commission having jurisdiction
over the Borrower or any of the Subsidiaries as to which the failure to obtain
same could reasonably be expected to have a Material Adverse Effect. All
Borrower's existing authorizations, licenses and permits are in full force and
effect, are duly issued in the name of, or validly assigned to the Borrower and
the Borrower has full power and authority to operate thereunder. There is no
material violation or material failure of compliance or, to Borrower's
knowledge, allegation of such violation or failure of compliance on the part of
the Borrower with any such permits, licenses, registrations, approvals, rules or
regulations and there is no action, proceeding or investigation pending or to
the knowledge of the Borrower threatened nor has the Borrower received any
notice of such which might result in the termination or suspension of any such
permit, license, registration or approval which in any case could have a
Material Adverse Effect.
Section 4.1.18. Principal Place of Business; Books and Records. The
Borrower's chief executive offices are located at Borrower's addresses set forth
in Section 9.6.
Section 4.1.19. Subsidiaries. As of the date of this Agreement, the
Borrower has only the Subsidiaries identified on Exhibit 1.1.
Section 4.1.20. [Intentionally omitted.].
Section 4.1.21. Environmental Compliance. The Borrower has
taken all necessary steps to investigate the past and present condition and
usage of any real property owned, occupied, leased, subleased or used at any
time by the Borrower or any of its Subsidiaries (the "Real Estate") and the
operations conducted thereon and, based upon such diligent investigation, has
determined that:
(a) none of the Borrower, its Subsidiaries or any operator of the Real
Estate or any operations thereon is in violation, or alleged violation, of any
judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree relating to
health, safety or the environment (hereinafter "Environmental Laws"), which
violation would have a Material Adverse Effect;
53
(b) neither the Borrower nor any of its Subsidiaries has received notice
from any third party including, without limitation: any federal, state or local
governmental authority, (i) that any one of them has been identified by the
United States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X; (ii) that any hazardous waste,
as defined by 42 U.S.C. ss.6903(5), any hazardous substances as defined by 42
U.S.C. ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
ss.9601(33) and any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated, transported or disposed of has
been found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that the Borrower or any of its Subsidiaries
conduct a remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative proceeding
(in each case, contingent or otherwise) arising out of any third party's
incurrence of costs, expenses, losses or damages of any kind whatsoever in
connection with the release of the Hazardous Substances;
(c) except as set forth on Exhibit 4.1.21 attached hereto; (i) no portion
of the Real Estate has been used for the handling, processing, storage or
disposal of Hazardous Substances except in accordance with applicable
Environmental Laws; and no underground tank or other underground storage
receptacle for Hazardous Substances is located on any portion of the Real
Estate; (ii) in the course of any activities conducted by the Borrower, its
Subsidiaries or operators of its properties, no Hazardous Substances have been
generated or are being used on the Real Estate except in accordance with
applicable Environmental Laws; (iii) there have been no releases (i.e. any past
or present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping) or threatened releases
of Hazardous Substances on, upon, into or from the properties of the Borrower or
its Subsidiaries, which releases would have a Material Adverse Effect on the
value of any of the Real Estate or adjacent properties or the environment; (iv)
to the best of the Borrower's knowledge, there have been no releases on, upon,
from or into any real property in the vicinity of any of the Real Estate which,
through soil or groundwater contamination, may have come to be located on, and
which would have a Material Adverse Effect on the value of, the Real Estate; and
(v) in addition, any Hazardous Substances that have been generated on any of the
Real Estate have been transported offsite only by carrier having an
identification number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities have been and
are, to the best of the Borrower's knowledge, operating in compliance with such
permits and applicable Environmental Laws; and
(d) none of the Borrower and its Subsidiaries, or any of the Real Estate is
subject to any applicable environmental law requiring the performance of
Hazardous Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any governmental agency or the
recording or delivery to other Persons of an environmental disclosure document
or statement by virtue of the transactions set forth herein and contemplated
hereby, or as a condition to the effectiveness of any other transactions
contemplated hereby.
Section 4.1.22. Material Agreements, etc. Exhibit 4.1.22 attached hereto
accurately and completely lists all material agreements to which the Borrower or
any of the Subsidiaries are a party including without limitation all software
licenses, and all material construction, engineering, consulting, employment,
management, operating and related agreements, if any, which are presently in
effect. All of the material agreements to which Borrower or any Subsidiary is a
54
party, are legally valid, binding, and, to Borrower's knowledge, in full force
and effect and neither the Borrower, any of the Subsidiaries nor, to Borrower's
knowledge, any other parties thereto are in material default thereunder.
Section 4.1.23. Patents, Trademarks and Other Property Rights. The Borrower
and any Subsidiaries own, possess, or have licenses or the right to use or could
obtain ownership, possession, license or the right to use without having a
Material Adverse Effect on Borrower's Business Condition all the patents,
trademarks, service marks, trade names, copyrights and non-governmental
licenses, and all rights with respect to the foregoing, necessary for the
conduct of their respective businesses as now conducted, without, to the
Borrower's knowledge any conflict with the rights of others with respect
thereto.
ARTICLE 5.
COVENANTS OF THE BORROWER
Section 5.1. Affirmative Covenants of the Borrower Other than Reporting
Requirements. From the date hereof and thereafter for so long as there is
Indebtedness of the Borrower to any Lender and/or the Agent under any of the
Financing Documents or any part of the Commitment is in effect, the Borrower
will, with respect to itself and, unless noted otherwise below, with respect to
each of its Subsidiaries, ensure that each Subsidiary will, unless the Majority
Lenders shall otherwise consent in writing:
Section 5.1.1. Payment of Taxes, etc. Pay and discharge all
material taxes and assessments and governmental charges or levies imposed upon
it or upon its income or profits, or upon any properties belonging to it, prior
to the date on which penalties attach thereto, and all lawful claims for the
same which, if unpaid, might become a Lien upon any of its properties, provided
that (unless and until foreclosure, restraint, sale or any similar proceeding is
pending and is not stayed, discharged or bonded within 30 days after
commencement) the Borrower shall not be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings and for which proper reserve or other provision has been made
in accordance with GAAP.
Section 5.1.2. Insurance. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurers
insurance with respect to its properties and business against such casualties
and contingencies as shall be in accordance with the general practices of
businesses engaged in similar activities in similar geographic areas and in
amounts, containing such terms, in such forms and for such periods as may be
reasonable and prudent.
Section 5.1.3. Preservation of Existence, etc. Except as permitted under
Sections 5.2.3 or 5.2.4, preserve and maintain in full force and effect its
legal existence, and all material rights, franchises and privileges in the
jurisdiction of its organization, preserve and maintain all material licenses,
governmental approvals, trademarks, patents, trade secrets, copyrights and trade
names owned or possessed by it and which are necessary or, in the reasonable
business judgment of the Borrower, desirable in view of its business and
operations or the ownership of its properties and qualify or remain qualified as
a foreign corporation in each jurisdiction in which such qualification is
necessary or, in its reasonable business judgment, desirable in view of its
business and operations and ownership of its properties, except where the
failure to so maintain or qualify would not be reasonably expected to have a
Material Adverse Effect.
55
Section 5.1.4. Compliance with Laws, etc. Comply with the requirements of
all present and future applicable laws, rules, regulations and orders of any
governmental authority having jurisdiction over it and/or its business
including, without limitation, regulations of the United States Copyright Office
and the Copyright Royalty Tribunal, except where the failure to comply would not
be reasonably expected to have a Material Adverse Effect.
Section 5.1.5. Visitation Rights. Permit, during normal business hours and
upon the giving of reasonable notice, the Agent, the Lenders and any agents or
representatives thereof, to examine and make copies of (at Borrower's cost and
expense) and abstracts from the records and books of account of, and visit the
properties of the Borrower and any Subsidiary to discuss the affairs, finances
and accounts of the Borrower or any Subsidiary with any of their partners,
officers or management level employees and/or any independent certified public
accountant of the Borrower and/or any Subsidiary.
Section 5.1.6. Keeping of Records and Books of Account. Keep adequate
records and books of account, in which complete entries will be made in
accordance with GAAP and with applicable requirements of any governmental
authority having jurisdiction over the Borrower and/or any Subsidiary in
question, reflecting all financial transactions.
Section 5.1.7. Maintenance of Properties, etc. Maintain and preserve all of
its properties necessary or useful in the proper conduct of its business, in
good working order and condition, ordinary wear and tear excepted except where
the failure to do so would not be reasonably expected to have a Material Adverse
Effect.
Section 5.1.8. Post-Closing Items. Complete in a timely fashion all actions
required in the Post-Closing Letter.
Section 5.1.9. Other Documents, etc. Except as otherwise
required by this Agreement, pay, perform and fulfill in all material respects
all of its obligations and covenants under each document, instrument or
agreement to which it is a party; provided that so long as the Borrower or any
Subsidiary is contesting any claimed default by it or them under any of the
foregoing by proper proceedings conducted in good faith and for which any proper
reserve or other provision in accordance with and to the extent required by GAAP
has been made, such default shall not be deemed a violation of this covenant.
Section 5.1.10. Minimum Fixed Coverage Ratio. Maintain a Fixed Charge
Coverage Ratio of not less than 3.0:1.0 for the period from the Closing Date
until the second anniversary thereof, such ratio to be measured (i) at each
Borrower fiscal quarter end on or prior to September 30, 1998 for the period
commencing as of the Closing Date and ending on such fiscal quarter end and (ii)
at each Borrower fiscal quarter end thereafter for the rolling four Borrower
fiscal quarter period consisting of the Borrower fiscal quarter then ending and
the three immediately preceding Borrower fiscal quarters and after the second
anniversary of the Closing Date, maintain a Fixed Charge Coverage Ratio of not
less than 2.0:1.0, such ratio to be measured at each Borrower fiscal quarter end
thereafter for the rolling four Borrower fiscal quarter period consisting of the
Borrower fiscal quarter then ending and the three immediately preceding Borrower
fiscal quarters.
Section 5.1.11. Minimum Consolidated Tangible Net Worth. Maintain a
Consolidated Tangible Net Worth in an amount not less than the sum of (i)
56
$110,000,000 plus (ii) seventy five percent (75%) of Net Income for the period
beginning as of the Closing Date without any reduction for losses plus (iii) one
hundred percent (100%) of the gross proceeds of (y) any offering or sale of a
security, note or other instrument of the Borrower or any Subsidiaries after the
Closing Date, or (z) the conversion of any debt instrument of the Borrower or
any Subsidiaries into an equity security of the Borrower or any Subsidiaries
after the Closing Date less (iv) nonrecurring, extraordinary charges against Net
Income incurred in connection with acquisitions effected by Borrower or by its
Subsidiaries, so long as such nonrecurring, extraordinary charges against Net
Income are taken not later than ninety (90) days following such acquisition,
which such charges against Net Income may not exceed in the aggregate
$50,000,000, to be measured at each Borrower fiscal quarter end on a cumulative
basis from the Closing Date.
Section 5.1.12. Maximum Ratio of Total Indebtedness for Borrowed Money to
EBITDA. Maintain at the end of each fiscal quarter of the Borrower in each
period set forth below a ratio of (i) total Indebtedness for Borrowed Money of
the Borrower and its Subsidiaries on a consolidated basis as of the last day of
such fiscal quarter to (ii) EBITDA for the rolling four Borrower fiscal quarter
period consisting of such fiscal quarter and the three immediately preceding
Borrower fiscal quarters of not greater than 2.75:1.0.
Section 5.1.13. Minimum Quick Ratio. Maintain at the end of each fiscal
quarter of the Borrower a ratio of (i) the sum of (w) cash on hand or on deposit
in any bank or trust company which has not suspended business, (x) Cash
Equivalent Investments (without duplication with (w)) and (y) net outstanding
amount of accounts receivable to (ii) (x) Current Liabilities plus the
outstanding amount of the Revolving Credit Loan of not less than 1.20:1.00. Each
item described in clauses (i) and (ii) of this Section 5.1.13 shall be
calculated as of the last day of the Borrower fiscal quarter and include only
the item(s) in question of the Borrower and its Subsidiaries on a consolidated
basis.
Section 5.1.14. Officer's Certificates and Requests Provide
each Officer's Certificate required under this Agreement and each Request so
that the statements contained therein are accurate and complete in all material
respects.
Section 5.1.15. Depository. Use the Agent as a depository of Borrower's
funds.
Section 5.1.16. Additional Assurances. From time to time hereafter, execute
and deliver or cause to be executed and delivered, such additional instruments,
certificates and documents, and take all such actions, as the Agent shall
reasonably request for the purpose of implementing or effectuating the
provisions of the Financing Documents, and upon the exercise by the Agent of any
power, right, privilege or remedy pursuant to the Financing Documents which
requires any consent, approval, registration, qualification or authorization of
any governmental authority or instrumentality, exercise and deliver all
applications, certifications, instruments and other documents and papers that
the Agent may be so required to obtain.
Section 5.1.17. Environmental Compliance. The Borrower will not, and will
not permit any of its Subsidiaries to, (i) use any of the Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances except in compliance with law, (ii) cause or permit to be located on
any of the Real Estate any underground tank or other underground storage
receptacle for Hazardous Substances, (iii) generate any Hazardous Substances on
any of the Real Estate except in compliance with law, (iv) conduct any activity
at any Real Estate or use any Real Estate in any manner so as to cause a release
57
(i.e. releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping) or threatened
release of Hazardous Substances on, upon or into the Real Estate except in
compliance with law or (v) otherwise conduct any activity at any Real Estate or
use any Real Estate in any manner that would violate any Environmental Law or
bring such Real Estate into violation of any Environmental Law except if such
violation cannot reasonably be expected to have a Material Adverse Effect.
Section 5.1.18. Remediation. Immediately contain and remove any Hazardous
Material found on the Premises in compliance with applicable laws and at the
Borrower's expense, subject however, to the right of the Agent, at the Agent's
option but at the Borrower's expense, to have an environmental engineer or other
representative review the work being done.
Section 5.1.19. Site Assessments. Promptly upon the request of
the Agent, based upon the Agent's reasonable belief that a material Hazardous
Waste or other environmental problem exists with respect to any Premises,
provide the Agent with a Phase I environmental site assessment report and, if
Agent finds a reasonable basis for further assessment in such Phase I
assessment, a Phase II environmental site assessment report, or an update of any
existing report, all in scope, form and content and performed by such company as
may be reasonably satisfactory to the Agent.
Section 5.1.20. Indemnity. Indemnify, defend, and hold the Agent and the
Lenders harmless from and against any claim, cost, damage (including without
limitation consequential damages), expense (including without limitation
reasonable attorneys' fees and expenses), loss, liability, or judgment now or
hereafter arising as a result of any claim for environmental cleanup costs, any
resulting damage to the environment and any other environmental claims against
the Borrower, any Subsidiary, the Lenders and/or the Agent arising out of the
transactions contemplated by this Agreement, or any of the Premises. The
provisions of this Section shall continue in effect and shall survive (among
other events), until the applicable statute of limitations has expired, any
termination of this Agreement, foreclosure, a deed in lieu transaction, payment
and satisfaction of the Obligations of Borrower, and release of any collateral
for the Loans.
Section 5.2. Negative Covenants of the Borrower. From the date hereof and
thereafter for so long as there is Indebtedness of the Borrower to any Lender
and/or the Agent under any of the Financing Documents or any part of the
Commitment is in effect, the Borrower will not, with respect to itself and,
unless noted otherwise below, with respect to each of the Subsidiaries, will
ensure that each such Subsidiary will not, without the prior written consent of
the Majority Lenders:
Section 5.2.1. Liens, etc. Create, incur, assume or suffer to exist any
Lien of any nature, upon or with respect to any of its properties, now owned or
hereafter acquired, or assign as collateral or otherwise convey as collateral,
any right to receive income, except that the foregoing restrictions shall not
apply to any Liens:
Section 5.2.1.1. For taxes, assessments or governmental charges or levies
on property if the same shall not at the time be delinquent or thereafter can be
paid without penalty or interest, or (if foreclosure, distraint, sale or other
similar proceedings shall not have been commenced or if commenced not stayed,
bonded or discharged within 30 days after commencement) are being contested in
good faith and by appropriate proceedings diligently conducted and for which
proper reserve or other provision has been made in accordance with and to the
extent required by GAAP;
58
Section 5.2.1.2. Imposed by law, such as landlords', carriers',
warehousemen's and mechanics' liens, bankers' set off rights and other similar
Liens arising in the ordinary course of business for sums not yet due or being
contested in good faith and by appropriate proceedings diligently conducted and
for which proper reserve or other provision has been made in accordance with and
to the extent required by GAAP;
Section 5.2.1.3. Arising in the ordinary course of business out of pledges
or deposits under worker's compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or similar
legislation;
Section 5.2.1.4. Arising from or upon any judgment or award, provided that
such judgment or award is being contested in good faith by proper appeal
proceedings and only so long as execution thereon shall be stayed;
Section 5.2.1.5. Those set forth on Exhibit 1.8;
Section 5.2.1.6. Those which may hereafter be granted to the Agent for the
benefit of the Lenders as collateral for the Loans and/or Borrower's other
Obligations arising in connection with or under any of the Financing Documents;
Section 5.2.1.7. Deposits to secure the performance of bids, trade
contracts (other than for Borrowed Money), leases, statutory obligations, surety
bonds, performance bonds and other obligations of a like nature incurred in the
ordinary course of the Borrower's or any Subsidiary's business;
Section 5.2.1.8. Easements, rights of way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of business by any Borrower or any
Subsidiary;
Section 5.2.1.9. Liens securing Indebtedness permitted to exist under
Section 5.2.7.3; provided that the Lien securing any such Indebtedness is
limited to the item of property purchased or leased in each case together with
accessions, attachments, additions and improvements thereto and replacements and
proceeds thereof;
Section 5.2.1.10. UCC-1 financing statements filed solely for notice or
precautionary purposes by lessors under operating leases which do not secure
Indebtedness and which are limited to the items of equipment leased pursuant to
the lease in question;
Section 5.2.1.11. Liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
Section 5.2.1.12. Liens on properties in respect of judgments or awards,
the Indebtedness with respect to which is permitted by Section 6.1.4;
59
Section 5.2.1.13. leases or subleases and licenses and sublicenses granted
to others in the ordinary course of Borrower's business not interfering in any
material respect with the business of Borrower and its Subsidiaries taken as a
whole, and any interest or title of a lessor, licensor or under any lease or
license;
Section 5.2.1.14. Liens on assets (including the proceeds thereof and
accessions thereto) that existed at the time such assets were acquired by
Borrower or a Subsidiary (including liens on assets of any corporation that
existed at the time it became or becomes a Subsidiary);
Section 5.2.1.15. Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection with the
importation of goods;
Section 5.2.1.16. Liens that are not prior to the Lien of the Agent or
Lenders which constitute rights of set-off of a customary nature or bankers'
liens with respect to amounts on deposit, whether arising by operation of law or
by contract, in connection with arrangements entered into with banks in the
ordinary course of business; and
Section 5.2.1.17. Liens on insurance proceeds in favor of insurance
companies solely to secure the payment of financed premiums; provided that the
foregoing shall not apply to (i) customary provisions in license or similar
agreements that restrict the ability of the Borrower or its Subsidiaries to
assign, transfer, license or sublicense any intellectual property subject to
such license or agreement, (ii) negative pledge provisions in operating leases,
capital leases or other equipment finance agreements; provided such negative
pledge agreements restrict only Liens on the equipment subject to such lease or
agreement together with any accessions, additions, replacements or proceeds of
such equipment, (iii) negative pledge agreements that require that any Person is
entitled to the benefit, on a pari passu basis, of any Lien grated to the Banks
as security for the Obligations so long as the Indebtedness benefiting from such
provision does not exceed $2,500,000 outstanding at any time and is not
Subordinated Debt, and (iv) restrictions contained in contracts or instruments
governing Subordinated Debt..
Section 5.2.2. Assumptions, Guaranties, etc. of Indebtedness of Other
Persons. Assume, guarantee, endorse or otherwise become directly or contingently
liable in connection with any obligation or Indebtedness of any other Person
("Guaranties"), except:
Section 5.2.2.1. Guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business;
Section 5.2.2.2. Guaranties constituting Indebtedness permitted by Section
5.2.7; and
Section 5.2.2.3. Guaranties set forth on Exhibit 5.2.2.
Section 5.2.2.4. Guaranties by any Subsidiary of Indebtedness of other
Subsidiaries or the Borrower otherwise permitted by this Agreement and
Guaranties by the Borrower of Indebtedness of any Subsidiary otherwise permitted
by this Agreement.
Section 5.2.3. Acquisitions, Dissolution, etc. Acquire, in one or a series
of transactions, all or any substantial portion of the assets or ownership
60
interests in another Person, or dissolve, liquidate, wind up, merge or
consolidate or combine with another Person; provided, however, that Borrower
shall be permitted to acquire all or any portion of the assets of or ownership
interests in another Person (by merger, consolidation or otherwise so long as
the Borrower survives) having aggregate (for all such acquisitions since the
Closing Date) consideration not to exceed an amount equal to the lesser of (i)
twenty percent (20%) of Consolidated Tangible Net Worth immediately prior to the
proposed effective date of such acquisition or (ii) $50,000,000. Prior to the
consummation of any such permitted transaction, Borrower shall submit to the
Agent a pro-forma Compliance Certificate on a consolidated basis (including the
to-be-acquired assets and any assumed liabilities or if ownership interests are
acquired, the to-be-acquired Person if such Person is to be a Subsidiary and if
not, the to-be-acquired ownership interests, all measured as set forth below in
this Section 5.2.3), which such pro-forma Compliance Certificate shall indicate
that no Default or Event of Default exists or would exist following consummation
of the permitted transaction and that the Borrower would be in compliance with
(on a consolidated basis including the to-be-acquired assets and any assumed
liabilities or if ownership interests are acquired, the to-be-acquired Person if
such Person is to be a Subsidiary and if not, the to-be-acquired ownership
interests), Sections 5.1.10, 5.1.11, 5.1.12 and 5.1.13 following consummation of
the permitted transaction, including the to-be-acquired assets, Person or
ownership interests and the operating results thereof on the same basis and for
the same periods as the Borrower is measured for each such covenant,
respectively.
Section 5.2.4. Disposition of Assets. Effect any disposition of material
assets, other than (i) the disposition of assets in the ordinary course of
business, consistent with past practices and (ii) subject to Section 5.2.8, the
disposition of assets not to exceed 15% of Consolidated Tangible Net Worth in
the aggregate over the period commencing on the Closing Date and ending on
August 31, 2000, the value of which assets shall be based upon the aggregate
book value of all such assets determined as of the date of the sale thereof and
prior to such disposition.
Section 5.2.5. Change in Nature of Business. Engage as a material portion
of the Borrower's business in a business materially different from existing
business of the Borrower.
Section 5.2.6. Sale and Leaseback. Enter into any arrangements, directly or
indirectly, whereby the Borrower or any Subsidiary of the Borrower shall sell or
transfer any property owned by it in order then or thereafter to lease such
property or lease other property that the Borrower or any Subsidiary of the
Borrower intends to use for substantially the same purpose as the property being
sold or transferred, other than the sale and leaseback of assets not to exceed,
subject to Section 5.2.8, 10% of Borrower's Consolidated Tangible Net Worth in
the aggregate during the period commencing on the Closing Date and ending on
August 31, 2000, the value of which assets shall be based upon the aggregate
book value of all such assets determined as of the date of the sale and
leaseback thereof.
Section 5.2.7. Indebtedness. Incur, create, become or be liable directly or
indirectly in any manner with respect to or permit to exist any Indebtedness
except:
Section 5.2.7.1. Indebtedness under the Financing Documents;
Section 5.2.7.2. Indebtedness with respect to trade payable obligations and
other normal accruals and customer deposits in the ordinary course of business
not yet due and payable in accordance with customary trade terms or with respect
to which the Borrower or any Subsidiary is contesting in good faith the amount
61
or validity thereof by appropriate proceedings and then only to the extent such
person has set aside on its books adequate reserves therefor in accordance with
and to the extent required by GAAP;
Section 5.2.7.3. Indebtedness with respect to Capitalized Lease Obligations
and purchase money Indebtedness with respect to real or personal property in an
aggregate amount outstanding at any time not to exceed , subject to Section
5.2.8 ten percent (10%) of Consolidated Tangible Net Worth; provided that the
amount of any purchase money Indebtedness does not exceed 90% of the lesser of
the cost or fair market value of the asset purchased with the proceeds of such
Indebtedness;
Section 5.2.7.4. Unsecured Indebtedness in an aggregate amount outstanding
at any time not to exceed, subject to Section 5.2.8, an amount equal to five
percent (5%) of Consolidated Tangible Net Worth;
Section 5.2.7.5. Indebtedness listed on Exhibit 3.1.1.8;
Section 5.2.7.6. Indebtedness owing by the Borrower to any Subsidiary or by
any Subsidiary to the Borrower or any other Subsidiary.
Section 5.2.7.7. Indebtedness constituting Guaranties permitted by Section
5.2.2.
Section 5.2.7.8. Indebtedness outstanding as a refinancing of Indebtedness
permitted under another clause of this Section 5.2.7 other than Sections 5.2.7.2
or 5.2.7.8; provided that such Indebtedness as refinanced continues to qualify
as permitted Indebtedness under the clause of this Section 5.2.7 under which the
refinanced Indebtedness was permitted under this Section 5.2.7.
Section 5.2.7.9. current liabilities of the Borrower or such Subsidiary
incurred in the ordinary course of business not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for credit on an open
account basis customarily extended and in fact extended in connection with
normal purchases of goods and services;
Section 5.2.7.10. Subordinated Debt;
Section 5.2.7.11. Indebtedness incurred by Borrower or any of its
Subsidiaries constituting interest rate or currency future, forward or swap
contracts entered into for the purpose of hedging interest rate or currency
fluctuation risk.
Section 5.2.8. Overall Aggregate Cap.. Notwithstanding the terms and
conditions of Sections 5.2.4, 5.2.6, 5.2.7.3, 5.2.7.4 and 5.2.10 the
Consolidated Tangible Net Worth measurements of permitted transactions contained
therein are subject to an aggregate Consolidated Tangible Net Worth limitation
of thirty percent (30%) of Consolidated Tangible Net Worth for all such
transactions permitted by any of said Sections.
Section 5.2.9. Minimum Net Income. Have a negative Net Income for any two
(2) consecutive Borrower fiscal quarters in excess of $2,000,000 for each such
fiscal quarter or as of the end of any Borrower fiscal quarter, have a negative
Net Income for the rolling four Borrower fiscal quarter period consisting of
such fiscal quarter and the three immediately preceding Borrower fiscal
quarters.
62
Section 5.2.10. Dividends, Payments and Distributions. Declare or pay any
dividends, or make any other distribution of cash or property or both (other
than of the capital stock of Borrower) to any holder of any security of the
Borrower or any of its Subsidiaries other than compensation for services
rendered to the Borrower and/or any Subsidiary or use any of its assets for
payment, purchase, conversion, redemption, retention, acquisition or retirement
of any beneficial interest in the Borrower or set aside or reserve assets for
sinking or like funds for any of the foregoing purposes, make any other
distribution by reduction of capital or otherwise in respect of any beneficial
interest in the Borrower (each a "Restricted Payment"); provided, however, that;
(i) the Borrower may honor conversions of its Subordinated Debt permitted by
this Agreement in accordance with the terms thereof; (ii) Borrower may make
Restricted Payments with the proceeds of the issuance of its equity securities
or Subordinated Debt permitted by this Agreement; and (iii) the Borrower shall
be permitted to repurchase shares of its own capital stock having aggregate (for
all such repurchases since the Closing Date) consideration not to exceed,
subject to Section 5.2.8, ten percent (10%) of Consolidated Tangible Net Worth.
Section 5.2.11. Investments in or to Other Persons. Make or commit to make
any Investment in or to any other Person (including, without limitation, any
Subsidiary) other than (i) advances to employees for business expenses not to
exceed $1,000,000 in the aggregate outstanding at any one time to all such
employees, (ii) other employee loans made in the ordinary course of the
Borrower's business in amounts and for purposes consistent with the Borrower's
past practice, (iii) Cash Equivalent Investments, (iv), Investments in accounts,
contract rights and chattel paper (as defined in the Uniform Commercial Code)
and notes receivable, arising or acquired in the ordinary course of business,
(v) Investments in Subsidiaries not to exceed in the aggregate at any one time
five percent (5%) of Consolidated Tangible Net Worth, (vi) Investments described
on Exhibit 5.2.2, (vii) Investments by Subsidiaries of the Borrower in the
Borrower, (viii) Investments received as consideration for permitted asset
dispositions under Section 5.2.4, (ix) Investments arising in connection with
acquisitions permitted under Section 5.2.3 of this Agreement, (x) Investments
made pursuant to, or arising under, currency or interest rate, swap, futures or
forward agreements entered into by Borrower or its Subsidiaries, to the extent
such swap, futures or forward agreements are otherwise permitted under this
Agreement.
Section 5.2.12. Transactions with Affiliates. Engage in any transaction or
enter into any agreement with an Affiliate, or in the case of Affiliates or
Subsidiaries, with the Borrower or another Affiliate or Subsidiary, except in
the ordinary course of business, as permitted by any other provision of this
Agreement and then only on an arm's length basis except as set forth on Exhibit
5.2.12.
Section 5.2.13. Change of Fiscal Year. Change its fiscal year.
Section 5.2.14. [Intentionally omitted.].
Section 5.2.15. Compliance with ERISA. With respect to Borrower and any
Commonly Controlled Entity (a) withdraw from or cease to have an obligation to
contribute to, any Multiemployer Plan, (b) engage in any "prohibited
transaction" (as defined in Section 4975 of the Code) involving any Plan, (c)
except for any deficiency caused by a waiver of the minimum funding requirement
under sections 412 and/or 418 of the Code, as described above, incur or suffer
to exist any material "accumulated funding deficiency" (as defined in section
302 of ERISA and section 412 of the Code) of the Borrower or any Commonly
Controlled Entity, whether or not waived, involving any Single Employer Plan,
63
(d) incur or suffer to exist any Reportable Event or the appointment of a
trustee or institution of proceedings for appointment of a trustee for any
Single Employer Plan if, in the case of a Reportable Event, such event continues
unremedied for ten (10) days after notice of such Reportable Event pursuant to
sections 4043(a), (c) or (d) of ERISA is given, if in the reasonable opinion of
the Majority Lenders any of the foregoing is likely to result in a material
liability of the Borrower, (e) permit the assets held under any Plan to be
insufficient to protect all accrued benefits, (f) allow or suffer to exist any
event or condition, which presents a material risk of incurring a material
liability of the Borrower or any Commonly Controlled Entity to PBGC by reason of
termination of any such Plan or (g) cause or permit any Plan maintained by
Borrower and/or any Commonly Controlled Entity to be out of compliance with
ERISA in any material respect. For purposes of this Section 5.2.15 "material
liability" shall be deemed to mean any liability of Fifty Thousand Dollars
($50,000) or more in the aggregate.
Section 5.2.16. Hazardous Waste. Become involved, or permit, to the extent
reasonably possible after the exercise by the Borrower of reasonable due
diligence and preventive efforts, any tenant of its real property to become
involved, in any operations at such real property generating, storing,
disposing, or handling Hazardous Material or any other activity that could lead
to the imposition on the Borrower or the Agent or any Lender, or any such real
property of any material liability or Lien under any environmental laws.
Section 5.2.17. Other Restrictions on Liens. Enter into any agreement or
otherwise agree to or grant any restriction substantially similar to the
provisions of Section 5.2.1 hereof or which would otherwise have the effect of
prohibiting, restricting, impeding or interfering with the creation subsequent
to the Closing Date of Liens to secure the Obligations; provided that the
foregoing shall not apply to (i) customary provisions in license or similar
agreements that restrict the ability of the Borrower or its Subsidiaries to
assign, transfer, license or sublicense any intellectual property subject to
such license or agreement, (ii) negative pledge provisions in operating leases,
capital leases or other equipment finance agreements; provided such negative
pledge agreements restrict only Liens on the equipment subject to such lease or
agreement together with any accessions, additions, replacements or proceeds of
such equipment, (iii) negative pledge agreements that require that any Person is
entitled to the benefit, on a pari passu basis, of any Lien grated to the Banks
as security for the Obligations so long as the Indebtedness benefiting from such
provision does not exceed $2,500,000 outstanding at any time and is not
Subordinated Debt, and (iv) restrictions contained in contracts or instruments
governing Subordinated Debt..
Section 5.3. Reporting Requirements. From the date hereof and
thereafter for so long as the Borrower is indebted to any Lender and/or the
Agent under any of the Financing Documents, the Borrower will, unless the
Majority Lenders shall otherwise consent in writing, furnish or cause to be
furnished to the Agent for distribution to the Lenders:
Section 5.3.1. As soon as possible and in any event upon acquiring
knowledge of an Event of Default or Default, continuing on the date of such
statement, the written statement of an Authorized Representative setting forth
details of such Event of Default or Default and the actions which the Borrower
has taken and proposes to take with respect thereto;
Section 5.3.2. As soon as practicable after the end of each Borrower fiscal
year and in any event within 90 days after the end of each such fiscal year,
consolidated and consolidating balance sheets of the Borrower and any
Subsidiaries as at the end of such year, and the related statements of income
and cash flows or shareholders' equity of the Borrower and any Subsidiaries
setting forth in each case the corresponding figures for the preceding fiscal
64
year, such statements to be certified by a firm of independent certified public
accountants selected by Borrower and reasonably acceptable to the Majority
Lenders, to be accompanied by a true copy of said auditors' management letter,
if one was provided to the Borrower, and to contain a statement to the effect
that such accountants have examined Sections 5.1.10 through 5.1.13 and 5.2.17
and that no Default or Event of Default exists on account of Borrower's failure
to have been in compliance therewith on the date of such statement;
Section 5.3.3. As soon as is practicable after the end of each fiscal
quarter of each Borrower fiscal year and in any event within 45 days thereafter,
consolidated balance sheets of the Borrower and any Subsidiaries as of the end
of such period and the related statements of income and cash flows and
shareholders' equity of the Borrower and any Subsidiaries, subject to changes
resulting from year-end adjustments, together, subject to Section 5.3.6, with a
comparison to the Budget for the applicable period, such balance sheets and
statements to be prepared and certified by an Authorized Representative in an
Officer's Certificate as having been prepared in accordance with GAAP except for
footnotes and year-end adjustments;
Section 5.3.4. Simultaneously with the furnishing of each of the year-end
consolidated and consolidating financial statements of the Borrower and any
Subsidiaries to be delivered pursuant to Section 5.3.2 and each of the
consolidated quarterly statements of the Borrower and the Subsidiaries to be
delivered pursuant to Section 5.3.3 an Officer's Certificate of an Authorized
Representative which shall contain a statement in the form of Exhibit 3.1.1.10
to the effect that no Event of Default or Default has occurred, without having
been waived in writing, or if there shall have been an Event of Default not
previously waived in writing pursuant to the provisions hereof, or a Default,
such Officer's Certificate shall disclose the nature thereof and the actions the
Borrower has taken and prepare to take with respect thereto. Each such Officer's
Certificate shall also contain a calculation of and certify to the accuracy of
the amounts required to be calculated in the financial covenants of the Borrower
contained in this Agreement and described in Exhibit 3.1.1.10;
Section 5.3.5. Promptly after the commencement thereof, notice of all
material actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, affecting the Borrower and/or any Subsidiary;
Section 5.3.6. On or before January 31 of each fiscal year of the Borrower,
an updated proposed budget, prepared on a quarterly basis, and updated financial
projections for the Borrower and any Subsidiaries on a consolidated basis
(together, the "Budget") for such fiscal year, setting forth in detail
reasonably satisfactory to the Agent the projected results of operations of the
Borrower and any Subsidiaries on a consolidated quarterly basis, detailed
Capital Expenditures plan and stating underlying assumptions and accompanied by
a written statement of an Authorized Representative certifying as to the
approval of such Budget by Borrower's board of directors;
Section 5.3.7. Such other information respecting the Business Condition of
the Borrower or any Subsidiaries as the Agent or any Lender may from time to
time reasonably request. Notwithstanding any provision of this Agreement to the
contrary, neither the Borrower nor any of its Subsidiaries will be required to
disclose, permit the inspection, examination, copying or making extracts of, or
discuss, any document, information or other matter that (i) constitutes
non-financial trade secrets or non-financial proprietary information, or (ii)
the disclosure of which to the Agent or any Lender, or their designated
representative, is then prohibited by (a) law, or (b) an agreement binding on
65
the Borrower or any Subsidiary that was not entered into by the Borrower or such
Subsidiary for the primary purpose of concealing information from the Agent or
any of the Lenders;
Section 5.3.8. Prompt written notice of any Material Adverse Effect and an
explanation thereof and of the actions the Borrower and/or such Subsidiary
propose to take with respect thereto; and
Section 5.3.9. Written notice of the following events, as soon as possible
and in any event within 15 days after the Borrower knows or has reason to know
thereof: (i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, or (ii) the institution of proceedings or the taking or
expected taking of any other action by PBGC or the Borrower or any Commonly
Controlled Entity to terminate, withdraw or partially withdraw from any Plan
and, with respect to any Multiemployer Plan, the Reorganization (as defined in
Section 4241 of ERISA) or Insolvency (as defined in Section 4245 of ERISA) of
such Multiemployer Plan and in addition to such notice, deliver to the Agent
whichever of the following may be applicable: (a) an Officer's Certificate
setting forth details as to such Reportable Event and the action that the
Borrower or Commonly Controlled Entity proposes to take with respect thereto,
together with a copy of any notice of such Reportable Event that may be required
to be filed with PBGC, or b) any notice delivered by PBGC evidencing its intent
to institute such proceedings or any notice to PBGC that such Plan is to be
terminated, as the case may be.
ARTICLE 6.
EVENTS OF DEFAULT
Section 6.1. Events of Default. The Borrower shall be in default under each
of the Financing Documents, upon the occurrence of any one or more of the
following events ("Events of Default"):
Section 6.1.1. If the Borrower shall fail to make due and punctual payment
of any principal, fees, interest and/or other amounts payable under this
Agreement as provided in any Note and/or in this Agreement when the same is due
and payable except that it shall not be an Event of Default if any interest or
fees are paid within 5 days after they or it is or are due and payable, whether
at the due date thereof or at a date fixed for prepayment and it shall not be an
Event of Default if Borrower pays any expense reimbursements owing to the Agent
or any Lender (other than those payable on the Closing Date) within 30 days
after they are due and payable, but it shall be an Event Default if the Borrower
shall fail to make any such payment of fees, interest, principal and/or any
other amount under this Agreement and/or under any Note on the date when such
payment becomes due and payable by acceleration;
Section 6.1.2. If the Borrower or any Subsidiary shall make an assignment
for the benefit of creditors, or shall fail generally to pay its debts as they
become due, or shall admit in writing its inability to pay its debts as they
become due or shall file a voluntary petition in bankruptcy, or shall file any
petition or answer seeking any reorganization, arrangement, composition,
adjustment, liquidation, dissolution or similar relief under the present or any
future federal bankruptcy laws or other applicable federal, state or other
statute, law or regulation, or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of it or of all or any
substantial part of its properties, or if partnership or corporate action shall
be taken for the purpose of effecting any of the foregoing; or
66
Section 6.1.3. To the extent not described in Section 6.1.2, (i) if the
Borrower or any Subsidiary shall be the subject of a bankruptcy proceeding, or
(ii) if any proceeding against any of them seeking any reorganization,
arrangement, composition, adjustment, liquidation, dissolution, or similar
relief under the present or any future federal bankruptcy law or other
applicable federal, foreign, state or other statute, law or regulation shall be
commenced, or (iii) if any trustee, receiver or liquidator of any of them or of
all or any substantial part of any or all of their properties shall be appointed
without their consent or acquiescence; provided that in any of the cases
described above in this Section 6.1.3, such proceeding or appointment shall not
be an Event of Default if the Borrower or the Subsidiary in question shall cause
such proceeding or appointment to be discharged, vacated, dismissed or stayed
within sixty (60) days after commencement thereof; or
Section 6.1.4. If final judgment or judgments (other than those described
in Section 6.1.10) aggregating more than $1,000,000 shall be rendered against
the Borrower or any Subsidiary and shall remain undischarged, unstayed or unpaid
for an aggregate of thirty (30) days (whether or not consecutive) after entry
thereof; or
Section 6.1.5. If the Borrower or any Subsidiary shall default (after
giving effect to any applicable grace period) in the due and punctual payment of
the principal of or interest on any Indebtedness exceeding in the aggregate
$2,000,000 (other than the Loans), or if any default shall have occurred and be
continuing after any applicable grace period under any mortgage, note or other
agreement evidencing, securing or providing for the creation of such
Indebtedness exceeding in the aggregate $2,000,000, which results in the
acceleration of such Indebtedness; or
Section 6.1.6. If there shall be a default in the performance of the
Borrower's obligations under Section 5.1.3 (insofar as such Section requires the
preservation of the corporate existence of the Borrower), any of Sections 5.1.10
through 5.1.13 or Section 5.2 of this Agreement; or
Section 6.1.7. If there shall be any Default in the performance of any
covenant or condition contained in this Agreement or in any of the other
Financing Documents to be observed or performed pursuant to the terms hereof or
any Financing Document, as the case may be, other than a covenant or condition
referred to in any other subsection of this Section 6.1 and such Default shall
continue unremedied or unwaived, (i) in the case of any covenant or condition
contained in Section 5.3, for fifteen (15) Business Days, or (ii) in the case of
any other covenant or condition for which no other grace period is provided, for
thirty (30) days, or (iii) in the case of any other covenant or condition for
which another grace period is provided, for such grace period, or (iv) if any of
the representations and warranties made or deemed made by the Borrower to the
Agent and/or any Lender pursuant to any of the Financing Documents proves to
have been false or misleading in any material respect when made and such
falseness or misleading representation or warranty would be reasonably likely to
have a material adverse effect on the Agent or any Lender or their rights and
remedies or a Material Adverse Effect; or
Section 6.1.8. If there shall be any attachment of any deposits or other
property of the Borrower and/or any Subsidiary in the possession of any Lender
or any attachment of any other property of the Borrower and/or any Subsidiary in
an amount exceeding $50,000, which shall not be discharged, vacated or stayed
within thirty (30) days of the date of such attachment; or
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Section 6.1.9. Any certification of the financial statements, furnished to
the Agent pursuant to Section 5.3.2, shall contain any material qualification;
provided, however, that such qualifications will not be deemed an Event of
Default if in each case (i) such certification shall state that the examination
of the financial statements covered thereby was conducted in accordance with
generally accepted auditing standards, including but not limited to all such
tests of the accounting records as are considered necessary in the circumstances
by the independent certified public accountants preparing such statements, (ii)
such financial statements were prepared in accordance with GAAP and (iii) such
qualification does not involve the "going concern" status of the entity being
reported upon.
Section 6.1.10. The Borrower or any of its Subsidiaries shall be indicted
for a state or federal crime, or any criminal action (other than as described in
Section 6.1.4) shall otherwise have been brought against the Borrower or any of
its Subsidiaries, a punishment for which in any such case could include the
forfeiture of any assets of the Borrower or such Subsidiary having a fair market
value in excess of $2,000,000.
Section 6.1.11. Any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by
the Securities and Exchange Commission under said Act) of 35% or more of the
outstanding shares of common stock of the Borrower; or, during any period of
twelve consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period or who were successors to such
directors in the ordinary course shall cease to constitute a majority of the
board of directors of the Borrower.
ARTICLE 7.
REMEDIES OF LENDERS
Upon the occurrence and during the continuance of any one or more of the
Events of Default, the Agent, at the request of the Majority Lenders, shall, by
written notice to the Borrower, declare the obligation of the Lenders to make or
maintain the Loans to be terminated, whereupon the same and the Commitment shall
forthwith terminate, and the Agent, at the request of the Majority Lenders,
shall, by notice to the Borrower, declare the entire unpaid principal amount of
each Note and all fees and interest accrued and unpaid thereon and/or under this
Agreement, and/or any of the other Financing Documents and any and all other
Indebtedness under this Agreement, each Note and/or any of the other Financing
Documents to the Agent and/or any of the Lenders and/or to any holder of all or
any portion of each Note to be forthwith due and payable, whereupon each Note,
and all such accrued fees and interest and other such Indebtedness shall become
and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that upon the occurrence of an Event of Default
under Sections 6.1.2 or 6.1.3, all of the unpaid principal amount of each Note,
all fees and interest accrued and unpaid thereon and/or under this Agreement
and/or under any of the other Financing Documents and any and all other such
Indebtedness of the Borrower to any of the Lenders and/or to any such holder
shall thereupon be due and payable in full without any need for the Agent and/or
any Lender to make any such declaration or take any action and the Lenders'
obligations to make the Loans shall simultaneously terminate. The Agent shall,
in accordance with the votes of the Majority Lenders, exercise all remedies on
behalf of and for the account of each Lender and on behalf of its respective Pro
Rata Share of the Loans, its Note and Indebtedness of the Borrower owing to it
or any of the foregoing, including, without limitation, all remedies available
under or as a result of this Agreement, the Notes or any of the other Financing
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Documents or any other document, instrument or agreement now or hereafter
securing any Note without any such exercise being deemed to modify in any way
the fact that each Lender shall be deemed a separate creditor of the Borrower to
the extent of its Note and Pro Rata Share of the Loans and any other amounts
payable to such Lender under this Agreement and/or any of the other Financing
Documents and the Agent shall be deemed a separate creditor of the Borrower to
the extent of any amounts owed by the Borrower to the Agent.
ARTICLE 8.
AGENT
Section 8.1. Appointment. The Agent is hereby appointed as Agent, hereunder
and each Lender hereby authorizes the Agent to act under the Financing Documents
as its Agent hereunder and thereunder, respectively. The Agent agrees to act as
such upon the express conditions contained in this Article 8. The provisions of
this Article 8 are solely for the benefit of the Agent, and, except as expressly
provided in Section 8.6, neither the Borrower nor any third party shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement and the other Financing
Documents to which the Agent is a party, the Agent shall act solely as Agent of
the Lenders and does not assume nor shall the Agent be deemed to have assumed
any obligation towards or relationship of agency or trust with or for the
Borrower, any Affiliate or any Subsidiary.
Section 8.2. Powers; General Immunity.
Section 8.2.1. Duties Specified. Each Lender irrevocably
authorizes the Agent to take such action on such Lender's behalf, including,
without limitation, to execute and deliver the Financing Documents to which the
Agent is a party and to exercise such powers hereunder and under the Financing
Documents and other instruments and agreements referred to herein as are
specifically delegated to the Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto. The Agent shall have only
those duties and responsibilities which are expressly specified in this
Agreement or in any of the Financing Documents and may perform such duties by or
through its agents or employees. The duties of the Agent shall be mechanical and
administrative in nature; and the Agent shall not have by reason of this
Agreement or any of the Financing Documents a fiduciary relationship in respect
of any Lender; and nothing in this Agreement or any of the Financing Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
the Agent any obligations in respect of this Agreement or any of the Financing
Documents or the other instruments and agreements referred to herein except as
expressly set forth herein or therein.
Section 8.2.2. No Responsibility For Certain Matters. The Agent shall not
be responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of any of the Financing
Documents or any other document, instrument or agreement now or hereafter
executed in connection herewith or therewith, or for any representations,
warranties, recitals or statements made herein or therein or made in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith by or on
behalf of the Borrower and/or any Subsidiary to the Agent or any Lender, or be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained herein or
therein or as to the use of the proceeds of the Loans or of the existence or
possible existence of any Default or Event of Default.
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Section 8.2.3. Exculpatory Provisions. Neither the Agent nor
any of its officers, directors, employees or agents shall be liable to any
Lender for any action taken or omitted hereunder or under any of the Financing
Documents, or in connection herewith or therewith unless caused by its or their
gross negligence or willful misconduct. If the Agent shall request instructions
from Lenders with respect to any action (including the failure to take an
action) in connection with any of the Financing Documents, the Agent shall be
entitled to refrain from taking such action unless and until the Agent, shall
have received instructions from the Majority Lenders (or all of the Lenders if
the action requires their consent). Without prejudice to the generality of the
foregoing, (i) the Agent shall be entitled to rely, and shall be fully protected
in relying, upon any communication, instrument or document believed by it to be
genuine and correct and to have been signed or sent by the proper person or
persons, and shall be entitled to rely and shall be protected in relying on
opinions and judgments of attorneys (who may be attorneys for the Borrower
and/or any Subsidiary), accountants, experts and other professional advisors
selected by it; and (ii) no Lender shall have any right of action whatsoever
against the Agent as a result of the Agent acting or (where so instructed)
refraining from acting under any of the Financing Documents or the other
instruments and agreements referred to herein in accordance with the
instructions of the Majority Lenders (or all of the Lenders if the action
requires their consent). The Agent shall be entitled to refrain from exercising
any power, discretion or authority vested in it under any of the Financing
Documents or the other instruments and agreements referred to herein unless and
until it has obtained the instructions of the Majority Lenders (or all of the
Lenders if the action requires their consent).
Section 8.2.4. Agent Entitled to Act as Lender. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, Fleet in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans and the Commitment,
Fleet shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include Fleet in its
individual capacity. The Agent and its affiliates may accept deposits from, lend
money to and generally engage in any kind of banking, trust, financial advisory
or other business with the Borrower or any Affiliate or Subsidiary as if it were
not performing the duties specified herein, and may accept fees and other
consideration from the Borrower and/or any of such other Persons for services in
connection with this Agreement and otherwise without having to account for the
same to Lenders.
Section 8.3. Representations and Warranties; No Responsibility for
Appraisal of Creditworthiness. Each Lender represents and warrants that it has
made its own independent investigation of the financial condition and affairs of
the Borrower and any Subsidiaries of any of them in connection with the making
of the Loans hereunder and has made and shall continue to make its own appraisal
of the creditworthiness of the Borrower and the Subsidiaries. The Agent shall
not have any duty or responsibility, either initially or on a continuing basis,
to make any such investigation or any such appraisal on behalf of Lenders or to
provide any Lender with any credit or other information with respect thereto
whether coming into its possession before the making of any Loan or any time or
times thereafter (except for information received by the Agent under Section 5.3
hereof which the Agent will promptly forward to the Lenders), and the Agent
shall further not have any responsibility with respect to the accuracy of or the
completeness of the information provided to any of the Lenders.
Section 8.4. Right to Indemnity. Each Lender severally agrees to indemnify
the Agent proportionately to its Pro Rata Share of the Loans, to the extent the
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Agent shall not have been reimbursed by or on behalf of the Borrower, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
counsel fees and disbursements) or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
performing its duties hereunder or in any way relating to or arising out of this
Agreement and/or any of the other Financing Documents; provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. If any
indemnity furnished to the Agent for any purpose shall, in the opinion of the
Agent, be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished.
Section 8.5. Payee of Note Treated as Owner. The Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Agent. Any request, authority or consent of any person or entity
who, at the time of making such request or giving such authority or consent, is
the holder of any Note shall be conclusive and binding on any subsequent holder,
transferee or assignee of that Note or of any Note or Notes issued in exchange
for such Note.
Section 8.6. Resignation by Agent.
Section 8.6.1. The Agent may resign from the performance of all its
functions and duties under the Financing Documents at any time by giving 30
days' prior written notice to the Borrower and each of the Lenders. Such
resignation shall take effect upon the acceptance by a successor Agent, of
appointment pursuant to Sections 8.6.2 and 8.6.3 below or as otherwise provided
below.
Section 8.6.2. Upon any such notice of resignation, the Majority Lenders
shall appoint a successor Agent, who shall be a Lender and, so long as no
Default or Event of Default exists and is continuing, who shall be reasonably
satisfactory to the Borrower and in any event shall be an incorporated bank or
trust company with a combined surplus and undivided capital of at least Five
Hundred Million Dollars ($500,000,000).
Section 8.6.3. If a successor Agent shall not have been so
appointed within said 30 day period, the resigning Agent, with the consent of
the Borrower, which shall not be unreasonably withheld or delayed, shall then
appoint a successor Agent, who shall be a Lender and who shall serve as the
Agent, until such time, if any, as the Majority Lenders, and so long as no
Default or Event of Default exists and is continuing, with the consent of the
Borrower, which shall not be unreasonably withheld or delayed, appoint a
successor Agent as provided above.
Section 8.6.4. If no successor Agent has been appointed pursuant to
Sections 8.6.2 or 8.6.3 by the 40th day after the date such notice of
resignation was given by the resigning Agent, the resigning Agent's resignation
shall become effective and the Majority Lenders shall thereafter perform all the
duties of the resigning Agent under the Financing Documents including without
limitation directing the Borrower on how to submit Requests and Interest Rate
Elections and otherwise on administration of the Agent's duties under the
Financing Documents and the Borrower shall comply therewith so long as such
directions do not have a Material Adverse Effect on the Borrower or any
Subsidiary until such time, if any, as the Majority Lenders, and so long as no
71
Default or Event of Default exists and is continuing, with the consent of the
Borrower, which shall not be unreasonably withheld or delayed, appoint a
successor Agent, as provided above.
Section 8.7. Successor Agent. Upon the acceptance of any appointment as the
Agent hereunder by a successor Agent, that successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent and the retiring Agent, shall be discharged from its
duties and obligations as the Agent under the Financing Documents. After any
retiring Agent's resignation hereunder as the Agent the provisions of this
Article 8 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Agent under the Financing Documents.
Section 8.8. Syndication Agent. The Syndication Agent shall have no duties,
responsibilities or liabilities in its capacity as Syndication Agent hereunder.
ARTICLE 9.
MISCELLANEOUS
Section 9.1. Consent to Jurisdiction and Service of Process.
Section 9.1.1. Except to the extent prohibited by applicable law, the
Borrower irrevocably:
Section 9.1.1.1. agrees that any suit, action, or other legal proceeding
arising out of any of the Financing Documents or any of the Loans may be brought
in the courts of record of The Commonwealth of Massachusetts or the State of
California or any other state(s) in which any of the Borrower's assets are
located or the courts of the United States located in The Commonwealth of
Massachusetts or the State of California or any other state(s) in which any of
the Borrower's assets are located;
Section 9.1.1.2. consents to the jurisdiction of each such court in any
such suit, action or proceeding; and
Section 9.1.1.3. waives any objection which it may have to the laying of
venue of such suit, action or proceeding in any of such courts.
For such time as any of the Indebtedness of the Borrower to any Lender
and/or the Agent shall be unpaid in whole or in part and/or the Commitment is in
effect, the Borrower irrevocably designates the registered agent or agent for
service of process of the Borrower as reflected in the records of the Secretary
of State of the State of California as its registered agent, and, in the absence
thereof, the Secretary of State of the State of California as its agent to
accept and acknowledge on its behalf service of any and all process in any such
suit, action or proceeding brought in any such court and agrees and consents
that any such service of process upon such agent and written notice of such
service to the Borrower by registered or certified mail shall be taken and held
to be valid personal service upon the Borrower regardless of where the Borrower
shall then be doing business and that any such service of process shall be of
the same force and validity as if service were made upon it according to the
laws governing the validity and requirements of such service in each such state
and waives any claim of lack of personal service or other error by reason of any
such service. Any notice, process, pleadings or other papers served upon the
aforesaid designated agent shall, within three (3) Business Days after such
service, be sent by the method provided therefor under Section 9.6 to the
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Borrower at its address set forth in this Agreement. EACH OF THE PARTIES HERETO
HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF ANY DISPUTE BETWEEN THE
BORROWER AND THE AGENT AND/OR THE LENDERS WITH RESPECT TO THE FINANCING
DOCUMENTS AND/OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREBY.
Section 9.2. Rights and Remedies Cumulative. No right or remedy conferred
upon or reserved to the Agent and/or the Lenders in any of the Financing
Documents is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given under any of the Financing
Documents or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy under any of the Financing
Documents, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 9.3. Delay or Omission not Waiver. No delay in exercising or
failure to exercise by the Agent and/or the Lenders of any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by any of the Financing
Documents or by law to the Agent and/or any of the Lenders may be exercised from
time to time, and as often as may be deemed expedient, by the Agent and/or any
of the Lenders.
Section 9.4. [Intentionally omitted.].
Section 9.5. Amendments, etc. No amendment, modification, termination, or
waiver of any provision of any of the Financing Documents nor consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be in a written notice given to the Borrower by the Agent and
consented to in writing by the Majority Lenders (or by the Agent acting alone if
any specific provision of this Agreement provides that the Agent, acting alone,
may grant such amendment, modification, termination, waiver or departure) and
the Agent shall give any such notice if the Majority Lenders so consent or
direct the Agent to do so; provided, however, that any such amendment,
modification, termination, waiver or consent shall require a written notice
given to the Borrower by the Agent and consented to in writing by all of the
Lenders if the effect thereof is to (i) change any of the provisions affecting
the interest rate or the fees on the Loans, (ii) extend or modify the
Commitment, (iii) discharge or release the Borrower from its obligation to repay
all principal due under the Loans or release any collateral or guaranty for the
Loans, (iv) change any Lender's Pro Rata Share of the Commitment or the Loans,
(v) modify this Section 9.5, (vi) change the definition of Majority Lenders,
(vii) extend any scheduled due date for payment of principal, interest or fees
or (viii) permit the Borrower to assign any of its rights under or interest in
this Agreement, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. Any amendment or
modification of this Agreement must be signed by the Borrower, the Agent and at
least all of the Lenders consenting thereto who shall then hold the Pro Rata
Shares of the Loans required for such amendment or modification under this
Section 9.5 and the Agent shall sign any such amendment if such Lenders so
consent or direct the Agent to do so provided that any Lender dissenting
therefrom shall be given an opportunity to sign any such amendment or
modification. Any amendment of any of the Financing Documents must be signed by
each of the parties thereto. No notice to or demand on the Borrower and no
consent, waiver or departure from the terms of this Agreement granted by the
Agent and/or the Lenders in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances.
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Section 9.6. Addresses for Notices, etc. All notices, requests, demands and
other communications provided for hereunder (other than those which, under the
terms of this Agreement, may be given by telephone, which shall be effective
when received verbally) shall be in writing (including telecopied communication)
and mailed (provided that in the case of items referred to in the next-to-last
sentence of Section 9.1 and the items set forth below as requiring a copy to
legal counsel for the Borrower, the Agent or a Lender, such items shall be
mailed by overnight courier for delivery the next Business Day), telecopied or
delivered to the applicable party at the addresses indicated below:
If to the Borrower:
Xxxxxxx Navigation Limited
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxx, Treasurer
Telecopy: (000) 000-0000
With a copy to (if given pursuant to any of Sections 5.3.1, 5.3.5,
5.3.8 and 5.3.9):
Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxx Xxxxxxxx, Esq.
Telecopy: (000) 000-0000
If to Fleet as the Agent and/or a Lender:
Fleet National Bank
Mailstop: MA BO F04M
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Vice President
Telecopy: (000) 000-0000
With a copy to (if given pursuant to any of Sections 5.3.1, 5.3.5,
5.3.8 and 5.3.9, )
Xxxxxxxx, Xxxxx & Xxxxxx
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx III, Esq.
Telecopy: (000) 000-0000
If to any other Lender, to the address set forth on Exhibit
1.9.
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or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party complying as to the delivery with the
terms of this Section. All such notices, requests, demands and other
communications shall be effective when received. Requests, certificates, other
items provided pursuant to Section 5.3 and other routine mailings or notices
need not be accompanied by a copy to legal counsel for the Lenders or the
Borrower.
Section 9.7. Costs, Expenses and Taxes. The Borrower agrees to pay on
demand the reasonable fees and out-of-pocket expenses of Messrs. Xxxxxxxx, Xxxxx
& Xxxxxx, counsel for the Agent and of any local counsel retained by the Agent
in connection with the preparation, execution, delivery and administration
(excluding expenses of any Lender's sale of a participation in or sale or
assignment of all or a portion of such Lender's Commitment or Loans other than
any such sale pursuant to Sections 2.2.3 or 2.9.7) of the Financing Documents
and the Loans. The Borrower agrees to pay on demand all reasonable costs and
expenses (including without limitation reasonable attorneys' fees) incurred by
the Agent and/or any Lender, upon or after the occurrence and during the
continuance of any Default or Event of Default, if any, in connection with the
enforcement of any of the Financing Documents and any amendments, waivers, or
consents with respect thereto. In addition, the Borrower shall pay on demand any
and all stamp and other taxes and fees payable or determined to be payable in
connection with the execution and delivery of the Financing Documents, and
agrees to save the Lenders and the Agent harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes or fees, except those resulting from the Lenders' or Agent's
gross negligence or willful misconduct.
Section 9.8. Participations. Subject to compliance with the proviso in the
first sentence of Section 9.11, any Lender may sell participations in all or
part of the Loans made by it and/or its Pro Rata Share of the Commitment or any
other interest herein to a financial institution having at least $500,000,000 of
assets, in which event the participant shall not have any rights under any of
the Financing Documents (the participant's rights against such Lender in respect
of that participation to be those set forth in the Agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder or thereunder shall be determined as if such Lender had
not sold such participation. Such Lender may furnish any information concerning
the Borrower and any Subsidiary in the possession of such Lender from time to
time to participants (including prospective participants); provided that such
Lender and any participant comply with the proviso in Section 9.11.7 as if any
such participant was a Substituted Lender.
Section 9.9. Binding Effect; Assignment. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Agent and the Lenders and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Agent and the Lenders. This Agreement and all
covenants, representations and warranties made herein and/or in any of the other
Financing Documents shall survive the making of the Loans, the execution and
delivery of the Financing Documents and shall continue in effect so long as any
amounts payable under or in connection with any of the Financing Documents or
any other Indebtedness of the Borrower to the Agent and/or any Lender remains
unpaid or the Commitment remains outstanding; provided, however, that Sections
2.2.3 and 9.7 shall, except to the extent agreed to in a pay-off letter by the
Agent and the Lenders in their complete discretion, survive and remain in full
force and effect for 90 days following repayment in full of all amounts payable
under or in connection with all of the Financing Documents and any other such
Indebtedness.
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Section 9.10. Actual Knowledge. For purposes of this Agreement, neither the
Agent nor any Lender shall be deemed to have actual knowledge of any fact or
state of facts unless the senior loan officer or any other officer responsible
for the Borrower's account established pursuant to this Agreement at the Agent
or such Lender, shall, in fact, have actual knowledge of such fact or state of
facts or unless written notice of such fact shall have been received by the
Agent or such Lender in accordance with Section 9.6.
Section 9.11. Substitutions and Assignments. Upon the request of any
Lender, the Agent and such Lender may assign all or any portion of its Pro Rata
Share of the Commitment and the Loans to a Federal Reserve Bank and may, subject
to the terms and conditions hereinafter set forth, with the consent of the
Borrower which consent shall not be unreasonably withheld or delayed and without
such consent if a Default or Event of Default is continuing, take the actions
set forth below to substitute one or more financial institutions having at least
$500,000,000 in assets (a "Substituted Lender") as a Lender or Lenders hereunder
having an amount of the Loans as specified in the relevant Substitution
Agreement executed in connection therewith; provided that no Lender, Selling
Lender or Substituted Lender shall have a Pro Rata Share of the Commitment and
the Loans in the aggregate of less than 10% and Fleet and/or its Affiliates
shall retain for their own account at least 30% of the Commitment.
Section 9.11.1. In connection with any such substitution the Substituted
Lender and the Agent shall enter into a Substitution Agreement in the form of
Exhibit 9.11.1 hereto (a "Substitution Agreement") pursuant to which such
Substituted Lender shall be substituted for the Lender requesting the
substitution in question (any such Lender being hereinafter referred to as a
"Selling Lender") to the extent of the reduction in the Selling Lender's portion
of the Loans specified therein. In addition, such Substituted Lender shall
assume such of the obligations of each Selling Lender under the Financing
Documents as may be specified in such Substitution Agreement and this Agreement
shall be amended by execution and delivery of each Substitution Agreement to
include such Substituted Lender as a Lender for all purposes under the Financing
Documents and to substitute for the then existing Exhibit 1.9 to this Agreement
a new Exhibit 1.9 in the form of Schedule A to such Substitution Agreement
setting forth the portion of the Loans belonging to each Lender following
execution thereof. Each Lender and the Borrower hereby appoint the Agent as
Agent on its behalf to countersign and accept delivery of each Substitution
Agreement and, to the extent applicable, the provisions of Article 8 hereof
shall apply mutatis mutandis with respect to such appointment and anything done
or omitted to be done by the Agent in pursuance thereof.
Section 9.11.2. Without prejudice to any other provision of this Agreement,
each Substituted Lender shall, by its execution of a Substitution Agreement,
agree that neither the Agent nor any Lender is any way responsible for or makes
any representation or warranty as to: (a) the accuracy and/or completeness of
any information supplied to such Substituted Lender in connection therewith, (b)
the financial condition, creditworthiness, affairs, status or nature of the
Borrower and/or any of the Subsidiaries or the observance by the Borrower, or
any other party of any of its obligations under this Agreement or any of the
other Financing Documents or (c) the legality, validity, effectiveness, adequacy
or enforceability of any of the Financing Documents.
Section 9.11.3. The Agent shall be entitled to rely on any Substitution
Agreement delivered to it pursuant to this Section 9.11 which is complete and
regular on its face as to its contents and appears to be signed on behalf of the
Substituted Lender which is a party thereto, and the Agent shall have no
liability or responsibility to any party as a consequence of relying thereon and
76
acting in accordance with and countersigning any such Substitution Agreement.
The effective date of each Substitution Agreement shall be the date specified as
such therein and each Lender prior to such effective date shall, for all
purposes hereunder, be deemed to have and possess all of their respective rights
and obligations hereunder up to 12:00 o'clock Noon on the effective date
thereof.
Section 9.11.4. Upon delivery to the Agent of any Substitution Agreement
pursuant to and in accordance with this Section 9.11 and acceptance thereof by
the Agent (which delivery shall be evidenced and accepted exclusively and
conclusively by the Agent's countersignature thereon pursuant to the terms
hereof without which such Substitution Agreement shall be ineffective): (i)
except as provided hereunder and in Section 9.11.5, the respective rights of
each Selling Lender and the Borrower against each other under the Financing
Documents with respect to the portion of the Loans being assigned or delegated
shall be terminated and each Selling Lender and the Borrower shall each be
released from all further obligations to the other hereunder with respect
thereto (all such rights and obligations to be so terminated or released being
referred to in this Section 9.11 as "Discharged Rights and Obligations"); and
(ii) the Borrower and the Substituted Lender shall each acquire rights against
each other and assume obligations towards each other which differ from the
Discharged Rights and Obligations only in so far as the Borrower and the
Substituted Lender have assumed and/or acquired the same in place of the Selling
Lender in question; and (iii) the Agent, the Substituted Lender and the other
Lenders shall acquire the same rights and assume the same obligations between
themselves as they would have acquired and assumed had such Substituted Lender
been an original party to this Agreement as a Lender possessing the Discharged
Rights and Obligations acquired and/or assumed by it in consequence of the
delivery of such Substitution Agreement to the Agent.
Section 9.11.5. Discharged Rights and Obligations shall not include, and
there shall be no termination or release pursuant to this Section 9.11 of (i)
any rights or obligations arising pursuant to any of the Financing Documents in
respect of the period or in respect of payments hereunder made during the period
prior to the effective date of the relevant Substitution Agreement or, (ii) any
rights or obligations relating to the payment of any amount which has fallen due
and not been paid hereunder prior to such effective date or rights or
obligations for the payment of interest, damages or other amounts becoming due
hereunder as a result of such nonpayment.
Section 9.11.6. With respect to any substitution of a Substituted Lender
taking place after the Closing Date, the Borrower shall issue to such
Substituted Lender and to such Selling Lender, new Notes reflecting the
inclusion of such Substituted Lender as a Lender and the reduction in the
respective Loans of such Selling Lender, such new Notes to be issued against
receipt by the Borrower of the existing Notes of such Lender. The Selling Lender
or the Substituted Lender shall pay to the Agent for its own account an
assignment fee in the amount of $3,000 for each assignment hereunder, which
shall be payable at or before the effective date of the assignment.
Section 9.11.7. Each Lender may furnish to any financial institution having
at least $500,000,000 in assets which such Lender proposes to make a Substituted
Lender or to a Substituted Lender any information concerning such Lender, the
Borrower and any Subsidiary in the possession of that Lender from time to time;
provided that any Lender providing any confidential information about the
Borrower and/or any Subsidiary to any such financial institution shall first
obtain such financial institution's agreement to keep confidential any such
confidential information.
77
Section 9.12. Payments Pro Rata. The Agent agrees that promptly after its
receipt of each payment from or on behalf of the Borrower in respect of any
obligations of the Borrower hereunder it shall distribute such payment to the
Lenders pro rata based upon their respective Pro Rata Shares, if any, of the
obligations with respect to which such payment was received. Each of the Lenders
agrees that, if it should receive any amount hereunder (whether by voluntary
payment, by realization upon security, by the exercise of the right of setoff
under Section 2.5.2 or otherwise or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Financing Documents, or
otherwise), which is applicable to the payment of the Obligations of a sum which
with respect to the related sum or sums received by other Lenders is in a
greater proportion than the total amount of such Obligation then owed and due to
such Lender bears to the total amount of such Obligation then owed and due to
all of the Lenders immediately prior to such receipt, except for any amounts
received pursuant to Section 2.2.3, then such Lender receiving such excess
payment shall purchase for cash without recourse or warranty from the other
Lenders an interest in the Obligations of the Borrower to such Lenders in such
amount as shall result in a proportional participation by all the Lenders in
such amount; provided further, however, that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
Section 9.13. Indemnification. The Borrower irrevocably agrees to and does
hereby indemnify and hold harmless Agent and each of the Lenders, their agents
or employees and each Person, if any, who controls any of the Agent and the
Lenders within the meaning of Section 15 of the Securities Act of 1933, as
amended, and each and all and any of them (the "Indemnified Parties"), against
any and all losses, claims, actions, causes of action, damages or liabilities
(including any amount paid in settlement of any action, commenced or threatened
and any amount described in Section 8.4) (collectively, the "Damages"), joint or
several, to which they, or any of them, may become subject under statutory law
or at common law, and to reimburse the Indemnified Parties for any legal or
other out-of-pocket expenses reasonably incurred by it or them in connection
with investigating, preparing for or defending against any of the Indemnified
Parties, insofar as such losses, claims, damages, liabilities or actions arise
out of or are related to any act or omission of the Borrower and/or any
Subsidiary with respect to this Agreement, any of the Notes, any of Loans and/or
any offering of securities by the Borrower and/or any Subsidiary after the date
hereof and/or in connection with the Securities and Exchange Act of 1933 and/or
failure to comply with any applicable federal, state or foreign governmental
law, rule, regulation, order or decree, including without limitation, any
Damages which arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact with respect to matters relative to any of
the foregoing contained in any document distributed in connection therewith, or
the omission or alleged omission to state in any of the foregoing a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, but excluding any Damages to the
extent arising from or due to the gross negligence or willful misconduct of any
of the Indemnified Parties.
Promptly upon receipt of notice of the commencement of any action, or
information as to any threatened action against any of the Indemnified Parties
in respect of which indemnity or reimbursement may be sought from the Borrower
on account of the agreement contained in this Section 9.13, notice shall be
given to the Borrower in writing of the commencement or threatening thereof,
together with a copy of all papers served, but the omission so to notify the
Borrower of any such action shall not release the Borrower from any liability
which it may have to such Indemnified Parties unless, and only to the extent
that, such omission materially prejudiced Borrower's ability to defend against
such action.
78
In case any such action shall be brought against any of the Indemnified
Parties, the Borrower shall be entitled to participate in (and, to the extent
that it shall wish, to select counsel and to direct) the defense thereof at its
own expense. Any of the Indemnified Parties shall have the right to employ its
or their own counsel in any case, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless the employment of such
counsel shall have been authorized in writing by the Borrower in connection with
the defense of such action or the Borrower shall not have employed counsel to
have charge of the defense of such action or such Indemnified Party shall have
received an opinion from an independent counsel that there may be defenses
available to it which are different from or additional to those available to the
Borrower (in which case the Borrower shall not have the right to direct the
defense of such action on behalf of such Indemnified Party), in any of which
events the same shall be borne by the Borrower. If any Indemnified Party settles
any claim or action with respect to which the Borrower has agreed to indemnify
such Indemnified Party pursuant to the terms hereof, the Borrower shall have no
liability pursuant to this Section 9.13 to such Indemnified Party with respect
to such claim or action unless the Borrower shall have consented in writing to
the terms of such settlement.
The provisions of Section 9.13 shall be effective only to the fullest
extent permitted by law.
Section 9.14. Governing Law. This Agreement and each Note shall be governed
by, and construed in accordance with, the laws of The Commonwealth of
Massachusetts without regard to such state's conflict of laws rules.
Section 9.15. Severability of Provisions. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Section 9.16. Headings. Article and Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
Section 9.17. Counterparts. This Agreement may be executed and delivered in
any number of counterparts each of which shall be deemed an original, and this
Agreement shall be effective when at least one counterpart hereof has been
executed by each of the parties hereto.
79
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as a sealed instrument by their respective officers thereunto duly
authorized, as of August 26, 1997.
In the presence of: XXXXXXX NAVIGATION LIMITED
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Ing
Name: Xxxxxx X. Ing
Title: Vice President, Finance and Chief
Financial Officer
In the presence of: FLEET NATIONAL BANK, as Agent for the Lenders
and as a Lender
By: /s/ Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx, Vice President
In the presence of: BANKBOSTON, N.A., as Syndication Agent for the
Lenders and as a Lender
By: /s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx X. Xxxxxx
Title: Director
In the presence of: SANWA BANK CALIFORNIA, as a Lender
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
In the presence of: ABN AMRO BANK N.V., as a Lender
/s/ X.X. Xxxxxxx By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxxx
Title: Assistant Vice President
80
EXHIBIT 1.1 - SUBSIDIARIES
XXXXXXX NAVIGATION LIMITED
LIST OF SUBSIDIARIES OF REGISTRANT
TR Navigation Corporation Trimble Mexico S. de X.X.
(incorporated in California) (incorporated under the laws of Mexico)
Trimble Specialty Products, Inc. Trimble Brasil Limitada
(incorporated in California) (incorporated under the laws of Brazil)
Xxxxxxx Navigation Europe Limited
(organized under the laws of the United Kingdom)
Xxxxxxx Navigation International Foreign Sales Corporation
(organized under the laws of Barbados)
Xxxxxxx Navigation International Limited
(incorporated in California)
TNL Flight Services, Inc.
(incorporated in Texas)
Xxxxxxx Navigation New Zealand Limited
(organized under the laws of New Zealand)
DataCom Software Research Limited
(organized under the laws of New Zealand)
Xxxxxxx Navigation Italia s.r.l.
(organized under the laws of Italy)
Xxxxxxx Navigation Deutchland GmbH
(organized under the laws of Germany)
Xxxxxxx Navigation France S.A.
(organized under the laws of France)
Xxxxxxx Navigation Singapore PTE Limited
(organized under the laws of Singapore)
Xxxxxxx Navigation Iberica S.L.
(organized under the laws of Spain)
Xxxxxxx Navigation Australia Pty Limited
(organized under the laws of Australia)
Trimble Japan K.K.
(organized under the laws of Japan)
Trimble Export Limited
(incorporated in California)
Trimble Middle East WLL
(incorporated under the laws of Egypt)
81
EXHIBIT 1.4 - FORM OF INTEREST RATE ELECTION AND REQUEST
Date:
Fleet National Bank
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
Telecopy: (000) 000-0000
Re: Interest Rate Election[ and Request]
Gentlemen:
Reference is made to that certain Loan Agreement, dated as of August
[], 1997 by and among the undersigned, you, and the Lenders, (the "Loan
Agreement"). Capitalized terms used herein shall have the same meaning as in the
Loan Agreement.
The undersigned hereby requests a Revolving Credit Loan from the Lenders
pursuant to the Loan Agreement in the amount of and no/100 Dollars ($ .00) at
the interest rate set forth in the Interest Rate Election pertaining to such
Loan.
The undersigned requests that each Lender fund its Pro Rata Share of such
Loan on , 19 and such date is in accordance with the terms and conditions of the
Loan Agreement.
The undersigned hereby elects, pursuant to the Loan Agreement, that the
[Libor Rate or Prime Rate] shall be the interest rate applicable to that certain
[outstanding] Loan [requested pursuant to the Request which is part hereof] in
the principal amount of and no/100 Dollars ($ ). [The Interest Adjustment Date
for said Loan is .]
The undersigned hereby elects an Interest Period for such Loan of []
months. [Complete only if electing Adjusted Libor Rate].
The undersigned hereby certifies to the Lenders that as of the date hereof:
A. No Event of Default and no Default has occurred and is continuing; and
82
B. The representations and warranties of the Borrower contained in Article
4 of the Loan Agreement are true and correct in all material respects except as
altered by actions permitted under the Loan Agreement.
XXXXXXX NAVIGATION LIMITED
By:
Name: []
Title: []
cc: Xxxxxx X. Xxxxxxxxxx, Vice President
Fleet National Bank
Mailstop: MA BO F04M
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
83
EXHIBIT 1.5 - FORM OF REVOLVING CREDIT NOTE
REVOLVING CREDIT NOTE
[Insert Maximum Amount of _________, 19__
Lender's Pro Rata Share of
Revolving Credit Loan
Commitment]
FOR VALUE RECEIVED, XXXXXXX NAVIGATION LIMITED, a California
corporation with a business address of 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxx, XX
00000 (hereinafter referred to as the "Borrower"), promises to pay to the order
of [insert name of Lender], [a national banking association organized and
existing under the laws of the United States of America] [a _________ banking
corporation _____________] (the "Lender"), at the Lender's office located at
[insert address] or to FLEET NATIONAL BANK or any successor agent under the Loan
Agreement (defined below) (the "Agent") in accordance with the Loan Agreement
(defined below), the lesser of (i) the principal sum of [insert Lender's Pro
Rata Share of the Commitment] ($__________.00), or (ii) the aggregate unpaid
principal amount of all advances of funds under the Revolving Credit Loan made
by the Lender to the Borrower or by the Lender through the Agent to the Borrower
pursuant to that certain Loan Agreement dated as of the date hereof by and among
the Borrower, the Agent, the other Lenders party thereto and the Lender, as the
same may be amended (the "Loan Agreement").
The Borrower shall pay in full all unpaid principal, interest, fees and
other amounts due under this Note on the Revolving Credit Repayment Date.
The Borrower promises to pay to the order of the Lender interest before
and after maturity on the principal amount of this Note outstanding from time to
time from the date hereof until payment in full of all principal, interest, fees
and other sums due under this Note in accordance with the Loan Agreement.
Upon the occurrence and during the continuance of any Event of Default
each Prime Rate Loan evidenced by this Note, shall bear interest, payable on
demand, at a floating interest rate per annum equal to two percent (2.0%) above
the Prime Rate and each Libor Loan evidenced by this Note shall bear interest at
the Libor Rate plus two percent (2.0%). In addition, in the event that the
Borrower fails to pay any amount of principal or interest hereof within ten (10)
days after such payment is due, the Borrower shall pay to the Lender upon demand
by the Agent or the Lender, a late charge in an amount equal to five percent
(5%) of such amount of principal or interest.
Principal, interest, fees and other sums are payable in immediately
available Dollars to the Agent at its address set forth in the Loan Agreement or
as otherwise directed in writing from the Agent to the Borrower.
This Note is one of the Notes referred to in, and is entitled to the
benefits of, the Loan Agreement. The applicable terms and provisions of the Loan
Agreement are incorporated herein by reference as if fully set forth herein. In
the event of any conflict between any provision of this Note and any
provision(s) of the Loan Agreement, such provision(s) of the Loan Agreement
shall control. Each capitalized term used in this Note and not expressly defined
84
in this Note shall have the meaning ascribed to such term in the Loan Agreement.
The Loan Agreement, among other things, contains provisions for acceleration of
the maturity of this Note upon the happening of certain stated events and also
for prepayments on account of principal of this Note prior to the maturity of
this Note upon the terms and conditions specified in the Loan Agreement.
If this Note shall not be paid when due and shall be placed by the
holder hereof in the hands of an attorney for collection, through legal
proceedings or otherwise, the Borrower will pay reasonable attorneys' fees to
the holder hereof together with reasonable costs and expenses of collection.
All provisions of this Note and any other agreements between the
Borrower and the Lender are expressly subject to the condition that in no event,
whether by reason of acceleration of maturity of the Indebtedness evidenced by
this Note or otherwise, shall the amount paid or agreed to be paid to the Lender
which is deemed interest under applicable law exceed the maximum permitted rate
of interest under applicable law (the "Maximum Permitted Rate"), which shall
mean the law in effect on the date of this Note, except that if there is a
change in such law which results in a higher Maximum Permitted Rate, then this
Note shall be governed by such amended law from and after its effective date. In
the event that fulfillment of any provision of this Note, or the Loan Agreement
or any document, instrument or agreement providing security for this Note
results in the rate of interest charged hereunder being in excess of the Maximum
Permitted Rate, the obligation to be fulfilled shall automatically be reduced to
eliminate such excess. If, notwithstanding the foregoing, the Lender receives an
amount which under applicable law would cause the interest rate hereunder to
exceed the Maximum Permitted Rate, the portion thereof which would be excessive
shall automatically be deemed a prepayment of and be applied to the unpaid
principal balance of this Note to the extent of then outstanding Prime Rate
Loans and not a payment of interest and to the extent said excessive portion
exceeds the outstanding principal amount of Prime Rate Loans, said excessive
portion shall be repaid to the Borrower.
The Borrower expressly waives presentment, notice of acceleration and
intent to accelerate, demand for payment and protest and notice of protest and
nonpayment.
This Note shall for all purposes be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts without regard to
such state's conflict of laws rules.
Executed as a sealed instrument as of the date first above written.
In the presence of: XXXXXXX NAVIGATION LIMITED
_________________________ By:
Name: []
Title: []
85
EXHIBIT 1.8 - PERMITTED ENCUMBRANCES
Item 5.2.1
(Loan Agreement)
Secured Jurisdiction Filing Date File File Type Collateral
Party Number
Xxxxxx Made California 12-21-92 92271111 Original Equipment
Office Sys.
Xxxxxx Made California 09-13-93 93187053 Original Equipment
Office Sys.
Xxxxxx Made California 01-31-94 94019796 Original Equipment
Office Sys.
Xxxxxx Made California 05-03-94 94087404 Original Equipment
Office Sys.
Xxxxxx Made California 05-03-94 94087419 Original Equipment
Office Sys.
Xxxxxx Made California 08-18-94 94169900 Original Equipment
Office Sys.
Xxxxxx Made California 09-14-94 94189659 Original Equipment
Office Sys.
Xxxxxx Made California 09-23-94 9428760334 Original Equipment
Office Sys.
Xxxxxx Made California 05-25-95 0000000000 Original Equipment
Office Sys.
Xxxxxx Made California 10-22-95 9527060086 Original Equipment
Office Sys.
Xxxxxx Made California 03-01-96 9606760941 Original Equipment
Office Sys.
Cash collateral for existing letters of credit issued by BankBoston, N.A.
86
EXHIBIT 1.9 - PRO RATA SHARES
AGENT'S AND LENDERS'
NOTICE ADDRESSES AND WIRE TRANSFER INSTRUCTIONS
Name of AGENT, address for notices and wire transfer instructions:
Fleet National Bank
Mailstop: MA BO F04M
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Vice President
Wire Transfer Instructions:
Fleet National Bank
ABA #: 000000000
Account: Commercial Loan Services
Attn: Agent Bank MA
Account #: 0000000 G/L
Re: XXXXXXX NAVIGATION LIMITED
Name of LENDER, address for notices
and wire transfer instructions: Pro Rata Share
Fleet National Bank 32%
Mailstop: MA BO F04M
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Vice President
Telecopy: (000) 000-0000
Wire Transfer Instructions:
Fleet National Bank
ABA #: 000000000
Account: Commercial Loan Services
Attn: Agent Bank MA
Account #: 0000000 G/L
Re: XXXXXXX NAVIGATION LIMITED
87
Name of LENDER, address for notices
and wire transfer instructions: Pro Rata Share
BankBoston, N.A. 28%
000 Xxxxx Xxxxxx, xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Assistant Vice President
and Xxxxxx Xxxxxx, Director
Wire Transfer Instructions:
BankBoston, N.A.
ABA #: 000-000-000
Account #: 540-99647
Attention: HT ADM 50
Re: XXXXXXX NAVIGATION LIMITED
Name of LENDER, address for notices
and wire transfer instructions: Pro Rata Share
SANWA BANK CALIFORNIA 20%
000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Vice President
Telecopy: (000) 000-0000
Wire Transfer Instructions:
SANWA BANK CALIFORNIA
ABA #: 000000000
Account #: 1128-19005 (Money Net)
Attention: Xxxxxxx Xxxxxx
Re: XXXXXXX NAVIGATION LIMITED
Name of LENDER, address for notices
and wire transfer instructions: Pro Rata Share
ABN AMRO BANK N.V. 20%
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx, Assistant Vice President
Telecopy: (000) 000-0000
88
Wire Transfer Instructions:
ABN AMRO BANK N.V. - New York
ABA #: 000000000
Account: Credit ABN AMRO Bank N.V. - Chicago
Attention: CPU
Account #: 650-001-1789-41
Re: XXXXXXX NAVIGATION LIMITED
89
EXHIBIT 3.1.1.8 - PERMITTED INDEBTEDNESS AND CAPITALIZED LEASES
Item 5.2.7.5
(Loan Agreement)
Indebtedness
None
90
EXHIBIT 3.1.1.10 - FORM OF COMPLIANCE CERTIFICATE
Fleet National Bank
Attention: Xxxxxx X. Xxxxxxxxxx, Vice President
Mailstop: MA BO F04M
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Re: Compliance Certificate Required by Sections 3.1.1.10 or 5.3.4 of the
Loan Agreement dated as of [], 19[] by and among you as Agent, the undersigned
and certain Lenders, as same may have been amended (the "Loan Agreement")
Gentlemen:
This certificate is submitted by the undersigned (hereinafter the
"Borrower") pursuant to Sections 3.1.1.10 or 5.3.4 of the Loan Agreement.
Capitalized terms used herein have the same meaning as in the Loan Agreement.
The Borrower hereby certifies to the Agent and the Lenders that the
following information is true, accurate and complete as of , 19 .
I. Definitions.
1.1 Interest Expense
(a) Interest on Indebtedness under Financing Documents $
(b) Other fees, charges and expenses on Indebtedness
under Financing Documents (not including Up-Front Fees) $
(c) Interest, fees and other charges
on other Indebtedness $
(d) (a)+(b)+(c) = total Interest Expense $______
1.2 EBITDA (all for a Borrower fiscal quarter)
(a) Net Income (loss) on GAAP basis $
91
(b) plus Interest Expense $
(c) plus taxes $
(d) plus depreciation $
(e) plus amortization $
(f) sum of (a) through (e) = EBITDA $______
1.3 EBITDA for covenants
(a) EBITDA for most recent Borrower fiscal quarter $
(b) EBITDA for immediately preceding Borrower fiscal quarter $
(c) EBITDA for second immediately preceding Borrower
fiscal quarter $
(d) EBITDA for third immediately preceding Borrower
fiscal quarter $
(e) Sum of (a) through (d) equals $______
1.4 Total Debt Service (for Borrower fiscal quarter
ending on date of determination and three Borrower
fiscal quarters next preceding such Borrower
fiscal quarter)
(a) Interest Expense $
(b) plus scheduled and mandatory principal amortization
on Loans $
(c) less any Sections 2.6.1.2, 2.6.1.3 and 2.6.1.4
mandatory payments required $
(d) plus scheduled and mandatory payments on other
Indebtedness and Capitalized Lease Obligations $
92
(e) (a)+(b)-(c)+(d) = Total Debt Service $______
1.5 Fixed Charge Coverage Ratio
(a) EBITDA for current and applicable preceding quarters $
(b) Total Debt Service for same period $
(c) (a):-(b) = Fixed Charge Coverage Ratio ___:1.0
II. Section 5.1.10. Minimum Fixed Charge Coverage Ratio.
(a) Fixed Charge Coverage Ratio ___:1.0
(b) Minimum ratio permitted []:1.0
III. Section 5.1.11. Minimum Consolidated Tangible Net Worth.
(a) Consolidated Tangible Net Worth $
(b) Opening Tangible Net Worth $110,000,000
(c) 75% of Net Income since Closing Date $
(d) 100% of proceeds of sales of securities $
(e) Extraordinary charges from acquisitions $
(f) Sum of (b), (c) & (d) $
(g) (f) less (e) = Minimum Consolidated Tangible $
Net Worth
(h) (a) less (g) = $________
IV. Section 5.1.12. Maximum Ratio of Total
Indebtedness for Borrowed Money to EBITDA.
(a) Total Indebtedness for Borrowed Money $
(b) EBITDA $
93
(c) Ratio of (a) to (b) ___:1.0
(d) Maximum Permitted Ratio 2.75:1.0
V. Section 5.1.13. Minimum Quick Ratio.
(a) Cash $
(b) Cash Equivalent Investments $
(c) Net outstanding amount of accounts receivable $
(d) Sum of (a), (b) and (c) $
(e) Current Liabilities $
(f) Ratio of (d) to (e) _____:1.0
(g) Minimum Permitted Ratio 1.20:1.0
VI. Section 5.2.9. Minimum Net Income.
(a) Net Income for most recent Borrower
fiscal quarter $
(b) Net Income for immediately preceding Borrower
fiscal quarter $
(c) Net Income for second immediately preceding Borrower
fiscal quarter $
(d) Net Income for third immediately preceding
Borrower fiscal quarter $
(e) Sum of (a) through (d) = (Must be greater than $0) $_____
The Borrower further certifies to the Lenders that as of the date hereof no
Event of Default or Default has occurred without having been waived in writing.
XXXXXXX NAVIGATION LIMITED
By:
94
Name: []
Title: []
95
EXHIBIT 4.1.2 - AUTHORIZATIONS
Item 4.1.2
(Loan Agreement)
Authorization and Absence of Defaults
None
96
EXHIBIT 4.1.3 - CONSENTS
Section 4.1.3
(Loan Agreement)
Acquisitions of Consents
None
97
EXHIBIT 4.1.6 - LITIGATION
Item 4.1.6
(Loan Agreement)
Litigation
1. On October 18, 1995, a lawsuit entitled Xxxxxxxx Xxxxxxxxxx x. Xxxxxxx
Navigation Limited, No. CV753194, was filed in the Superior Court of California
for the County of Santa Xxxxx. In this lawsuit, an employee terminated from
employment by the Company in 1992 alleges that his incentive stock options
continued to vest subsequent to his termination, and further, that he had a
right to exercise such options in 1995. He seeks damages "in excess of
$1,000,000". The Company has filed a general denial in answer to the Complaint.
The matter is currently in discovery. A trial date has been set for September
15, 1997.
2. On December 5, 1995; Xx. Xxx X. XxXxxxxxx, Xx., a former employee of the
Company, filed a charge of discrimination with the Equal Employment Opportunity
Commission (the "EEOC"), Case No. 36A-96-0121, alleging that he was demoted and
discriminated against on the basis of his disability. Previously, on May 5,
1995, Xx. XxXxxxxxx filed a charge of discrimination with the EEOC based on
race. A notice of Right to Xxx was issued, however, Xx. XxXxxxxxx did not file a
civil action. The Company has responded to the EEOC denying Xx. XxXxxxxxx'x
allegations of discrimination.
3. On December 6, 1995 a putative class action lawsuit entitled Xxxxxxxx Xxxxx
and Xxxxxx Xxxxxx v. Xxxxxxx X. Xxxxxxx, et al., No. C95-4353 MMC, was filed in
the United States District Court for the Northern District of California. The
Complaint accuses the Company, Xxxxx Xxxxxx, Inc., and eleven of the Company's
officers and directors of engaging in a fraud-on-the-market securities fraud in
violation of Sections 10(b) and 20(a) of the Securities Exchange Act and Rule
10b-5 promulgated thereunder, during the period between October 20, 1994, and
December 5, 1995. Six other lawsuits, with essentially the same allegations,
were filed shortly thereafter (collectively, the "Complaints"). Notably, these
lawsuits were filed only a few days before the enactment of the law reforming
the federal securities acts regarding the rules respecting such actions. The
Complaints allege generally that the Defendants engaged in a scheme artificially
to inflate the price of Trimble common stock through misleading public
disclosures. The Complaint does not specify the amount of damages sought. On
February 28, 1997, the Court heard the Company's motion to dismiss the Second
Amended Complaint. On April 28, 1997, the Court issued an Order granting in
part, and denying in part, the Company's motion to dismiss, with leave to amend
some of the dismissed claims. No pretrial dates have been set.
4. In connection with claims made by Xxx. Xxxxxxxx Xxxxxx and Xx. Xxxx Xxxxxx X.
Xxxxxxx, the former spouse and son of Xx. Xxxxxx X. Xxxxxxx, respectively, a
one-time shareholder of the Company, as to which we advised you in our letter of
March 30, 1995, an action was filed in the United states District Court of the
District of New Jersey on July 24, 1995 against the Company, this firm and Xx.
Xxxxxx X. Xxxxxxx, the former shareholder. The Complaint seeks "an amount not
less than the highest trading value of 10,000 shares of the capital stock of the
Company from the date of demand to the date of payment is actually authorized."
The New Jersey court recently granted the Company's motion to transfer the
action the United States District Court for the Northern District of California.
The claim has been refiled in the Northern District of California. The Company's
98
motion to dismiss the lawsuit was granted by the Court on jurisdictional
grounds. There is a possibility that the plaintiffs may refile in state court,
although they have not done so to date. The Company is being represented in this
matter by Bergeson, Eliopoulos, Xxxxx & Xxxx.
5. On August 7, 1997, a third party complaint was filed against the Company
in a lawsuit entitled Leastec Systems Credit v. Freight Masters Systems, Inc.
Case No. 49DOG-9510-CP-1516, in Xxxxxx Superior Court, Indiana. The Company is
represented in this matter by Xxxxx Xxxxxxxx in Indianapolis, Indiana.
99
EXHIBIT 4.1.11 - PROPERTY EXCEPTIONS
Item 4.1.11.3
(Loan Agreement)
Ownership of Properties
None
100
EXHIBIT 4.1.21 - HAZARDOUS WASTE
Item 4.1.21
(Loan Agreement)
Hazardous Waste
None
101
EXHIBIT 4.1.22 - MATERIAL CONTRACTS
Item 4.1.22
(Loan Agreement)
Material Agreements, etc.
1. Stock Option Plan.
2. Forms of Incentive and Nonstatutory Stock Option Agreements under the
1983 Stock Option Plan.
3. Employee Stock Purchase Plan, as amended, and form of Subscription
Agreement.
4. Form of Employee Restricted Stock Purchase Agreement.
5. Form of Indemnification Agreement between the Company and its officers
and directors.
6. Note Purchase Agreement dated July 7, 1986, between the Company and
certain purchasers.
7. Form of Common Stock Purchase Agreement dated March 1989 between the
Company and certain investors.
8. Memorandum of Understanding dated March 11, 1988, and License Agreement
dated September 5, 1988, between the Company and AEG Aktiengesellschaft, with
Amendments Xx. 0, Xx. 0, and No. 3 thereto, and Letter Agreement dated December
22, 1989, between Trimble and Telefunken Systemtechnik GmbH.
9. Agreement dated February 6, 1989, between the Company and Pioneer
Electronic Corporation.
10. International OEM Agreement dated May 30, 1989, between the Company and
Geotronics AB.
11. Patent License Agreement dated January 18, 1990, between the Company
and the United States Navy.
12. Asset Purchase Agreement dated April 19, 1990, between the Company; TR
Navigation Corporation, a subsidiary of the Company; and Tracor Aerospace, Inc.
13. Promissory Note dated April 20, 1990, for the principal amount of
$400,000 issued by TR Navigation Corporation to DAC International, Inc.
14. Guarantee dated April 20, 1990, between the Company and DAC
International, Inc.
15. Indemnification Agreement dated April 20, 1990, between the Company; TR
Navigation Corporation, a subsidiary of the Company; DAC International, Inc.;
and Banner Industries, Inc.
102
16. Distributor Agreement dated April 20, 1990, between TR Navigation
Corporation, a subsidiary of the Company, and DAC International, Inc.
17. Distributor Agreement dated December 6, 1989, between the Company and
DAC International, Inc.
18. Lease Agreement dated April 26, 1990, between the Company and NCNB
Texas National Bank, Trustee for the Company's offices located at 0000 Xxxxxx
Xxxxx, Xxxxxx, Xxxxx.
19. Director Stock Option Plan, as amended, and form of Outside Director
Non statutory Stock Option Agreement.
20. Sublease Agreement dated January 2, 1991, between the Company, Aetna
Insurance Company, and Poqet Computer Corporation for property located at 000
Xxxxx Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx.
21. Lease Agreement dated February 20, 1991, between the Company, Xxxx
Xxxxxxxxx Separate Property Trust , and Xxxxxxx X. Xxxxx Separate Property Trust
for property located at 000 Xxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx.
22. Share and Asset Purchase Agreement dated February 22, 1991, among the
Company and Datacom Group Limited and Datacom Software Research Limited.
23. License Agreement dated June 29, 1991 between the Company and Avion
Systems, Inc.
24. Industrial Lease Agreement dated December 3, 1991 between the Company
and Aetna Life Insurance Company for property located at 000 Xxxxx Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx.
25. Industrial Lease Agreement dated December 3, 1991 between the Company
and Aetna Life Insurance Company for property located at 000 Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxx.
26. Industrial Lease Agreement dated December 3, 1991 between the Company
and Aetna Life Insurance Company for property located at 000 Xxxxx Xxxxx,
Xxxxxxxxx, Xxxxxxxxxx.
27. Industrial Lease Agreement dated December 3, 1991 between the Company
and Aetna Life Insurance Company for property located at 000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx.
28. Management Discount Stock Option and form of Nonstatutory Stock Option
Agreement
29. Memorandum of Understanding dated December 24, 1992 between the Company
and Pioneer Electronic Corporation.
30. Stock Option Plan, as amended, and Forms of Incentive and Nonstatutory
Stock Option Agreements.
31. Note and Warrant Purchase Agreement dated June 13, 1994 with Xxxx
Xxxxxxx Life Insurance Company.
103
EXHIBIT 5.2.2 - GUARANTIES
Item 5.2.2.3
(Loan Agreement)
Guaranties
None
104
EXHIBIT 5.2.2 - INVESTMENTS IN OR TO OTHER PERSONS
Item 5.2.11
(Loan Agreement)
Investments in or to Other Persons
1) Money Market Account with Dreyfus U.S. Treasury Money Market Fund,
managed by Mellon private Asset Management Services.
2) Other short-term investments currently managed by Mellon Private Asset
Management Services.
3) Other short-term investments currently managed by Bank of Boston Liquid
Funds Management group.
4) Loans by Xxxxxxx Navigation Limited made to employees:
Xxxxxx, Xxxxx $ 22,500
Xxxxxxx, Xxxx $ 135,000
Xxxxx, Xxxxx $ 30,000
Xxxxx, Xxxxx $ 50,000
Xxxxxxx, Xxxx $ 250,000
5) Xxxxxxx Navigation Limited has other investments in :
ProShot Golf $ 2,500,000.00
Aquila Mining $ 136,075.95
AirCell, Inc. $ 1,000,000.00
Integrinautics $ 80,000.00
105
EXHIBIT 5.2.12 - TRANSACTIONS WITH AFFILIATES
Item 5.2.12
(Loan Agreement)
Transactions with Affiliates
None
106
EXHIBIT 9.11.1 - FORM OF SUBSTITUTION AGREEMENT
Form of Substitution Agreement
Agreement made and entered into as of _____ day of ___________, 19__ by
and between ______________________, a ___________ having a principal place of
business at _______________________ (the "Substituted Lender") and FLEET
NATIONAL BANK, acting as Agent for itself in its individual capacity and for the
Borrower, [insert name(s) of Selling Lender(s)] and the other Lenders which are
parties to the Loan Agreement (defined below) (the "Agent").
1. This Agreement relates to a Loan Agreement (the "Loan
Agreement") dated August [], 1997, as same may have been or be
amended, made between XXXXXXX NAVIGATION LIMITED, a California
corporation (the "Borrower") and the Lenders which are parties
thereto and FLEET NATIONAL BANK acting as Agent for the
Lenders thereunder, upon and subject to the terms of which the
Lenders have agreed to make available to the Borrower the
Loans in an aggregate principal amount up to $[]. Terms
defined in the Loan Agreement shall, unless otherwise defined
herein, have the same meanings herein.
2. The Substituted Lender hereby agrees to become a Lender
pursuant to the terms of Section 9.11 of the Loan Agreement
having a Pro Rata Share of the Loans and the Commitment in the
amount set forth opposite the Substituted Lender's name on
Schedule A hereto and to fund its Pro Rata Share of any
outstanding Loans in which it is purchasing a Pro Rata Share
by wire transfer to the Selling Lender in accordance with
Schedule A hereto on [insert proposed effective date].
3. [insert name of Selling Lender] hereby agrees that, effective
as the effective date of this Agreement, its Pro Rata Share of
the Loans and the Commitment shall be reduced to the Pro Rata
Share set forth opposite its name on Schedule A hereto.
4. The Substituted Lender hereby agrees (i) that its address for
notices for the purposes of Section 9.6 of the Loan Agreement
shall be the address set forth opposite its name on Schedule A
hereto and (ii) that the instructions for wire transfers of
funds to the Agent and for wire transfers of funds to the
Substituted Lender are as set forth on Schedule A hereto.
5. The Substituted Lender hereby requests the Agent to accept, on
behalf of the Borrower and the Lenders, this Agreement as a
Substitution Agreement delivered to the Agent pursuant to and
for the purposes of Section 9.11 of the Loan Agreement so as
to take effect in accordance with the terms hereof and thereof
on [insert proposed effective date].
6. The Substituted Lender hereby acknowledges (a) receipt of a
copy of the Loan Agreement and the other Financing Documents
together with such other documents and information as it has
required in connection herewith, (b) the provisions of Section
9.11 of the Loan Agreement as they apply in connection with
its execution hereof and the transactions and matters to occur
in consequence hereof, and (c) the correctness of the details
specified in Schedule A hereto.
107
7. The Substituted Lender hereby undertakes with each of the
other parties to the Loan Agreement that it will perform in
accordance with their respective terms all those obligations
which by the terms of the Loan Agreement will be assumed by it
upon and after delivery of this Substitution Agreement to the
Agent, and agrees to be bound by the provisions of the Loan
Agreement as though it were an original signatory thereto.
8. This Agreement and the rights and obligations of the parties
hereunder shall be governed by, and construed in accordance
with the laws of [] without regard to such state's conflict of
laws rules.
[ ]
By:
Name:
Title:
FLEET NATIONAL BANK, as Agent for itself in
its individual capacity and as agent for the
Borrower, [insert name(s) of Selling
Lender(s)] and any other Lenders
By:
108
SCHEDULE A
Name of AGENT, address for notices and wire transfer instructions:
Fleet National Bank
Mailstop: MA BO F04M
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Vice President
Wire Transfer Instructions:
Fleet National Bank
ABA #: 000000000
Account: Commercial Loan Services
Attn: Agent Bank MA
Account #: 0000000 G/L
Re: XXXXXXX NAVIGATION LIMITED
Name of LENDER, address for notices
and wire transfer instructions: Pro Rata Share
Fleet National Bank 32%
Mailstop: MA BO F04M
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Vice President
Wire Transfer Instructions:
Fleet National Bank
ABA #: 000000000
Account: Commercial Loan Services
Attn: Agent Bank MA
Account #: 0000000 G/L
Re: XXXXXXX NAVIGATION LIMITED
109
Name of LENDER, address for notices
and wire transfer instructions: Pro Rata Share
BankBoston, N.A. 28%
000 Xxxxx Xxxxxx, xxxxx 000
Xxxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Assistant Vice President
and Xxxxxx Xxxxxx, Director
Wire Transfer Instructions:
BankBoston, N.A.
ABA #: 000-000-000
Account #: 540-99647
Attention: HT ADM 50
Re: XXXXXXX NAVIGATION LIMITED
Name of LENDER, address for notices
and wire transfer instructions: Pro Rata Share
SANWA BANK CALIFORNIA 20%
000 Xxxxxxx Xxxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Vice President
Telecopy: (000) 000-0000
Wire Transfer Instructions:
SANWA BANK CALIFORNIA
ABA #: 000000000
Account #: 1128-19005 (Money Net)
Attention: Xxxxxxx Xxxxxx
Re: XXXXXXX NAVIGATION LIMITED
Name of LENDER, address for notices
and wire transfer instructions: Pro Rata Share
ABN AMRO BANK N.V. 20%
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxx, Assistant Vice President
Telecopy: (000) 000-0000
110
Wire Transfer Instructions:
ABN AMRO BANK N.V. - New York
ABA #: 000000000
Account: Credit ABN AMRO Bank N.V. - Chicago
Attention: CPU
Account #: 650-001-1789-41
Re: XXXXXXX NAVIGATION LIMITED
111
