EXHIBIT 10.3
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[GRAPHIC OMITTED]
$7,500,000
CREDIT AGREEMENT
dated as of October 31, 2003
between
PAR TECHNOLOGY CORPORATION
and
JPMORGAN CHASE BANK
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
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SECTION 1.01. Defined Terms CORRECT PAGE NUMBERS.......................... 1
SECTION 1.02. Terms Generally............................................. 9
SECTION 1.03. Accounting Terms; GAAP...................................... 9
ARTICLE II
The Credits
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SECTION 2.01. Commitment.................................................. 10
SECTION 2.02. Loans....................................................... 10
SECTION 2.03. Requests for Loans.......................................... 10
SECTION 2.04. Funding of Loans............................................ 11
SECTION 2.05. Interest Elections.......................................... 11
SECTION 2.06. Termination and Reduction of Commitment..................... 11
SECTION 2.07. Repayment of Loans; Evidence of Debt........................ 12
SECTION 2.08. Prepayment of Loans......................................... 12
SECTION 2.09. Fees........................................................ 13
SECTION 2.10. Interest.................................................... 13
SECTION 2.11. Alternate Rate of Interest.................................. 13
SECTION 2.12. Increased Costs............................................. 14
SECTION 2.13. Break Funding Payments...................................... 15
SECTION 2.14. Taxes....................................................... 15
ARTICLE III
Representations and Warranties
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SECTION 3.01. Organization; Powers........................................ 16
SECTION 3.02. Authorization; Enforceability............................... 16
SECTION 3.03. Governmental Approvals; No Conflicts........................ 16
SECTION 3.04. Financial Condition; No Material Adverse Change............. 16
SECTION 3.05. Properties.................................................. 16
SECTION 3.06. Litigation and Environmental Matters........................ 17
SECTION 3.07. Compliance with Laws and Agreements......................... 17
SECTION 3.08. Investment and Holding Company Status....................... 17
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SECTION 3.09. Taxes....................................................... 17
SECTION 3.10. ERISA....................................................... 17
SECTION 3.11. Disclosure.................................................. 18
ARTICLE IV
Conditions
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SECTION 4.01. Effective Date.............................................. 18
SECTION 4.02. Each Loan................................................... 19
ARTICLE V
Affirmative Covenants
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SECTION 5.01. Financial Statements and Other Information.................. 19
SECTION 5.02. Notices of Material Events.................................. 20
SECTION 5.03. Existence; Conduct of Business.............................. 20
SECTION 5.04 Payment of Obligations...................................... 20
SECTION 5.05. Maintenance of Properties; Insurance........................ 21
SECTION 5.06. Books and Records; Inspection Rights........................ 21
SECTION 5.07. Compliance with Laws........................................ 21
SECTION 5.08. Use of Proceeds and Letters of Credit....................... 21
ARTICLE VI
Negative Covenants
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SECTION 6.01. Indebtedness................................................ 21
SECTION 6.02. Liens....................................................... 22
SECTION 6.03. Fundamental Changes......................................... 22
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions... 23
SECTION 6.05. Hedging Agreements.......................................... 23
SECTION 6.06. Restricted Payments......................................... 23
SECTION 6.07. Transactions with Affiliates................................ 23
SECTION 6.08. Restrictive Agreements...................................... 24
SECTION 6.09. Leverage Ratio 24
SECTION 6.10. Fixed Charge Coverage Ratio 24
SECTION 6.11. Minimum Tangible Net Worth 24
ARTICLE VII
Events of Default..................................... 24
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ARTICLE VIII
Miscellaneous
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SECTION 8.01. Notices..................................................... 26
SECTION 8.02. Waivers; Amendments......................................... 27
SECTION 8.03. Expenses; Indemnity; Damage Waiver.......................... 27
SECTION 8.04. Successors and Assigns...................................... 28
SECTION 8.05. Survival.................................................... 29
SECTION 8.06. Counterparts; Integration; Effectiveness................... 29
SECTION 8.07. Severability................................................ 29
SECTION 8.08. Right of Setoff............................................. 29
SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process.. 29
SECTION 8.10. WAIVER OF JURY TRIAL........................................ 30
SECTION 8.11. Headings.................................................... 30
SECTION 8.12. Confidentiality............................................. 30
SECTION 8.13. Interest Rate Limitation.................................... 31
SCHEDULES:
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Schedule 3.06 -- Disclosed Matters
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.08 -- Existing Restrictions
EXHIBITS:
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Exhibit A -- Form of Certificate of [Assistant] Secretary
Exhibit B -- Form of Borrowing Request
Exhibit C -- Form of Interest Election Request
Exhibit D -- Form of Financial Officer's Certificate
Exhibit E -- Form of Opinion of Borrower's Counsel
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CREDIT AGREEMENT dated as of October 31, 2003, between PAR TECHNOLOGY
CORPORATION and JPMORGAN CHASE BANK.
The parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms. As used in this Agreement, the following terms
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have the meanings
specified below:
"ABR", when used in reference to any Loan, refers to whether such Loan is
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bearing interest at a rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Loan for any
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Interest Period, an interest rate per annum equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Affiliate" means, with respect to a specified Person, another Person that
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directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
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Prime Rate in effect on such day. Any change in the Alternate Base Rate due to a
change in the Prime Rate shall be effective from and including the effective
date of such change in the Prime Rate.
"Applicable Rate" means, for any day, with respect to any ABR Loan or
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Eurodollar Loan, or with respect to the commitment fee payable hereunder, as the
case may be, the applicable rate per annum set forth below:
LEVEL I LEVEL II LEVEL III LEVEL IV
Eurodollar Rate 2.25% 2.625% 3.00% 3.375%
Alternate Base Rate 0% 0% 0% .375%
APPLICABLE FEE RATE LEVEL I LEVEL II LEVEL III LEVEL IV
Commitment Fee .25% .375% .50% .625%
"Level I" status exists at any date if, as of the last day of the Fiscal Quarter
of the Borrower referred to in the most recent financial statements of Borrower
delivered to the Bank, the Leverage Ratio is less than or equal to 2.00 to 1.00.
"Level II" status exists at any date if, as of the last day of the Fiscal
Quarter of the Borrower referred to in the most recent financial statements of
Borrower delivered to the Bank, (i) the Borrower has not qualified for Level I
status and (ii) the Leverage Ratio is less than or equal to 2.75 to 1.00.
"Level III" status exists at any date if, as of the last day of the Fiscal
Quarter of the Borrower referred to in the most recent financial statements of
Borrower delivered to the Bank, (i) the Borrower has not qualified for Level I
or II status and (ii) the Leverage Ratio is less than or equal to 3.5 to 1.00.
"Level IV" status exists at any date if, as of the last day of the Fiscal
Quarter of the Borrower referred to in the most recent financial statements of
Borrower delivered to the Bank, (i) the Borrower has not qualified for Level I,
II or III status and (ii) the Leverage Ratio is greater than 3.5 to 1.00.
"Assessment Rate" means, for any day, the annual assessment rate in effect
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on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States.
"Availability Period" means the period from and including the Effective
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Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitment.
"Bank" means JPMorgan Chase Bank.
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"Board" means the Board of Governors of the Federal Reserve System of the
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United States of America.
"Borrower" means PAR Technology Corporation, a Delaware corporation.
"Borrowing Request" means a request by the Borrower for a Loan in
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accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other day on
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which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
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Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" means (a) the acquisition of ownership, directly or
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indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof), of shares
representing more than 10% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Borrower, in addition to those
shares owned by such Person or group on the date hereof; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower by Persons who were neither (i) nominated by the board of directors of
the Borrower nor (ii) appointed by directors so nominated; or (c) the
acquisition of direct or indirect Control of the Borrower by any Person or group
other than the executive management of the Borrower.
"Change in Law" means (a) the adoption of any law, rule or regulation after
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the date of this Agreement, (b) any change in any law, rule or regulation or in
the interpretation or application thereof by
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any Governmental Authority after the date of this Agreement or (c) compliance by
the Bank with any request, guideline or directive (whether or not having the
force of law) of any Governmental Authority made or issued after the date of
this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
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time.
"Commitment" means, the commitment of the Bank to make Loans, as such
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commitment may be reduced from time to time pursuant to Section 2.06. The
initial amount of the Bank's Commitment is $7,500,000.
"Control" means the possession, directly or indirectly, of the power to
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direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an Event of
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Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
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environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of America.
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"Effective Date" means the date on which the conditions specified in
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Section 4.01 are satisfied (or waived in accordance with Section 8.02).
"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
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orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to health
and safety matters.
"Environmental Liability" means any liability, contingent or otherwise
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(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law,
(b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
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that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
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of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing
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pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan, refers to whether such
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Loan is bearing interest at a rate determined by reference to the Adjusted LIBO
Rate.
"Event of Default" has the meaning assigned to such term in Article VII.
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"Excluded Taxes" means, with respect to the Bank, (a) income or franchise
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taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located.
"Financial Officer" means the chief financial officer, principal accounting
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officer, treasurer or controller of the Borrower.
"Fixed Charge Coverage Ratio" means, as to a Person and in respect of the
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period for which the computation is being made, and which period shall in each
case consist of a twelve month period ending on the last day of a Fiscal
Quarter, the ratio of (i) Earnings Before Interest, Taxes, Depreciation and
Amortization to (ii) the current maturities of long term Indebtedness plus
interest expense. The category of "Earnings Before Interest, Taxes, Depreciation
and Amortization" in the Fixed Charge Coverage Ratio shall be measured for such
Person over the preceding four Fiscal Quarters. In the case of the Borrower, its
Fixed Charge Coverage Ratio shall be measured on a consolidated basis with its
Subsidiaries.
"GAAP" means generally accepted accounting principles in the United States
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of America.
"Governmental Authority" means the government of the United States of
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America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
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contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
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including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of
4
credit or letter of guaranty issued to support such Indebtedness or obligation;
provided, that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
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"Index Debt" means senior, unsecured, long-term indebtedness for borrowed
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money of the Borrower that is not guaranteed by any other Person or subject to
any other credit enhancement.
"Interest Election Request" means a request by the Borrower to convert or
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continue a Loan in accordance with Section 2.05.
"Interest Payment Date" means (a) with respect to any ABR Loan, the first
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day of each month, and (b) with respect to any Eurodollar Loan, the last day of
the Interest Period therefor and, in the case of a Eurodollar Loan with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Loan, the period
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commencing on the date of such Loan and ending on the numerically corresponding
day in the calendar month that is one, two, three or six months thereafter, as
the Borrower may elect; provided, that (i) if any Interest Period would end on a
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day other than a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless, in the case of a Eurodollar Loan only, such
next succeeding Business Day would fall in the next calendar month, in which
case such Interest Period shall end on the next preceding Business Day and (ii)
any Interest Period pertaining to a Eurodollar Loan that commences on the last
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Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Loan initially shall be the date on which such
Loan is made and, thereafter shall be the effective date of the most recent
conversion or continuation of such Loan.
"Leverage Ratio" means, as to a Person and in respect of the period for
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which the computation is being made, and which period shall in each case consist
of a twelve month period ending on the last day of a Fiscal Quarter, the ratio
of (i) Indebtedness to (ii) Earnings Before Interest, Taxes, Depreciation and
Amortization. The category of "Earnings Before Interest, Taxes, Depreciation and
Amortization" in the Leverage Ratio shall be measured for such Person over the
preceding four Fiscal Quarters. In the case of the Borrower, its Leverage Ratio
shall be measured on a consolidated basis with its Subsidiaries.
"LIBO Rate" means, with respect to any Eurodollar Loan for any Interest
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Period, the rate at which dollar deposits in an amount and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Bank in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
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lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loans" means the loans made by the Bank to the Borrower pursuant to this
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Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
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business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform any of its obligations under this Agreement or other loan
documents or (c) the rights of or benefits available to the Bank under this
Agreement or available to other lenders under other loan documents.
"Material Indebtedness" means Indebtedness (other than the Loans), or
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obligations in respect of one or more Hedging Agreements, of any one or more of
the Borrower and its Subsidiaries in an aggregate principal amount exceeding
$250,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"Maturity Date" means two years from the date of this Agreement.
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"Moody's" means Xxxxx'x Investors Service, Inc.
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"Multiemployer Plan" means a multiemployer plan as defined in Section
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4001(a)(3) of ERISA.
"Other Taxes" means any and all present or future stamp or documentary
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taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement.
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"PBGC" means the Pension Benefit Guaranty Corporation referred to and
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defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.04;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's and
other like Liens imposed by law, arising in the ordinary course of business and
securing obligations that are not overdue by more than 30 days or are being
contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature, in each case in the ordinary course of business;
and
(e) easements, zoning restrictions, rights-of-way and similar encumbrances
on real property imposed by law or arising in the ordinary course of business
that do not secure any monetary obligations and do not materially detract from
the value of the affected property or interfere with the ordinary conduct of
business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
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securing Indebtedness.
"Permitted Investments" means:
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(a) direct obligations of, or obligations the principal of and interest on
which are unconditionally guaranteed by, the United States of America (or by any
agency thereof to the extent such obligations are backed by the full faith and
credit of the United States of America), in each case maturing within one year
from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, any domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of not more than
30 days for securities described in clause (a) above and entered into with a
financial institution satisfying the criteria described in clause (c) above.
"Person" means any natural person, corporation, limited liability company,
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trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
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"Plan" means any employee pension benefit plan (other than a Multiemployer
----
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum publicly announced from
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time to time by the Bank as its prime rate in effect at its principal office in
New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"Related Parties" means, with respect to any specified Person, such
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Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"Restricted Payment" means any dividend or other distribution (whether in
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cash, securities or other property) with respect to any shares of any class of
capital stock of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of capital stock of the Borrower
or any option, warrant or other right to acquire any such shares of capital
stock of the Borrower.
"S&P" means Standard & Poor's.
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"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
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numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Bank is subject with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"subsidiary" means, with respect to any Person (the "parent") at any date,
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any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
----------
"Tangible Net Worth" means the total of shareholders' or partnership equity
------------------
of a Person as it appears on the balance sheet of such Person, minus the net
carrying value of intangible assets properly classified as such in accordance
with GAAP (including, but not limited to, goodwill, organizational expenses,
trademarks, tradenames, licenses, patents, capitalized research and development
costs), minus minority interests in its Subsidiaries, and without regard to
unrealized gains or losses due to foreign
8
currency fluctuations. In the case of the Borrower, its Tangible Net Worth shall
be measured on a consolidated basis with its Subsidiaries.
"Taxes" means any and all present or future taxes, levies, imposts, duties,
-----
deductions, charges or withholdings imposed by any Governmental Authority.
"Transactions" means the execution, delivery and performance by the
------------
Borrower of this Agreement, the borrowing of Loans and the use of the proceeds
thereof.
"Type", when used in reference to any Loan, refers to whether the rate of
-----
interest on such Loan is determined by reference to the Adjusted LIBO Rate or
the Alternate Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
---------------------
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions of terms herein shall apply
---------------
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly
----------------------
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
--------
that, if the Borrower notifies the Bank that the Borrower requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the Bank notifies the Borrower that the Bank request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
9
ARTICLE II
The Credit
----------
SECTION 2.01. Commitment. Subject to the terms and conditions set forth
----------
herein, the Bank agrees to make Loans to the Borrower from time to time during
the Availability Period in an aggregate principal amount that will not result in
outstanding Loans exceeding the Commitment. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Loans.
SECTION 2.02. Loans.
------
(a) At the commencement of each Interest Period for any Eurodollar Loan,
such Loan shall be in an amount that is an integral multiple of $100,000 and not
less than $500,000. At the time that each ABR Loan is made, such Loan shall be
in an aggregate amount that is an integral multiple of $100,000 and not less
than $100,000; provided that an ABR Loan may be in an aggregate amount that is
--------
equal to the entire unused balance of the total Commitment. Loans of more than
one Type and Class may be outstanding at the same time; provided that there
--------
shall not at any time be more than a total of fourteen Eurodollar Loans
outstanding.
(b) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any Loan
if the Interest Period requested with respect thereto would end after the
Maturity Date.
SECTION 2.03. Requests for Loans. To request a Loan, the Borrower shall
------------------
notify the Bank of such request by telephone (a) in the case of a Eurodollar
Loan, not later than 11:00 a.m., New York City time, three Business Days before
the date of the proposed Loan or (b) in the case of an ABR Loan, not later
than2:00 p.m., New York City time, one Business Day before the date of the
proposed Loan. Each such telephonic Borrowing Request shall be irrevocable and,
as to a Eurodollar Loan, shall be confirmed promptly by hand delivery or
telecopy to the Bank of a written Borrowing Request in a form approved by the
Bank and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section 2.02:
(i) the amount of the requested Loan;
(ii) the date of such Loan, which shall be a Business Day;
(iii) whether such Loan is to be an ABR Loan or a Eurodollar Loan;
(iv) in the case of a Eurodollar Loan, the initial Interest Period to
be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of Section
2.04.
If no election as to the Type of Loan is specified, then the requested Loan
shall be an ABR Loan. If no Interest Period is specified with respect to any
requested Eurodollar Loan, then the Borrower shall be deemed to have selected an
Interest Period of one month's duration, in the case of a Eurodollar Loan.
10
SECTION 2.04. Funding of Loans. The Bank shall make each Loan available to
----------------
the Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Bank in New York City and designated
by the Borrower in the applicable Borrowing Request.
SECTION 2.05. Interest Elections. (a) Each Loan initially shall be of the
------------------
Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Loan, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Loan to a
different Type or to continue such Loan and, in the case of a Eurodollar Loan,
may elect Interest Periods therefor, all as provided in this Section. The
Borrower may elect different options with respect to different portions of the
affected Loan and each such portion shall be considered a separate Loan.
(b) To make an election pursuant to this Section, the Borrower shall notify
the Bank of such election by telephone by the time that a Borrowing Request
would be required under Section 2.03 if the Borrower were requesting a Loan of
the Type resulting from such election to be made on the effective date of such
election. Each such telephonic Interest Election Request shall be irrevocable
and, as to a Eurodollar Loan, shall be confirmed promptly by hand delivery or
telecopy to the Bank of a written Interest Election Request in a form approved
by the Bank and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02:
(i) the Loan to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Loan (in which case the information to be specified pursuant
to clauses (iii) and (iv) below shall be specified for each resulting
Loan);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Loan is to be an ABR Loan or a
Eurodollar Loan; and
(iv) if the resulting Loan is a Eurodollar Loan, the Interest
Period to be applicable thereto after giving effect to such election,
which shall be a period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurodollar Loan but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration, in the case of a Eurodollar Loan.
(d) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Loan prior to the end of the Interest Period
applicable thereto, then, unless such Loan is repaid as provided herein, at the
end of such Interest Period such Loan shall be converted to an ABR Loan.
Notwithstanding any contrary provision hereof, if an Event of Default has
occurred and is continuing and the Bank so notifies the Borrower, then, so long
as an Event of Default is continuing (i) no outstanding Loan may be converted to
or continued as a Eurodollar Loan and (ii) unless repaid, each Eurodollar Loan
shall be converted to an ABR Loan at the end of the Interest Period applicable
thereto.
SECTION 2.06. Termination and Reduction of Commitment. (a) Unless
---------------------------------------
previously terminated, the Commitment shall terminate on the Maturity Date.
11
(b) The Borrower may at any time terminate, or from time to time reduce,
the Commitment; provided that (i) each reduction of the Commitment shall be in
--------
an amount that is an integral multiple of $500,000 and not less than $500,000
and (ii) the Borrower shall not terminate or reduce the Commitment if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.08, the aggregate amount of Loans outstanding exceeds the Commitment.
(c) The Borrower shall notify the Bank of any election to terminate or
reduce the Commitment under paragraph (b) of this Section at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Each notice delivered
by the Borrower pursuant to this Section shall be irrevocable; provided that a
notice of termination of the Commitment delivered by the Borrower may state that
such notice is conditioned upon the effectiveness of other credit facilities, in
which case such notice may be revoked by the Borrower (by notice to the Bank on
or prior to the specified effective date) if such condition is not satisfied.
Any termination or reduction of the Commitment shall be permanent.
SECTION 2.07. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
------------------------------------
unconditionally promises to pay to the Bank the then unpaid principal amount of
each Loan on the Maturity Date.
(b) The Bank shall maintain in accordance with its usual practice an
account or accounts evidencing (i) the indebtedness of the Borrower to the Bank
resulting from each Loan made by the Bank, including the amounts of principal
and interest payable and paid to the Bank from time to time hereunder, (ii) the
amount of each Loan made hereunder, the Type thereof and the Interest Period
applicable thereto, and (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to the Bank hereunder.
(c) The entries made in the accounts maintained pursuant to paragraph (b)
of this Section shall be prima facie evidence of the existence and amounts of
the obligations recorded therein; provided that the failure of the Bank to
maintain such accounts or any error therein shall not in any manner affect the
obligation of the Borrower to repay the Loans in accordance with the terms of
this Agreement.
(d) The Bank may request that Loans be evidenced by a promissory note. In
such event, the Borrower shall prepare, execute and deliver to the Bank a
promissory note payable to the order of the Bank (or, if requested by the Bank,
to the Bank and its registered assigns). Thereafter, the Loans evidenced by such
promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 8.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.08. Prepayment of Loans. (a) The Borrower shall have the right at
-------------------
any time and from time to time to prepay any Loan in whole or in part, subject
to prior notice in accordance with paragraph (b) of this Section.
(b) The Borrower shall notify the Bank by telephone (confirmed by telecopy)
of any prepayment hereunder (i) in the case of prepayment of a Eurodollar Loan,
not later than 11:00 a.m., New York City time, three Business Days before the
date of prepayment, (ii) in the case of prepayment of an ABR Loan, not later
than 11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Loan or portion thereof to be
prepaid; provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitment as contemplated by Section
2.06, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.06.
12
Each partial prepayment of any Loan shall be in an amount that would be
permitted in the case of an advance of a Loan of the same Type as provided in
Section 2.02. Prepayments shall be accompanied by accrued interest to the extent
required by Section 2.10.
SECTION 2.09. Fees. (a) The Borrower agrees to pay to the Bank a commitment
----
fee, which shall accrue at the Applicable Rate on the daily unused amount of the
Commitment during the period from and including the date hereof to but excluding
the date on which the Commitment terminates. Accrued commitment fees shall be
payable in arrears on the last day of March, June, September and December of
each year and on the date on which the Commitment terminates, commencing on the
first such date to occur after the date hereof. All commitment fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(b) All fees payable hereunder shall be paid on the dates due, in
immediately available funds. Fees paid shall not be refundable under any
circumstances.
SECTION 2.10. Interest. (a) The ABR Loans shall bear interest at the
--------
Alternate Base Rate plus the Applicable Rate.
(b) The Eurodollar Loans shall bear interest at the Adjusted LIBO Rate for
the Interest Period in effect for such Loan plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitment;
provided that (i) interest accrued pursuant to paragraph (c) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Loan prior to the end of the
Availability Period), accrued interest on the principal amount repaid or prepaid
shall be payable on the date of such repayment or prepayment and (iii) in the
event of any conversion of any Eurodollar Loan prior to the end of the current
Interest Period therefor, accrued interest on such Loan shall be payable on the
effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate, Adjusted
LIBO Rate or LIBO Rate shall be determined by the Bank, and such determination
shall be conclusive absent manifest error.
SECTION 2.11. Alternate Rate of Interest. If prior to the commencement of
--------------------------
any Interest Period for a Eurodollar Loan:
(a) the Bank determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period; or
13
(b) the Bank determines (which determination shall be conclusive absent
manifest error) that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for
such Interest Period will not adequately and fairly reflect the cost to the Bank
of making or maintaining the Loan for such Interest Period;
then the Bank shall give notice thereof to the Borrower by telephone or telecopy
as promptly as practicable thereafter and, until the Bank notifies the Borrower
that the circumstances giving rise to such notice no longer exist, (i) any
Interest Election Request that requests the conversion of any Loan to, or
continuation of any Loan as, a Eurodollar Loan shall be ineffective and (ii) if
any Borrowing Request requests a Eurodollar Loan, such Loan shall be made as an
ABR Loan; provided that if the circumstances giving rise to such notice affect
only one Type of Loan, then the other Type of Loans shall be permitted.
SECTION 2.12. Increased Costs. (a) If any Change in Law shall:
----------------
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, the Bank (except any such
reserve requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on the Bank or the London interbank market any
other condition affecting this Agreement or Eurodollar Loans made by
the Bank;
and the result of any of the foregoing shall be to increase the cost to the Bank
of making or maintaining any Eurodollar Loan (or of maintaining its obligation
to make any such Loan) or to reduce the amount of any sum received or receivable
by the Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to the Bank, as to Eurodollar Loans made by the Bank after
notification of such Change in Law, such additional amount or amounts as will
compensate the Bank for such additional costs incurred or reduction suffered.
(b) If the Bank determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on the
Bank's capital or on the capital of the Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by the Bank to a level below
that which the Bank or the Bank's holding company could have achieved but for
such Change in Law (taking into consideration the Bank's policies and the
policies of the Bank's holding company with respect to capital adequacy), then
from time to time the Borrower will pay to the Bank, as to Eurodollar Loans made
by the Bank after notification of such Change in Law, such additional amount or
amounts as will compensate the Bank or the Bank's holding company for any such
reduction suffered.
(c) A certificate of the Bank setting forth the amount or amounts necessary
to compensate the Bank or its holding company, as the case may be, as specified
in paragraph (a) or (b) of this Section shall be delivered to the Borrower and
shall be conclusive absent manifest error. The Borrower shall pay the Bank the
amount shown as due on any such certificate, as to Eurodollar Loans made by the
Bank after notification of such Change in Law.
(d) Failure or delay on the part of the Bank to demand compensation
pursuant to this Section shall not constitute a waiver of the Bank's right to
demand such compensation; provided that the Borrower shall not be required to
compensate the Bank, as to Eurodollar Loans made by the Bank after notification
of such Change in Law, pursuant to this Section for any increased costs or
reductions incurred more than 270 days prior to the date that the Bank notifies
the Borrower of the Change in Law giving rise to such increased costs or
reductions and of the Bank's intention to claim compensation therefor; provided
--------
further that, if the Change in Law giving rise to such increased costs or
-------
reductions is
14
retroactive, then the 270-day period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.13. Break Funding Payments. In the event of (a) the payment of
----------------------
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Eurodollar Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.11(b) and is revoked in accordance therewith), then, in any such event, the
Borrower shall compensate the Bank for the loss, cost and expense attributable
to such event. In the case of a Eurodollar Loan, such loss, cost or expense to
the Bank shall be deemed to include an amount determined by the Bank to be the
excess, if any, of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate (in the case of a Eurodollar Loan) that would have been applicable to such
Loan, for the period from the date of such event to the last day of the then
current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which the Bank would bid
were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of the Bank setting forth any amount or amounts that the Bank is
entitled to receive pursuant to this Section shall be delivered to the Borrower
and shall be conclusive absent manifest error. The Borrower shall pay the Bank
the amount shown as due on any such certificate within 10 days after receipt
thereof.
SECTION 2.14. Taxes. (a) Any and all payments by or on account of any
-----
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the
--------
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Bank receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Bank within 10 days after written
demand therefor, for the full amount of any Indemnified Taxes or Other Taxes
paid by the Bank on or with respect to any payment by or on account of any
obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by the Bank on its own behalf or on behalf of the Bank shall be
conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Bank the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
Bank.
15
ARTICLE III
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Bank that:
SECTION 3.01. Organization; Powers. Each of the Borrower and its
------------
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. Authorization; Enforceability. The Transactions are within
-----------------------------
the Borrower's corporate powers and have been duly authorized by all necessary
corporate and, if required, stockholder action. This Agreement has been duly
executed and delivered by the Borrower and constitutes a legal, valid and
binding obligation of the Borrower, enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions (a) do
------------------------------------
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the charter, by-laws or other organizational documents of
the Borrower or any of its Subsidiaries or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by the Borrower or any of its Subsidiaries, and (d) will not
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a) The
-----------------------------------------------
Borrower has heretofore furnished to the Bank its consolidated balance sheet and
statements of income, stockholders equity and cash flows (i) as of and for the
Fiscal Year ended December 31, 2002, reported on by PriceWaterhouseCoopers LLP,
independent public accountants, and (ii) as of and for the Fiscal Quarter and
the portion of the Fiscal Year ended March 31, 2003, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year-end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.
(b) Since December 31, 2002, there has been no material adverse change in
the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Borrower and its Subsidiaries has
----------
good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
16
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
------------------------------------
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, neither the Borrower nor any of its
Subsidiaries (i) has failed to comply with any Environmental Law or to obtain,
maintain or comply with any permit, license or other approval required under any
Environmental Law, (ii) has become subject to any Environmental Liability, (iii)
has received notice of any claim with respect to any Environmental Liability or
(iv) knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of the Borrower and
-----------------------------------
its Subsidiaries is in compliance with all laws, regulations and orders of any
Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08. Investment and Holding Company Status. Neither the Borrower
-------------------------------------
nor any of its Subsidiaries is (a) an "investment company" as defined in, or
subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Borrower and its Subsidiaries has timely
-----
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the Borrower or such Subsidiary, as applicable, has
set aside on its books adequate reserves or (b) to the extent that the failure
to do so could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
-----
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $1,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as
17
of the date of the most recent financial statements reflecting such amounts,
exceed by more than $1,000,000 the fair market value of the assets of all such
underfunded Plans.
SECTION 3.11. Disclosure. The Borrower has disclosed to the Bank all
----------
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information furnished by or on behalf of the Borrower to the Bank in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The obligation of the Bank to make Loans
--------------
hereunder shall not become effective until the date on which each of the
following conditions is satisfied (or waived in accordance with Section 8.02):
(a) The Bank (or its counsel) shall have received from each party hereto
either (i) a counterpart of this Agreement signed on behalf of such party or
(ii) written evidence satisfactory to the Bank (which may include telecopy
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement.
(b) The Bank shall have received a favorable written opinion (addressed to
the Bank and dated the Effective Date) of Xxxxxxx & Xxxxxxxxx, LLP, counsel for
the Borrower, substantially in the form of Exhibit A, and covering such other
matters relating to the Borrower, this Agreement or the Transactions as the Bank
shall reasonably request. The Borrower hereby requests such counsel to deliver
such opinion.
(c) The Bank shall have received such documents and certificates as the
Bank or its counsel may reasonably request relating to the organization,
existence and good standing of the Borrower, the authorization of the
Transactions and any other legal matters relating to the Borrower, this
Agreement or the Transactions, all in form and substance satisfactory to the
Bank and its counsel.
(d) The Bank shall have received a certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer of the
Borrower, confirming compliance with the conditions set forth in paragraphs (a)
and (b) of Section 4.02.
(e) The Bank shall have received all fees and other amounts due and payable
on or prior to the Effective Date, including a Facility Fee of $27, 500 and, to
the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.
The Bank shall notify the Borrower of the Effective Date, and such notice shall
be conclusive and binding. Notwithstanding the foregoing, the obligation of the
Bank to make Loans hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 9.02)
18
at or prior to 3:00 p.m., New York City time, on November 15, 2003 (and, in the
event such conditions are not so satisfied or waived, the Commitment shall
terminate at such time).
SECTION 4.02. Each Loan. The obligation of the Bank to make any Loan
---------
(including the intial Loan) is subject to the satisfaction of the following
conditions:
(a) The representations and warranties of the Borrower set forth in this
Agreement shall be true and correct on and as of the date of such Loan.
(b) At the time of and immediately after giving effect to such Loan no
Default shall have occurred and be continuing.
The borrowing of each Loan shall be deemed to constitute a representation and
warranty by the Borrower on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitment has expired or been terminated and the principal
of and interest on each Loan and all fees payable hereunder shall have been paid
in full, the Borrower covenants and agrees with the Bank that:
SECTION 5.01. Financial Statements and Other Information. The Borrower will
------------------------------------------
furnish to the Bank:
(a) within 120 days after the end of each Fiscal Year of the Borrower, its
audited consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous Fiscal Year,
all reported on by KPMG LLP or other independent public accountants of
recognized national standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to the scope of such
audit) to the effect that such consolidated financial statements present fairly
in all material respects the financial condition and results of operations of
the Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
(b) within 60 days after the end of each of the first three Fiscal Quarters
of each Fiscal Year of the Borrower, its consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of the end of
and for such Fiscal Quarter and the then elapsed portion of the Fiscal Year,
setting forth in each case in comparative form the figures for the corresponding
period or periods of (or, in the case of the balance sheet, as of the end of)
the previous Fiscal Year, all certified by one of its Financial Officers as
presenting fairly in all material respects the financial condition and results
of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under clause (a)
or (b) above, a certificate of a Financial Officer of the Borrower (i)
certifying as to whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be taken with
respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.09, 6.10 and 6.11 and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in Section 3.04 and, if any
such
19
change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(d) concurrently with any delivery of financial statements under clause (a)
above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the ordinary course of
their examination of such financial statements of any Default (which certificate
may be limited to the extent required by accounting rules or guidelines);
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, as the case may be; and
(f) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this Agreement, as
the Bank may reasonably request.
SECTION 5.02. Notices of Material Events. The Borrower will furnish to the
--------------------------
Bank prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Borrower and its Subsidiaries in an aggregate amount exceeding
$1,000,000; and
(d) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Borrower will, and will
------------------------------
cause each of its Subsidiaries to, do or cause to be done all things necessary
to preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges and franchises material to the conduct of
its business; provided that the foregoing shall not prohibit any merger,
--------
consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.04. Payment of Obligations. The Borrower will, and will cause
----------------------
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
20
SECTION 5.05. Maintenance of Properties; Insurance. The Borrower will, and
--------------------------
will cause each of its Subsidiaries to, (a) keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted, and (b) maintain, with financially sound and
reputable insurance companies, insurance in such amounts and against such risks
as are customarily maintained by companies engaged in the same or similar
businesses operating in the same or similar locations.
SECTION 5.06. Books and Records; Inspection Rights. (a) The Borrower will,
-----------------
and will cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Bank, upon reasonable prior notice, to visit and inspect its properties, to
examine and make extracts from its books and records, and to discuss its
affairs, finances and condition with its officers and independent accountants,
all at such reasonable times and as often as reasonably requested.
(b) In the event that the Borrower's Leverage Ratio is at any time greater
than 3.5 to 1.0 for two consecutive quarters (unless an Event of Default has
occurred and is continuing, in which case such limitation shall not apply), the
Borrower will permit the Bank (or any agents or representatives thereof) to
conduct, and cooperate with the Bank in connection therewith, a field
examination of the Accounts of the Borrower and its Subsidiaries, and all books
and records and other information relating thereto, financial or otherwise, the
fees and expenses of which shall be for the account of the Borrower, all at such
reasonable times and as often as reasonably requested.
SECTION 5.07. Compliance with Laws. The Borrower will, and will cause each
--------------------
of its Subsidiaries to, comply with all laws, rules, regulations and orders of
any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds. The proceeds of the Loans will be used only
---------------
for working capital. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations G, U and X.
ARTICLE VI
Negative Covenants
------------------
Until the Commitment has expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full, the
Borrower covenants and agrees with the Bank that:
SECTION 6.01. Indebtedness. The Borrower will not, and will not permit any
------------
Subsidiary to, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01
and extensions, renewals and replacements of any such Indebtedness that do not
increase the maximum amount of borrowing permitted thereunder by such lender as
set forth on such Schedule;
21
(c) Indebtedness of the Borrower to any Subsidiary and of any Subsidiary to
the Borrower or any other Subsidiary;
(d) Guarantees by the Borrower of Indebtedness of any Subsidiary and by any
Subsidiary of Indebtedness of the Borrower or any other Subsidiary;
(e) Indebtedness of the Borrower or any Subsidiary incurred to finance the
acquisition, construction or improvement of any fixed or capital assets,
including Capital Lease Obligations and any Indebtedness assumed in connection
with the acquisition of any such assets or secured by a Lien on any such assets
prior to the acquisition thereof, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal amount
thereof; provided that (i) such Indebtedness is incurred prior to or within 90
days after such acquisition or the completion of such construction or
improvement and (ii) the aggregate principal amount of Indebtedness permitted by
this clause (e) shall not exceed $1,000,000 at any time outstanding; and
(f) Indebtedness of the Borrower or any Subsidiary as an account party in
respect of trade letters of credit.
SECTION 6.02. Liens. The Borrower will not, and will not permit any
-----
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Borrower or any Subsidiary
existing on the date hereof and set forth in Schedule 6.02; provided that (i)
such Lien shall not apply to any other property or asset of the Borrower or any
Subsidiary and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements thereof
that do not increase the outstanding principal amount thereof;
(c) any Lien existing on any property or asset prior to the acquisition
thereof by the Borrower or any Subsidiary or existing on any property or asset
of any Person that becomes a Subsidiary after the date hereof prior to the time
such Person becomes a Subsidiary; provided that (i) such Lien is not created in
contemplation of or in connection with such acquisition or such Person becoming
a Subsidiary , as the case may be, (ii) such Lien shall not apply to any other
property or assets of the Borrower or any Subsidiary and (iii) such Lien shall
secure only those obligations which it secures on the date of such acquisition
or the date such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding principal
amount thereof; and
(d) Liens on fixed or capital assets acquired, constructed or improved by
the Borrower or any Subsidiary; provided that (i) such security interests secure
Indebtedness permitted by clause (e) of Section 6.01, (ii) such security
interests and the Indebtedness secured thereby are incurred prior to or within
90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Borrower or any Subsidiary.
SECTION 6.03. Fundamental Changes. (a) The Borrower will not, and will not
-------------------
permit any Subsidiary to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or sell, transfer,
lease or otherwise dispose of (in one transaction or in a series of
22
transactions) all or substantially all or any substantial part of its assets, or
all or substantially all of the stock of any of its Subsidiaries (in each case,
whether now owned or hereafter acquired), or liquidate or dissolve, except that,
if at the time thereof and immediately after giving effect thereto no Default
shall have occurred and be continuing (i) any Subsidiary or Person may merge
into the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Subsidiary or Person may merge into any Subsidiary in a
transaction in which the surviving entity is a Subsidiary, (iii) any Subsidiary
may sell, transfer, lease or otherwise dispose of its assets to the Borrower or
to another Subsidiary and (iv) any Subsidiary may liquidate or dissolve if the
Borrower determines in good faith that such liquidation or dissolution is in the
best interests of the Borrower and is not materially disadvantageous to the
Lenders; provided that any such merger involving a Person that is not a wholly
--------
owned Subsidiary immediately prior to such merger shall not be permitted unless
also permitted by Section 6.04.
(b) The Borrower will not, and will not permit any of its Subsidiaries to,
engage to any material extent in any business other than businesses of the type
conducted by the Borrower and its Subsidiaries on the date of execution of this
Agreement and businesses reasonably related thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.
---------------------------------------------------------
The Borrower will not, and will not permit any of its Subsidiaries to, purchase,
hold or acquire (including pursuant to any merger with any Person that was not a
wholly owned Subsidiary prior to such merger) any capital stock, evidences of
indebtedness or other securities (including any option, warrant or other right
to acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist any
investment or any other interest in, any other Person, or purchase or otherwise
acquire (in one transaction or a series of transactions) any assets of any other
Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments by the Borrower existing on the date hereof in the capital
stock of its Subsidiaries;
(c) loans or advances made by the Borrower to any Subsidiary and made by
any Subsidiary to the Borrower or any other Subsidiary; and
(d) Guarantees constituting Indebtedness permitted by Section 6.01.
SECTION 6.05. Hedging Agreements. The Borrower will not, and will not
------------------
permit any of its Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities.
SECTION 6.06. Restricted Payments. The Borrower will not, and will not
-------------------
permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except (a) the Borrower may
declare and pay dividends with respect to its capital stock payable solely in
additional shares of its common stock, (b) Subsidiaries may declare and pay
dividends ratably with respect to their capital stock and (c) the Borrower may
make Restricted Payments pursuant to and in accordance with stock option plans
or other benefit plans for management or employees of the Borrower and its
Subsidiaries.
SECTION 6.07. Transactions with Affiliates. The Borrower will not, and will
----------------------------
not permit any of its Subsidiaries to, sell, lease or otherwise transfer any
property or assets to, or purchase, lease or otherwise acquire any property or
assets from, or otherwise engage in any other transactions with, any of
23
its Affiliates, except (a) in the ordinary course of business at prices and on
terms and conditions not less favorable to the Borrower or such Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Borrower and its [wholly owned] Subsidiaries
not involving any other Affiliate and (c) any Restricted Payment permitted by
Section 6.06.
SECTION 6.08. Restrictive Agreements. The Borrower will not, and will not
----------------------
permit any of its Subsidiaries to, directly or indirectly, enter into, incur or
permit to exist any agreement or other arrangement that prohibits, restricts or
imposes any condition upon (a) the ability of the Borrower or any Subsidiary to
create, incur or permit to exist any Lien upon any of its property or assets, or
(b) the ability of any Subsidiary to pay dividends or other distributions with
respect to any shares of its capital stock or to make or repay loans or advances
to the Borrower or any other Subsidiary or to Guarantee Indebtedness of the
Borrower or any other Subsidiary; provided that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by this Agreement, (ii)
the foregoing shall not apply to restrictions and conditions existing on the
date hereof identified on Schedule 6.08 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.
Section 6.09. Leverage Ratio. Borrower will not suffer or permit its
--------------
Leverage Ratio, as measured at the end of each Fiscal Quarter, to be greater
than 4.0 to 1.0.
Section 6.10. Fixed Charge Coverage Ratio. Borrower will not suffer or
---------------------------
permit its Fixed Charge Coverage Ratio, as measured at the end of each Fiscal
Quarter, to be less than 4.0 to 1.0.
Section 6.11 Minimum Tangible Net Worth. Borrower will not suffer or permit
--------------------------
its Tangible Net Worth to be at any time less than (a) $49,000,000 plus (b) 50%
of its Consolidated Net Income earned in each Fiscal Quarter commencing with the
Net Income earned in the Fiscal Quarter ended September 30, 2003.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall occur:
-----------------
(a) the Borrower shall fail to pay any principal of any Loan when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee or
any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of three
Business Days;
(c) any representation or warranty made or deemed made by or on behalf of
the Borrower or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver
24
hereunder, or in any report, certificate, financial statement or other document
furnished pursuant to or in connection with this Agreement or any amendment or
modification hereof or waiver hereunder, shall prove to have been incorrect when
made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant, condition
or agreement contained in Section 5.02, 5.03 (with respect to the Borrower's
existence) or 5.08 or in Article VI;
(e) the Borrower shall fail to observe or perform any covenant, condition
or agreement contained in this Agreement (other than those specified in clause
(a), (b) or (d) of this Article), and such failure shall continue unremedied for
a period of 30 days after notice thereof from the Bank to the Borrower;
(f) the Borrower or any Subsidiary shall fail to make any payment (whether
of principal or interest and regardless of amount) in respect of any Material
Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material Indebtedness
becoming due prior to its scheduled maturity or that enables or permits (with or
without the giving of notice, the lapse of time or both) the holder or holders
of any Material Indebtedness or any trustee or agent on its or their behalf to
cause any Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity;
provided that this clause (g) shall not apply to secured Indebtedness that
becomes due as a result of the voluntary sale or transfer of the property or
assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of the Borrower or any Subsidiary or its debts, or of a substantial part
of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in writing or
fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount
in excess of $1,000,000 shall be rendered against the Borrower, any Subsidiary
or any combination thereof and the same shall remain undischarged for a period
of 30 consecutive days during which execution shall not be effectively stayed,
or any action shall be legally taken by a judgment creditor to attach or levy
upon any assets of the Borrower or any Subsidiary to enforce any such judgment;
25
(l) an ERISA Event shall have occurred that, in the opinion of the Bank,
when taken together with all other ERISA Events that have occurred, could
reasonably be expected to result in a Material Adverse Effect in any year; or
(m) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Bank may, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitment, and thereupon the Commitment shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to the Borrower described in
clause (h) or (i) of this Article, the Commitment shall automatically terminate
and the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower.
ARTICLE VIII
Miscellaneous
-------------
SECTION 8.01. Notices. Except in the case of notices and other
-------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at:
PAR Technology Corporation
0000 Xxxxxx Xxxxxxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000-0000
Attention of Xxxxxx X. Xxxxxxxx, Vice President, CFO and
Treasurer
Telecopy No. (000) 000-0000
(b) if to Bank, to it at:
JPMorgan Chase Bank
Bridgewater Place
000 Xxxx Xxxxxx, Xxxxx 0
Xxxxxxxx, XX 00000
Attention of Xxxxxxx X. XxXxxxx, Vice President
Telecopy No. (000) 000-0000
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
26
SECTION 8.02. Waivers; Amendments. (a) No failure or delay by the Bank in
-------------------
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Bank hereunder are cumulative and
are not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of this Agreement or consent to any departure by the
Borrower therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether the
Bank may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived, amended
or modified except pursuant to an agreement or agreements in writing entered
into by the Borrower and the Bank.
SECTION 8.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall
----------------------------------
pay (i) all reasonable out-of-pocket expenses incurred by the Bank and its
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Bank and costs allocated by its internal legal department, in connection
with the preparation and administration of this Agreement or any amendments,
modifications or waivers of the provisions hereof (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
out-of-pocket expenses incurred by the Bank, including the fees, charges and
disbursements of any counsel for the Bank, in connection with the enforcement or
protection of its rights in connection with this Agreement, including its rights
under this Section, or in connection with the Loans made hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Bank, and each Related Party of the
Bank (each such Person being called an "Indemnitee") against, and hold each
----------
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or the proceeds therefrom, (iii) any actual or alleged presence or release of
Hazardous Materials on or from any property owned or operated by the Borrower or
any of its Subsidiaries, or any Environmental Liability related in any way to
the Borrower or any of its Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
--------
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or the use of the proceeds thereof.
(d) All amounts due under this Section shall be payable not later than 15
days after written demand therefor.
27
SECTION 8.04. Successors and Assigns. (a) The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that the
Borrower may not assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of the Bank (and any attempted
assignment or transfer by the Borrower without such consent shall be null and
void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Bank) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) The Bank may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that, except in the
--------
case of an assignment to an Affiliate of the Bank, the Borrower must give its
prior written consent to such assignment (which consent shall not be
unreasonably withheld); and provided further that any consent of the Borrower
---------------------
otherwise required under this paragraph shall not be required if an Event of
Default under clause (h) or (i) of Article VII has occurred and is continuing.
Subject to notification of an assignment, the assignee shall be a party hereto
and, to the extent of the interest assigned, have the rights and obligations of
the Bank under this Agreement, and the Bank shall, to the extent of the interest
assigned, be released from its obligations under this Agreement (and, in the
case of an assignment covering all of the Bank's rights and obligations under
this Agreement, the Bank shall cease to be a party hereto but shall continue to
be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 8.03). Any
assignment or transfer by the Bank of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by the Bank of a participation in such rights and
obligations in accordance with paragraph (c) of this Section.
(c) The Bank may, without the consent of the Borrower, sell participations
to one or more banks or other entities (a "Participant") in all or a portion of
-----------
the Bank's rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans owing to it); provided that (i) the
--------
Bank's obligations under this Agreement shall remain unchanged, (ii) the Bank
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (iii) the Borrower shall continue to deal solely and
directly with the Bank in connection with the Bank's rights and obligations
under this Agreement. Any agreement or instrument pursuant to which the Bank
sells such a participation shall provide that the Bank shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or
--------
instrument may provide that the Bank will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 8.02(b) that affects such Participant. Subject to
paragraph (d) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 2.12, 2.13 and 2.14 to the same extent
as if it were the Bank and had acquired its interest by assignment pursuant to
paragraph (b) of this Section.
(d) A Participant shall not be entitled to receive any greater payment
under Section 2.12 or 2.14 than the Bank would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower's prior written
consent.
(e) The Bank may at any time pledge or assign a security interest in all or
any portion of its rights under this Agreement to secure obligations of the
Bank, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
--------
interest shall release the Bank from any of its obligations hereunder or
substitute any such pledgee or assignee for the Bank as a party hereto.
28
SECTION 8.05. Survival. All covenants, agreements, representations and
--------
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the Bank and shall survive the execution
and delivery of this Agreement and the making of any Loans, regardless of any
investigation made by the Bank or on its behalf and notwithstanding that the
Bank may have had notice or knowledge of any Default or incorrect representation
or warranty at the time any credit is extended hereunder, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any fee or any other amount payable under this Agreement is outstanding
and unpaid and so long as the Commitment has not expired or terminated. The
provisions of Sections 2.12, 2.13, 2.14 and 8.03 and Article VII shall survive
and remain in full force and effect regardless of the consummation of the
transactions contemplated hereby, the repayment of the Loans, the expiration or
termination of the Commitment or the termination of this Agreement or any
provision hereof.
SECTION 8.06. Counterparts; Integration; Effectiveness. This Agreement may
----------------------------------------
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Bank constitute
the entire contract among the parties relating to the subject matter hereof and
supersede any and all previous agreements and understandings, oral or written,
relating to the subject matter hereof. Except as provided in Section 4.01, this
Agreement shall become effective when it shall have been executed by the Bank
and when the Bank shall have received counterparts hereof which, when taken
together, bear the signature of the Borrower, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 8.07. Severability. Any provision of this Agreement held to be
------------
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 8.08. Right of Setoff. If an Event of Default shall have occurred
---------------
and be continuing, the Bank and each of its Affiliates is hereby authorized at
any time and from time to time, to the fullest extent permitted by law, to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by the Bank and such Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by the Bank, irrespective of whether or not
the Bank shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of the Bank under this Section are in
addition to other rights and remedies (including other rights of setoff) which
the Bank may have.
SECTION 8.09. Governing Law; Jurisdiction; Consent to Service of Process.
-----------------------------------------------------------
(a) This Agreement shall be construed in accordance with and governed by the law
of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and
29
determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any
such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement shall affect any right that the Bank may otherwise
have to bring any action or proceeding relating to this Agreement against the
Borrower or its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 8.01. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 8.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
--------------------
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 8.11. Headings. Article and Section headings and the Table of
--------
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 8.12. Confidentiality. The Bank agrees to maintain the
---------------
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Borrower or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to the Bank on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this Section, "Information" means all information received from the Borrower
-----------
relating to the Borrower or its business, other than any such information that
is available to the Bank on a nonconfidential basis prior to disclosure by the
Borrower; provided that, in the case of information received from the Borrower
--------
after the date hereof, such information is clearly identified at the
30
time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 8.13. Interest Rate Limitation. Notwithstanding anything herein to
------------------------
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
------------
received or reserved by the Bank in accordance with applicable law, the rate of
interest payable in respect of such Loan hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan but were not payable as a result of the operation of this Section
shall be cumulated and the interest and Charges payable to the Bank in respect
of other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, together with interest thereon at the
Federal Funds Effective Rate to the date of repayment, shall have been received
by the Bank.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
PAR TECHNOLOGY CORPORATION
By _______________________
Name:
Title:
JPMORGAN CHASE BANK
By ______________________
Name:
Title:
31
Schedule 3.06
Disclosed Matters
None.
Schedule 6.01
Existing Indebtedness
$12,500,000 Working Capital Line of Credit, pursuant to a Business Loan
Agreement dated September 21, 2001 between the Borrower and NBT Bank, National
Association, as modified and extended pursuant to a (Renewal) Promissory Note
dated May 1, 2003, and further modified and extended pursuant to a Change In
Terms Agreement dated July 18, 2003.
Commercial Mortgage, dated ____________, executed and delivered by the Borrower
to NBT Bank, National Association, in the original principal amount of
$____________and having an approximate present principal balance of $2,114,000.
Schedule 6.02
Existing Liens
General Security Agreement dated May 1, 2001, executed by the Borrower and
ParTech, Inc. in favor of NBT Bank, National Association, covering all personal
property of the Borrower and ParTech, Inc., as further described in the General
Security Agreement.
A mortgage lien covering real property owned by the Borrower, pursuant to the
Commercial Mortgage loan described in Schedule 6.01.
Schedule 6.08
Existing Restrictions
None.
EXHIBIT A
FORM OF CERTIFICATE
OF [ASSISTANT] SECRETARY
Reference is made to the Credit Agreement dated as of October 31, 2003 (the
"Credit Agreement"), among PAR Technology Corporation and JPMorgan Chase Bank.
Terms defined in the Credit Agreement are used herein with the same meanings.
This certificate is being delivered pursuant to Section 4.01 of the Credit
Agreement.
I, [ ], [Assistant] Secretary of the Borrower, DO HEREBY CERTIFY that:
(a) there have been no amendments or supplements to, or restatements of,
the [charter] of the Borrower since [ ];
(b) no proceedings have been instituted or are pending or contemplated with
respect to the dissolution, liquidation or sale of all or substantially all the
assets of the Borrower or threatening its existence or the forfeiture of any of
its corporate rights;
(c) annexed hereto as Exhibit A is a true and correct copy of the By-laws
of the Borrower as in effect on [Date] 1/ and at all times thereafter through
the date hereof;
(d) annexed hereto as Exhibit B is a true and correct copy of certain
resolutions duly adopted by the Board of Directors of the Borrower at [a
meeting/meetings] of said Board of Directors duly called and held on [Date(s)],
which resolutions are the only resolutions adopted by the shareholders or Board
of Directors of the Borrower or any committee thereof relating to the Credit
Agreement or the Transactions and have not been revoked, amended, supplemented
or modified and are in full force and effect on the date hereof; and
3
(e) each of the persons named below is and has been at all times since
[Date] a duly elected and qualified officer of the Borrower holding the
respective office set forth opposite his or her name and the signature set forth
opposite the name of each such person is his or her genuine signature:
Name Title Specimen Signature
---- ----- ------------------
[Include all officers who are signing
the Credit Agreement or any closing
documents.]
IN WITNESS WHEREOF, I have hereunto signed my name this [ ] day of [ ]. 2/
----------------------------
[Assistant] Secretary
I, [ ], [ ] of the Borrower, do hereby certify that [ ] has been duly
elected, is duly qualified and is the [Assistant] Secretary of the Borrower,
that the signature set forth above is [his/her] genuine signature and that
[he/she] has held such office at all times since [ ].
IN WITNESS WHEREOF, I have hereunto signed my name this [ ] day of [ ]. 3/
-
_____________________________________
1/
Title:
___________________
2/ To be the Effective Date.
-
3/This certification should be included as part of the secretary's certificate
-
and signed by one of the officers whose incumbancy is certified pursuant to
clauuse (e) above.
EXHIBIT B
FORM OF EURODOLLAR LOAN BORROWING REQUEST
JPMorgan Chase Bank
Bridgewater Place
000 Xxxx Xxxxxx, Xxxxx 0
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxxx, Vice President [Date]
Greetings:
Reference is made to the Credit Agreement dated as of October 31, 2003 (the
"Credit Agreement"), among PAR Technology Corporation and JPMorgan Chase Bank.
Terms defined in the Credit Agreement are used herein with the same meanings.
This notice constitutes a Borrowing Request and the Borrower hereby requests a
Loan under the Credit Agreement, and in that connection the Borrower specifies
the following information with respect to the Loan requested hereby:
(A) Principal amount of requested
Loan:____________________
(B) Date of such Loan (which is a Business
Day):___________________
(C) Whether such Loan is to be an ABR Loan or a
Eurodollar Loan: _____________________
(D) In the case of a Eurodollar Loan, the initial
Interest Period to be applicable thereto, which shall
be a period contemplated by the definition of the
term "Interest Period": ___________________
(E) Location and number of Borrower's account at Bank to
which proceeds of Loan are to be
disbursed:______________________
The Borrower hereby represents and warrants that the conditions specified in
paragraphs (a) and (b) of Section 4.02 of the Credit Agreement are satisfied.
Very truly yours,
PAR Technology Corporation
By:
--------------------------------------
Name:
Title:
EXHIBIT C
FORM OF INTEREST ELECTION REQUEST
JPMorgan Chase Bank
Bridgewater Place
000 Xxxx Xxxxxx, Xxxxx 0
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. XxXxxxx, Vice President [Date]
Greetings:
Reference is made to the Credit Agreement dated as of October 31, 2003 (the
"Credit Agreement"), among PAR Technology Corporation and JPMorgan Chase Bank.
Terms defined in the Credit Agreement are used herein with the same meanings.
This notice constitutes an Interest Election Request and the Borrower hereby
requests the conversion or continuation of a Loan under the Credit Agreement,
and in that connection the Borrower specifies the following information with
respect to the Loan to be converted or continued as requested hereby:
(A) Loan to which this request applies:
_______________________
(B) principal amount of Loan to be
converted/continued:_______________
(C) Effective date of election (which is a Business
Day):___________________
(D) Whether such Loan is to be an ABR Loan or a
Eurodollar Loan: _____________________
(E) In the case of a Eurodollar Loan, the Interest Period
to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest
Period":
-------------------
Very truly yours,
PAR Technology Corporation
By:
------------------------
Name:
Title:
EXHIBIT D
FORM OF FINANCIAL OFFICER'S CERTIFICATE
Reference is made to the Credit Agreement dated as of October 31, 2003 (the
"Credit Agreement"), between PAR Technology Corporation and JPMorgan Chase Bank.
Terms defined in the Credit Agreement are used herein with the same meanings.
This certificate is being delivered pursuant to Section 5.01(c) of the
Credit Agreement.
I, [ ], [ ] of the Borrower, DO HEREBY CERTIFY that:
(a) the representations and warranties of the Borrower set forth in the
Credit Agreement are true and correct on and as of the date hereof;
(b) no Default has occurred and is continuing at the date hereof;
(c) Fixed Charge Coverage Ratio. Borrower's Fixed Charge Coverage Ratio, as
---------------------------
measured in respect of the period for which the computation is being made, and
which period shall in each case consist of a twelve month period ending on the
last day of a Fiscal Quarter, is calculated as follows:
(i) Earnings Before Interest, Taxes, Depreciation and Amortization equals:
___________
(ii) the current maturities of long term Indebtedness equals:
______________________
plus: interest expense equals: __________________
Total of (ii) equals: ___________________
Ratio of (i) to (ii): ___________
Required Ratio: _____________
(d) Leverage Ratio. Borrower's Leverage Ratio, as measured in respect of
--------------
the period for which the computation is being made, and which period shall in
each case consist of a twelve month period ending on the last day of a Fiscal
Quarter, is calculated as follows:
(i) Indebtedness equals: _________
(ii) Earnings Before Interest, Taxes, Depreciation and Amortization equals:
___________
Ratio of (i) to (ii): ___________
Required Ratio: _____________
(e) Minimum Tangible Net Worth. Borrower's Minimum Tangible Net Worth, as
measured in respect of the period for which the computation is being made, and
which period shall in each case be the period ending on the last day of a Fiscal
Quarter, is calculated as follows: (i) $49,000,000 plus (ii) 50% of its
Consolidated Net Income earned in each Fiscal Quarter, commencing with the Net
Income earned in the Fiscal Quarter ended September 30, 2003 equals: ___________
and (iii) 100% of the aggregate net cash proceeds from any issuance of capital
stock or other ownership interests received by the Borrower or any of its
Subsidiaries equals: ______________
Total of (i), (ii) and (iii) equals: $ _________
IN WITNESS WHEREOF, I have hereunto signed my name this [ ] day of [ ]. 4/
-
------------------------------------------
Name:
Title:
--------------------------
4/To be dated the Effective Date.
-
EXHIBIT E
OPINION OF COUNSEL FOR THE BORROWER
[Effective Date]
JPMorgan Chase Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
[I/We] have acted as counsel for PAR Technology Corporation, a Delaware
corporation (the "Borrower"), in connection with the Credit Agreement dated as
of October 31, 2003 (the "Credit Agreement"), between the Borrower and JPMorgan
Chase Bank. Terms defined in the Credit Agreement are used herein with the same
meanings.
[I, or individuals under my direction,/We] have examined originals or
copies, certified or otherwise identified to [my/our] satisfaction, of such
documents, corporate records, certificates of public officials and other
instruments and have conducted such other investigations of fact and law as
[I/we] have deemed necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, [I am/we are] of the opinion that:
1. The Borrower (a) is a corporation duly organized, validly existing and
in good standing under the laws of Delaware and New York, (b) has all requisite
power and authority to carry on its business as now conducted and (c) except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
2. The Transactions are within the Borrower's corporate powers and have
been duly authorized by all necessary corporate and, if required, stockholder
action. The Credit Agreement has been duly executed and delivered by the
Borrower and constitutes a legal, valid and binding obligation of the Borrower,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
3. The Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect, (b)
will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any of its Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon the Borrower or
any of its Subsidiaries or its assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries, and
(d) will not result in the creation or imposition of any Lien on any asset of
the Borrower or any of its Subsidiaries.
4. There are no actions, suits or proceedings by or before any arbitrator
or Governmental Authority pending against or, to [my/our] knowledge, threatened
against or affecting the Borrower or any of its Subsidiaries (a) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect (other than the Disclosed Matters)
or (b) that involve the Credit Agreement or the Transactions.
5. Neither the Borrower nor any of its Subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
[I am a member/we are members] of the bar of the State of New York and the
foregoing opinion is limited to the laws of the State of New York, the General
Corporation Law of the State of Delaware and the Federal laws of the United
States of America. [[I/We] note that the Credit Agreement is governed by the
laws of the State of New York. This opinion is rendered solely to you in
connection with the above matter. This opinion may not be relied upon by you for
any other purpose or relied upon by any other Person (other than your successors
and assigns as Lenders and Persons that acquire participations in your Loans)
without our prior written consent.
Very truly yours,
Xxxxxxx & Xxxxxxxxx, LLP
