EXHIBIT 10.11
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AMENDED AND RESTATED CREDIT AGREEMENT
AMONG
INDUS INTERNATIONAL, INC.
AND
THE BANKS NAMED HEREIN
AND
SUMITOMO BANK OF CALIFORNIA
JUNE 10, 1998
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CREDIT AGREEMENT
Table of Contents
Page
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SECTION I. INTERPRETATION .......................................................................... 2
1.01 Definitions.............................................................................. 2
1.02 GAAP.....................................................................................15
1.03 Headings.................................................................................15
1.04 Plural Terms.............................................................................15
1.05 Time.....................................................................................16
1.06 Governing Law............................................................................16
1.07 Construction.............................................................................16
1.08 Entire Agreement ........................................................................16
1.09 Calculation of Interest and Fees.........................................................16
1.10 Other Interpretive Provisions............................................................16
SECTION II. CREDIT FACILITIES.........................................................................17
2.01. Loan Facility............................................................................17
2.02. Letter of Credit Facility................................................................20
2.03. Amount Limitations, Commitment Reductions, Etc...........................................25
2.04. Fees.....................................................................................25
2.05. Prepayments..............................................................................26
2.06. Other Payment Terms......................................................................27
2.07. Notes and Interest Account...............................................................28
2.08. Loan Funding, Etc........................................................................28
2.09. Pro Rata Treatment.......................................................................29
2.10. Change of Circumstances..................................................................30
2.11. Taxes on Payments........................................................................32
2.12. Funding Loss Indemnification.............................................................34
2.13. Security.................................................................................34
SECTION III. CONDITIONS PRECEDENT.....................................................................35
3.01. Initial Conditions Precedent.............................................................35
3.02. Conditions Precedent to Each Credit Event................................................35
SECTION IV. REPRESENTATIONS AND WARRANTIES...........................................................36
4.01. Representations and Warranties...........................................................36
4.02. Reaffirmation............................................................................40
SECTION V. COVENANTS................................................................................40
5.01. Affirmative Covenants....................................................................40
5.02. Negative Covenants.......................................................................43
5.03. Financial Covenants......................................................................49
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SECTION VI. DEFAULT..................................................................................50
6.01. Events of Default........................................................................50
6.02. Remedies.................................................................................51
SECTION VII. AGENT AND RELATIONS AMONG BANKS..........................................................52
7.01. Appointment, Powers and Immunities.......................................................52
7.02. Reliance by Agent........................................................................52
7.03. Defaults.................................................................................53
7.04. Indemnification..........................................................................53
7.05. Non-Reliance.............................................................................53
7.06. Resignation or Removal of Agent..........................................................54
7.07. Authorization............................................................................54
7.08. Agent in its Individual Capacity.........................................................54
SECTION VIII. MISCELLANEOUS............................................................................54
8.01. Notices..................................................................................54
8.02. Expenses.................................................................................55
8.03. Indemnification..........................................................................56
8.04. Waivers; Amendments......................................................................56
8.05. Successors and Assigns...................................................................57
8.06. Setoff; Security Interest................................................................60
8.07. No Third Party Rights....................................................................60
8.08. Partial Invalidity.......................................................................61
8.09. Jury Trial...............................................................................61
8.10. Counterparts.............................................................................61
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SCHEDULES
I Banks
II Pricing Grid
3.01 Initial Conditions Precedent
4.01(g) Litigation
4.01(q) Borrower's Subsidiaries
5.02(a) Existing Indebtedness
5.02(b) Existing Liens
5.02(e) Existing Investments
EXHIBITS
A Notice of Borrowing (2.01(b))
B Notice of Conversion (2.01(d))
C Notice of Interest Period Selection (2.01(e))
D Note (2.07(a)
E Borrower Security Agreement (2.13(a))
F Compliance Certificate (5.01(a))
G Assignment Agreement (8.05(c))
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 10, 1998,
is entered into by and among:
(1) INDUS INTERNATIONAL, INC., a Delaware corporation
("Borrower");
(2) Each of the financial institutions from time to time
listed in Schedule I hereto, as amended from time to time (such
financial institutions to be referred to herein collectively as the
"Banks"); and
(3) SUMITOMO BANK OF CALIFORNIA, a California banking
corporation ("SBC"), as agent for the Banks (in such capacity,
"Agent").
RECITALS
A. The Indus Group, Inc., a California corporation and a
wholly-owned Subsidiary of Borrower (the "Indus Group"), the Banks and Agent
were parties to a certain Credit Agreement, dated as of September 2, 1997 (as
amended, the "Indus Group Credit Agreement") pursuant to which the Banks made
revolving loans to the Indus Group in an aggregate principal amount not
exceeding $35,000,000 outstanding at any time.
B. Effective as of December 31, 1997, the Indus Group and TSW
International, Inc., a Georgia corporation and a wholly-owned Subsidiary of
Borrower ("TSW"), merged with and into Borrower with Borrower as the surviving
corporation (the "Merger"). Concurrent with the Merger, Borrower assumed, inter
alia, (i) all of the rights and obligations of the Indus Group arising under the
Indus Group Credit Agreement and the other credit documents to which the Indus
Group was a party pursuant to the Indus Group Credit Agreement and (ii) all of
the rights and obligations of TSW arising under that certain Security Agreement
dated as of September 2, 1997, executed by TSW in favor of Agent and the Banks
and the other credit documents to which TSW was a party pursuant to the Indus
Group Credit Agreement. Such assumption by Borrower was evidenced by that
certain Assumption Agreement, dated as of December 31, 1997, among Borrower, the
Banks and Agent (the "Assumption Agreement").
C. Pursuant to the Assumption Agreement, Borrower agreed, inter
alia, to enter into a new credit agreement and related credit documents in form
and substance satisfactory to the Banks and Agent and substantially similar to
the Indus Group Credit Agreement and the other applicable credit documents
pursuant to which the Banks would agree to make loans to Borrower pursuant to
the terms and conditions of such new credit agreement and related credit
documents and Borrower would grant to Agent, for the benefit of Agent and the
Banks, a security interest in certain assets of Borrower to secure such loans.
D. Borrower, the Banks and Agent now wish to enter into this
Amended and Restated Credit Agreement pursuant to which Borrower, the Banks and
Agent shall amend and restate the obligations and agreements of Borrower, the
Banks and Agent arising under the Indus Group Credit Agreement and related
credit documents, as assumed by Borrower pursuant to the Assumption Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION I. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or
any other Credit Document, each term set forth below, when used in this
Agreement or any other Credit Document, shall have the respective meaning given
to that term below or in the provision of this Agreement or other Credit
Document referenced below:
"Affiliate" shall mean, with respect to any Person, (a) each
Person that, directly or indirectly, owns or controls, whether
beneficially or as a trustee, guardian or other fiduciary, five percent
(5%) or more of any class of Equity Securities of such Person, (b) each
Person that controls, is controlled by or is under common control with
such Person or any Affiliate of such Person or (c) each of such
Person's officers, directors, joint venturers and partners; provided,
however, that in no case shall Agent or any Bank be deemed to be an
Affiliate of Borrower or any of its Subsidiaries for purposes of this
Agreement.
"Agent" shall have the meaning given to that term in clause
(3) of the introductory paragraph hereof.
"Agreement" shall mean this Amended and Restated Credit
Agreement, as amended, restated or otherwise modified from time to time
in accordance with this Agreement.
"Applicable Lending Office" shall mean, with respect to any
Bank, (a) initially, its office designated as such in Schedule I (or,
in the case of any Bank which becomes a Bank by an assignment pursuant
to Subparagraph 8.05(c), its office designated as such in the
applicable Assignment Agreement) and (b) subsequently, such other
office or offices as such Bank may designate to Agent as the office at
which such Bank's Loans will thereafter be maintained and for the
account of which all payments of principal of, and interest on, such
Bank's Loans will thereafter be made.
"Applicable Margin" shall mean, with respect to any LIBOR Loan
at any time, the per annum margin which is determined pursuant to the
Pricing Grid and added to the LIBO Rate for such LIBOR Loan; provided,
however, that each Applicable
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Margin determined pursuant to the Pricing Grid shall be increased by
two percent (2.00%) on the date an Event of Default of the type set
forth in Subparagraph 6.01(a) occurs and ten (10) days after the date
of notification of any other type of Event of Default occurs and
remains uncured, and in each case shall continue at such increased rate
during the continuance of such Event of Default.
"Assignee Bank" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assignment" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assignment Agreement" shall have the meaning given to that
term in Subparagraph 8.05(c).
"Assignment Effective Date" shall have, with respect to each
Assignment Agreement, the meaning set forth therein.
"Assignor Bank" shall have the meaning given to that term in
Subparagraph 8.05(c).
"Assumption Agreement" shall have the meaning given to that
term in Recital B.
"Bank Parties" shall mean, collectively, the Banks and Issuing
Bank. Unless otherwise indicated, the term "Bank Parties" shall include
any Bank acting as Issuing Bank but not in its capacity as such.
"Banks" shall have the meaning given to that term in clause
(2) of the introductory paragraph hereof. Unless otherwise indicated,
the term "Banks" shall include any Bank acting as Issuing Bank but not
in its capacity as such.
"Base Rate" shall mean, on any day, the greater of (a) the
Prime Rate in effect on such date and (b) the Federal Funds Rate for
such day plus one-half percent (0.50%); provided, however, that the
Base Rate shall be increased by two percent (2.00%) on the date an
Event of Default of the type set forth in Subparagraph 6.0l(a) occurs
and ten (10) days after the date of notification of any other type of
Event of Default occurs and remains uncured, and in each case shall
continue at such increased rate during the continuance of such Event of
Default.
"Base Rate Loan" shall mean, at any time, a Loan which then
bears interest as provided in clause (i) of Subparagraph 2.01(c).
"Borrower" shall have the meaning given to that term in clause
(1) of the introductory paragraph hereof.
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"Borrower Security Agreement" shall have the meaning given to
that term in Subparagraph 2.13(a).
"Borrowing" shall mean a borrowing by Borrower consisting of
the Loans made by each of the Banks on the same date and of the same
Type pursuant to a single Notice of Borrowing.
"Business Day" shall mean any day on which (a) commercial
banks are not authorized or required to close in San Francisco,
California and (b) if such Business Day is related to a Loan which
bears or is to bear interest based on a LIBO Rate, dealings in Dollar
deposits are carried out in the London or other applicable interbank
eurodollar market.
"Capital Adequacy Requirement" shall have the meaning given to
that term in Subparagraph 2.10(d).
"Capital Leases" shall mean any and all lease obligations
that, in accordance with GAAP, are required to be capitalized on the
books of a lessee.
"Cash Equivalents" shall mean:
(a) Direct obligations of, or obligations the
principal and interest on which are unconditionally guaranteed
by, the United States of America or obligations of any agency
of the United States of America to the extent such obligations
are backed by the full faith and credit of the United States
of America, in each case maturing within twelve months from
the date of acquisition thereof;
(b) Certificates of deposit maturing within
twelve months from the date of acquisition thereof issued by a
commercial bank or trust company organized under the laws of
the United States of America or a state thereof or that is a
Bank, provided that (A) such deposits are denominated in
Dollars, (B) such bank or trust company has capital, surplus
and undivided profits of not less than $100,000,000 and (C)
such bank or trust company has certificates of deposit or
other debt obligations rated at least A-1 (or its equivalent)
by Standard and Poor's Ratings Group or P-1 (or its
equivalent) by ▇▇▇▇▇'▇ Investors Service, Inc.; and
(c) Open market commercial paper maturing within
twenty-four months from the date of acquisition thereof issued
by a corporation organized under the laws of the United States
of America or a state thereof, provided such commercial paper
is rated at least BBB (or its equivalent) by Standard and
Poor's Ratings Group or Baa (or its equivalent) by ▇▇▇▇▇'▇
Investors Service, Inc.
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"Change of Control" shall mean the occurrence of any of the
following events: (a) any person or group of persons (within the
meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) shall (i) acquire beneficial ownership (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange Commission under
the Securities Exchange Act of 1934, as amended) of fifty-one (51%) or
more of the outstanding Equity Securities of Borrower entitled to vote
for members of the board of directors, or (ii) acquire all or
substantially all of the assets of Borrower and its Subsidiaries taken
as a whole, or (b) any change in the management of Borrower which Agent
determines will have a Material Adverse Effect.
"Change of Law" shall have the meaning given to that term in
Subparagraph 2.10(b).
"Closing Date" shall mean June 10, 1998.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" shall mean all property in which Agent or any
Bank has a Lien to secure the Obligations.
"Commitment" shall mean, with respect to any Bank at any time,
such Bank's Proportionate Share at such time of the Total Commitment at
such time.
"Commitment Fee Percentage" shall mean, with respect to the
Unused Commitment at any time, a per annum rate which is determined
pursuant to the Pricing Grid.
"Commitment Fees" shall have the meaning given to that term in
Subparagraph 2.04(a).
"Commitment Reduction Date" shall mean, collectively, the
First Commitment Reduction Date and the Second Commitment Reduction
Date.
"Compliance Certificate" shall have the meaning given to that
term in Subparagraph 5.01(a).
"Contractual Obligation" of any Person shall mean, any
indenture, note, lease, loan agreement, security, deed of trust,
mortgage, security agreement, guaranty, instrument, contract, agreement
or other form of contractual obligation or undertaking to which such
Person is a party or by which such Person or any of its property is
bound.
"Credit Documents" shall mean and include this Agreement, the
LC Applications, the Notes, and the Security Documents; all documents,
instruments and
5
agreements delivered to any Agent or any Bank Party pursuant to
Paragraph 3.01; and all other documents, instruments and agreements
delivered by Borrower or any of its Subsidiaries to Agent or any Bank
Party in connection with this Agreement on or after the date of this
Agreement.
"Credit Event" shall mean the making of any Loan, the
conversion of any Base Rate Loan into a LIBOR Loan, the selection of a
new Interest Period for any LIBOR Loan, the issuance of any Letter of
Credit or any amendment of any Letter of Credit which increases its
stated amount or extends its expiration date.
"Default" shall have the meaning given to that term in
Paragraph 6.01.
"Dollars" and "$" shall mean the lawful currency of the
United States of America.
"Drawing Payment" shall have the meaning given to that term in
Subparagraph 2.02(c).
"Employee Benefit Plan" shall mean any employee benefit plan
within the meaning of section 3(3) of ERISA maintained or contributed
to by Borrower or any ERISA Affiliate of Borrower, other than a
Multiemployer Plan.
"Equity Securities" of any Person shall mean (a) all common
stock, preferred stock, participations, shares, partnership interests
or other equity interests in such Person (regardless of how designated
and whether or not voting or non-voting) and (b) all warrants, options
and other rights to acquire any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may from time to time be amended or supplemented,
including any rules or regulations issued in connection therewith.
"ERISA Affiliate" shall mean any Person which is treated as a
single employer with Borrower under Section 414 of the Code.
"Event of Default" shall have the meaning given to that term
in Paragraph 6.01.
"Federal Funds Rate" shall mean, for any day, the Federal
funds effective rate as set forth in the weekly statistical release
designated as H.15(519) published by the Federal Reserve Bank of New
York for such day, or in any successor publication (or, if such rate is
not so published for any day, the average rate quoted to Agent on and
for such day by three (3) Federal funds brokers of recognized standing
selected by Agent).
"Federal Reserve Board" shall mean the Board of Governors of
the Federal Reserve System.
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"Financial Statements" shall mean, with respect to any
accounting period for any Person, statements of income, shareholders'
equity and cash flows of such Person for such period, and a balance
sheet of such Person as of the end of such period, setting forth in
each case in comparative form figures for the corresponding period in
the preceding fiscal year if such period is less than a full fiscal
year or, if such period is a full fiscal year, corresponding figures
from the preceding annual audit, all prepared in reasonable detail and
in accordance with GAAP.
"First Commitment Reduction Date" shall mean June 30, 1998.
"GAAP" shall mean generally accepted accounting principles and
practices as in effect in the United States of America from time to
time, consistently applied.
"Governmental Authority" shall mean any domestic or foreign
national, state or local government, any political subdivision thereof,
any department, agency, authority or bureau of any of the foregoing, or
any other entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government,
including, without limitation, the Federal Deposit Insurance
Corporation, the Federal Reserve Board, the Comptroller of the
Currency, any central bank or any comparable authority.
"Governmental Charges" shall mean, with respect to any Person,
all levies, assessments, fees, claims or other charges imposed by any
Governmental Authority upon such Person or any of its property or
otherwise payable by such Person.
"Governmental Rule" shall mean any law, rule, regulation,
ordinance, order, code interpretation, judgment, decree, directive,
guidelines, policy or similar form of decision of any Governmental
Authority.
"Guaranty Obligation" shall mean, with respect to any Person,
any direct or indirect liability of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation of
another Person. The amount of any Guaranty Obligation shall be deemed
equal to the liability in respect thereof required to be reported as a
liability (contingent or otherwise) on either the balance sheet or in
the financial statements of such Person in accordance with GAAP.
"Hazardous Materials" shall mean all materials, substances and
wastes which are classified or regulated as "hazardous," "toxic" or
similar descriptions under any environmental law or which are
hazardous, toxic, harmful or dangerous to human health.
"Indebtedness" of any Person shall mean, without duplication:
(a) All obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments and all
other obligations of such
7
Person for borrowed money (including obligations to repurchase
receivables and other assets sold with recourse);
(b) All obligations of such Person for the
deferred purchase price of property or services (including
obligations under letters of credit and other credit
facilities which secure or finance such purchase price and
obligations under "synthetic" leases);
(c) All obligations of such Person under
conditional sale or other title retention agreements with
respect to property acquired by such Person (to the extent of
the value of such property if the rights and remedies of the
seller or lender under such agreement in the event of default
are limited solely to repossession or sale of such property);
(d) All obligations of such Person as lessee
under or with respect to Capital Leases;
(e) All non-contingent payment or reimbursement
obligations of such Person under or with respect to letters of
credit, banker's acceptances or other similar instruments;
(f) All Guaranty Obligations of such Person with
respect to the obligations of other Persons of the types
described in clauses (a) - (e) above; and
(g) All obligations of other Persons of the
types described in clauses (a) - (f) above to the extent
secured by (or for which any holder of such obligations has an
existing right, contingent or otherwise, to be secured by) any
Lien in any property (including accounts and contract rights)
of such Person, even though such Person has not assumed or
become liable for the payment of such obligations.
"Indus Group" shall have the meaning given to that term in
Recital A.
"Indus Group Credit Agreement" shall have the meaning given to
that term in Recital A.
"Interest Account" shall have the meaning given to that term
in Subparagraph 2.07(b).
"Interest Period" shall mean, with respect to any LIBOR Loan,
the time periods selected by Borrower pursuant to Subparagraph 2.01(b)
or Subparagraph 2.01(d) which commences on the first day of such Loan
or the effective date of any conversion and ends on the last day of
such time period, and thereafter, each subsequent time period selected
by Borrower pursuant to Subparagraph 2.01(e) which
8
commences on the last day of the immediately preceding time period and
ends on the last day of that time period.
"Investment" of any Person shall mean any loan or advance of
funds by such Person to any other Person (other than advances to
employees of such Person for moving and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business),
any purchase or other acquisition of any Equity Securities or
Indebtedness of any other Person, any capital contribution by such
Person to or any other investment by such Person in any other Person
(including any Guaranty Obligations of such Person and any Indebtedness
of such Person of the type described in clause (f) of the definition of
"Indebtedness" on behalf of any other Person); provided, however, that
Investments shall not include (a) accounts receivable or other
indebtedness owed by customers of such Person which are current assets
and arose from sales of inventory in the ordinary course of such
Person's business or (b) prepaid expenses of such Person incurred and
prepaid in the ordinary course of business.
"Issuing Bank" shall mean SBC, in its capacity as issuer of
letters of credit under Paragraph 2.02.
"LC Application" shall have the meaning given to that term in
Subparagraph 2.02(b).
"LC Commitment" shall have the meaning given to that term in
Subparagraph 2.02(a).
"LC Facility Expiration Date" shall have the meaning given to
that term in Subparagraph 2.02(a).
"LC Issuance Fees" shall have the meaning given to that term
in Subparagraph 2.04(b).
"LC Usage Fee" shall have the meaning given to that term in
Subparagraph 2.04(b).
"LC Usage Fee Rate" shall mean, with respect to Letters of
Credit, the per annum rate which is determined pursuant to the Pricing
Grid and used to calculate the LC Usage Fee.
"Letter of Credit" shall have the meaning given to that term
in Subparagraph 2.02(a).
"Leverage Ratio" shall mean, with respect to Borrower and its
Subsidiaries at any time, the ratio, determined on a consolidated basis
in accordance with GAAP, of (a) the sum of the total liabilities of
Borrower and its Subsidiaries at such time minus
9
cash and Cash Equivalents in excess of Two Million Dollars ($2,000,000)
to (b) the Tangible Net Worth of Borrower and its Subsidiaries at such
time.
"LIBO Rate" shall mean, with respect to any Interest Period
for the LIBOR Loans in any Borrowing, a rate per annum equal to the
quotient of (a) the arithmetic mean (rounded upward if necessary to the
nearest 1/16 of one percent) of the rates per annum appearing on the
Reuters screen LIBO page (or any successor publication) on the second
Business Day prior to the first day of such Interest Period at or about
11:00 A.M. (London time) (for delivery on the first day of such
Interest Period) for a term comparable to such Interest Period, divided
by (b) one minus the Reserve Requirement for such Loans in effect from
time to time. If for any reason rates are not available as provided in
clause (a) of the preceding sentence, the rate to be used in clause (a)
shall be, at Agent's discretion, (i) the rate per annum at which Dollar
deposits are offered to Agent in the London interbank eurodollar
currency market or (ii) the rate at which Dollar deposits are offered
to Agent in, or by Agent to major banks in, any offshore interbank
eurodollar market selected by Agent, in each case on the second
Business Day prior to the commencement of such Interest Period at or
about 10:00 A.M. (New York time) (for delivery on the first day of such
Interest Period) for a term comparable to such Interest Period and in
an amount approximately equal to the amount of the Loan to be made or
funded by Agent as part of such Borrowing.
"LIBOR Loan" shall mean, at any time, a Loan which then bears
interest as provided in clause (ii) of Subparagraph 2.01(c).
"Lien" shall mean, with respect to any property, any security
interest, mortgage, pledge, lien, charge or other encumbrance in, of,
or on such property or the income therefrom, and the filing of any
financing statement or similar instrument under the Uniform Commercial
Code or comparable law of any jurisdiction.
"Loan" shall have the meaning given to that term in
Subparagraph 2.01(a).
"Margin Stock" shall have the meaning given to that term in
Regulation U issued by the Federal Reserve Board, as amended from time
to time, and any successor regulation thereto.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, assets, operations or financial or other condition
of Borrower and its Subsidiaries; (b) the ability of Borrower to pay or
perform the Obligations in accordance with the terms of this Agreement
and the other Credit Documents; or (c) the rights and remedies of Agent
and the Bank Parties under this Agreement or any other Credit Documents
taken as a whole.
"maturity" shall mean, with respect to any Loan, Reimbursement
Obligation, interest, fee or other amount payable by Borrower under
this Agreement or the other Credit Documents, the date such Loan,
interest, Reimbursement Obligation, fee or
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other amount becomes due, whether upon the stated maturity or due date,
upon acceleration or otherwise.
"Maturity Date" shall have the meaning given to that term in
Subparagraph 2.01(a).
"Merger" shall have the meaning given to that term in Recital
B.
"Multiemployer Plan" shall mean any multiemployer plan within
the meaning of section 3(37) of ERISA maintained or contributed to by
Borrower or any ERISA Affiliate.
"Note" shall have the meaning given to that term in
Subparagraph 2.07(a).
"Notice of Borrowing" shall have the meaning given to that
term in Subparagraph 2.01(b).
"Notice of Conversion" shall have the meaning given to that
term in Subparagraph 2.01(d).
"Notice of Interest Period Selection" shall have the meaning
given to that term in Subparagraph 2.01(e).
"Obligations" shall mean and include, with respect to Borrower
and its Affiliates, all loans, advances, debts, liabilities, and
obligations, howsoever arising, owed by Borrower to Agent or any Bank
Party of every kind and description (whether or not evidenced by any
note or instrument and whether or not for the payment of money), direct
or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising pursuant to the terms of this Agreement or any of
the other Credit Documents, including without limitation all interest,
fees, charges, expenses, attorneys' fees and accountants' fees
chargeable to Borrower or payable by Borrower hereunder or thereunder.
"Outstanding Facilities Credit" shall have the meaning given
to that term in Subparagraph 2.03(a).
"Participant" shall have the meaning given to that term in
Subparagraph 8.05(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"Permitted Indebtedness" shall have the meaning given to that
term in Subparagraph 5.02(a).
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"Permitted Liens" shall have the meaning given to that term in
Subparagraph 5.02(b).
"Person" shall mean and include an individual, a partnership,
a corporation (including a business trust), a limited liability
company, a joint stock company, an unincorporated association, a joint
venture, a trust or other entity or a Governmental Authority.
"Pricing Grid" shall mean Schedule II.
"Pricing Period" shall mean (a) the period commencing on the
date of this Agreement and ending on August 31, 1998, and (b) each
consecutive three-calendar month period thereafter which commences on
the day following the last day of the immediately preceding
three-calendar month period and ends on the last day of that time
period.
"Prime Rate" shall mean the per annum rate publicly announced
by Agent from time to time at its San ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇. The Prime
Rate is determined by Agent from time to time as a means of pricing
credit extensions to some customers and is neither directly tied to any
external rate of interest or index nor necessarily the lowest rate of
interest charged by Agent at any given time for any particular class of
customers or credit extensions. Any change in the Base Rate resulting
from a change in the Prime Rate shall become effective on the Business
Day on which each change in the Prime Rate occurs.
"Proportionate Share" shall mean, with respect to each Bank,
the percentage set forth under the caption "Proportionate Share"
opposite such Bank's name on Schedule I, or, if changed, such
percentage as may be set forth for such Bank in the Register.
"Quick Ratio" shall mean, with respect to Borrower and its
Subsidiaries at any time, the ratio, determined on a consolidated basis
in accordance with GAAP, of:
(a) The sum at such time of all (i) cash of
Borrower and its Subsidiaries; (ii) Cash Equivalents of
Borrower and its Subsidiaries; and (iii) accounts receivable
of Borrower and its Subsidiaries, less all reserves therefor;
provided, however, that in computing the foregoing sum, there
shall be excluded therefrom any cash, Cash Equivalent or
accounts receivable subject to a security interest (except a
security interest in favor of Agent or any Bank Party securing
the Obligations);
to
(b) The sum at such time of (i) the current
liabilities of Borrower and its Subsidiaries; and (ii) to the
extent not included in such current liabilities, the
Outstanding Facilities Credit at such time.
12
"Register" shall have the meaning given to that term in
Subparagraph 8.05(d).
"Reimbursement Obligation" shall have the meaning given to
that term in Subparagraph 2.02(c).
"Reimbursement Payment" shall have the meaning given to that
term in Subparagraph 2.02(c).
"Reportable Event" shall have the meaning given to that term
in ERISA and applicable regulations thereunder.
"Requirement of Law" applicable to any Person shall mean (a)
the Articles or Certificate of Incorporation and By-laws, Partnership
Agreement, Operating Agreement or other organizational or governing
documents of such Person, (b) any Governmental Rule binding upon such
Person, (c) any license, permit, approval or other authorization
granted by any Governmental Authority to or for the benefit of such
Person or (d) any judgment, decision or determination of any
Governmental Authority or arbitrator, in each case applicable to or
binding upon such Person or any of its property or to which such Person
or any of its property is subject.
"Reserve Requirement" shall mean, with respect to any day in
an Interest Period for a LIBOR Loan, the aggregate of the reserve
requirement rates (expressed as a decimal) in effect on such day for
eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of the Federal Reserve Board) maintained
by a member bank of the Federal Reserve System. As used herein, the
term "reserve requirement" shall include, without limitation, any
basic, supplemental or emergency reserve requirements imposed on Bank
by any Governmental Authority.
"Required Banks" shall mean (a) at any time Loans are
outstanding and the Banks are obligated to make Loans pursuant to their
Commitments, Banks holding seventy-five percent (75%) or more of the
aggregate principal amount of all Loans outstanding, calculated as if
Loans in the full amount of the Banks' Commitments were outstanding,
(b) at any time Loans are outstanding and the Banks are not obligated
to make Loans pursuant to their Commitments, Banks holding seventy-five
percent or more of the aggregate principal amount of all Loans
outstanding and (c) at any time no Loans are outstanding, Banks whose
aggregate Commitments exceed seventy-five percent (75%) or more of the
Total Commitment at such time.
"SBC" shall have the meaning given to that term in clause (3)
of the introductory paragraph hereof.
"Second Commitment Reduction Date" shall mean September 30,
1998.
"Security Documents" shall mean and include the Borrower
Security Agreement, and all other instruments, agreements, certificates
and documents
13
(including Uniform Commercial Code financing statements) delivered to
Agent or any Bank in connection with any Collateral to secure the
Obligations.
"Solvent" shall mean, with respect to any Person on any date,
that on such date (a) the fair value of the property of such Person is
greater than the fair value of the liabilities (including, without
limitation, contingent liabilities) of such Person, (b) the present
fair saleable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature and (d) such Person is not engaged in business
or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute an
unreasonably small capital.
"Subsidiary" of any Person shall mean (a) any corporation of
which more than 50% of the issued and outstanding Equity Securities
having ordinary voting power to elect a majority of the Board of
Directors of such corporation is at the time directly or indirectly
owned or controlled by such Person and (b) any partnership, joint
venture, or other association of which more than 50% of the equity
interest having the power to vote, direct or control the management of
such partnership, joint venture or other association is at the time
owned and controlled by such Person.
"Tangible Net Worth" shall mean, with respect to Borrower and
its Subsidiaries at any time, the remainder at such time, determined on
a consolidated basis in accordance with GAAP, of (a) the total assets
of Borrower and its Subsidiaries minus (b) the sum (without limitation
and without duplication of deductions) of (i) the Total Liabilities of
Borrower and its Subsidiaries, (ii) all reserves established by
Borrower and its Subsidiaries for anticipated losses and expenses (to
the extent not deducted in calculating total assets in clause (a)
above), and (iii) all intangible assets of Borrower and its
Subsidiaries (to the extent included in calculating total assets in
clause (a) above), including, without limitation, goodwill (including
any amounts, however designated on the balance sheet, representing the
cost of acquisition of businesses and investments in excess of
underlying tangible assets), trademarks, trademark rights, trade name
rights, copyrights, patents, patent rights, licenses, unamortized debt
discount, marketing expenses, organizational expenses, non-compete
agreements and deferred research and development and (iv) all loans
owed to Borrower and its Subsidiaries by officers, directors and
employees of Borrower and its Subsidiaries.
"Taxes" shall have the meaning given to that term in
Subparagraph 2.11(a).
"Total Commitment" shall mean (a) from and after the Closing
Date up to and including the First Commitment Reduction Date,
Thirty-Five Million Dollars ($35,000,000) or, if such amount is reduced
pursuant to Subparagraph 2.03(b), the amount to which so reduced and in
effect at such time; (b) from and after July 1, 1998 through the Second
Commitment Reduction Date, Thirty Million Dollars
14
($30,000,000) or, if such amount is reduced pursuant to Subparagraph
2.03(b), the amount to which so reduced and in effect at such time; and
(c) from and after the January 1, 1999 through the Maturity Date,
Twenty-Five Million Dollars ($25,000,000) or, if such amount is reduced
pursuant to Subparagraph 2.03(b), the amount to which so reduced and in
effect at such time.
"Total Liabilities" shall mean, with respect to Borrower and
its Subsidiaries at any time, the sum at such time, determined on a
consolidated basis in accordance with GAAP, of (a) all liabilities of
Borrower and its Subsidiaries determined in accordance with GAAP plus
(b) all Guaranty Obligations of Borrower and its Subsidiaries at such
time.
"TSW" shall have the meaning given to that term in Recital B.
"Type" shall mean, with respect to any Loan or Borrowing at
any time, the classification of such Loan or Borrowing by the type of
interest rate it then bears, whether an interest rate based on the Base
Rate or the LIBO Rate.
"UCP" shall have the meaning given to that term in
Subparagraph 2.02(a).
"Unused Commitment" shall mean, at any time after this
Agreement is executed by Borrower, Agent and Banks, the remainder of
(a) the Total Commitment at such time minus (b) the sum of the
aggregate principal amount of all Loans then outstanding and the
aggregate stated amount of all Letters of Credit then outstanding.
1.02. GAAP. Unless otherwise indicated in this Agreement or any other
Credit Document, all accounting terms used in this Agreement or any other Credit
Document shall be construed, and all accounting and financial computations
hereunder or thereunder shall be computed, in accordance with GAAP. If GAAP
changes during the term of this Agreement such that any covenants contained
herein would then be calculated in a different manner or with different
components, Borrower, the Banks and Agent agree to negotiate in good faith to
amend this Agreement in such respects as are necessary to conform those
covenants as criteria for evaluating Borrower's financial condition to
substantially the same criteria as were effective prior to such change in GAAP;
provided, however, that, until Borrower, the Banks and Agent so amend this
Agreement, all such covenants shall be calculated in accordance with GAAP as in
effect immediately prior to such change.
1.03. Headings. Headings in this Agreement and each of the other Credit
Documents are for convenience of reference only and are not part of the
substance hereof or thereof.
1.04. Plural Terms. All terms defined in this Agreement or any other
Credit Document in the singular form shall have comparable meanings when used in
the plural form and vice versa.
15
1.05. Time. All references in this Agreement and each of the other
Credit Documents to a time of day shall mean San Francisco, California time
unless otherwise indicated.
1.06. Governing Law. This Agreement and each of the other Credit
Documents (unless otherwise provided in such other Credit Documents) shall be
governed by and construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
1.07. Construction. This Agreement is the result of negotiations
among, and has been reviewed by, Borrower, each Bank, Agent and their respective
counsel. Accordingly, this Agreement shall be deemed to be the product of all
parties hereto, and no ambiguity shall be. construed in favor of or against
Borrower, Agent or any Bank Party.
1.08. Entire Agreement. This Agreement and each of the other Credit
Documents, taken together, constitute and contain the entire agreement of
Borrower, the Banks and Agent and supersede any and all prior agreements,
negotiations, correspondence, understandings and communications among the
parties, whether written or oral, respecting the subject matter hereof.
1.09. Calculation of Interest and Fees. All calculations of interest
and fees under this Agreement and the other Credit Documents for any period (a)
shall include the first day of such period and exclude the last day of such
period and (b) shall be calculated on the basis of a year of 360 days for actual
days elapsed, except that during any period any Loan bears interest based upon
the Base Rate, such interest shall be calculated on the basis of a year of 365
or 366 days, as appropriate, for actual days elapsed.
1.10. Other Interpretive Provisions. References in this Agreement to
"Recitals," "Sections," "Paragraphs," "Subparagraphs," "Exhibits" and
"Schedules" are to recitals, sections, paragraphs, subparagraphs, exhibits and
schedules herein and hereto unless otherwise indicated. References in this
Agreement and each of the other Credit Documents to any document, instrument or
agreement (a) shall include all exhibits, schedules and other attachments
thereto, (b) shall include all documents, instruments or agreements issued or
executed in replacement thereof and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified and
supplemented from time to time and in effect at any given time. The words
"hereof," "herein" and "hereunder" and words of similar import when used in this
Agreement or any other Credit Document shall refer to this Agreement or such
other Credit Document, as the case may be, as a whole and not to any particular
provision of this Agreement or such other Credit Document, as the case may be.
The words "include" and "including" and words of similar import when used in
this Agreement or any other Credit Document shall not be construed to be
limiting or exclusive. In the event of any inconsistency between the terms of
this Agreement and the terms of any other Credit Document, the terms of this
Agreement shall govern.
16
SECTION II. CREDIT FACILITIES.
2.01. Loan Facility.
(a) Loan Availability. Subject to the terms and
conditions of this Agreement (including the amount limitations set
forth in Paragraph 2.03), each Bank severally agrees to continue to
advance to Borrower from time to time during the period beginning on
the Closing Date and ending on July 31, 1999 (the "Maturity Date") such
revolving loans as are currently outstanding or as Borrower may request
under this Paragraph 2.01 (individually, a "Loan"); provided, however,
that (i) the aggregate principal amount of all Loans made by such Bank
at any time outstanding shall not exceed such Bank's Commitment at such
time and (ii) the aggregate principal amount of all Loans made by all
Banks at any time outstanding shall not exceed the Total Commitment at
such time. All Loans shall be made on a pro rata basis by the Banks in
accordance with their respective Proportionate Shares, with each
Borrowing to be comprised of a Loan by each Bank equal to such Bank's
Proportionate Share of such Borrowing. Except as otherwise provided
herein, Borrower may borrow, repay and reborrow Loans until the
Maturity Date.
(b) Notice of Borrowing. Borrower shall request each
Borrowing by delivering to Agent an irrevocable written notice in the
form of Exhibit A, appropriately completed (a "Notice of Borrowing"),
which specifies, among other things:
(i) The principal amount of the requested
Borrowing, which shall be in the amount of (A) $500,000 or an
integral multiple of $100,000 in excess thereof;
(ii) Whether the requested Borrowing is to
consist of Base Rate Loans or LIBOR Loans;
(iii) If the requested Borrowing is to consist of
LIBOR Loans, the initial Interest Period selected by Borrower
for such LIBOR Loans in accordance with Subparagraph 2.01(e);
and
(iv) The date of the requested Borrowing, which
shall be a Business Day.
Borrower shall give each Notice of Borrowing to Agent at least three
(3) Business Days before the date of the requested Borrowing in the
case of a Borrowing consisting of LIBOR Loans and at least one (1)
Business Day before the date of the requested Borrowing in the case of
a Borrowing consisting of Base Rate Loans. Each Notice of Borrowing
shall be delivered by first-class mail or facsimile to Agent at the
office or facsimile number and during the hours specified in Paragraph
8.01; provided, however, that Borrower shall promptly deliver to Agent
the original of any
17
Notice of Borrowing initially delivered by facsimile. Agent shall
promptly notify each Bank of the contents of each Notice of Borrowing
and of the amount and Type of (and, if applicable, the Interest Period
for) each Loan to be made by such Bank as part of the requested
Borrowing.
(c) Interest Rates. Borrower shall pay interest on the
unpaid principal amount of each Loan from the date of such Loan until
the maturity thereof, at one of the following rates per annum:
(i) During such periods as such Loan is a Base
Rate Loan, at a rate per annum equal to the Base Rate, such
rate to change from time to time as the Base Rate shall
change; and
(ii) During such periods as such Loan is a LIBOR
Loan, at a rate per annum equal at all times during each
Interest Period for such LIBOR Loan to the LIBO Rate for such
Interest Period plus the Applicable Margin therefor, such rate
to change from time to time during such Interest Period as the
Applicable Margin shall change;
Provided, however, that all Loans outstanding during the period
commencing on the Closing Date and ending three (3) Business Days after
the Closing Date shall be Base Rate Loans. All Loans in each Borrowing
shall, at any given time prior to maturity, bear interest at one, and
only one, of the above rates. The number of Borrowings consisting of
LIBOR Loans shall not exceed ten (10) at any time.
(d) Conversion of Loans. Borrower may convert any
Borrowing from one Type of Borrowing to the other Type; provided,
however, that any conversion of a Borrowing consisting of LIBOR Loans
into a Borrowing consisting of Base Rate Loans shall be made on, and
only on, the last day of an Interest Period for such LIBOR Loans.
Borrower shall request such a conversion by an irrevocable written
notice to Agent in the form of Exhibit B, appropriately completed (a
"Notice of Conversion"), which specifies, among other things:
(i) The Borrowing which is to be converted;
(ii) The Type of Loans into which such Loans are
to be converted;
(iii) If such Borrowing is to be converted into a
Borrowing consisting of LIBOR Loans, the initial Interest
Period selected by Borrower for such Loans in accordance with
Subparagraph 2.01(e); and
(iv) The date of the requested conversion, which
shall be a Business Day.
Borrower shall give each Notice of Conversion to Agent at least three
(3) Business Days before the date of the requested conversion in the
case of a conversion into a
18
Loan consisting of LIBOR Loans and at least one (1) Business Day before
the date of the requested conversion in the case of a conversion into a
Loan consisting of Base Rate Loans. Each Notice of Conversion shall be
delivered by first-class mail or facsimile to Agent at the office or to
the facsimile number and during the hours specified in Paragraph 8.01;
provided, however, that Borrower shall promptly deliver to Agent the
original of any Notice of Conversion initially delivered by facsimile.
Agent shall promptly notify each Bank of the contents of each Notice of
Conversion.
(e) LIBOR Loan Interest Periods.
(i) The initial and each subsequent Interest
Period selected by Borrower for a LIBOR Loan shall be one (1),
two (2), three (3), four (4), five (5), six (6), nine (9) or
twelve (12) months as Borrower may specify; provided, however,
that (A) any Interest Period which would otherwise end on a
day which is not a Business Day shall be extended to the next
succeeding Business Day unless such next Business Day falls in
another calendar month, in which case such Interest Period
shall end on the immediately preceding Business Day; (B) any
Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of a
calendar month; (C) no Interest Period for any Borrowing shall
end after a Commitment Reduction Date, if, as a result of the
selection of such Interest Period, the Outstanding Facilities
Credit as of such Commitment Reduction Date shall exceed the
Total Commitment as of such Commitment Reduction Date; and (D)
no Interest Period shall end after the Maturity Date.
(ii) Borrower shall notify Agent by an
irrevocable written notice in the form of Exhibit C,
appropriately completed (a "Notice of Interest Period
Selection"), at least three (3) Business Days prior to the
last day of each Interest Period for L113OR Loans of the
Interest Period selected by Borrower for the next succeeding
Interest Period for such Loans. Each Notice of Interest Period
Selection shall be given by first-class mail or facsimile to
the office or the facsimile number and during the hours
specified in Paragraph 8.01; provided, however, that Borrower
shall promptly deliver to Agent the original of any Notice of
Interest Period Selection initially delivered by facsimile. If
Borrower fails to notify Agent of the next Interest Period for
LIBOR Loans in accordance with this Subparagraph 2.01(e) such
LIBOR Loans shall automatically convert to Base Rate Loans on
the last day of the current Interest Period therefor.
(f) Scheduled Loan Payments. Borrower shall repay the
unpaid principal amount of all Loans on the Maturity Date. Borrower
shall pay accrued interest on the unpaid principal amount of the Loans
in arrears (i) in the case of Base Rate Loans, on the last Business Day
in each month; (ii) in the case of LIBOR Loans, on the last day of each
Interest Period thereof (and, if any such Interest Period is longer
than one (1)
19
month, on the last Business Day in each month after the first day of
such Interest Period); and (iii) in the case of all Loans, upon
prepayment (to the extent thereof) and at maturity.
(g) Purpose. Borrower shall use the proceeds of the Loans
to finance Borrower's working capital and general corporate needs.
2.02. Letter of Credit Facility.
(a) Letter of Credit Availability. Subject to the terms
and conditions of this Agreement (including the amount limitations set
forth in Paragraph 2.03, Issuing Bank shall issue on behalf of Borrower
from time to time during the period beginning on the Closing Date and
ending on the date which is fifteen (15) days prior to the Maturity
Date (the "LC Facility Expiration Date") such letters of credit as
Borrower may request under this Paragraph 2.02 (individually, a "Letter
of Credit"); provided, however, as follows:
(i) The aggregate amount available for drawing
under all Letters of Credit at any time outstanding shall not
exceed Five Million Dollars ($5,000,000) (such amount, as
reduced from time to time pursuant to this Agreement, to be
referred to herein as the "LC Commitment").
(ii) Each Letter of Credit shall expire on or
prior to the LC Facility Expiration Date (or if such Letter of
Credit shall extend beyond the Expiration Date, Borrower shall
agree in connection with the issuance of such Letter of Credit
that on or prior to the Expiration Date Borrower shall deposit
with Agent an amount equal to the face amount of such Letter
of Credit as cash collateral for the Obligations of Borrower
under such Letter of Credit to be applied to repay any draws
after the Expiration Date on such Letter of Credit).
(iii) Each Letter of Credit shall be governed by
the Uniform Customs and Practices for Documentary Credits as
most recently published by the International Chamber of
Commerce (the "UCP") prior to the date of issuance of such
Letter of Credit and the terms of the UCP are hereby
incorporated by reference with respect to each Letter of
Credit.
(iv) Each Letter of Credit shall be in a form
reasonably acceptable to Issuing Bank.
Except as otherwise provided herein, Borrower may request Letters of
Credit, cause or allow Letters of Credit to expire and request
additional Letters of Credit until the LC Facility Expiration Date.
(b) LC Application. Borrower shall request each Letter of
Credit by delivering to Agent and Issuing Bank an irrevocable written
application in a form reasonably acceptable to Issuing Bank (it being
understood that such form shall not
20
contain terms inconsistent with the terns set forth in this Agreement),
appropriately completed (an "LC Application"), which specifies, among
other things:
(i) The stated amount of the requested Letter of
Credit;
(ii) The name and address of the beneficiary of
the requested Letter of Credit;
(iii) The expiration date of the requested Letter
of Credit;
(iv) The documentary conditions for drawing under
the requested Letter of Credit;
(v) The date of issuance for the requested
Letter of Credit, which shall be a Business Day; and
(vi) The aggregate amount available for drawing
under all Letters of Credit then outstanding.
Borrower shall give each LC Application to Issuing Bank at least three
(3) Business Days before the proposed date of issuance of the requested
Letter of Credit. Each LC Application shall be delivered by an
established express courier service, first-class mail or facsimile to
Agent and Issuing Bank at their respective offices or facsimile numbers
and during the hours specified in Paragraph 8.01; provided, however,
that Borrower shall promptly deliver to Issuing Bank the original of
any LC Application initially delivered by facsimile. Agent shall
promptly notify each Bank of the contents of each LC Application. In
the event of any conflict between the terms of this Agreement and the
terms of any LC Application, the terms of this Agreement shall control.
(c) Disbursement and Reimbursement.
(i) Disbursement. Issuing Bank will notify
Borrower by facsimile forthwith upon receipt of the
presentment of any demand for payment under any Letter of
Credit, together with notice of the amount of such payment and
the date such payment shall be made. Subject to the terms and
provisions of such Letter of Credit, Issuing Bank shall make
such payment (a "Drawing Payment") to the appropriate
beneficiary.
(ii) Time of Reimbursement. Not later than 11:00
a.m. on the day each Drawing Payment is to be made by Issuing
Bank, Borrower shall make or cause to be made to Issuing Bank
a payment in the amount of such Drawing Payment (a
"Reimbursement Payment"); provided, however, that Borrower
shall make such Reimbursement Payment to, or cause such
Reimbursement Payment to be made to, Agent for the benefit of
the Banks if, prior to the time such Reimbursement Payment is
made, Issuing Bank has notified Borrower
21
that it has requested the Banks pursuant to clause (ii) of
Subparagraph 2.02(d) to pay to Issuing Bank their respective
Proportionate Shares of the Drawing Payment made by Issuing
Bank. If any such Reimbursement Payment is made to Agent, Agent
shall promptly pay to each Bank which has paid its
Proportionate Share of the Drawing Payment, such Bank's
Proportionate Share of the Reimbursement Payment and shall
promptly pay to Issuing Bank the balance of such Reimbursement
Payment.
(iii) Reimbursement Obligation Absolute. The
obligation of Borrower to reimburse Issuing Bank or the Banks,
as the case may be, for Drawing Payments (such obligation to
be referred to herein collectively as a "Reimbursement
Obligation") shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms
of this Agreement under and without regard to any
circumstances, including, without limitation (A) any lack of
validity or enforceability of any of the Credit Documents, (B)
the existence of any claim, setoff, defense or other right
which Borrower may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any Persons for
whom any such beneficiary or transferee may be acting),
Issuing Bank, Agent, any Bank Party or any other Person,
whether in connection with this Agreement, the transactions
contemplated herein or in the other Credit Documents, or in
any unrelated transaction, (C) any breach of contract or
dispute between Borrower, any beneficiary or any transferee of
any Letter of Credit (or any Persons for whom any such
beneficiary or transferee may be acting), Issuing Bank, Agent,
any Bank Party or any other Person, (D) any demand, statement
or other document presented under any Letter of Credit proving
to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in
any respect, (E) payment by Issuing Bank under any Letter of
Credit against presentation of a demand for payment which does
not comply with the terms of such Letter of Credit, (F) any
non-application or misapplication by any beneficiary or any
transferee of any Letter of Credit (or any Persons for whom
any such beneficiary or transferee may be acting) of the
proceeds of any drawing under such Letter of Credit or (G) any
delay, extension of time, renewal, compromise or other
indulgence or modification granted or agreed to by Issuing
Bank, Agent or any Bank Party, with or without notice to or
approval by Borrower, with respect to Borrower's indebtedness
under this Agreement; provided, that this Subparagraph 2.02(b)
shall not abrogate any right which Borrower may have to seek
to enjoin any drawing under any Letter of Credit or to recover
damages from Issuing Bank pursuant to Subparagraph 2.02(e).
(d) Bank Participations; Loan Funding.
(i) Participation Agreement. Each Bank
severally, unconditionally and irrevocably agrees with Issuing
Bank to participate in the extension of credit arising from
the issuance of each Letter of Credit in an amount equal to
such Bank's Proportionate Share of the stated amount of such
Letter of Credit
22
from time to time, and the issuance of each Letter of Credit
shall be deemed a confirmation by Issuing Bank of such
participation in such amount.
(ii) Participation Funding. Issuing Bank may
request the Banks to fund their participations in Letters of
Credit by paying to Issuing Bank all or any portion of any
Drawing Payment made or to be made by Issuing Bank under any
Letter of Credit. Issuing Bank shall make such a request by
delivering to Agent (with a copy to Borrower), at any time
after the drawing for which such payment is requested has been
made upon Issuing Bank, a written request for such payment
which specifies the amount of such Drawing Payment and the
date on which such Drawing Payment is to be made or was made;
provided, however, that Issuing Bank shall not request the
Banks to make any payment under this Subparagraph 2.02(d) in
connection with any portion of a Drawing Payment for which
Issuing Bank has been reimbursed from a Reimbursement Payment
by Borrower unless such Reimbursement Payment has been
thereafter recovered by Borrower. Agent shall promptly notify
each Bank of the contents of each such request and of such
Bank's Proportionate Share of the applicable portion of such
Drawing Payment. Promptly following receipt of such notice
from Agent, each Bank shall pay to Agent,, for the benefit of
Issuing Bank, such Bank's Proportionate Share of the
applicable portion of such Drawing Payment.
(iii) Funding Through Loans. At any time any
Reimbursement Obligations are outstanding, Agent may or, upon
the written request of Issuing Bank (if Borrower is not then
the subject of a bankruptcy proceeding), shall (subject to the
terms and conditions of this Subparagraph 2.02(d)), initiate a
Borrowing in an amount not exceeding the aggregate amount of
such outstanding Reimbursement Obligations and use the
proceeds of such Loan to repay all or a portion of such
Reimbursement Obligations. Agent shall initiate such a
Borrowing by delivering to each Bank (with a copy to Borrower)
a written notice which specifies the aggregate amount of
outstanding Reimbursement Obligations, the amount of the
Borrowing, the date of such Borrowing and the amount of the
Loan to be made by such Bank as part of such Borrowing. Each
Bank shall make available to Agent funds in the amount of its
Proportionate Share of such Loan as provided in Subparagraph
2.08(a). After receipt of such funds, Agent shall promptly
disburse such funds to Issuing Bank and the Banks, as
appropriate, in payment of the outstanding Reimbursement
Obligations.
(iv) Obligations Absolute. Each Bank's
obligations to fund its participations under this Subparagraph
2.02(d) shall be absolute, unconditional and irrevocable and
shall not be affected by (A) the occurrence or existence of
any Default or Event of Default, (B) any failure to satisfy
any condition set forth in Section III, (C) any event or
condition which might have a Material Adverse Effect, (D) the
failure of any other Bank to make any payment under this
Subparagraph 2.02(d), (E) any right of offset, abatement,
withholding or
23
reduction which such Bank may have against Issuing Bank, Agent,
any other Bank Party or Borrower, (F) any event, circumstance
or condition set forth in Subparagraph 2.02(c) or Subparagraph
2.02(e), or (G) any other event, circumstance or condition
whatsoever, whether or not similar to any of the foregoing;
provided, that nothing in this Paragraph 2.02 shall prejudice
any right which any Bank may have against Issuing Bank for any
action by Issuing Bank which constitutes gross negligence or
willful misconduct.
(e) Liability of Issuing Bank, Etc. Borrower agrees that
none of Issuing Bank, Agent or any other Bank Party (nor any of their
respective directors, officers or employees) shall be liable or
responsible for (i) the use which may be made of any Letter of Credit
or for any acts or omissions of any beneficiary or transferee thereof
in connection therewith; (ii) any reference which may be made to this
Agreement or to any Letter of Credit in any agreements, instruments or
other documents relating to obligations secured by such Letter of
Credit; (iii) the validity, sufficiency or genuineness of documents, or
of any endorsements) thereon, even if such documents should in fact
prove to be in any or all respects invalid, insufficient, fraudulent or
forged or any statement therein prove to be untrue or inaccurate in any
respect whatsoever; (iv) payment by Issuing Bank against presentation
of documents which do not comply with the terms of any Letter of
Credit, including failure of any documents to bear any reference or
adequate reference to any Letter of Credit; or (v) any other
circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except only that Issuing Bank shall be liable to
Borrower for acts or events described in clauses (i) through (v) above,
to the extent, but only to the extent, of any damages suffered by
Borrower (excluding consequential damages) which Borrower proves were
caused by (A) Issuing Bank's willful misconduct, bad faith or gross
negligence in determining whether a drawing made under any Letter of
Credit complies with the terms and conditions therefor stated in such
Letter of Credit or (B) Issuing Bank's willful misconduct, bad faith or
gross negligence in failing to pay under any Letter of Credit after a
drawing by the beneficiary thereof strictly complying with the terms
and conditions of such Letter of Credit. Without limiting the
foregoing, Issuing Bank may accept a drawing that appears on its face
to be in order, without responsibility for further investigation. The
determination of whether a drawing has been made under any Letter of
Credit prior to its expiration or whether a drawing made under any
Letter of Credit is in proper and sufficient form shall be made by
Issuing Bank in its sole discretion, which determination shall be
conclusive and binding upon Borrower to the extent permitted by law.
Borrower hereby waives any right to object to any payment made under
any Letter of Credit with regard to a drawing that is in the form
provided in such Letter of Credit but which varies with respect to
punctuation, capitalization, spelling or similar matters of form.
(f) Reports of Issuing Bank. While any Letter of Credit
is outstanding, Issuing Bank shall on a monthly basis provide to Agent
or any Bank such information regarding the Letters of Credit as Agent
or such Bank may reasonably request, including the Letters of Credit
outstanding, the stated amounts of outstanding Letters of Credit, the
expiration dates of outstanding Letters of Credit, the names of the
24
beneficiaries of outstanding Letters of Credit, the amounts of unpaid
Reimbursement Obligations and the amounts and times of Drawing Payments
and Reimbursement Payments.
(g) Purpose. Borrower shall use the Letters of Credit
solely as provided in clause (ii) of Subparagraph 2.02(a).
2.03. Amount Limitations, Commitment Reductions, Etc.
(a) Total Commitments. The sum of the aggregate principal
amount of all Loans outstanding at any time, the aggregate amount
available for drawing under all Letters of Credit then outstanding and,
the aggregate amount of all Reimbursement Obligations then outstanding
(such sum to be referred to herein as the "Outstanding Facilities
Credit") shall not exceed the Total Commitment at such time.
(b) Optional Reduction or Cancellation of Commitments.
Borrower may, upon three (3) Business Days written notice to Agent
(and, in the case of the LC Commitment, to Issuing Bank), permanently
reduce the Total Commitment by the amount of $20,000,000 or integral
multiples of $5,000,000 in' excess thereof or cancel the Total
Commitment in its entirety; provided, however, that:
(i) Borrower may not reduce the Total Commitment
if, after giving effect to such reduction, the Outstanding
Facilities Credit would exceed the Total Commitment at such
time as so reduced; and
(ii) Borrower may not cancel the Total Commitment
if, after giving effect to such cancellation, any Loan or
Letter of Credit would remain outstanding.
(c) Effect of Commitment Reductions. From the effective
date of any reduction of the Total Commitment, the Commitment Fees
payable pursuant to Subparagraph 2.04(b) shall be computed on the basis
of the Total Commitment as so reduced. Any reduction of the Total
Commitment shall be applied ratably to reduce each Bank's Commitment in
accordance with clause (i) of Subparagraph 2.09(a).
2.04. Fees.
(a) Commitment Fees. Borrower shall pay to Agent, for the
ratable benefit of the Banks as provided in clause (v) of Subparagraph
2.09(a), nonrefundable commitment fees (the "Commitment Fees") equal to
the Commitment Fee Percentage on the daily average Unused Commitment
for the period beginning on the date of this Agreement and ending on
the Maturity Date. The Commitment Fee Percentage shall be determined as
provided in the Pricing Grid and may change for each Pricing Period.
Borrower shall pay the Commitment Fees quarterly in arrears on the last
Business Day in each calendar quarter and on the Maturity Date (or if
the Total Commitment is cancelled on a date prior to the Maturity Date,
on such prior date).
25
(b) Letter of Credit Fees.
(i) Letter of Credit Usage Fees. Borrower shall
pay to Agent, for the ratable benefit of the Banks as provided
in clause (v) of Subparagraph 2.09(a), nonrefundable usage
fees for the Letters of Credit (the "LC Usage Fees") equal to
one percent (1%) per annum on the daily average available
amount of each Letter of Credit for the period beginning on
the date such Letter of Credit is issued and ending on the
date such Letter of Credit expires. Borrower shall pay the LC
Usage Fees quarterly in arrears on the last Business Day in
each quarter (commencing at the end of the first calendar
quarter after the issuance of the initial Letter of Credit)
and on the Maturity Date.
(ii) Letter of Credit Issuance Fees. Borrower
shall pay to Agent, for the sole benefit of Issuing Bank,
nonrefundable issuance fees for the Letters of Credit (the "LC
Issuance Fees") as agreed to between Borrower and Issuing
Bank.
(iii) Other Letter of Credit Fees. In addition to
the LC Issuance Fees, Borrower shall pay to Agent, for the
sole benefit of Issuing Bank, other standard reasonable fees
of Issuing Bank for drawings under, transfers of and
amendments to any Letter of Credit and other administrative
actions performed by Issuing Bank in connection with any
Letter of Credit, payable at such times and in such amounts as
are consistent with Issuing Bank's standard fee policy at the
time of such amendment or other action.
2.05. Prepayments.
(a) Terms of all Prepayments. Upon the prepayment of any
Loan (whether such prepayment is an optional prepayment under
Subparagraph 2.05(b), a mandatory prepayment required by Subparagraph
2.05(c) or a mandatory prepayment required by any other provision of
this Agreement or the other Credit Documents, including, without
limitation, a prepayment upon acceleration), Borrower shall pay to
Agent for the benefit of the Bank Party which made such Loan (i) all
accrued interest to the date of such prepayment on the amount prepaid
and (ii) if such prepayment is the prepayment of a LIBOR Loan on a day
other than the last day of an Interest Period for such Loan, all
amounts payable to such Bank Party pursuant to Paragraph 2.12.
(b) Optional Prepayments. At its option, Borrower may,
upon three (3) Business Days notice to Agent for LIBOR Loans and one
(1) Business Day notice to Agent for Base Rate Loans, prepay any
Borrowing in part, in an aggregate principal amount of $100,000 or
more, or in whole.
(c) Mandatory Prepayments. If, at any time, the
Outstanding Facilities Credit exceeds the Total Commitment at such time
(including, without limitation, as a result of the occurrence of a
Commitment Reduction Date), Borrower shall immediately prepay Loans in
an aggregate principal amount equal to such excess.
26
(d) Application of Loan Prepayments. All prepayments of
the Loans shall, to the extent possible, be first applied to prepay
Base Rate Loans and then, if any funds remain, to prepay LIBOR Loans.
2.06. Other Payment Terms.
(a) Place and Manner. Except as otherwise expressly
provided herein, Borrower shall make all payments due to each Bank
Party hereunder by payments to Agent, for the account of such Bank
Party and such Bank Party's Applicable Lending Office, by Agent
debiting Borrower's account maintained with Agent, or if no such
account is currently being maintained, at Agent's office, located at
the address specified in Paragraph 8.01, in lawful money of the United
States and in same day or immediately available funds not later than
12:00 noon on the date due. Agent shall promptly disburse to each Bank
Party each such payment received by Agent for such Bank Party.
(b) Date. Whenever any payment due hereunder shall fall
due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day, and such extension of time shall be
included in the computation of interest or fees, as the case may be.
(c) Late Payments. If any amounts required to be paid by
Borrower under this Agreement or the other Credit Documents (including,
without limitation, principal or interest payable on any Loan, any fees
or other amounts) remain unpaid after such amounts are due, Borrower
shall pay interest on the aggregate, outstanding balance of such
amounts from the date due until those amounts are paid in full at a per
annum rate equal to the Base Rate plus two percent (2.00%), such rate
to change from time to time as the Base Rate shall change.
(d) Application of Payments. All payments hereunder shall
be applied first to unpaid fees; costs and expenses then due and
payable under this Agreement or the other Credit Documents, second to
accrued interest then due and payable under this Agreement or the other
Credit Documents and finally to reduce the principal amount of
outstanding Loans.
(e) Failure to Pay Agent. Unless Agent shall have
received notice from Borrower at least one (1) Business Day prior to
the date on which any payment is due to any Bank Party hereunder that
Borrower will not make such payment in full, Agent may assume that
Borrower has made such payment in full to Agent on such date and Agent
may, in reliance upon such assumption, cause to be distributed to the
appropriate Bank Parties on such due date an amount equal to the amount
then due such Bank Parties. If and to the extent Borrower shall not
have so made such payment in full to Agent, each such Bank Party shall
repay to Agent forthwith on demand such amount distributed to such Bank
Party together with interest thereon, for each day from the date such
amount is distributed to such Bank Party until the date such Bank Party
repays such amount to Agent, at (i) the Federal Funds Rate for the
27
first three (3) days and (ii) the Base Rate thereafter. A certificate
of Agent submitted to any Bank Party with respect to any amounts owing
by such Bank Party under this Subparagraph 2.06(e) shall be conclusive
absent manifest error.
2.07. Notes and Interest Account.
(a) Notes. The obligation of Borrower to repay the Loans
made by each Bank and to pay interest thereon at the rates provided
herein shall be evidenced by a promissory note in the form of Exhibit D
(individually, a "Note") which note shall be (i) payable to the order
of such Bank, (ii) in the amount of such Bank's Commitment, (iii) dated
the Closing Date and (iv) otherwise appropriately completed. Borrower
authorizes each Bank to record on the schedule annexed to such Bank's
Note the date and amount of each Loan made by such Bank and of each
payment or prepayment of principal thereon made by Borrower, and agrees
that all such notations shall constitute prima facie evidence of the
matters noted; provided, however, that any failure by a Bank to make
any such notation shall not affect the Obligations. Borrower further
authorizes each Bank to attach to and make a part of such Bank's Note
continuations of the schedule attached thereto as necessary.
(b) Interest Account. Borrower authorizes Agent to record
in an account or accounts maintained by Agent on its books (the
"Interest Account") (i) the interest rates applicable to all Loans and
the effective dates of all changes thereto, (ii) the Interest Period
for each LIBOR Loan, (iii) the date and amount of each principal and
interest payment on each Loan and (iv) such other information as Agent
may determine is necessary for the computation of interest payable by
Borrower hereunder.
2.08. Loan Funding, Etc.
(a) Bank Funding and Disbursement to Borrower. Each Bank
shall, before 11:00 A.M. on the daze of each Borrowing, make available
to Agent at its office specified in Paragraph 8.01, in same day or
immediately available funds, such Bank's Proportionate Share of such
Borrowing. After Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Section III, Agent shall
promptly disburse such funds in same day or immediately available funds
to Borrower. Unless otherwise directed by Borrower, Agent shall
disburse the proceeds of each Borrowing to Borrower by disbursement to
the account or accounts specified in the applicable Notice of
Borrowing.
(b) Bank Failure to Fund. Unless Agent shall have
received notice from a Bank prior to the date of any Borrowing that
such Bank will not make available to Agent such Bank's Proportionate
Share of such Borrowing, Agent may assume that such Bank has made such
portion available to Agent on the date of such Borrowing in accordance
with Subparagraph 2.08(a), and Agent may, in reliance upon such
assumption, make available to Borrower (or otherwise disburse) on such
date a corresponding amount. If any Bank does not make the amount of
its Proportionate
28
Share of any Borrowing available to Agent on or prior to the date of
such Borrowing, such Bank shall pay to Agent, on demand, interest which
shall accrue on such amount until made available to Agent at rates
equal to (i) the daily Federal Funds Rate during the period from the
date of such Borrowing through the third Business Day thereafter and
(ii) the Base Rate thereafter. A certificate of Agent submitted to any
Bank with respect to any amounts owing under this Subparagraph 2.08(b)
shall be conclusive absent manifest error. If any Bank's Proportionate
Share of any Borrowing is not in fact made available to Agent by such
Bank within three (3) Business Days after the date of such Borrowing,
Borrower shall pay to Agent, on demand, an amount equal to such
Proportionate Share together with interest thereon, for each day from
the date such amount was made available to Borrower until the date such
amount is repaid to Agent, at the interest rate applicable at the time
to the Loans comprising such Borrowing.
(c) Banks' Obligations Several. The failure of any Bank
to make the Loan to be made by it as part of any Borrowing shall not
relieve any other Bank of its obligation hereunder to make its Loan on
the date of such Borrowing, but no Bank shall be responsible for the
failure of any other Bank to make the Loan to be made by such other
Bank on the date of any Borrowing.
2.09. Pro Rata Treatment.
(a) Borrowings. Commitment Reductions. Etc. Except as
otherwise provided herein:
(i) Each Borrowing, each reduction of the Total
Commitment and participations in each Letter of Credit shall
be made by or shared among the Banks pro rata according to
their respective Proportionate Shares;
(ii) Each payment of principal of Loans in any
Borrowing shall be shared among the Banks which made or funded
the Loans in such Borrowing pro rata according to the
respective unpaid principal amounts of such Loans so made or
funded by such Banks;
(iii) Each payment of interest on Loans in any
Borrowing shall be shared among the Banks which made or funded
the Loans in such Borrowing pro rata according to (A) the
respective unpaid principal amounts of such Loans so made or
funded by such Banks and (B) the dates on which such Banks so
made or funded such Loans;
(iv) Each Reimbursement Payment and interest
payable by Borrower thereon shall be shared among the Banks
(including Issuing Bank) which made or funded the applicable
Drawing Payment pro rata according to the respective amounts
of such Drawing Payment so made or funded by such Banks;
29
(v) Each payment of Commitment Fees shall be
shared among the Banks pro rata according to (A) their
respective Proportionate Share and (B) in the case of each
Bank which becomes a Bank hereunder after the date hereof, the
date upon which such Bank so became a Bank;
(vi) Each payment of LC Usage Fees shall be
shared among the Banks (including Issuing Bank in its capacity
as a Bank) pro rata according to (A) their respective
Proportionate Share and (B) in the case of each Bank which
becomes a Bank hereunder after the date hereof, the date upon
which such Bank so became a Bank;
(vii) Each payment of interest (other than
interest on Loans) shall be shared among the Bank Parties owed
the amount upon which such interest accrues pro rata according
to (A) the respective amounts so owed such Bank Parties and
(B) the dates on which such amounts became owing to such Bank
Parties; and
(viii) All other payments under this Agreement and
the other Credit Documents shall be for the benefit of the
Person or Persons specified.
(b) Sharing of Payments, Etc. If any Bank Party shall
obtain any payment (whether voluntary, involuntary, through the
exercise of any right of setoff, or otherwise) on account of Loans owed
to it in excess of its ratable share of payments on account of such
Loans obtained by all Banks entitled to such payments, such Bank Party
shall forthwith purchase from the other Bank Parties entitled to such
payments such participations in the Loans or Reimbursement Obligations
as shall be necessary to cause such purchasing Bank Party to share the
excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from
such purchasing Bank Party, such purchase shall be rescinded and each
other Bank Party shall repay to the purchasing Bank Party the purchase
price to the extent of such recovery together with an amount equal to
such other Bank Party's ratable share (according to the proportion of
(i) the amount of such other Bank Party's required repayment to (ii)
the total amount so recovered from the purchasing Bank) of any interest
or other amount paid or payable by the purchasing Bank Party in respect
of the total amount so recovered. Borrower agrees that any Bank Party
so purchasing a participation from another Bank Party pursuant to this
Subparagraph 2.09(b) may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of setoff, but
only as provided in Paragraph 8.06) with respect to such participation
as fully as if such Bank Party were the direct creditor of Borrower in
the amount of such participation.
2.10. Change of Circumstances.
(a) Inability to Determine Rates. If, on or before the
first day of any Interest Period for any LIBOR Loan, Agent shall
determine that (i) the LIBOR Rate for such Interest Period cannot be
adequately and reasonably determined due to the
30
unavailability of funds in or other circumstances affecting the London
interbank market or (ii) the rates of interest for such LIBOR Loans do
not adequately and fairly reflect the cost to the Banks of making or
maintaining such LIBOR Loans, Agent shall immediately give notice of
such condition to Borrower and the Banks. After the giving of any such
notice and until Agent shall otherwise notify Borrower that the
circumstances giving rise to such condition no longer exist, Borrower's
right to request the making of or conversion to, and the Banks'
obligations to make or convert to LIBOR Loans shall be suspended. Any
LIBOR Loans outstanding at the commencement of any such suspension
shall, unless fully repaid, be converted at the end of the then current
Interest Period for such LIBOR Loans into Base Rate Loans unless such
suspension has then ended.
(b) Illegality. If, after the date of this Agreement, the
adoption of any Governmental Rule, any change in any Governmental Rule
or the application or requirements thereof (whether such change occurs
in accordance with the terms of such Governmental Rule as enacted, as a
result of amendment or otherwise), any change in the interpretation or
administration of any Governmental Rule by any Governmental Authority,
or compliance by any Bank with any request or directive (whether or not
having the force of law) of any Governmental Authority (a "Change of
Law") shall make it unlawful or impossible for any Bank to make or
maintain any LIBOR Loan, such Bank shall immediately notify Agent and
Borrower of such Change of Law. Upon receipt of such notice, (i)
Borrower's right to request the making of or conversion to, and such
Bank's obligation to make or convert to, LIBOR Loans shall be
terminated, and (ii) Borrower shall, at the request of such Bank,
either (A) pursuant to Subparagraph 2.01(d), convert any such then
outstanding LIBOR Loans of such Bank into Base Rate Loans at the end of
the current Interest Period for such LIBOR Loans, or (B) immediately
repay or convert any such LIBOR Loans if such Bank shall notify
Borrower that such Bank may not lawfully continue to fund and maintain
such LIBOR Loans. Any conversion or prepayment of LIBOR Loans made
pursuant to the preceding sentence prior to the last day of an Interest
Period for such LIBOR Loans shall be deemed a prepayment thereof for
purposes of Paragraph 2.12. After any Bank notifies Agent and Borrower
of such a Change of Law and until such Bank notifies Agent and Borrower
that it is no longer unlawful or impossible for such Bank to make or
maintain any LIBOR Loan, all Loans of such Bank shall be Base Rate
Loans.
(c) Increased Costs. If, after the date of this
Agreement, any Change of Law:
(i) Shall subject any Bank to any tax, duty or
other charge with respect to any LIBOR Loan, or shall change
the basis of taxation of payments by Borrower to any Bank on
such a LIBOR Loan or in respect to such a LIBOR Loan under
this Agreement (except for changes in the rate of taxation on
the overall net income of any Bank imposed by its jurisdiction
of incorporation or the jurisdiction in which its principal
executive office is located); or
31
(ii) Shall impose, modify or hold applicable any
reserve (excluding any Reserve Requirement or other reserve to
the extent included in the calculation of the LIBOR Rate for
any LIBOR Loans), special deposit or similar requirement
against assets held by, deposits or other liabilities in or
for the account of, advances or loans by, or any other
acquisition of funds by any Bank for any LIBOR Loan; or
(iii) Shall impose on any Bank any other condition
related to any LIBOR Loan or such Bank's Commitments;
And the effect of any of the foregoing is to increase the cost to such
Bank of making, renewing, or maintaining any such LIBOR Loan or such
Bank's Commitments or to reduce any amount receivable by such Bank
hereunder, then Borrower shall from time to time, within five (5) days
after demand by such Bank, pay to such Bank additional amounts
sufficient to reimburse such Bank for such increased costs or to
compensate such Bank for such reduced amounts. A certificate as to the
amount of such increased costs or reduced amounts submitted by such
Bank to Borrower shall, in the absence of manifest error, be conclusive
and binding on Borrower for all purposes. The obligations of Borrower
under this Subparagraph 2.10(c) shall survive the payment and
performance of the Obligations and the termination of this Agreement.
(d) Capital Requirements. If, after the date of this
Agreement, any Bank Party determines that (i) any Change of Law affects
the amount of capital required or expected to be maintained by such
Bank Party or any Person controlling such Bank Party (a "Capital
Adequacy Requirement") and (ii) the amount of capital maintained by
such Bank Party or such Person which is attributable to or based upon
the Loans, the Letters of Credit, the Commitments or this Agreement
must be increased as a result of such Capital Adequacy Requirement
(taking into account such Bank Party's or such Person's policies with
respect to capital adequacy), Borrower shall pay to such Bank Party or
such Person, within five (5) days after demand of such Bank Party, such
amounts as such Bank Party or such Person shall determine are necessary
to compensate such Bank Party or such Person for the increased costs to
such Bank Party or such Person of such increased capital. A certificate
of any Bank Party setting forth in reasonable detail the computation of
any such increased costs delivered by such Bank Party to Borrower
shall, in the absence of manifest error, be conclusive and binding on
Borrower for all purposes. The obligations of Borrower under this
Subparagraph 2.10(d) shall survive the payment and performance of the
Obligations and the termination of this Agreement.
2.11. Taxes on Payments.
(a) Payments Free of Taxes. All payments made by Borrower
under this Agreement and the other Credit Documents shall be made free
and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by
32
any Governmental Authority (except net income taxes and franchise taxes
in lieu of net income taxes imposed on any Agent or Bank Party by its
jurisdiction of incorporation or the jurisdiction in which its
Applicable Lending Office is located) (all such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions and withholdings
being hereinafter called "Taxes"). If any Taxes are required to be
withheld from any amounts payable to any Agent or any Bank Party
hereunder or under the other Credit Documents, the amounts so payable
to Agent or such Bank Party shall be increased to the extent necessary
to yield to Agent or such Bank Party (after payment of all Taxes)
interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement and the other Credit Documents.
Whenever any Taxes are payable by Borrower, as promptly as possible
thereafter, Borrower shall send to Agent for its own account or for the
account of such Bank Party, as the case may be, a certified copy of an
original official receipt received by Borrower showing payment thereof.
If Borrower fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to Agent the required receipts or other
required documentary evidence, Borrower shall indemnify Agent and the
Bank Parties for any incremental taxes, interest or penalties that may
become payable by Agent or any Bank Party as a result of any such
failure. The obligations of Borrower under this Subparagraph 2.11 (a)
shall survive the payment and performance of the Obligations and the
termination of this Agreement.
(b) Withholding Exemption Certificates. On or prior to
the Closing Date, each Bank which is not incorporated under the laws of
the United States of America or a state thereof shall deliver to
Borrower and Agent either two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 (or successor applicable
form), as the case may be, certifying in each case that such Bank is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal taxes. Each Bank which
delivers to Borrower and Agent a Form 1001 or 4224 pursuant to the
immediately preceding sentence further undertakes to deliver to
Borrower and Agent two further copies of Form 1001 or 4224, or
successor applicable forms, or other manner of certification or
procedure, as the case may be, on or before the date that any such
letter or form expires or becomes obsolete or after the occurrence of
any event requiring a change in the most recent letter and form
previously delivered by it to Borrower and Agent, and such extensions
or renewals thereof as may reasonably be requested by Borrower or
Agent, certifying in the case of a Form 1001 or 4224 that such Bank is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal taxes, unless in any such
cases an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent a Bank from duly completing and
delivering any such letter or form with respect to it and such Bank
advises Borrower and Agent that it is not capable of receiving payments
without any deduction or withholding of United States federal income
tax.
33
2.12. Funding Loss Indemnification. If Borrower shall (a) repay,
prepay or convert any LIBOR Loan on any day other than the last day of an
Interest Period therefor (whether a scheduled payment, an optional prepayment or
conversion, a mandatory prepayment or conversion, a payment upon acceleration or
otherwise), (b) fail to borrow any LIBOR Loan for which a Notice of Borrowing
has been delivered to Agent (whether as a result of the failure to satisfy any
applicable conditions or otherwise) or (c) fail to convert any Loans into LIBOR
Loans in accordance with a Notice of Conversion delivered to Agent (whether as a
result of the failure to satisfy any applicable conditions or otherwise),
Borrower shall, upon demand by any Bank, reimburse such Bank for and hold such
Bank harmless from all costs and losses incurred by such Bank as a result of
such repayment, prepayment or failure. Borrower understands that such costs and
losses may include, without limitation, losses incurred by a Bank as a result of
funding and other contracts entered into by such Bank to a fund a LIBOR Loan.
Each Bank demanding payment under this Paragraph 2.12 shall deliver to Borrower,
with a copy to Agent, a certificate setting forth the amount of costs and losses
for which demand is made, which certificate shall set forth in reasonable detail
the calculation of the amount demanded. Such a certificate so delivered to
Borrower shall constitute prima facie evidence of such costs and losses. The
obligations of Borrower under this Paragraph 2.12 shall survive the payment and
performance of the Obligations and the termination of this Agreement.
2.13. Security
(a) Security Agreements, Etc. The Obligations shall be
secured by a Security Agreement in the form of Exhibit E, duly executed
by Borrower (the "Borrower Security Agreement"); provided, however,
that if during any fiscal quarter after the First Commitment Reduction
Date, Borrower maintains a Leverage Ratio of less than 0.65/1.00, the
security interests of Agent and the Bank Parties created pursuant to
the Borrower Security Agreement shall be released and discharged and
shall not be reinstated.
(b) Further Assurances. At all times while the security
interest created pursuant to the Borrower Security Agreement is in
place, Borrower shall deliver to Agent such additional security
agreements, and other instruments, agreements, certificates, opinions
and documents (including Uniform Commercial Code financing statements)
as Agent may reasonably request to:
(i) Grant, perfect, maintain, protect and
evidence security interests in favor of Agent, for the benefit
of Agent and the Bank Parties, in and to the Collateral prior
to the Liens or other interests of any Person, except for
Permitted Liens; and
(ii) Otherwise establish, maintain, protect and
evidence the rights provided to Agent, for the benefit of
Agents and the Banks, pursuant to the Security Documents.
34
Borrower shall fully cooperate with Agent and the Bank Parties and
perform all additional acts reasonably requested by Agent or any Bank
to effect the purposes of this Paragraph 2.13.
SECTION III. CONDITIONS PRECEDENT.
3.01. Initial Conditions Precedent. The obligations of the Bank
Parties to continue to make Loans or of Issuing Bank to continue to issue
Letters of Credit are subject to receipt by Agent, on or prior to the Closing
Date, of each item listed in Schedule 3.01, each in form and substance
reasonably satisfactory to the Banks, and with sufficient copies for, Agent and
each Bank.
3.02. Conditions Precedent to Each Credit Event. The occurrence of
each Credit Event is subject to the further conditions that:
(a) Borrower shall have delivered to Agent (and Issuing
Bank, in the case of an LC Application) the Notice of Borrowing, Notice
of Conversion or Notice of Interest Period Selection, as the case may
be, for such Credit Event in accordance with this Agreement;
(b) On the date such Credit Event is to occur and after
giving effect to such Credit Event, the following shall be true and
correct:
(i) The representations and warranties of
Borrower and its Subsidiaries set forth in Paragraph 4.01 and
in the other Credit Documents are true and correct in all
material respects as if made on such date (except for
representations and warranties expressly made as of a
specified date, which shall be true as of such date); and
(ii) No Default or Event of Default has occurred
and is continuing or will result from such Credit Event; and
(c) On the date such Credit Event is to occur and after
giving effect to such Credit Event, all of the Credit Documents are in
full force and effect.
The submission by Borrower to Agent of each Notice of Borrowing, each Notice of
Conversion (other than a notice for a conversion to a Base Rate Loan), each
Notice of Interest Period Selection and each LC Application shall be deemed to
be a representation and warranty by Borrower as of the date thereon as to the
above.
35
SECTION IV. REPRESENTATIONS AND WARRANTIES.
4.01. Representations and Warranties. In order to induce Agent and
the Bank Parties to enter into this Agreement, Borrower hereby represents and
warranties to Agent and the Bank Parties as follows:
(a) Due Incorporation. Qualification, etc. Borrower (i)
is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation; (ii) has the power
and authority to own, lease and operate its properties and carry on its
business as now conducted; and (iii) is duly qualified, licensed to do
business and in good standing as a foreign corporation in each
jurisdiction where the failure to be so qualified or licensed is
reasonably likely to have a Material Adverse Effect.
(b) Authority. The execution, delivery and performance by
Borrower of each Credit Document executed, or to be executed, by
Borrower and the consummation of the transactions contemplated thereby
(i) are within the corporate power of Borrower and (ii) have been duly
authorized by all necessary corporate actions on the part of Borrower.
(c) Enforceability. Each Credit Document executed, or to
be executed, by Borrower has been, or will be, duly executed and
delivered by Borrower and constitutes, or will constitute, a legal,
valid and binding obligation of Borrower, enforceable against Borrower
in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and general
principles of equity.
(d) Non-Contravention. The execution and delivery by
Borrower of the Credit Documents and the performance and consummation
of the transactions contemplated thereby do not (i) violate any
Requirement of Law applicable to Borrower; (ii) violate any provision
of, or result in the breach or the acceleration of, or entitle any
other Person to accelerate (whether after the giving of notice or lapse
of time or both), any Contractual Obligations of Borrower; or (iii)
result in the creation or imposition of any Lien (or the obligation to
create or impose any Lien) upon any property, asset or revenue of
Borrower (except such Liens as may be created in favor of Agent
pursuant to this Agreement or the other Credit Documents).
(e) Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Authority or other Person (including the shareholders of
Borrower) is required in connection with the execution and delivery of
the Credit Documents executed by Borrower or the performance and
consummation of the transactions contemplated thereby, except such as
have been made or obtained and are in full force and effect.
(f) No Violation or Default. Borrower is not in violation
of or in default with respect to (i) any Requirement of Law applicable
to Borrower or (ii) any
36
Contractual Obligation of Borrower, where, in each case, such violation
or default is reasonably likely to have a Material Adverse Effect.
Without limiting the generality of the foregoing, neither Borrower nor
any of its Subsidiaries (A) is in violation of any environmental laws,
(B) has any liability or potential liability under any environmental
laws or (C) has received notice or other communication of an
investigation or is under investigation by any Governmental Authority
having authority to enforce environmental laws, where, in each case,
such violation, liability or investigation could reasonably be expected
to have a Material Adverse Effect. No Event of Default or Default has
occurred and is continuing.
(g) Litigation. Except as set forth in the Schedule
4.01(g) (with estimates of the dollar amounts involved), no actions
(including, without limitation, derivative actions), suits, proceedings
or investigations are pending or, to the knowledge of Borrower,
threatened against Borrower or any of its Subsidiaries at law or in
equity in any court or before any other Governmental Authority which
(i) is reasonably likely (alone or in the aggregate) to have a Material
Adverse Effect or (ii) seeks to enjoin, either directly or indirectly,
the execution, delivery or performance of the Credit Documents or the
transactions contemplated thereby.
(h) Title; Possession Under Leases. Borrower and its
Subsidiaries own and have good and marketable title, or a valid
leasehold interest in, all their respective properties and assets as
reflected in the most recent Financial Statements delivered to Agent
(except those assets and properties disposed of in the ordinary course
of business or otherwise in compliance with this Agreement since the
date of such Financial Statements) and all respective assets and
properties acquired by Borrower and its Subsidiaries since such date
(except those disposed of in the ordinary course of business or
otherwise in compliance with this Agreement). Such assets and
properties are subject to no Lien, except for Permitted Liens. Each of
Borrower and its Subsidiaries has complied with all material
obligations under all material leases to which it is a party and all
such leases are in full force and effect. Each of Borrower and its
Subsidiaries enjoys peaceful and undisturbed possession under such
leases.
(i) Financial Statements. The Financial Statements of
Borrower and its Subsidiaries which have been delivered to Agent in
connection with this Agreement or the Indus Group Credit Agreement, (i)
are in accordance with the books and records of Borrower, which have
been maintained in accordance with good business practice; (ii) have
been prepared in conformity with GAAP; and (iii) fairly present the
financial condition and results of operations of Borrower and its
Subsidiaries as of the date thereof and for the periods covered
thereby. As of the date of each of the Financial Statements of Borrower
and its Subsidiaries delivered pursuant to Paragraph 3.01 or clause (i)
or (ii) of Subparagraph 5.01(a), neither Borrower nor any of its
Subsidiaries has any contingent obligations, liability for taxes or
other outstanding obligations which are reasonably likely, in the
aggregate, to have a Material Adverse Effect, except as disclosed in
such Financial Statements.
37
(j) No Agreements to Sell Assets; Etc. As of the Closing
Date, neither Borrower nor any of its Subsidiaries has any legal
obligation, absolute or contingent, to any Person to sell all or any
material part of the assets of Borrower or any of its Subsidiaries
(other than sales in the ordinary course of business), or to effect any
merger, consolidation or other reorganization of Borrower or any of its
Subsidiaries or to enter into any agreement with respect thereto.
(k) Employee Benefit Plans.
(i) Based on the latest valuation of each
Employee Benefit Plan that either Borrower or any ERISA
Affiliate maintains or contributes to, or has any obligation
under (which occurred within twelve months of the date of this
representation), the aggregate benefit liabilities of such
plan within the meaning of ss. 4001 of ERISA did not exceed
the aggregate value of the assets of such plan. Neither
Borrower nor any ERISA Affiliate has any liability with
respect to any post-retirement benefit under any Employee
Benefit Plan which is a welfare plan (as defined in section
3(1) of ERISA), other than liability for health plan
continuation coverage described in Part 6 of Title I(B) of
ERISA, which liability for health plan contribution coverage
is not reasonably likely to have a Material Adverse Effect.
(ii) Each Employee Benefit Plan complies, in both
form and operation, in all material respects, with its terms,
ERISA and the Code, and no condition exists or event has
occurred with respect to any such plan which would result in
the incurrence by either Borrower or any ERISA Affiliate of
any material liability, fine or penalty. Each Employee Benefit
Plan, related trust agreement, arrangement and commitment of
Borrower or any ERISA Affiliate is legally valid and binding
and in full force and effect. No Employee Benefit Plan is
being audited or investigated by any government agency or is
subject to any pending or threatened claim or suit. Neither
Borrower nor any ERISA Affiliate nor any fiduciary of any
Employee Benefit Plan has engaged in a prohibited transaction
under section 406 of ERISA or section 4975 of the Code.
(iii) Neither Borrower nor any ERISA Affiliate has
any material contingent obligations to any Multiemployer Plan.
Neither Borrower nor any ERISA Affiliate has incurred any
material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under Section 4201 of
ERISA or as a result of a sale of assets described in Section
4204 of ERISA. Neither Borrower nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization
or insolvent under and within the meaning of Section 4241 or
Section 4245 of ERISA or that any Multiemployer Plan intends
to terminate or has been terminated under Section 4041A of
ERISA.
38
(l) Other Regulations. Neither Borrower nor any of its
Subsidiaries is subject to regulation under the Investment Company Act
of 1940, the Public Utility Holding Company Act of 1935, the Federal
Power Act, any state public utilities code or to any other Governmental
Rule limiting its ability to incur indebtedness.
(m) Patent and Other Rights. Borrower and its
Subsidiaries own or license under validly existing agreements, and have
the full right to license without the consent of any other Person, all
patents, licenses, trademarks, trade names, trade secrets, service
marks, copyrights and all rights with respect thereto, which are
material to conduct the businesses of Borrower and its Subsidiaries
(taken as a whole) as now conducted.
(n) Governmental Charges. Borrower and its Subsidiaries
have filed or caused to be filed all material tax returns which are
required by law to be filed by them. Borrower and its Subsidiaries have
paid, or made provision for the payment of, all taxes and other
Governmental Charges which have or may have become due pursuant to said
returns or otherwise, except such Governmental Charges, if any, which
are being contested in good faith and as to which adequate reserves
(determined in accordance with GAAP) have been provided or which are
not reasonably likely to have a Material Adverse Effect if unpaid.
(o) Margin Stock. Neither Borrower nor any of its
Subsidiaries owns Margin Stock which, in the aggregate, would
constitute a substantial part of the assets of such Person, and no
proceeds of any Loan and no better of Credit will be used to purchase
or carry, directly or indirectly, any Margin Stock or to extend credit,
directly or indirectly, to any Person for the purpose of purchasing or
carrying any Margin Stock.
(p) Subsidiaries, etc. Set forth in Schedule 4.01(p) (as
immediately supplemented by Borrower on or immediately prior to any
change thereto) is a complete list of all of Borrower's Subsidiaries,
the jurisdiction of incorporation of each, the asset value of each and
the percentage of Borrower's consolidated total assets represented by
each. Except for such Subsidiaries, Borrower does not have any
Subsidiaries, is not a partner in any partnership or a joint venturer
in any joint venture.
(q) Capital Stock. As of April 30, 1998, 3,349,692 shares
of capital stock of Borrower have been duly issued and are outstanding.
All outstanding capital stock is duly authorized, validly issued, fully
paid and non-assessable. There are no outstanding subscriptions,
options, conversion rights, warrants or other agreements or commitments
of any nature whatsoever (firm or conditional) obligating Borrower to
issue, deliver or sell, or cause to be issued, delivered or sold, any
additional capital stock of Borrower, or obligating Borrower to grant,
extend or enter into any such agreement or commitment.
39
(r) Solvency, Etc. Borrower and each of its Subsidiaries
is Solvent and, after the execution and delivery of the Credit
Documents and the consummation of the transactions contemplated
thereby, will be Solvent.
(s) Catastrophic Events. Neither Borrower nor any of its
Subsidiaries and none of their properties is or has been affected by
any fire, explosion, strike, lockout or other labor dispute,
earthquake, embargo or other casualty that is reasonably likely to have
a Material Adverse Effect. As of the Closing Date, there are no
disputes presently subject to grievance procedure, arbitration or
litigation under any of the collective bargaining agreements,
employment contracts or employee welfare or incentive plans to which
Borrower or any of its Subsidiaries is a party, and there are no
strikes, lockouts, work stoppages or slowdowns, or, to the best
knowledge of Borrower, jurisdictional disputes or organizing activities
occurring or threatened which alone or in the aggregate are reasonably
likely to have a Material Adverse Effect.
(t) No Material Adverse Effect. No event has occurred and
no condition exists which could reasonably be expected to have a
Material Adverse Effect.
(u) Accuracy of Information Furnished. None of the Credit
Documents and none of the other certificates, statements or information
furnished to Bank Party by or on behalf of Borrower or any of their
Subsidiaries in connection with the Credit Documents or the
transactions contemplated thereby contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
4.02. Reaffirmation. Borrower shall be deemed to have reaffirmed,
for the benefit of Agent and the Bank Parties, each representation and warranty
contained in Paragraph 4.01 on and as of the date of each Credit Event (except
for representations and warranties expressly made as of a specified date, which
shall be true as of such date).
SECTION V. COVENANTS.
5.01. Affirmative Covenants. Until the termination of this Agreement
and the satisfaction in full by Borrower of all Obligations, Borrower will
comply, and will cause compliance, with the following affirmative covenants,
unless Required Banks shall otherwise consent in writing:
(a) Financial Statements, Reports, etc. Borrower shall
furnish to Agent (and Agent shall promptly thereupon furnish to each
Bank) the following, each in such form and such detail as Agent or the
Required Banks shall reasonably request:
(i) As soon as available and in no event later
than forty-five (45) days after the last day of each quarter,
a copy of the Financial Statements of
40
Borrower (prepared on a consolidated and consolidating basis)
for such month and for the fiscal year to date, certified by
the Chief Financial Officer of Borrower to present fairly the
financial condition, results of operations and other
information reflected therein and to have been prepared in
accordance with GAAP (subject to normal year-end audit
adjustments);
(ii) At all times during which the Obligations of
Borrower are secured by the Collateral pledged pursuant to the
Security Agreement, as soon as available and in no event later
than thirty (30) days after the last day of each month, a
summary aging of Borrower's and its Subsidiaries' consolidated
accounts receivable as of the most recent month end, certified
by the Vice President Finance of Borrower to present fairly
the aging of such accounts receivable reflected therein;
(iii) As soon as available and in no event later
than one hundred twenty (120) days after the close of each
fiscal year of Borrower, (A) copies of the audited Financial
Statements of Borrower and its Subsidiaries (prepared on a
consolidated and consolidating basis) for such year, prepared
by independent certified public accountants of recognized
national standing acceptable to Agent, (B) copies of the
unqualified opinions (or qualified opinions reasonably
acceptable to Agent) and management letters delivered by such
accountants in connection with all such Financial Statements
and (C) certificates of such accountants to Agent stating that
in making the examination necessary for their opinion they
have reviewed this Agreement and have obtained no knowledge of
any Default which has occurred and is continuing, or if, in
the opinion of such accountants, a Default has occurred and is
continuing, a statement as to the nature thereof;
(iv) Contemporaneously with the quarterly and
year-end Financial Statements required by the foregoing
clauses (ii) and (iii), a certificate of an executive officer
of Borrower in the form of Exhibit F, appropriately completed,
together with such financial computations as Agent may
reasonably request to determine compliance with the terms of
this Agreement (a "Compliance Certificate");
(v) As soon as possible and in no event later
than five (5) Business Days after any officer of Borrower
knows of the occurrence or existence of (A) any Reportable
Event under any Employee Benefit Plan or Multiemployer Plan;
(B) any actual or threatened litigation, suits, claims or
disputes against Borrower or any of its Subsidiaries involving
potential monetary damages payable by Borrower or its
Subsidiaries of $1,000,000 or more (alone or in the
aggregate); (C) any other event or condition which is
reasonably likely to have a Material Adverse Effect; or (D)
any Default; the statement of the president or chief financial
officer of Borrower setting forth details of such event,
condition or Default and the action which Borrower proposes to
take with respect thereto;
41
(vi) If requested, copies of Borrower's and its
Subsidiaries' federal income tax returns, and if requested by
Agent, copies of any extensions with respect to the filing
thereof; and
(vii) Such other certificates, opinions,
statements, documents and information relating to the
operations or condition (financial or otherwise) of Borrower
or any of its Subsidiaries, and compliance by Borrower with
the terms of this Agreement and the other Credit Documents as
any Bank Party through Agent may from time to time reasonably
request.
(b) Books and Records. Borrower and its Subsidiaries
shall at all times keep proper books of record and account in which
full, true and correct entries will be made of their transactions in
accordance with GAAP.
(c) Inspections. Borrower and its Subsidiaries shall
permit any Person designated by any Bank Party, upon reasonable notice
and during normal business hours, to visit and inspect any of the
properties and offices of Borrower and its Subsidiaries, to conduct
audits of any or all of the Collateral at Borrower's expense, to
examine the books and records of Borrower and its Subsidiaries and make
copies thereof and to discuss the affairs, finances and business of
Borrower and its Subsidiaries with, and to be advised as to the same
by, their officers, auditors and accountants, all at such times and
intervals as any Bank may reasonably request.
(d) Insurance. Borrower and its Subsidiaries shall:
(i) Carry and maintain insurance of the types
and in the amounts customarily carried from time to time
during the term of this Agreement by others engaged in
substantially the same business as such Person and operating
in the same geographic area as such Person, including, but not
limited to, fire, public liability, property damage and
worker's compensation;
(ii) Carry and maintain each policy for such
insurance with (A) a company which is rated A or better by
A.M. Best and Company at the time such policy is placed and at
the time of each annual renewal thereof or (B) any other
insurer which is reasonably satisfactory to Agent; and
(iii) Deliver to Agent from time to time, as Agent
may request, schedules setting forth all insurance then in
effect.
(e) Governmental Charges. Borrower and its Subsidiaries
shall promptly pay and discharge when due (i) all taxes and other
Governmental Charges prior to the date upon which penalties accrue
thereon, (ii) all indebtedness which, if unpaid, could become a Lien
upon the property of Borrower or its Subsidiaries and (iii) subject to
any subordination provisions applicable thereto, all other Indebtedness
which, if unpaid, is reasonably likely to have a Material Adverse
Effect.
42
(f) Use of Proceeds. Borrower shall use the proceeds of
the Loans and the Letters of Credit only for the respective purposes
set forth in Subparagraph 2.01(g) and Subparagraph 2.02(g). Borrower
shall not use any part of the proceeds of any Loan or any Letter of
Credit, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock or for the purpose of purchasing or carrying
or trading in any securities under such circumstances as to involve
Borrower, any Bank Party or Agent in a violation of Regulations G, T, U
or X issued by the Federal Reserve Board.
(g) General Business Operations. Each of Borrower and its
Subsidiaries shall (i) preserve and maintain its corporate existence
and all of its rights, privileges and franchises reasonably necessary
to the conduct of its business, (ii) conduct its business activities in
compliance with all Requirements of Law and Contractual Obligations
applicable to such Person, the violation of which is reasonably likely
to have a Material Adverse Effect, (iii) keep all property useful and
necessary in its business in good working order and condition, ordinary
wear and tear excepted, and (iv) pay and perform all Contractual
Obligations as and when due (except to the extent disputed in good
faith by Borrower or the appropriate Subsidiary and where non-payment
would not be reasonably expected to have a Material Adverse Effect).
Borrower shall maintain its chief executive office and principal place
of business in the United States and shall not relocate its chief
executive office or principal place of business outside of California
except upon not less than ninety (90) days prior written notice to
Agent.
5.02. Negative Covenants. Until the termination of this Agreement
and the satisfaction in full by Borrower of all Obligations, Borrower will
comply, and will cause compliance, with the following negative covenants, unless
Required Banks shall otherwise consent in writing:
(a) Indebtedness. On a consolidated basis, neither
Borrower nor any of its Subsidiaries shall create, incur, assume or
permit to exist any Indebtedness or any Guaranty Obligations except for
the following ("Permitted Indebtedness"):
The Obligations of Borrower under the Credit
Documents;
(ii) Indebtedness listed in Schedule 5.021a1
existing on the date of this Agreement;
(iii) Indebtedness of Borrower and its
Subsidiaries under purchase money loans and Capital Leases
incurred by Borrower or any of its Subsidiaries to finance the
acquisition by such Person of real property, fixtures,
equipment or other fixed assets provided that in each case,
(A) such Indebtedness is incurred by such Person at the time
of, or not later than ninety (90) days after, the acquisition
by such Person of the property so financed, (B) such
Indebtedness does not exceed the purchase price of the
property so
43
financed and (C) the aggregate principal amount of any such
Indebtedness does not exceed $4,000,000 at any time;
(iv) Indebtedness arising from the endorsement of
instruments for collection in the ordinary course of
Borrower's or a Subsidiary's business;
(v) Indebtedness of Borrower and its
Subsidiaries with respect to surety, appeal, indemnity,
performance or other similar bonds in the ordinary course of
business;
(vi) Indebtedness of Borrower and its
Subsidiaries under initial or successive refinancings of any
Indebtedness permitted by clause (ii) or (iii) above, provided
that (A) the principal amount of any such refinancing does not
exceed the principal amount of the Indebtedness being
refinanced and (B) the material terms and provisions of any
such refinancing (including maturity, redemption, prepayment,
default and subordination provisions) are no less favorable to
the Banks than the Indebtedness being refinanced;
(vii) Indebtedness of Borrower and its
Subsidiaries for trade accounts payable, provided that (A)
such accounts arise in the ordinary course of business and (B)
no material part of such account is more than ninety (90) days
past due (unless subject to a bona fide dispute and for which
adequate reserves have been established);
(viii) Guaranty Obligations of Borrower and its
Subsidiaries in respect of other Permitted Indebtedness;
(ix) Indebtedness of Borrower to any of its
Subsidiaries, Indebtedness of any of its Subsidiaries to
Borrower or Indebtedness of any of its Subsidiaries to any of
its other Subsidiaries; and
(x) Other Indebtedness of Borrower and its
Subsidiaries, provided that the aggregate principal amount of
all such other Indebtedness does not exceed $1,000,000 at any
time.
(b) Liens. Neither Borrower nor any of its Subsidiaries
shall create, incur, assume or permit to exist any Lien on or with
respect to any of its assets or property of any character, whether now
owned or hereafter acquired, except for the following ("Permitted
Liens"):
(i) Liens in favor of Agent or any Bank securing
the Obligations;
(ii) Liens listed in Schedule 5.02(b) existing on
the date of this Agreement;
44
(iii) Liens for taxes or other Governmental
Charges not at the time delinquent or thereafter payable
without penalty or being contested in good faith, provided
that adequate reserves for the payment thereof have been
established in accordance with GAAP;
(iv) Liens of carriers, warehousemen, mechanics,
materialmen, vendors, and landlords and other similar Liens
imposed by law incurred in the ordinary course of business for
sums (A) not overdue or (B) being contested in good faith
provided that adequate reserves for the payment thereof have
been established in accordance with GAAP;
(v) Deposits under workers' compensation,
unemployment insurance and social security laws or to secure
the performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, or to secure
statutory obligations of surety or appeal bonds or to secure
indemnity, performance or other similar bonds in the
ordinary course of business;
(vi) Zoning restrictions, easements,
rights-of-way, title irregularities and other similar
encumbrances, which alone or in the aggregate are not
substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the
ordinary conduct of the business of Borrower or any of its
Subsidiaries;
(vii) Liens securing Indebtedness which
constitutes Permitted Indebtedness under clause (iii) and (x)
of Subparagraph 5.02(a) provided that, in each case, such Lien
(A) covers only those assets, the acquisition of which was
financed by such Permitted Indebtedness, and (B) secures only
such Permitted Indebtedness;
(viii) Banker's Liens and similar Liens (including
set-off rights) in respect of bank deposits;
(ix) Liens incurred in connection with the
extension, renewal or refinancing of the Indebtedness secured
by the Liens described in clause (ii) or vii above, provided
that any extension, renewal or replacement Lien (A) is limited
to the property covered by the existing Lien and (B) secures
Indebtedness which is no greater in amount and has material
terms no less favorable to the Banks than the Indebtedness
secured by the existing Lien; and
(x) Liens on property or assets of any
corporation which becomes a Subsidiary of Borrower after the
date of this Agreement, provided that (A) such Liens exist at
the time the stock of such corporation is acquired by Borrower
or any of its Subsidiaries and (B) such Liens were not created
in contemplation of such acquisition;
45
(xi) Judgment Liens, provided that such Liens do
not have a value in excess of $2,000,000 or such Liens are
released, stayed, vacated or otherwise dismissed within ten
(10) days after issue or levy and, if so stayed, such stay is
not thereafter removed;
(xii) Rights of vendors or lessors under
conditional sale agreements, Capital Leases or other title
retention agreements, provided that, in each case, (A) such
rights secure or otherwise relate to Permitted Indebtedness,
(B) such rights do not extend to any property other than
property acquired with the proceeds of such Permitted
Indebtedness and (C) such rights do not secure any
Indebtedness other than such Permitted Indebtedness;
(xiii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties and in connection with the importation of goods
in the ordinary course of Borrower's' and its Subsidiaries'
businesses; and
(xiv) Liens on insurance proceeds in favor of
insurance companies with respect to the financing of insurance
premiums.
(c) Asset Dispositions. Neither Borrower nor any of its
Subsidiaries shall sell, lease, transfer or otherwise dispose of all or
any of its assets or property, whether now owned or hereafter acquired,
except for the following:
(i) Sales of inventory by Borrower and its
Subsidiaries in the ordinary course of their businesses;
(ii) Sales of surplus, damaged, worn or obsolete
assets or properties for not less than fair market value;
(iii) Sales or other dispositions of Investments
permitted by Subparagraph 5.02(e) for not less than fair
market value;
(iv) Sales or assignments of defaulted
receivables to a collection agency in the ordinary course of
business; and
(v) Other sales, leases, transfers and disposals
of assets and property, provided that the aggregate value of
all such assets and property (based upon the greater of the
fair market or book value of such assets and property) so
sold, leased, transferred or otherwise disposed of in any
fiscal year does not exceed $2,000,000 per year.
(d) Mergers, Acquisitions, Etc. Neither Borrower nor any
of its Subsidiaries shall consolidate with or merge into any other
Person or permit any other Person to merge into it, establish any new
Subsidiary, acquire any Person as a new
46
Subsidiary or acquire all or substantially all of the assets of any
other Person, except that:
(i) Any wholly-owned Subsidiary of Borrower may
merge into any other wholly-owned Subsidiary of Borrower;
(ii) Borrower or any wholly-owned Subsidiary of
Borrower may merge into or consolidate with any other Person;
provided that (A) Borrower or any wholly-owned Subsidiary of
Borrower is the surviving corporation, (B) the aggregate
consideration paid in connection with any such merger or
acquisition does not exceed $5,000,000, of which no more than
$2,000,000 may consist of cash and/or assumed Indebtedness and
(C) the aggregate consideration paid in connection with all
such mergers in any calendar year does not exceed $10,000,000,
of which no more than $5,000,000 may consist of cash and/or
assumed Indebtedness; and
(iii) Borrower or any wholly-owned Subsidiary of
Borrower may merge into or consolidate with any other Person
with the prior written consent of the Required Banks.
(e) Investments. Neither Borrower nor any of its
Subsidiaries shall make any Investment except for Investments of
Borrower in an aggregate amount of up to $2,000,000 outstanding at any
time in the following:
(i) Investments of Borrower and its Subsidiaries
in Cash Equivalents;
(ii) Any transaction permitted by Subparagraph
5.02(a);
(iii) Money market mutual funds registered with
the Securities and Exchange Commission, meeting the
requirements of Rule 2a-7 promulgated under the Investment
Company Act of 1940;
(iv) Investments listed in Schedule 5.02(e)
existing on the date of this Agreement;
(v) Investments consisting of loans to officers
and directors of Borrower and its Subsidiaries, provided that
the aggregate amount of such loans shall not exceed $1,000,000
during the term of this Agreement; and
(vi) Other Investments, provided that the
aggregate amount of such other Investments does not exceed
$2,000,000 during the term of this Agreement.
(f) Dividends, Redemptions, Etc. Neither Borrower nor any
of its Subsidiaries shall pay any dividends or make any distributions
on its Equity
47
Securities; purchase, redeem, retire, defease or otherwise acquire for
value any of its Equity Securities; return any capital to any holder of
its Equity Securities as such; make any distribution of assets, Equity
Securities, obligations or securities to any holder of its Equity
Securities as such; or set apart any sum for any such purpose; except
as follows:
(i) Borrower may pay dividends on its capital
stock payable solely in Borrower's own capital stock;
(ii) Borrower may purchase or redeem shares of
its capital stock in connection with or pursuant to any of its
Employee Benefit Plans; and
(iii) Any Subsidiary or Affiliate of Borrower may
pay dividends to Borrower.
(g) Change in Business. Neither Borrower nor any of its
Subsidiaries shall engage, either directly or indirectly through
Affiliates, in any business substantially different from its present
business.
(h) Certain Indebtedness Payments. Etc. Neither Borrower
nor any of its Subsidiaries shall (i) prepay, redeem, purchase, defease
or otherwise satisfy in any manner prior to the scheduled payment
thereof any Indebtedness for borrowed money (other than the
Obligations) or lease obligations; or (ii) amend, modify or otherwise
change the terms of any document, instrument or agreement evidencing
Indebtedness for borrowed money (other than the Obligations) or lease
obligations so as to accelerate the scheduled payment thereof.
(i) ERISA. Neither Borrower nor any ERISA Affiliate shall
(i) adopt or institute any Employee Benefit Plan that is an employee
pension benefit plan within the meaning of Section 3(2) of ERISA, (ii)
take any action which will result in the partial or complete
withdrawal, within the meanings of sections 4203 and 4205 of ERISA,
from a Multiemployer Plan, (iii) engage or permit any Person to engage
in any transaction prohibited by section 406 of ERISA or section 4975
of the Code involving any Employee Benefit Plan or Multiemployer Plan
which would subject either Borrower or any ERISA Affiliate to any tax,
penalty or other liability including a liability to indemnify, (iv)
incur or allow to exist any accumulated funding deficiency (within the
meaning of section 412 of the Code or section 302 of ERISA), excluding
all extensions permitted by law or contract, (v) fail to make full
payment when due of all amounts due as contributions to any Employee
Benefit Plan or Multiemployer Plan, (vi) fail to comply with the
requirements of section 4980B of the Code or Part 6 of Title I(B) of
ERISA, or (vii) adopt any amendment to any Employee Benefit Plan which
would require the posting of security pursuant to section 401(a)(29) of
the Code, if any of such actions or inactions described in clauses (i)
- (vii), either individually or cumulatively, would have a Material
Adverse Effect.
48
(j) Transactions With Affiliates. Neither Borrower nor
any of its Subsidiaries shall enter into any Contractual Obligation
with any Affiliate or engage in any other transaction with any
Affiliate except upon terms at least as favorable to Borrower or such
Subsidiary as an arms-length transaction with unaffiliated Persons.
(k) Accounting Changes. Neither Borrower nor any of its
Subsidiaries shall change (i) its fiscal year (currently December 31
for Borrower) or (ii) its accounting practices except as permitted by
GAAP.
5.03. Financial Covenants. Until the termination of this Agreement
and the satisfaction in full by Borrower of all Obligations, Borrower will
comply, and will cause compliance, with the following financial covenants,
unless Required Banks shall otherwise consent in writing:
(a) Quick Ratio. Borrower shall not permit the Quick
Ratio of Borrower and its Subsidiaries to be less than 1.25 to 1.00 on
the last day of each fiscal quarter.
(b) Tangible Net Worth. Borrower shall not permit its
consolidated Tangible Net Worth to be less than on any date of
determination (such date to be referred to herein as a "determination
date") which occurs after September 30, 1997 (such date to be referred
to herein as the "base date") the sum on such determination date of the
following:
(i) $60,000,000;
plus
(ii) Eighty percent (80%) of the sum of
Borrower's consolidated quarterly net income (ignoring any
quarterly losses) for each quarter after the base date through
and including the quarter ending immediately prior to the
determination date;
plus
(iii) One Hundred percent (100%) of the net
proceeds of all Equity Securities issued by Borrower and its
Subsidiaries during the period commencing on the base date and
ending on the determination date.
(c) Leverage Ratio. Borrower shall not permit the
Leverage Ratio of Borrower and its Subsidiaries to be greater than .90
to 1.00.
(d) Profitability. Borrower shall not permit the
consolidated net income after taxes of Borrower and its Subsidiaries
for any fiscal quarter period to be less than $1.00.
49
SECTION VI. DEFAULT.
6.01. Events of Default. The occurrence or existence of any one or
more of the following shall constitute an "Event of Default" hereunder:
(a) Borrower shall fail to pay when due any payment
required under the terms of this Agreement or any of the other Credit
Documents; or
(b) Borrower shall fail to observe or perform any
covenant, obligation, condition or agreement set forth in Subparagraph
5.01(d), Paragraph 5.02 or Paragraph 5.03 of this Agreement or set
forth in Paragraph 4 of the Borrower Security Agreement; or
(c) Borrower or any of its Subsidiaries shall fail to
observe or perform any other covenant, obligation, condition or
agreement contained in this Agreement or the other Credit Documents and
such failure shall continue for ten (10) days; or
(d) Any written representation, warranty, certificate,
information or other statement (financial or otherwise) made or
furnished by Borrower or any of its Subsidiaries to Agent or any Bank
Party in or in connection with this Agreement or any of the other
Credit Documents shall be false, incorrect, incomplete or misleading in
any material respect when made or furnished; or
(e) (i) Borrower or any of its Subsidiaries (A) shall
fail to make a payment or payments in an aggregate amount of $100,000
or more when due under the terms of any Indebtedness to be paid by such
Person (excluding this Agreement and the other Credit Documents or any
intercompany Indebtedness between Borrower and any of its Subsidiaries,
but including any other evidence of indebtedness of Borrower or any of
its Subsidiaries to any Bank) and such failure shall continue beyond
any period of grace provided with respect thereto, or (B) shall fail to
make any other payment or payments when due under or otherwise default
in the observance or performance of any other agreement, term or
condition contained in any such Indebtedness, and the effect of such
failure or default is to cause, or permit the holder or holders thereof
to cause, indebtedness in an aggregate amount of $100,000 or more to
become due prior to its stated date of maturity; or (ii) there shall
occur or exist any other event or condition which causes, or permits
the holder or holders of such indebtedness to cause, indebtedness in an
aggregate amount of $100,000 or more to become due prior to its stated
date of maturity (whether through holder puts, mandatory redemptions or
prepayments or otherwise); or
(f) Borrower or any of its Subsidiaries shall (i) apply
for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property,
(ii) be unable, or admit in writing its inability, to pay its debts
generally as they mature, (iii) make a general assignment for the
benefit of its or any of its creditors, (iv) be dissolved or liquidated
in full or in part, (v) no longer be Solvent, (vi) commence a voluntary
case or other proceeding seeking
50
liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or consent to any such relief or to the appointment
of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vii)
take any action for the purpose of effecting any of the foregoing; or
(g) Proceedings for the appointment of a receiver,
trustee, liquidator or custodian of Borrower or any of its Subsidiaries
or of all or a substantial part of the property thereof, or an
involuntary case or other proceedings seeking liquidation,
reorganization or other relief with respect to Borrower or any of its
Subsidiaries or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an
order for relief entered or such proceeding shall not be dismissed or
discharged within sixty (60) days of commencement; or
(h) A final judgment or order for the payment of money in
excess of $1,000,000 shall be rendered against Borrower or any of its
Subsidiaries and the same shall remain undischarged and unpaid for a
period of thirty (30) days during which execution shall not be
effectively stayed; or
(i) Any Credit Document or any material term thereof
shall cease to be, or be asserted by Borrower or any of its
Subsidiaries not to be, a legal, valid and binding obligation of such
Person enforceable in accordance with its terms; or
(j) Any Reportable Event occurs which constitutes grounds
for the termination of any Employee Benefit Plan by the PBGC or for the
appointment of a trustee by the PBGC to administer any Employee Benefit
Plan, or any Employee Benefit Plan shall be terminated with unfunded
liabilities within the meaning of Title IV of ERISA or a trustee shall
be appointed by the PBGC to administer any Employee Benefit Plan; or
(k) Any Change of Control shall occur.
(Any of the events or conditions set forth in Subparagraphs 6.01(a)-(k), prior
to the giving of any required notice or the expiration of any specified grace
period, shall constitute a "Default" hereunder.)
6.02. Remedies. Upon the occurrence or existence of any Event of
Default (other than an Event of Default referred to in Subparagraph 6.01 (f) or
6.01(g)) and at any time thereafter during the continuance of such Event of
Default, Agent may, with the consent of the Required Banks, or shall, upon
instructions from the Required Banks, by written notice to Borrower, (a)
terminate the Commitments and the obligations of the Bank Parties to make Loans
or issue Letters of Credit (b) declare all outstanding Obligations payable by
Borrower to be immediately due and payable without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in the Notes to the contrary notwithstanding,
and/or (c) direct Borrower to deliver to Agent funds
51
in an amount equal to the aggregate stated amount of all outstanding Letters of
Credit. Upon the occurrence or existence of any Event of Default described in
Subparagraph 6.01(f) or 6.01(g) immediately and without notice, (1) the
Commitments and the obligations of the Bank Parties to make Loans or issue
Letters of Credit shall automatically terminate and (2) all outstanding
Obligations payable by Borrower hereunder shall automatically become immediately
due and payable, without presentment, demand, protest or any other notice of any
kind, all of which are hereby expressly waived, anything contained herein or in
the Notes to the contrary notwithstanding. In addition to the foregoing
remedies, upon the occurrence or existence of any Event of Default, Agent may
exercise any right, power or remedy permitted to it by law, either by suit in
equity or by action at law, or both. Immediately after taking any action under
this Paragraph 6.02, Agent shall notify each Bank Party of such action.
SECTION VII. AGENT AND RELATIONS AMONG BANKS.
7.01. Appointment, Powers and Immunities. Each Bank Party hereby
appoints and authorizes Agent to act as its agent hereunder and under the other
Credit Documents with such powers as are expressly delegated to Agent by the
terms of this Agreement and the other Credit Documents, together with such other
powers as are reasonably incidental thereto. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in any
other Credit Document, be a trustee for any Bank Party or have any fiduciary
duty to any Bank Party. Notwithstanding anything to the contrary contained
herein, Agent shall not be required to take any action which is contrary to this
Agreement or any other Credit Document or applicable law. Neither Agent nor any
Bank Party shall be responsible to Agent or any other Bank Party for any
recitals, statements, representations or warranties made by Borrower or any of
its Subsidiaries contained in this Agreement or in any other Credit Document,
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, or any other Credit Document or for any failure
by Borrower or any of its Subsidiaries to perform its obligations hereunder or
thereunder. Agent may employ agents and attorneys-in-fact and shall not be
responsible to any Bank Party for the negligence or misconduct of any such
agents or attorneys-in-fact selected by them with reasonable care. None of the
Agent or its directors, officers, employees or agents shall be responsible to
any Bank Party for any action taken or omitted to be taken by it or them
hereunder or under any other Credit Document or in connection herewith or
therewith, except for its or their own gross negligence or willful misconduct.
Except as otherwise provided under this Agreement, Agent shall take such action
with respect to the Credit Documents as shall be directed by the Required Banks.
7.02. Reliance by Agent. Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, facsimile
or telex) believed by them in good faith to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Agent with reasonable care. As to any other matters not
expressly provided for by this Agreement, Agent shall not be required to take
any action or exercise any discretion, but Agent shall be required to act or to
refrain from
52
acting upon instructions of the Required Banks and shall in all cases be fully
protected by the Bank Parties in acting, or in refraining from acting, hereunder
or under any other Credit Document in accordance with the instructions of the
Required Banks, and such instructions of the Required Banks and any action taken
or failure to act pursuant thereto shall be binding on Agent and all of the Bank
Parties.
7.03. Defaults. Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless Agent has
received a notice from a Bank Party or Borrower, referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"Notice of Default". If Agent receives such a notice of the occurrence of a
Default or Event of Default, Agent shall give prompt notice thereof to the Bank
Parties. Agent shall take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Required Banks; provided,
however, that until Agent shall have received such directions, Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Bank Parties.
7.04. Indemnification. Without limiting the Obligations of Borrower
hereunder, each Bank agrees to indemnify Agent, ratably in accordance with such
Bank's Proportionate Share, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by or asserted against Agent in any way relating to or arising out of this
Agreement or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof or of any such other documents; provided, however, that
no Bank shall be liable for any of the foregoing to the extent they arise from
Agent's gross negligence or willful misconduct. Agent shall be fully justified
in refusing to take or to continue to take any action hereunder unless it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The obligations of each Bank under this
Paragraph 7.04 shall survive the payment and performance of the Obligations, the
termination of this Agreement and any Bank ceasing to be a party to this
Agreement.
7.05. Non-Reliance. Each Bank Party represents that it has,
independently and without reliance on Agent or any other Bank Party, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of the financial condition and affairs of Borrower and its
Subsidiaries and its own decision to enter into this Agreement and agrees that
it will, independently and without reliance upon Agent or any Bank Party, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own appraisals and decisions in taking or not taking
action under this Agreement. Neither Agent nor any Bank Party shall be required
to keep Agent or any Bank Party informed as to the performance or observance by
Borrower or its Subsidiaries of the obligations under this Agreement or any
other document referred to or provided for herein or to make inquiry of, or to
inspect the properties or books of Borrower. Except for notices, reports and
other documents and information expressly required to be furnished to the Bank
Parties by Agent hereunder, neither Agent nor any Bank Party shall have any duty
or
53
responsibility to provide Agent or any Bank Party with any credit or other
information concerning Borrower or its Subsidiaries, which may come into the
possession of Agent or any Bank Party or any of its or their Affiliates.
7.06. Resignation or Removal of Agent. Subject to the appointment
and acceptance of a successor Agent as provided below, Agent may resign at any
time by giving notice thereof to the Banks, and Agent may be removed at any time
with or without cause by the Required Banks. Upon any such resignation or
removal, the Required Banks shall have the right to appoint a successor Agent,
which Agent shall be reasonably acceptable to Borrower. If no successor Agent
shall have been appointed by the Required Banks and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation or the Required Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Bank Parties, appoint a successor Agent,
which shall be (a) a bank having a combined capital, surplus and retained
earnings of not less than U.S. $250,000,000 and (b) shall be reasonably
acceptable to Borrower; provided, however, that Borrower shall have no right to
approve a successor Agent which is a Bank if an Event of Default has occurred
and is continuing. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section VII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Agent.
7.07. Authorization. Agent is hereby authorized by the Bank Parties
to execute, deliver and perform, each of the Credit Documents to which Agent is
or is intended to be a party and each Bank Party agrees to be bound by all of
the agreements of Agent contained in the Credit Documents.
7.08. Agent in its Individual Capacity. Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with Borrower and its Subsidiaries and affiliates as though such Agent were not
an Agent hereunder. With respect to Loans made and Letters of Credit issued by
SBC as a Bank, SBC shall have the same rights and powers under this Agreement
and the other Credit Documents as any other Bank Party and may exercise the same
as though it were not Agent.
SECTION VIII. MISCELLANEOUS.
8.01. Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Borrower, any Bank Party or Agent under this Agreement or the other Credit
Documents shall be in writing and faxed, mailed or delivered, if to Borrower or
Agent at its respective facsimile number or address set forth below, if to any
Bank, at the address or facsimile number specified beneath the heading "Address
for Notices" under the name of such Bank in Schedule I or, if to Issuing Bank,
at the address or facsimile number indicated in the notice given by Issuing Bank
to the other
54
parties at the time any such Issuing Bank is selected by Borrower and approved
by Agent (or to such other facsimile number or address for any party as
indicated in any notice given by that party to the other parties). All such
notices and communications shall be effective (a) when sent by Federal Express
or other overnight service of recognized standing, on the second Business Day
following the deposit with such service; (b) when mailed, first class postage
prepaid and addressed as aforesaid through the United States Postal Service,
upon receipt; (c) when delivered by hand, upon delivery; and (d) when faxed,
upon confirmation of receipt; provided, however, that any notice delivered to
Agent or Issuing Bank under Section II shall not be effective until received by
such Person.
Agent: Sumitomo Bank of California
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Borrower: Indus International, Inc.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇-▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Each Notice of Borrowing, Notice of Conversion, Notice of Interest Period
Selection and LC Application shall be given by Borrower to Agent and, in the
case of an LC Application, to Issuing Bank, to the office of such Person located
at the address referred to above during such Person's normal business hours;
provided, however, that any such notice received by any such Person after 1:00
P.M. on any Business Day shall be deemed received by such Person on the next
Business Day. In any case where this Agreement authorizes notices, requests,
demands or other communications by Borrower to Agent or any Bank Party to be
made by telephone or facsimile, Agent or any Bank Party may conclusively presume
that anyone purporting to be a person designated in any incumbency certificate
or other similar document received by Agent or such Bank Party is such a person.
8.02. Expenses. Borrower shall pay on demand, whether or not any
Loan is made or any Letter of Credit is issued hereunder, (a) all reasonable
fees and expenses payable to third parties, including Agent's out-of-pocket
expenses and reasonable attorneys' fees and expenses, incurred by Agent in
connection with the preparation, negotiation, execution and delivery of, and the
exercise of their duties under, this Agreement, and the structuring of, due
diligence relating to and syndication of the credit facilities set forth in this
Agreement; (b) all attorney costs and other reasonable fees and expenses payable
to third parties incurred by Agent in connection with the preparation,
negotiation, execution, delivery and syndication of this Agreement and the other
Credit Documents, and the preparation, negotiation, execution and delivery of
amendments and waivers hereunder and thereunder; (c) all attorney costs and
other reasonable fees and expenses payable to third parties incurred by Agent in
55
connection with the exercise of their rights or duties under this Agreement and
the other Credit Documents; and (d) all attorney costs and other reasonable fees
and expenses payable to third parties incurred by Agent or any Bank Party in the
enforcement or attempted enforcement of any of the Obligations or in preserving
any of Agent's or the Banks' rights and remedies (including all such fees and
expenses incurred in connection with any "workout" or restructuring affecting
the Credit Documents or the Obligations or any bankruptcy or similar proceeding
involving Borrower or any of its Subsidiaries). As used herein, the terns
"reasonable attorneys' fees and expenses" shall include, without limitation,
allocable costs and expenses of Agent's and Bank's in house legal counsel and
staff. The obligations of Borrower under this Paragraph 8.02 shall survive the
payment and performance of the Obligations and the termination of this
Agreement.
8.03. Indemnification. To the fullest extent permitted by law,
Borrower agrees to protect, indemnify, defend and hold harmless Agent, the Bank
Parties and their Affiliates and their respective directors, officers,
employees, agents and advisors ("Indemnitees") from and against any and all
liabilities, losses, damages or expenses of any kind or nature and from any
suits, claims or demands (including in respect of or for reasonable attorney's
fees and other expenses) arising on account of or in connection with any matter
or thing or action or failure to act by Indemnitees, or any of them, arising out
of or relating to the Credit Documents or any transaction contemplated thereby,
including without limitation any use by Borrower of any proceeds of the Loans or
any Letter of Credit, except to the extent such liability arises from the
willful misconduct or gross negligence of such Indemnitee. Upon receiving
knowledge of any suit, claim or demand asserted by a third party that Agent or
any Bank Party believes is covered by this indemnity, Agent or such Bank Party
shall give Borrower notice of the matter and an opportunity to defend it, at
Borrower's sole cost and expense, with legal counsel satisfactory to Agent or
such Bank Party, as the case may be. Any failure or delay of Agent or any Bank
Party to notify Borrower of any such suit, claim or demand shall not relieve
Borrower of its obligations under this Paragraph 8.03 but shall reduce such
obligations to the extent of any increase in those obligations caused solely by
any such failure or delay which is unreasonable. The obligations of Borrower
under this Paragraph 8.03 shall survive the payment and performance of the
Obligations and the termination of this Agreement.
8.04. Waivers; Amendments. Any term, covenant, agreement or
condition of this Agreement or any other Credit Document may be amended or
waived if such amendment or waiver is in writing and is signed by Borrower and
the Required Banks; provided, however that:
(a) Any amendment, waiver or consent which (i) amends
this Paragraph 8.04, or (ii) amends the definition of Required Banks
must be in writing and signed or approved in writing by all Banks;
(b) Any amendment, waiver or consent which (i) amends the
definition of Total Commitment, (ii) extends the Maturity Date, (iii)
reduces the principal of or interest on the Loans or any fees or other
amounts payable for the account of the Banks hereunder, (iv) increases
the LC Commitment, (v) releases any substantial part
56
of the Collateral, except for any release otherwise authorized by
Paragraph 2.13, or (vi) postpones any date fixed for any payment of the
principal of or interest on the Loans or any fees or other amounts
payable for the account of the Banks hereunder must be in writing and
signed or approved in writing by all Banks;
(c) Any amendment, waiver or consent which increases or
decreases the Proportionate Share of any Bank must be in writing and
signed by such Bank;
(d) Any amendment, waiver or consent which increases the
LC Commitment or otherwise affects the rights or obligations of Issuing
Bank must be in writing and signed by Issuing Bank; and
(e) Any amendment, waiver or consent which affects the
rights or obligations of Agent must be in writing and signed by Agent.
No failure or delay by Agent or any Bank Party in exercising any right hereunder
shall operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in such waiver or consent, a
waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
8.05. Successors and Assigns.
(a) Binding Effect. This Agreement and the other Credit
Documents shall be binding upon and inure to the benefit of Borrower,
the Bank Parties, Agent, all future holders of the Notes and their
respective successors and permitted assigns, except that Borrower may
not assign or transfer any of its rights or obligations under any
Credit Document without the prior written consent of Agent and each
Bank. All references in this Agreement to any Person shall be deemed to
include all successors and assigns of such Person.
(b) Participations. Any Bank may at any time sell to one
or more banks or other financial institutions ("Participants")
participating interests in any Loan owing to such Bank, any Note held
by such Bank, any Commitment of such Bank or any other interest of such
Bank under this Agreement and the other Credit Documents; provided,
however, that no Bank may sell a participating interest in its Loans or
Commitment in a principal amount of less than Ten Million Dollars ($10,
000, 000) . In the event of any such sale by a Bank of participating
interests, such Bank's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, such Bank shall
remain the holder of any such Note for all purposes under this
Agreement, such Bank shall retain the right to approve amendments and
waivers and other voting rights hereunder and Agent and Borrower shall
continue to deal solely and directly with such Bank in connection with
such Bank's rights and obligations under this Agreement; provided,
however, that any agreement pursuant to which any Bank sells a
participating interest to a Participant may require the selling Bank to
57
obtain the consent of such Participant in order for such Bank to agree
in writing to any amendment of a type specified in clause (i),
(ii), (iii), (iv) or (v) of Subparagraph 8.04(b) or Subparagraph
8.04(c), as appropriate. Borrower agrees that if amounts outstanding
under this Agreement and the other Credit Documents are due and unpaid,
or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the
fullest extent permitted by law, be deemed to have the right of setoff
in respect of its participating interest in amounts owing under this
Agreement and any other Credit Documents to the same extent as if the
amount of its participating interest were owing directly to it as a
Bank under this Agreement or any other Credit Documents; provided,
however, that (i) no Participant shall exercise any rights under this
sentence without the consent of Agent, (ii) no Participant shall have
any rights under this sentence which are greater than those of the
selling Bank and (iii) such rights of setoff shall be subject to the
obligation of such Participant to share with the Banks, and the Banks
agree to share with such Participant, as provided in Subparagraph
2.09(b). Borrower also agrees that any Bank which has transferred all
or part of its interests in the Commitments and the Loans to one or
more Participants shall, notwithstanding any such transfer, be entitled
to the full benefits accorded such Bank under Paragraph 2.10, Paragraph
2.11, and Paragraph 2.12, as if such Bank had not made such transfer.
(c) Assignments. Any Bank may at any time, sell and
assign to any Bank, any affiliate of a Bank or any other bank or
financial institution (individually, an "Assignee Bank") all or a
portion of its rights and obligations under this Agreement and the
other Credit Documents (such a sale and assignment to be referred to
herein as an "Assignment") pursuant to an assignment agreement in the
form of Exhibit G (an "Assignment Agreement"), executed by each
Assignee Bank and such assignor Bank (an "Assignor Bank") and delivered
to Agent for its acceptance and recording in the Register; provided,
however, that:
(i) Without the written consent of Borrower,
Agent and Issuing Bank (which consent of Borrower, Agent and
Issuing Bank shall not be unreasonably withheld), no Bank may
make any Assignment to any Assignee Bank which is not,
immediately prior to such Assignment, a Bank hereunder or an
affiliate which controls, is controlled by or is under common
control with a Bank hereunder;
(ii) Without the written consent of Agent and, if
no Default has occurred and is continuing, Borrower (which
consent of Agent and Borrower shall not be unreasonably
withheld), no Bank may make any Assignment to any Assignee
Bank if, after giving effect to such Assignment, the
Commitment of such Bank or such Assignee Bank would be less
than Ten Million Dollars ($10, 000, 000) (except that a Bank
may make an Assignment which reduces its Commitment to zero
without the written consent of Borrower and Agent); and
58
(iii) No Bank may make any Assignment which does
not assign and delegate an equal pro rata interest in such
Bank's Loans, Commitments and all other rights, duties and
obligations of such Bank under this Agreement and the other
Credit Documents.
Upon such execution, delivery, acceptance and recording of each
Assignment Agreement, from and after the Assignment Effective Date
determined pursuant to such Assignment Agreement, (A) each Assignee
Bank thereunder shall be a Bank hereunder with a Proportionate Share as
set forth on Attachment 1 to such Assignment Agreement and shall have
the rights, duties and obligations of such a Bank under this Agreement
and the other Credit Documents, and (B) the Assignor Bank thereunder
shall be a Bank with a Proportionate Share as set forth on Attachment 1
to such Assignment Agreement, or, if the Proportionate Share of the
Assignor Bank has been reduced to 0%, the Assignor Bank shall cease to
be a Bank; provided, however, that any such Assignor Bank which ceases
to be a Bank shall continue to be entitled to the benefits of any
provision of this Agreement which by its terms survives the termination
of this Agreement. Each Assignment Agreement shall be deemed to amend
Schedule I to the extent, and only to the extent, necessary to reflect
the addition of each Assignee Bank, the deletion of each Assignor Bank
which reduces its Proportionate Share to 0% and the resulting
adjustment of Proportionate Shares arising from the purchase by each
Assignee Bank of all or a portion of the rights and obligations of an
Assignor Bank under this Agreement and the other Credit Documents. On
or prior to the Assignment Effective Date determined pursuant to each
Assignment Agreement, Borrower, at its own expense, shall execute and
deliver to Agent, in exchange for the surrendered Note of the Assignor
Bank thereunder, a new Note to the order of each Assignee Bank
thereunder in an amount equal to the Commitment assumed by such
Assignee Bank and, if the Assignor Bank is continuing as a Bank
hereunder, a new Note to the order of the Assignor Bank in an amount
equal to the Commitment retained by it. Each such new Note shall be
dated the Closing Date and otherwise be in the form of the Note
replaced thereby. The Notes surrendered by the Assignor Bank shall be
returned by Agent to Borrower marked "replaced". Each Assignee Bank
which was not previously a Bank hereunder and which is not incorporated
under the laws of the United States of America or a state thereof
shall, within three (3) Business Days of becoming a Bank, deliver to
Borrower and Agent either two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 (or successor applicable
form), as the case may be, certifying in each case that such Bank is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes.
(d) Register. Agent shall maintain at its address
referred to in Paragraph 8.01 a copy of each Assignment Agreement
delivered to it and a register (the "Register") for the recordation of
the names and addresses of the Banks and the Proportionate Share of
each Bank from time to time. The entries in the Register shall be
conclusive in the absence of manifest error, and Borrower, Agent and
the Bank Parties may treat each Person whose name is recorded in the
Register as the owner of the Loans recorded therein for all purposes of
this Agreement. The Register shall be
59
available for inspection by Borrower or any Bank Party at any
reasonable time and from time to time upon reasonable prior notice.
(e) Registration. Upon its receipt of an Assignment
Agreement executed by an Assignor Bank and an Assignee Bank (and, to
the extent required by Subparagraph 8.05(c), by Borrower, Agent and
Issuing Bank), together with payment to Agent by Assignor Bank of a
registration and processing fee of $3,500 if such assignment occurs
more than thirty (30) days after the Closing Date, Agent shall (i)
promptly accept such Assignment Agreement and (ii) on the Assignment
Effective Date determined pursuant thereto record the information
contained therein in the Register and give notice of such acceptance
and recordation to the Bank Parties and Borrower. Agent may, from time
to time at its election, prepare and deliver to the Bank Parties and
Borrower a revised Schedule I reflecting the names, addresses and
respective Proportionate Shares of all Banks then parties hereto.
8.06. Setoff; Security Interest.
(a) Setoff. In addition to any rights and remedies of the
Bank Parties provided by law, each Bank Party shall have the right,
with the prior consent of Agent, but without prior notice to or consent
of Borrower, any such notice or consent being expressly waived by
Borrower to the extent permitted by applicable law, upon the occurrence
and during the continuance of an Event of Default, to set-off and
apply, or to authorize or direct such Bank to set-off and apply,
against any indebtedness, whether matured or unmatured, of Borrower to
such Bank Party, any amount owing from such Bank Party to Borrower. The
aforesaid right of set-off may be exercised by any Bank Party against
Borrower or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver or execution, judgment
or attachment creditor of Borrower or against anyone else claiming
through or against Borrower or such trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor, notwithstanding the fact
that such right of set-off shall not have been exercised by such Bank
Party prior to the occurrence of an Event of Default. Each Bank Party
agrees promptly to notify Borrower after any such set-off and
application made by such Bank Party, provided that the failure to give
such notice shall not affect the validity of such set-off and
application.
(b) Security Interest. As security for the Obligations,
Borrower hereby grants to each Bank Party, for the benefit of all the
Agent and Bank Parties, a continuing security interest in any and all
deposit accounts or moneys of Borrower now or hereafter maintained with
such Bank Party. Each Bank Party shall have all of the rights of a
secured party with respect to such security interest.
8.07. No Third Party Rights. Nothing expressed in or to be implied
from this Agreement is intended to give, or shall be construed to give, any
Person, other than the parties hereto and their permitted successors and assigns
hereunder, any benefit or legal or
60
equitable right, remedy or claim under or by virtue of this Agreement or under
or by virtue of any provision herein.
8.08. Partial Invalidity. If at any time any provision of this
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
8.09. Jury Trial. EACH OF BORROWER, THE BANK PARTIES AND AGENT, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY CREDIT DOCUMENT.
8.10. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
[The next page is the first signature page.]
61
IN WITNESS WHEREOF, Borrower, the Bank Parties and Agent have caused
this Agreement to be executed as of the day and year first above written.
BORROWER: INDUS INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇ ▇. Siskowsky
----------------------------------
Name: ▇▇▇▇▇ ▇. Siskowsky
Title: Chief Financial Officer
Agent: SUMITOMO BANK OF CALIFORNIA,
As Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇. ▇▇▇▇▇ Warden
Title: Sr. Vice President
BANKS: SUMITOMO BANK OF CALIFORNIA,
As a Bank
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
Name: ▇. ▇▇▇▇▇ Warden
Title: Senior Vice President
▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.,
As a Bank
By: /s/ ▇▇▇▇▇▇▇ Person
----------------------------------
Name: ▇▇▇▇▇▇▇ Person
Title: Vice President
63
SCHEDULE I
BANKS
Banks: Proportionate Share:
----- -------------------
Sumitomo Bank of California 71.42857%
Applicable Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Address for notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Wiring Instructions:
[Information maintained with Agent]
I-1
Banks: Proportionate Share:
----- -------------------
Union Bank of California, N.A. 28.57142%
Applicable Lending Office:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ Person
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Address for notices:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ Person
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Wiring Instructions:
Union Bank of California, N.A.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Commercial Note Operations
▇▇▇▇▇▇▇ ▇▇▇▇▇
Ref. Obligor No. 4115397714
ABA No. ▇▇▇▇▇▇▇▇▇
Acct No. 070-196431
RC No. 99251
Customer: The Indus Group, Inc.
I-2
SCHEDULE II
PRICING GRID
▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇
PERIOD PERIOD
APPLICABLE MARGINS 1.25% 1.50%
COMMITMENT FEE
PERCENTAGES: .125% .200%
EXPLANATION
1. The Applicable Margin for each LIBOR Loan and the Commitment Fee
Percentage will be set for each Pricing Period and will vary depending
upon whether such period is a Level 1 Period or a Level 2 Period.
2. The first Pricing Period, which commences on the date of this Agreement
and ends on August 31, 1998, will be a Level 1 Period or a Level 2
Period depending upon Borrower's Leverage Ratio for the fiscal quarter
period ending on March 31, 1998.
3. Each Pricing Period thereafter will be a Level 1 Period or a Level 2
Period depending upon Borrower's consolidated Leverage Ratio for-the
most recent fiscal quarter period ending prior to the first day of such
Pricing Period as follows:
(a) If, during any Pricing Period, Borrower's consolidated
Leverage Ratio is less than or equal to .650 to 1.00,
Borrower's pricing will be a Level 1 Period.
(b) If, during any Pricing Period, Borrower's consolidated
Leverage Ratio is greater than or .650 to 1.00, Borrower's
pricing will be a Level 2 Period.
4. Level 2 Period will also apply during any Pricing Period in which
Borrower has failed to provide its Compliance Certificate.
II-1
SCHEDULE 3.01
INITIAL CONDITIONS PRECEDENT
A. Principal Credit Documents.
(1) The Credit Agreement, duly executed by Borrower, each Bank
Party and Agent;
(2) A Note payable to each Bank, each duly executed by Borrower;
(3) The Borrower Security Agreement, duly executed by Borrower;
B. Borrower Corporate Documents.
(1) The Certificate of Incorporation of Borrower, certified as of
a recent date on or around the Closing Date by the Secretary of State
of Delaware;
(2) A Certificate of Good Standing for Borrower (or comparable
certificate), certified as of a recent date on or around the Closing
Date by the Secretary of State of Delaware;
(3) A certificate of the Secretary or an Assistant Secretary of
Borrower certifying (a) that attached thereto is a true and correct
copy of the Bylaws of Borrower as in effect on the Closing Date; (b)
that attached thereto are true and correct copies of resolutions duly
adopted by the Board of Directors of Borrower and continuing in effect,
which authorize the execution, delivery and performance by Borrower of
the Credit Agreement and the other Credit Documents executed or to be
executed by Borrower and the consummation of the transactions
contemplated hereby and thereby; and (c) that there are no proceedings
for the dissolution or liquidation of Borrower;
(4) A certificate of the Secretary or an Assistant Secretary of
Borrower certifying the incumbency, signatures and authority of the
officers of Borrower authorized to execute, deliver and perform the
Credit Documents and all other documents, instruments or agreements
related thereto executed or to be executed by Borrower and indicating
each such officer which is an executive officer; and
(5) Certificates of Good Standing (or comparable certificate) for
Borrower, certified as of a recent date on or around the Closing Date
by the Secretaries of State (or comparable public official) of the
State of California.
3.01-1
C. Financial Statements, Financial Condition, Etc.
(1) A copy of the unaudited Financial Statements of Borrower and
its Subsidiaries for the fiscal quarter ended March 31, 1998 and for
the fiscal year to such date (prepared on a consolidated and
consolidating basis), certified by an executive officer of Borrower to
present fairly the financial condition, results of operations and other
information reflected therein and to have been prepared in accordance
with GAAP (subject to normal year-end audit adjustments);
(2) A copy of the audited consolidated Financial Statements of
Borrower for the fiscal year ended December 31, 1997, prepared by Ernst
& Young and a copy of the unqualified opinion delivered by such
accountants in connection with such Financial Statements; and
(3) Such other financial, business and other information regarding
Borrower or any of their Subsidiaries as Agent may reasonably request,
including information as to possible contingent liabilities, tax
matters, environmental matters and obligations for employee benefits
and compensation.
D. Other Items.
(1) UCC-1, UCC-2 and/or UCC-3 Financing Statements (as applicable)
filed against Borrower in connection with the Assumption Agreement and
the Security Agreement;
(2) All fees and expenses payable to Agent and the Banks through
the Closing Date;
(3) All fees and expenses of Agent's counsel through the Closing
Date;
(4) Such other evidence as Agent or any Bank Party may reasonably
request to establish the accuracy and completeness of the
representations and warranties and the compliance with the terms and
conditions contained in this Agreement and the other Credit Documents;
and
(5) A certificate of an executive officer of Borrower, addressed
to Agent and dated the Closing Date, certifying that:
(a) The representations and warranties set forth in
Paragraph 4.01 are true and correct in all material respects
as of such date (except for such representations and
warranties made as of a specified date, which shall be true as
of such date); and
(b) No Event of Default or Default has occurred and is
continuing as of such date.
3.01-2
SCHEDULE 4.01(G)
LITIGATION
None.
4.01(g)-1
SCHEDULE 4.01(P)
SUBSIDIARIES
None.
4.01(p)-1
SCHEDULE 5.02(B)
EXISTING LIENS
None.
5.02(b)-1
SCHEDULE 5.02(E)
PERMITTED INVESTMENTS
None.
5.02(e)-1
EXHIBIT A
NOTICE OF BORROWING
[Date]
Sumitomo Bank of California,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
1. Reference is made to that certain Amended and Restated Credit
Agreement, dated as of June 10, 1998 (the "Credit Agreement"), among Indus
International, Inc., a Delaware corporation ("Borrower"), the financial
institutions listed in Schedule I to the Credit Agreement (the "Banks") and
Sumitomo Bank of California, as agent for the Banks (in such capacity, "Agent").
Unless otherwise indicated, all terms defined in the Credit Agreement have the
same respective meanings when used herein.
2. Pursuant to Subparagraph 2.01(b) of the Credit Agreement,
Borrower hereby irrevocably requests a Borrowing upon the following terms:
(a) The principal amount of the requested Borrowing is to
be $_________;
(b) The requested Borrowing is to consist of ["Base Rate"
or "LIBOR"] Loans;
(c) If the requested Borrowing is to consist of LIBOR
Loans, the initial Interest Period for such Loans will be _____ months;
and
(d) The date of the requested Borrowing is to be _______,
_______
3. Borrower hereby certifies to Agent and the Banks that, on the
date of this Notice of Borrowing and after giving effect to the requested
Borrowing:
(a) The representations and warranties of Borrower and
its Subsidiaries (including Borrower) set forth in Paragraph 4.01 of
the Credit Agreement and in the other Credit Documents are true and
correct in all material respects as if made on such date (except for
representations and warranties expressly made as of a specified date,
which shall be true as of such date);
(b) No Default has occurred and is continuing; and
(c) All of the Credit Documents are in full force and
effect.
A-1
4. Please disburse the proceeds of the requested Borrowing to
_____________________________________________________________.
IN WITNESS WHEREOF, Borrower has executed this Notice of Borrowing on
the date set forth above.
INDUS NATIONAL, INC.
By:
------------------------------------
Name:
Title:
A-2
EXHIBIT B
NOTICE OF CONVERSION
[Date]
Sumitomo Bank of California,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
1. Reference is made to that certain Amended and Restated Credit
Agreement, dated as of June 10, 1998 (the "Credit Agreement"), among Indus
International, Inc., a Delaware corporation ("Borrower"), the financial
institutions listed in Schedule I to the Credit Agreement (the "Banks") and
Sumitomo Bank of California, as agent for the Banks (in such capacity, "Agent").
Unless otherwise indicated, all terms defined in the Credit Agreement have the
same respective meanings when used herein.
2. Pursuant to Subparagraph 2.01(d) of the Credit Agreement,
Borrower hereby irrevocably requests to convert a Borrowing as follows:
(a) The Borrowing to be converted consists of ["Base
Rate" or "LIBOR"] Loans in the aggregate principal amount of $________
which were initially advanced to Borrower on ___________, ____;
(b) The Loans in the Borrowing are to be converted into
["Base Rate" or "LIBOR"] Loans;
(c) If such Loans are to be converted into LIBOR Loans,
the initial Interest Period for such Loans commencing upon conversion
will be _______ months; and
(d) The date of the requested conversion is to be ______,
_____.
3. Borrower hereby certifies to Agent and the Banks that, on the
date of this Notice of Conversion, and after giving effect to the requested
conversion:
(a) The representations and warranties of Borrower and
its Subsidiaries (including Borrower) set forth in Paragraph 4.01 of
the Credit Agreement and in the other Credit Documents are true and
correct in all material respects as if made on such date (except for
representations and warranties expressly made as of a specified date,
which shall be true as of such date);
(b) No Default has occurred and is continuing; and
B-1
(c) All of the Credit Documents are in full force and
effect.
IN WITNESS WHEREOF, Borrower has executed this Notice of Conversion on
the date set forth above.
INDUS INTERNATIONAL, INC.
By:
------------------------------------
Name:
Title:
B-2
EXHIBIT C
NOTICE OF INTEREST PERIOD SELECTION
[Date]
Sumitomo Bank of California,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
1. Reference is made to that certain Amended and Restated Credit
Agreement, dated as of June 10, 1998 (the "Credit Agreement"), among Indus
International, Inc., a Delaware corporation ("Borrower"), the financial
institutions listed in Schedule I to the Credit Agreement (the "Banks") and
Sumitomo Bank of California, as agent for the Banks (in such capacity, "Agent").
Unless otherwise indicated, all terms defined in the Credit Agreement have the
same respective meanings when used herein.
2. Pursuant to Subparagraph 2. O1(e) of the Credit Agreement,
Borrower hereby irrevocably selects a new Interest Period for a Borrowing as
follows:
(a) The Borrowing for which a new Interest Period is to
be selected consists of LIBOR Loans in the aggregate principal amount
of $______ which were initially advanced to Borrower on __________,
_____;
(b) (b) The last day of the current Interest Period for
such Loans is ___________, ___________; and
(c) The next Interest Period for such Loans commencing
upon the last day of the current Interest Period is to be _____ months.
3. Borrower hereby certifies to the Agents and the Banks that, on
the date of this Notice of Interest Period Selection, and after giving effect to
the requested selection:
(a) The representations and warranties of Borrower and
its Subsidiaries (including Borrower) set forth in Paragraph 4.01 of
the Credit Agreement and in the other Credit Documents are true and
correct in all material respects as if made on such date (except for
representations and warranties expressly made as of a specified date,
which shall be true as of such date);
(b) No Default has occurred and is continuing; and
(c) All of the Credit Documents are in full force and
effect.
C-1
IN WITNESS WHEREOF, Borrower has executed this Notice of Interest
Period Selection on the date set forth above.
INDUS NATIONAL, INC.
By:
------------------------------------
Name:
Title:
C-2
EXHIBIT D
NOTE
$ San Francisco, California
----------- June 10, 1998
FOR VALUE RECEIVED, INDUS INTERNATIONAL, INC., a Delaware corporation
("Borrower"), hereby promises to pay to the order of ___________________, a
_________________ ("Bank"), the principal sum of _________ DOLLARS ($________)
or such lesser amount as shall equal the aggregate outstanding principal balance
of the Loans made by Bank to Borrower pursuant to the Amended and Restated
Credit Agreement referred to below (as amended from time to time, the "Credit
Agreement"), on or before the Maturity Date specified in the Credit Agreement;
and to pay interest on said sum, or such lesser amount, at the rates and on the
dates provided in the Credit Agreement.
Borrower shall make all payments hereunder, for the account of Bank's
Applicable Lending Office, to Agent as indicated in the Credit Agreement, in
lawful money of the United States and in same day or immediately available
funds.
Borrower hereby authorizes Bank to record on the schedule(s) annexed to
this note the date and amount of each Loan and of each payment or prepayment of
principal made by Borrower and agrees that all such notations shall constitute
prima facie evidence of the matters noted; provided, however, that the failure
of Bank to make any such notation shall not affect Borrower's obligations
hereunder.
This note is one of the Notes referred to in the Credit Agreement,
dated as of June 10, 1998, among Borrower, Bank and the other financial
institutions from time to time parties thereto (collectively, the "Banks") and
Sumitomo Bank of California, as agent for the Banks. This note is subject to the
terms of the Credit Agreement, including the rights of prepayment and the rights
of acceleration of maturity set forth therein. Terms used herein have the
meanings assigned to those terms in the Credit Agreement, unless otherwise
defined herein.
Borrower shall pay all reasonable fees and expenses, including
reasonable attorneys' fees, incurred by Bank in the enforcement or attempt to
enforce any of Borrower's obligations
D-1
hereunder not performed when due. Borrower hereby waives notice of presentment,
demand, protest or notice of any other kind. This note shall be governed by and
construed in accordance with the laws of the State of California.
INDUS INTERNATIONAL, INC.
By:
------------------------------------
Name:
Title:
D-2
LOANS AND PAYMENTS OF PRINCIPAL
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Type of Amount of Interest Principal Paid Principal Notation
Date Loan Loan Period or Prepaid Balance Made By
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D-3
EXHIBIT E
AMENDED AND RESTATED SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGE (this "Security Agreement"),
dated as of June 10, 1998, is executed by INDUS NATIONAL, INC., a Delaware
corporation ("Borrower"), in favor of SUMITOMO BANK OF CALIFORNIA, a California
banking corporation, acting as agent (in such capacity, "Agent") for the
financial institutions which are from time to time parties to the Credit
Agreement referred to in Recital A below (collectively, the "Banks").
RECITALS
A. Pursuant to an Amended and Restated Credit Agreement, dated as
of June 10, 1998 (the "Credit Agreement"), among Borrower, the Banks and Agent,
the Banks have agreed to extend certain credit facilities to Borrower upon the
terms and subject to the conditions set forth therein.
B. The Banks' obligations to extend the credit facilities to
Borrower under the Credit Agreement are subject, among other conditions, to
receipt by Agent of this Security Agreement, which amends and restates that
certain Security Agreement dated September 2, 1997 from Borrower in favor of
Agent (the "Original Security Agreement"), duly executed by Borrower.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Borrower hereby agrees with Agent, for the ratable benefit of the
Banks and Agent, as follows:
1. DEFINITIONS AND INTERPRETATION. When used in this Security
Agreement, the following terms shall have the following respective meanings:
"Account Debtor" shall have the meaning given to that term in
subparagraph 3(g) hereof.
"Agent" shall have the meaning given to that term in the
introductory paragraph hereof.
"Banks" shall have the meaning given to that term in the
introductory paragraph hereof.
"Borrower" shall have the meaning given to that term in the
introductory paragraph hereof.
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"Collateral" shall have the meaning given to that term in
paragraph 2 hereof.
"Credit Agreement" shall have the meaning given to that term
in Recital A hereof.
"Obligations" shall mean and include all loans, advances,
debts, liabilities and obligations, howsoever arising, owed by Borrower
to any Bank or Agent of every kind and description (whether or not
evidenced by any note or instrument and whether or not for the payment
of money), direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising pursuant to the terms of the
Credit Agreement or any of the other Credit Documents, including
without limitation all interest, fees, charges, expenses, attorneys'
fees and accountants' fees chargeable to Borrower or payable by
Borrower thereunder.
"Original Security, Agreement" shall have the meaning given to
that term in Recital B.
"Receivables" shall have the meaning given to that term in
Attachment I hereto.
"Related Contracts" shall have the meaning given to that term
in Attachment 1 hereto.
"UCC" shall mean the Uniform Commercial Code as in effect in
the State of California from time to time.
Unless otherwise defined herein, all other capitalized terms used herein and
defined in the Credit Agreement shall have the respective meanings given to
those terms in the Credit Agreement, and all terms defined in the UCC shall have
the respective meanings given to those terms in the UCC. The rules of
construction set forth in Section I of the Credit Agreement shall, to the extent
not inconsistent with the terms of this Security Agreement, apply to this
Security Agreement and are hereby incorporated by reference.
2. REAFFIRMATION OF GRANT OF SECURITY INTEREST. As security for
the Obligations, Borrower hereby reaffirms the grant of the security interest
set forth in the Original Security Agreement and further pledges and assigns to
Agent (for the ratable benefit of the Banks and Agent) and grants to Agent (for
the ratable benefit of the Banks and Agent) a security interest in all right,
title and interest of Borrower in and to the property described in Attachment 1
hereto, whether now owned or hereafter acquired (collectively and severally, the
"Collateral"), which Attachment 1 is incorporated herein by this reference.
3. REPRESENTATIONS AND WARRANTIES. Borrower represents and
warrants to the Banks and Agent as follows:
(a) Borrower is the legal and beneficial owner of the
Collateral (or, in the case of after-acquired Collateral, at the time
Borrower acquires rights in the Collateral, will be the legal and
beneficial owner thereof). No other Person has (or, in the case of
E-2
after acquired Collateral, at the time Borrower acquires rights
therein, will have) any right, title, claim or interest (by way of
Lien, purchase option or otherwise) in, against or to the Collateral,
other than Permitted Liens.
(b) Agent has (or in the case of after-acquired
Collateral, at the time Borrower acquires rights therein, will have) a
first priority perfected security interest in the Collateral.
(c) All Borrower keeps all records concerning the
Receivables and the originals of all Related Contracts at its chief
executive office located at the address set forth in Paragraph 8.01 of
the Credit Agreement.
(d) Borrower has delivered to Agent, together with all
necessary stock powers, endorsements, assignments and other necessary
instruments of transfer, the originals of all Receivables consisting of
instruments and chattel paper.
(e) Each Receivable is genuine and enforceable against
the party obligated to pay the same (an "Account Debtor") free from any
right of rescission, defense, setoff or discount.
4. COVENANTS. Borrower hereby agrees as follows:
(a) Borrower, at Borrower's expense, shall promptly
procure, execute and deliver to Agent all documents, instruments and
agreements and perform all acts which are necessary or desirable, or
which Agent may request, to establish, maintain, preserve, protect and
perfect the Collateral, the Lien granted to Agent therein and the first
priority of such Lien or to enable Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the preceding sentence, Borrower shall (i)
procure, execute and deliver to Agent all endorsements, assignments,
financing statements and other instruments of transfer requested by
Agent and (ii) deliver to Agent promptly upon receipt all originals of
Collateral consisting of instruments, documents and chattel paper.
(b) Borrower shall not use or permit any Collateral to be
used in violation of (i) any provision of the Credit Agreement, this
Security Agreement or any other Security Document, (ii) any applicable
Governmental Rule where such use might have a Material Adverse Effect,
or (iii) any policy of insurance covering the Collateral.
(c) Borrower shall pay promptly when due all taxes and
other governmental charges, all Liens and all other charges now or
hereafter imposed upon, relating to or affecting any Collateral.
(d) Without thirty (30) days' prior written notice to
Agent, Borrower shall not (i) change Borrower's name or place of
business (or, if Borrower has more than one place of business, its
chief executive office), or the office in which Borrower's records
E-3
relating to Receivables or the originals of Related Contracts are kept,
or (ii) keep Collateral consisting of chattel paper and documents at
any location other than its chief executive office.
(e) Upon the written request of Agent, Borrower shall
deposit, or cause to be deposited, all remittances, checks and other
funds (in whatever form) received with respect to Receivables to a
deposit account in which Agent has a first priority perfected security
interest.
(f) Borrower shall appear in and defend any action or
proceeding which may affect its title to or Agent's interest in the
Collateral.
(g) If Agent gives value to enable Borrower to acquire
rights in or the use of any Collateral, Borrower shall use such value
for such purpose.
(h) Borrower shall keep separate, accurate and complete
records of the Collateral and shall provide Agent with such records and
such other reports and information relating to the Collateral as Agent
may reasonably request from time to time.
(i) Borrower shall not surrender or lose possession of
(other than to Agent), sell, encumber, lease, rent, option, or
otherwise dispose of or transfer any Collateral or right or interest
therein except as permitted in the Credit Agreement, and,
notwithstanding any provision of the Credit Agreement, Borrower shall
keep the Collateral free of all Liens except Permitted Liens.
(j) Borrower shall type, print or stamp conspicuously on
the face of all original copies of all Collateral consisting of chattel
paper and documents not in the possession of Agent a legend
satisfactory to Agent indicating that such chattel paper is subject to
the security interest granted hereby.
(k) Borrower shall collect, enforce and receive delivery
of the Receivables in accordance with past practice until otherwise
notified by Agent.
5. AUTHORIZED ACTION BY AGENT. Borrower hereby irrevocably
appoints Agent as its attorney-in-fact and agrees that Agent may perform (but
Agent shall not be obligated to and shall incur no liability to Borrower or any
third party for failure so to do) any act which Borrower is obligated by this
Security Agreement to perform, and to exercise such rights and powers as
Borrower might exercise with respect to the Collateral, including, without
limitation, the right to (a) collect by legal proceedings or otherwise and
endorse, receive and receipt for all dividends, interest, payments, proceeds and
other sums and property now or hereafter payable on or on account of the
Collateral; (b) enter into any extension, reorganization, deposit, merger,
consolidation or other agreement pertaining to, or deposit, surrender, accept,
hold or apply other property in exchange for the Collateral; (c) insure,
process, preserve and enforce the Collateral; (d) make any compromise or
settlement, and take any action it deems advisable, with respect to the
Collateral; (e) pay any Indebtedness of Borrower relating to the Collateral; and
(f) execute
E-4
UCC financing statements and other documents, instruments and agreements
required hereunder; provided, however, that Agent may exercise such powers only
after the occurrence and during the continuance of an Event of Default. Borrower
agrees to reimburse Agent upon demand for all reasonable costs and expenses,
including attorneys' fees, Agent may incur while acting as Borrower's
attorney-in-fact hereunder, all of which costs and expenses are included in the
Obligations. Borrower agrees that such care as Agent gives to the safekeeping of
its own property of like kind shall constitute reasonable care of the Collateral
when in Agent's possession; provided, however, that Agent shall not be required
to make any presentment, demand or protest, or give any notice and need not take
any action to preserve any rights against any prior party or any other Person in
connection with the Obligations or with respect to the Collateral.
6. DEFAULT AND REMEDIES. Borrower shall be deemed in default
under this Security Agreement upon the occurrence and during the continuance of
an Event of Default, as that term is defined in the Credit Agreement. In
addition to all other rights and remedies granted to Agent by this Security
Agreement, the Credit Agreement, the other Credit Documents, the UCC and other
applicable Governmental Rules, Agent may, upon the occurrence and during the
continuance of any Event of Default, exercise any one or more of the following
rights and remedies: (a) collect, receive, appropriate or realize upon the
Collateral or otherwise foreclose or enforce Agent's security interests in any
or all Collateral in any manner permitted by applicable Governmental Rules or in
this Security Agreement; (b) notify any or all Account Debtors to make payments
on Receivables directly to Agent; (c) sell or otherwise dispose of any or all
Collateral at one or more public or private sales, whether or not such
Collateral is present at the place of sale, for cash or credit or future
delivery, on such terms and in such manner as Agent may determine; (d) require
Borrower to assemble the Collateral and make it available to Agent at a place to
be designated by Agent; and (e) enter onto any property where any Collateral is
located and take possession thereof with or without judicial process. In
furtherance of Agent's rights hereunder, Borrower hereby grants to Agent an
irrevocable, non-exclusive license (exercisable without royalty or other payment
by Agent) to use, license or sublicense any patent, trademark, trade name,
copyright or other intellectual property in which Borrower now or hereafter has
any right, title or interest, together with the right of access to all media in
which any of the foregoing may be recorded or stored. In any case where notice
of any sale or disposition of any Collateral is required, Borrower hereby agrees
that seven (7) days notice of such sale or disposition is reasonable.
7. MISCELLANEOUS.
(a) Notices. Except as otherwise specified herein, all
notices, requests, demands, consents, instructions or other
communications to or upon Borrower or Agent under this Security
Agreement shall be given as provided in Paragraph 8.01 of the Credit
Agreement.
(b) Waivers, Amendments. Any term, covenant, agreement or
condition of this Security Agreement may be amended or waived only as
provided in the Credit Agreement. No failure or delay by Agent or any
Bank in exercising any right hereunder shall operate as a waiver
thereof or of any other right nor shall any single or partial
E-5
exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in any such waiver or
consent, a waiver or consent given hereunder shall be effective only in
the specific instance and for the specific purpose for which given.
(c) Successors and Assigns. This Security Agreement shall
be binding upon and inure to the benefit of Agent, the Banks and
Borrower and their respective successors and assigns; provided,
however, that Agent, the Banks and Borrower may sell, assign and
delegate their respective rights and obligations hereunder only as
permitted by the Credit Agreement. Agent may disclose this Security
Agreement as provided in the Credit Agreement.
(d) Partial Invalidity. If at any time any provision of
this Security Agreement is or becomes illegal, invalid or unenforceable
in any respect under the law or any jurisdiction, neither the legality,
validity or enforceability of the remaining provisions of this Security
Agreement nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction shall in any way be
affected or impaired thereby.
(e) Cumulative Rights, etc. The rights, powers and
remedies of Agent and the Banks under this Security Agreement shall be
in addition to all rights, powers and remedies given to Agent and the
Banks by virtue of any applicable Governmental Rule, the Credit
Agreement, any other Credit Document or any other agreement, all of
which rights, powers, and remedies shall be cumulative and may be
exercised successively or concurrently without impairing Agent's rights
hereunder. Borrower waives any right to require Agent or any Bank to
proceed against any Person or to exhaust any Collateral or to pursue
any remedy in Agent's or such Bank's power.
(f) Payments Free of Taxes, Etc. All payments made by
Borrower under this Security Agreement shall be made by Borrower free
and clear of and without deduction for any and all present and future
taxes, levies, charges, deductions and withholdings. In addition,
Borrower shall pay upon demand any stamp or other taxes, levies or
charges of any jurisdiction with respect to the execution, delivery,
registration, performance and enforcement of this Security Agreement.
Upon request by Agent, Borrower shall furnish evidence satisfactory to
Agent that all requisite authorizations and approvals by, and notices
to and filings with, governmental authorities and regulatory bodies
have been obtained and made and that all requisite taxes, levies and
charges have been paid.
(g) Borrower's Continuing Liability. Notwithstanding any
provision of this Security Agreement or any other Credit Document or
any exercise by Agent of any of its rights hereunder or thereunder
(including, without limitation, any right to collect or enforce any
Collateral), (i) Borrower shall remain liable to perform its
obligations and duties in connection with the Collateral (including,
without limitation, the Related Contracts and all other agreements
relating to the Collateral) and (ii) neither Agent nor any Bank shall
assume any liability to perform such obligations and duties or to
enforce any of Borrower's rights in connection with the Collateral
(including, without limitation, the Related Contracts and all other
agreements relating to the Collateral).
E-6
(h) Governing Law. This Security Agreement shall be
governed by and construed in accordance with the laws of the State of
California without reference to conflicts of law rules (except to the
extent otherwise provided in the UCC).
E-7
IN WITNESS WHEREOF, Borrower has caused this Security Agreement to be
executed as of the day and year first above written.
INDUS NATIONAL, INC.
By:
------------------------------------
Name:
Title:
E-8
ATTACHMENT I
TO SECURITY AGREE
All right, title and interest of Borrower, whether now owned or
hereafter acquired, in and to the following:
(a) All accounts, chattel paper, instruments, deposit accounts and
other rights to the payment of money (including, without limitation, general
intangibles and contract rights) (collectively, the "Receivables") and all
contracts, security agreements, leases, guaranties and other agreements
evidencing, securing or otherwise relating to the Receivables (collectively, the
"Related Contracts");
(b) All other general intangibles and contract rights not
otherwise described above (including, without limitation, customer and supplier
lists and contracts, books and records, insurance policies, tax refunds,
contracts for the purchase of real or personal property; and
(c) All proceeds of the foregoing (including, without limitation,
whatever is receivable or received when Collateral or proceeds is sold,
collected, exchanged, returned, substituted or otherwise disposed of, whether
such disposition is voluntary or involuntary, including rights to payment and
return premiums and insurance proceeds under insurance with respect to any
Collateral, and all rights to payment with respect to any cause of action
affecting or relating to the Collateral).
E[1]-1
EXHIBIT F
COMPLIANCE CERTIFICATE
[Date]
Sumitomo Bank of California,
as Agent
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇
1. Reference is made to that certain Amended and Restated Credit
Agreement, dated as of June 10, 1998 (the "Credit Agreement"), among Indus
International, Inc., a Delaware corporation ("Borrower"), the financial
institutions listed in Schedule I to the Credit Agreement (the "Banks") and
Sumitomo Bank of California, as agent for the Banks (in such capacity, "Agent").
Unless otherwise indicated, all terms defined in the Credit Agreement have the
same respective meanings when used herein.
2. Borrower hereby certifies to the Agent and the Lender Parties
as follows:
(a) In connection with the preparation of the Financial
Statements of Borrower for the [quarter] [year] ended (the "Financial
Statements"), the undersigned Chief Executive Officer of Borrower (the
"Undersigned") has reviewed the terms of the Credit Agreement and has
made, or caused to be made, a detailed review of the transactions and
financial condition of Borrower and its Subsidiaries during the
accounting period covered by the Financial Statements.
(b) The Undersigned did not discover during the course of
such reviews, and has no other knowledge of, any event or condition
which constitutes a Default or an Event of Default at the end of the
accounting period covered by the Financial Statements or as of the date
of this Compliance Certificate, except as follows:
[State "None" or describe in detail any event or
condition which constitutes a Default or an Event of
Default including the period during which any such
event or condition has existed and the action which
Borrower proposes to take in connection therewith.]
(c) Set forth in Attachment 1 hereto are true, complete
and accurate computations used in determining compliance with various
covenants set forth in Paragraph 5.03 of the Credit Agreement for the
period covered by the Financial Statements and as of the last day of
such period.
F-1
IN WITNESS WHEREOF, Borrower has executed this Compliance Certificate
on the date set forth above.
INDUS INTERNATIONAL, INC.
By:
------------------------------------
Name:
Title:
F-2
EXHIBIT G
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGE, dated as of the date set forth at the top of
Attachment 1 hereto, by and among:
(1) The bank designated under item A of Attachment I
hereto as the Assignor Bank ("Assignor Bank"); and
(2) Each bank designated under item B of Attachment I
hereto as an Assignee Bank (individually, an "Assignee Bank").
RECITALS
A. Assignor Bank is one of the lenders which is a party to the
Amended and Restated Credit Agreement dated as of June 10, 1998, by and among
Indus International, Inc., a Delaware corporation ("Borrower,") Assignor Bank
and the other financial institutions parties thereto (collectively, the "Banks")
and Sumitomo Bank of California, as agent for the Banks (in such capacity,
"Agent"). (Such credit agreement, as amended, supplemented or otherwise modified
in accordance with its terms from time to time to be referred to herein as the
"Credit Agreement").
B. Assignor Bank wishes to sell, and Assignee Bank wishes to
purchase, all or a portion of Assignor Bank's rights under the Credit Agreement
pursuant to Subparagraph 8.05(c) of the Credit Agreement.
AGREEMENT
Now, therefore, the parties hereto hereby agree as follows:
1. Definitions. Except as otherwise defined in this Assignment
Agreement, all capitalized terms used herein and defined in the Credit Agreement
have the respective meanings given to those terms in the Credit Agreement.
2. Sale and Assignment. Subject to the terms and conditions of
this Assignment Agreement, Assignor Bank hereby agrees to sell, assign and
delegate to each Assignee Bank and each Assignee Bank hereby agrees to purchase,
accept and assume the rights, obligations and duties of a Bank under the Credit
Agreement and the other Credit Documents equal to the Proportionate Share set
forth under the caption "Proportionate Share Transferred" opposite such Assignee
Bank's name on Attachment I hereto. Such sale, assignment and delegation shall
become effective on the date designated in Attachment I hereto (the "Assignment
Effective Date"), which date shall be, unless Agent shall otherwise consent, at
least five (5) Business Days
G-1
after the date following the date counterparts of this Assignment Agreement are
delivered to Agent in accordance with Paragraph 3 hereof.
3. Assignment Effective Notice. Upon (a) receipt by Agent of five
(5) counterparts of this Assignment Agreement (to each of which is attached a
fully completed Attachment I), each of which has been executed by Assignor Bank
and each Assignee Bank (and, to the extent required by Subparagraph 8,05(c) of
the Credit Agreement, by Borrower and Agent) and (b) payment to Agent of the
registration and processing fee specified in Subparagraph 8.05(c) of the Credit
Agreement by Assignor Bank, Agent will transmit to Borrower, Assignor Bank and
each Assignee Bank an Assignment Effective Notice substantially in the form of
Attachment II hereto, fully completed (an "Assignment Effective Notice").
4. Assignment Effective Date. At or before 12:00 noon (local time
of Assignor Bank) on the Assignment Effective Date, each Assignee Bank shall pay
to Assignor Bank, in immediately available or same day funds, an amount equal to
the purchase price, as agreed between Assignor Bank and such Assignee Bank (the
"Purchase Price"), for the Proportionate Share purchased by such Assignee Bank
hereunder. Effective upon receipt by Assignor Bank of the Purchase Price payable
by each Assignee Bank, the sale, assignment and delegation to such Assignee Bank
of such Proportionate Share as described in Paragraph 2 hereof shall become
effective.
5. Payments After the Assignment Effective Date. Assignor Bank
and each Assignee Bank hereby agree that Agent shall, and hereby authorize and
direct Agent to, allocate amounts payable under the Credit Agreement and the
other Credit Documents as follows:
(a) All principal payments made after the Assignment
Effective Date with respect to each Proportionate Share assigned to an
Assignee Bank pursuant to this Assignment Agreement shall be payable to
such Assignee Bank.
(b) All interest, fees and other amounts accrued after
the Assignment Effective Date with respect to each Proportionate Share
assigned to an Assignee Bank pursuant to this Assignment Agreement
shall be payable to such Assignee Bank.
Assignor Bank and each Assignee Bank shall make any separate arrangements
between themselves which they deem appropriate with respect to payments between
them of amounts paid under the Credit Documents on account of the Proportionate
Share assigned to such Assignee Bank, and neither Agent nor Borrower shall have
any responsibility to effect or carry out such separate arrangements.
6. Delivery of Notes. On or prior to the Assignment Effective
Date, Assignor Bank will deliver to Agent the Notes payable to Assignor Bank. On
or prior to the Assignment Effective Date, Borrower will deliver to Agent new
Notes for each Assignee Bank and Assignor Bank, in each case in principal
amounts reflecting, in accordance with the Credit Agreement, their respective
Commitments (as adjusted pursuant to this Assignment Agreement). As provided in
Sub paragraph 8.05(c) of the Credit Agreement, each such new Note shall be dated
the Closing Date. Promptly after the Assignment Effective Date, Agent will send
to each of
G-2
Assignor Bank and the Assignee Banks its new Notes and will send to Borrower the
superseded Note payable to Assignor Bank, marked "Replaced. "
7. Delivery of Copies of Credit Documents. Concurrently with the
execution and delivery hereof, Assignor Bank will provide to each Assignee Bank
(if it is not already a Bank party to the Credit Agreement) conformed copies of
all documents delivered to Assignor Bank on or prior to the Closing Date in
satisfaction of the conditions precedent set forth in the Credit Agreement.
8. Further Assurances. Each of the parties to this Assignment
Agreement agrees that at any time and from time to time upon the written request
of any other party, it will execute and deliver such further documents and do
such further acts and things as such other party may reasonably request in order
to effect the purposes of this Assignment Agreement.
9. Further Representations. Warranties and Covenants. Assignor
Bank and each Assignee Bank further represent and warrant to and covenant. with
each other, Agent and the Banks as follows:
(a) Other than the representation and warranty that it is
the legal and beneficial owner of the interest being assigned hereby
free and clear of any adverse claim, Assignor Bank makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with the Credit Agreement or the other Credit Documents or
the execution, legality, validity., enforceability, genuineness,
sufficiency or value of the Credit Agreement or the other Credit
Documents furnished or the Collateral or any security interest therein.
(b) Assignor Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
Borrower or any of its obligations under the Credit Agreement or any
other Credit Documents.
(c) Each Assignee Bank confirms that it has received a
copy of the Credit Agreement and such other documents and information
as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement.
(d) Each Assignee Bank will, independently and without
reliance upon Agent, Assignor Bank or any other Bank and based upon
such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not
taking action under the Credit Agreement and the other Credit
Documents.
(e) Each Assignee Bank appoints and authorizes Agent to
take such action as Agent on its behalf and to exercise such powers
under the Credit Agreement and the other Credit Documents as Agent is
authorized to exercise by the terms thereof, together with such powers
as are reasonably incidental thereto, all in accordance with Section
VII of the Credit Agreement.
G-3
(f) Each Assignee Bank agrees that it will perform in
accordance with their terms all of the obligations which by the terms
of the Credit Agreement and the other Credit Documents are required -to
be performed by it as a Bank.
(g) Attachment I hereto sets forth administrative
information with respect to each Assignee Bank.
10. Effect of this Assignment Agreement. On and after the
Assignment Effective Date, (a) each Assignee Bank shall be a Bank with a
Proportionate Share equal to the Proportionate Share set forth under the caption
"Proportionate Share After Assignment" opposite such Assignee Bank's name on
Attachment I hereto and shall have the rights, duties and obligations of such a
Bank under the Credit Agreement and the other Credit Documents and (b) Assignor
Bank shall be a Bank with a Proportionate Share equal to the Proportionate Share
set forth under the caption "Proportionate Share After Assignment" opposite
Assignor Bank's name on Attachment I hereto and shall have the rights, duties
and obligations of such a Bank under the Credit Agreement and the other Credit
Documents, or, if the Proportionate Share of Assignor Bank has been reduced to
0%, Assignor Bank shall cease to be a Bank and shall have no further obligation
to make any Loans.
11. Miscellaneous. This Assignment Agreement shall be governed by,
and construed in accordance with, the laws of the State of California. Paragraph
headings in this Assignment Agreement are for convenience of reference only and
are not part of the substance hereof.
G-4
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers as of the
date set forth in Attachment I hereto.
------------------------------, as
Assignor Bank
By:
---------------------------
Name:
-----------------------
Title:
----------------------
------------------------------, as an
Assignee Bank
By:
---------------------------
Name:
-----------------------
Title:
----------------------
------------------------------, as an
Assignee Bank
By:
---------------------------
Name:
-----------------------
Title:
----------------------
------------------------------, as an
Assignee Bank
By:
---------------------------
Name:
-----------------------
Title:
----------------------
G-5
CONSENTED TO AND ACKNOWLEDGED BY:
---------------------------------------
By:
------------------------------------
Name:
--------------------------------
Title:
-------------------------------
---------------------------------------
As Agent
By:------------------------------------
Name:
--------------------------------
Title:
-------------------------------
ACCEPTED FOR RECORDATION IN REGISTER:
---------------------------------------
As Agent
By:
------------------------------------
Name:
--------------------------------
Title:
-------------------------------
G-6
ATTACHMENT 2
TO ASSIGNMENT AGREEMENT
FORM OF
ASSIGNMENT EFFECTIVE NOTICE
Reference is made to the Amended and Restated Credit Agreement, dated
as of June 10, 1998, among Indus International, Inc., a Delaware corporation
("Borrower"), the financial institutions parties thereto (the "Banks") and
Sumitomo Bank of California, as agent for the Banks (in such capacity, "Agent").
Agent hereby acknowledges receipt of five executed counterparts of a completed
Assignment Agreement, a copy of which is attached hereto. [Note: Attach copy of
Assignment Agreement.] Terms defined in such Assignment Agreement are used
herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that
the Assignment Effective Date will be
2. Pursuant to such Assignment Agreement, Assignor Bank is
required to deliver to Agent on or before the Assignment Effective Date the
Notes payable to Assignor Bank.
3. Pursuant to such Assignment Agreement, Borrower is required
to deliver to Agent on or before the Assignment Effective Date the following
Notes, each dated _________________________ [Insert appropriate date]:
[Describe each new Note for Assignor Bank and each Assignee Bank as to
principal amount.]
4. Pursuant to such Assignment Agreement, each Assignee Bank is
required to pay its Purchase Price to Assignor Bank at or before 12:00 Noon on
the Assignment Effective Date in immediately available funds.
Very truly yours,
SUNIITOMO BANK OF CALIFORNIA,
as Agent
By:
------------------------------------
Name:
--------------------------------
Title:
-------------------------------
G(2)-1
Proportionate Proportionate
Share Share After
B. ASSIGNEE BANKS Transferred (1),(2) Assignment(1)
----------------- ------------------- -------------
-------------------- ------% ------%
Applicable Lending Office:
------------------------------
------------------------------
------------------------------
------------------------------
Address for notices:
------------------------------
------------------------------
------------------------------
------------------------------
Telephone No:
-----------------
Telecopier No:
----------------
Wiring Instructions:
------------------------------
------------------------------
---------------
(1) To be expressed by a percentage rounded to the [seventh]-digit to the right
of the decimal point.
(2) Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchased by Assignee Lender.
G(1)-2
Proportionate Proportionate
Share Share After
B. ASSIGNEE BANKS Transferred (1),(2) Assignment(1)
----------------- ------------------- -------------
(cont'd)
-------------------- ------% ------%
Applicable Lending Office:
------------------------------
------------------------------
------------------------------
------------------------------
Address for notices:
------------------------------
------------------------------
------------------------------
------------------------------
Telephone No:
-----------------
Telecopier No:
----------------
Wiring Instructions:
------------------------------
------------------------------
C. ASSIGNMENT EFFECTIVE DATE:
-------------------------
------------------------, ----
---------------
(1) To be expressed by a percentage rounded to the [seventh]-digit to the right
of the decimal point.
(2) Share of Total Commitment sold by Assignor Lender, and share of Total
Commitment purchased by Assignee Lender.
G(1)-3